Dáil Éireann debate -
Thursday, 21 May 1959

Vol. 175 No. 3

Committee on Finance. - Rates on Agricultural Land (Relief) Bill, 1959.—Second Stage.

Minister for Local Government (Mr. Blaney)

I move that the Bill be now read a Second Time.

The purpose of this Bill is to extend the duration of the Rates on Agricultural Land (Relief) Act, 1953, for a further period of three years from the 1st April, 1959. In other words, the Bill proposes to continue the Agricultural Grant on its present basis for a further three years.

The 1953 Act provided for the making by county councils of the following allowances by way of abatement of rates to occupiers of agricultural land holdings in rural areas:— (a) A primary allowance of three-fifths of the general rate in the £ on the land valuation up to £20; (b) an employment allowance of £17 for each adult workman at work on the holding during the whole of the preceding calendar year, subject to the limitation that the total of the employment allowance shall not exceed the produce of the general rate in the £ on the valuation over £20.

The 1953 Act applied to the financial years 1953/54 to 1955/56. The Rates on Agricultural Land (Relief) Act, 1956, continued the allowances on the basis provided for in the 1953 Act for a further period of three years up to the 31st March, 1959.

The agricultural grant was first given under the Local Government (Ireland) Act, 1898. It was a fixed annual subvention. Between 1898 and 1946 the amount of the grant and its method of distribution were altered on several occasions. The total of the grant in these years was, however, always a fixed amount.

The 1946 Act, which resulted in a large increase in the grant provided that the amount of the grant, instead of being fixed in advance as heretofore, should be related to the actual rates struck by county councils in a particular year. That Act provided that the grant would be the sum needed to give relief on the following basis:

(1) A primary allowance of three-fifths of the general rate in the £ on the land valuation up to £20.

(2) A supplementary allowance of one-fifth of the general rate in the £ on the land valuation over £20.

(3) An employment allowance calculated at the rate of 10/- in the £ on the land valuation over £20, subject to the limitation that the allowance should not exceed £6 10.0. for each adult workman at work on the holding during the whole of the preceding calendar year.

This method of distribution continued to operate until the passing of the 1953 Act, which abolished the supplementary allowance, increased the employment allowance, but left the primary allowance unchanged. While under the revised system of allowances some farmers gained and some lost, the intention of the change was to provide that the farmer who gave most employment would gain most.

The amount of the agricultural grant has increased from £1,870,000 in 1945/ 46 (the last year in which the amount of the grant was fixed in advance) to £4,647,000 in 1952/53 (the year prior to the last revision of the method of distribution) to £5,519,075 in 1958/59. In that year the agricultural grant afforded farmers relief to the extent of 44 per cent. of the rate levy on agricultural land.

The total payable in 1958/59 was divided as follows:—

Primary allowance	£4,278,595
Employment allowance	£1,224,988
Amount paid to certain county borough corporations and urban district councils	£15,492
TOTAL	£5,519,075

Under the Rates on Agricultural Land (Relief) Acts the employment allowance is given to rated occupiers in respect of a workman who was at work on the holding during the whole of the calendar year prior to the financial year in which the claim for the allowance was made and who was otherwise qualified under the Acts. There is also provision that if two or more men are successively at work on a holding, or are employed in such a way that at all times during the calendar year there is one man at work, such workmen may be regarded as one man at work for the purposes of the employment allowance. The Acts also provide that every doubt, question and dispute in relation to employment allowance claims shall be determined by the local authority, whose determination shall be final and conclusive.

A matter which has been raised in discussions in previous Bills is the question of broken time. It has been represented that a too rigid interpretation of the provisions of the law in regard to the continuity of employment might result in hardship to individual farmers especially where, for instance, a break occurs through no fault of the employer. I fully appreciate the difficulties of farmers in this matter. I realise that it is not always possible for a farmer to replace immediately an employee who has left without giving notice, and that breaks in employment often occur through illness. I think, however, that local authorities may be relied on to use their discretion in cases of this kind. I know that some of them allow an employment allowance claim where the length of the break or the total length of the breaks in employment in any year is not greater than one month. I think that is a very reasonable attitude to adopt. Some local authorities may at times have difficulty in deciding as to the authenticity of claims where the break in employment is stated to have been through illness. A test which they might find useful would be whether the workman claimed or received disability benefit or unemployment benefit.

In regard to the present Bill no new principle is involved. The purpose is simply to continue up to 31st March, 1962 the present system of distribution of the agricultural grant.

Mr. O'Donnell

Of course, we offer no objection to this Bill—it is merely a continuing Bill. I know the Minister's difficulties, but it is a pity that we cannot have some permanent legislation on this matter. These are all temporary measures introduced every two or three years and the Minister is just now doing what I did myself. He can always say to me: "Why did you not do it?" I found myself in the same difficulty as he is in, but some day we must tackle this matter and introduce permanent legislation.

The litle of this Bill is a misnomer. The principle behind this relief of rates is to guarantee employment. It is to ensure that the farmer shall employ labourers during the entire year and shall not throw them on the labour market during what might be described as the farming off-season. This legislation was originally introduced for the purpose of ensuring permanent employment for labourers. The Minister has pointed out that there is a period of one month which may elapse in which the labourer is off and in respect of which the farmer would be entitled to claim relief.

I know that in Deputy Corry's district and further west, in West Cork, a practice had grown up whereby the labourers voluntarily leave in or about the week before Christmas and do not return to work until around the first week in February. That practice was very prevalent around Fermoy and that part of the country. The farmers would like to keep these labourers on but the labourers had this habit of clearing out before Christmas. I understand some retainer was usually given to ensure that the labourer would return to the farmer when the spring began, around the month of February. I thought in cases such as that there was some understanding, when it was a local custom to have this broken period of six weeks, that the farmers would be entitled to relief. While the Minister has no function in the matter—it is one for the local authority—I think he has some directive or advisory power so far as the local authority is concerned.

I do not want to hold up the Bill in any way. I only hope that some day the Minister or his successor will get down to producing permanent legislation on the lines now suggested.

Mr. Corry

I had hoped that, with the large increase in the rates and the burden thrown upon local authorities in recent years as a result of legislation passed here, we would have had this year an increase in the agricultural grant. It is high time the position was reviewed from that point of view. I realise the difficulty there is in this labour question. It is a difficulty under which we are all labouring in Cork. I can tell the Minister that the local authority in Cork does not give the relief that is supposed to be given. The county manager is afraid of his life of a gentleman called an auditor who rambles down from the Minister's Department and goes over the books. This gentleman insists on a surcharge and the Minister would be well advised to say a few kind words in his ear before he lets him loose on us. We would get on a lot better if that were done.

If the final say is left with the local authority—in other words, the county manager—well and good. The position will be satisfactory if the county manager is not subsequently faced with the bogey of the Local Government auditor coming in and saying: "There is a gap here of one month. The Act stipulates the calendar year. You have permitted something which you were not entitled to permit, and I am now surcharging you." That is a difficulty under which successive Ministers have left local authorities labouring. It is a difficulty which grows greater from year to year, so far as the farmers are concerned. In the old days, you hired a man on 25th March. You had another chat with him on 25th March in the following year. That day is gone. Likewise, the day when the farmer had a labourer for nine, ten, and sometimes 20 years, without a break, is also gone. The man who comes in now comes in with one eye on you and the other on Whitegate or Haulbowline, in either of which he will find someone who will pay him more per week for his labour.

The position in the agricultural industry is that the worker gets something like 50 per cent. of the wages paid in manufacturing industries. The position is our responsibility and it is no good talking about the flight from the land while we permit that condition of affairs to continue. A man may come in to you to-day and there will be a job going in some local industry; he will not hum or haw, but you will miss him on Monday morning. He has gone into the local industry and it will take a couple of weeks to find a replacement for him. No labourer works for a farmer now permanently for 12 months. Indeed, if a farmer has a man for 12 months, he is lucky. Generally the farmer has him for three or four months, during which time he is looking around for someone who can afford to pay him more. God bless him for it.

If this statement of the Minister's is to have any beneficial effect, the county manager will have to have some assurance that the auditor will not come along and work on the strict letter of the law and impose a surcharge. As I said, I had hoped, in view of the enormous burden thrown on the ratepayers by legislation over the past few years, that we would have had an increase in the agricultural grant this year.

Mr. T. Lynch

I merely want to make one point which is a matter of some moment to those whom it affects. If a man is the owner of a holding with a valuation of £5 and he goes to work for a farmer, that farmer does not qualify for abatement of rates. That is a hardship on the small holder. He is a marked man and the farmer will employ him only for casual labour in periods when the farmer is very busy. I draw the Minister's attention to that anomaly. I think the valuation should be raised to £8 or £10. That would be a help. It would benefit the man with a holding out of which he cannot get a livelihood.

Mr. O'Malley

I was more than amazed to hear Deputy O'Donnell, a former Minister for Local Government, advocate that this legislation should be of a permanent nature. I would draw the attention of the Deputy and of those who sit with him on that side of the House, to the fact that on 30th November, 1956, the Capital Investment Committee was established by warrant of the Minister for Finance. The terms of reference were:—

To consider and advise, with full regard to the needs and interests of the national economy, on the volume of public investment from time to time desirable, the general priority appropriate for the various investment projects, and the manner in which each project should be financed.

That Committee met and in due course issued their findings. A great many of the recommendations dealt with the agricultural grant. The report was published on 22nd January, 1957. The general election in that year did not take place until some months later. There was no change of Government until March of that year. I now draw the attention of the House to one of the recommendations dealing with the agricultural grant. In the net result of the deliberations, it appeared that the majority of the members of the committee advocated that the agricultural grant was of an unproductive nature and should be scrapped.

Mr. Corry

How many farmers read that?

Mr. O'Malley

That is an interesting point. The point I want to elicit from Deputy O'Donnell is: Is it their policy to accept the recommendations of this Capital Investment Committee which was set up by their own Coalition Government, and their own Minister for Finance? Is it their policy to accept those recommendations, and if they had continued in power, is it not a fact that the agricultural grants would have been scrapped?

Mr. T. Lynch

No.

Mr. O'Malley

There is an old maxim that if one goes to a solicitor, one should take his advice. One should not go at all if one has already made up one's mind beforehand as to what course of action one will take. That only wastes one's money and time and the solicitor's time. The point I wish to stress is that paragraph 3 of this Report states:—

The Minister for Finance attended the first meeting and stated that the immediate problem was the expected deficit in the capital budget for 1957/58. He indicated that it would be desirable if the Committee were in a position to furnish a report on which decisions could be taken by the Government in relation to the framing of that budget.

In other words, the Minister for Finance urged this advisory committee to bring in their findings in time for the framing of the Budget of 1957/58 and that there would be an expected deficit. He wanted their recommendations in order that he and the Government could consider them. As I say, in January, 1957, in ample time, these recommendations came in——

Mr. O'Donnell

You could not do it in a Budget. The law was there. The Act was still in force.

An Ceann Comhairle

This Bill, of course, is only a Bill to extend the time. It does not raise the principle of the agricultural grant at all.

Mr. O'Malley

With due respect, Sir, the sole point with which I am dealing is that when Deputy O'Donnell spoke after the Minister's opening statement, he welcomed the extension of time, and advocated that this measure now before the House should be made permanent.

Mr. O'Donnell

He said no such thing. He said "some permanent legislation". He did not advocate that this should be permanent.

Mr. O'Malley

Am I correct in saying that Deputy O'Donnell advocated that the relief of rates on agricultural land should be of a permanent nature?

Mr. O'Donnell

You are.

Mr. O'Malley

That is the one and only point I want to bring out and I think I have done it effectively. I shall be very interested in getting an answer from that side of the House as to whether the recommendations of their own Capital Investment Committee would have been accepted, if they had continued in office, that is, that the agricultural grant would have been scrapped in toto.

Mr. Sweetman

The Minister must have felt like saying: "God preserve me from my friends." On more than one occasion during the past two years, I asked the Minister for Finance if he had had the time and the opportunity to consider the report of the Capital Investment Committee. In reply he told me that he had not had time. The purpose of a committee such as that is to explore, and to act as an assembler of the facts, and to advise. The decision to be taken on the report of such a committee is the decision of the Minister, or the Government for the time being, and not the decision of the committee.

In so far as this Bill is concerned, my understanding is that the phraseology of the Bill enables us purely to deal with it on the basis of whether instead of the Act being in force for eight years, it should continue for seven years or nine years. It is purely a point of time and we cannot put down amendments to it for any purpose other than to decrease or increase the period of the Act. Anything else would not be in order, and having regard to that, it seems that the Second Reading is the only time when one can make reference to anything else.

Frankly, I am quite intrigued by the last part of the Minister's statement. I understood that the stipulations in relation to employment were absolutely rigid and statutory, but I understand from Deputy O'Donnell that perhaps I am wrong in that respect. What I am interested in at the moment is the type of case where a man leaves a farmer on a Saturday night. That farmer may not be able to get another man to come in and start work on the following Monday morning. It may take him two days, a week or a couple of weeks to get somebody to replace the man and there is, therefore, a gap in the employment of a week or a couple of weeks, a gap which has arisen in no way through the fault of the farmer concerned. Does the fact that such a gap has arisen disqualify that farmer from the employment allowance?

I think the Minister will find that in relation to certain local authorities such a gap has been taken to disqualify. It would be undesirable that the local authorities should be absolutely rigid in that respect. I must confess that if the position is as indicated by the Minister in the last part of his statement, it would be better, but certain local authorities feel that they are completely bound by the letter of the law and have no power of discretion at all. There is, I believe, a custom in Cork that workmen sometimes take a month off of their own volition and are paid a small token retaining fee. It is not that type of case I am talking about. I entirely agree the employment allowance must operate to encourage permanent employment. I could not agree more on that, but I am thinking of the type of case where a man walks out on Saturday night and it takes the farmer, genuinely endeavouring to get another man, a week or two weeks to find a suitable man. That type of case should be covered in some measure.

Mr. Davern

I agree with Deputy O'Donnell who advocated that the 11 months' employment which obtains in many districts should be accepted as the full period of employment. In many cases, it is not the fault of the farmers, as previous speakers have said, and perhaps not the fault of the worker either that the full 52 weeks are not worked. I know that in many local authorities the letter of the law is rigidly enforced and many farmers lose as a result. That is very unfair, and I hope and trust that the Minister, perhaps next year or some year in the near future, will be in a position to agree to what we are now asking.

I hope the time will come when a more substantial rebate will be made with a view to inducing farmers to employ more workers. A rebate of rates is indeed a great inducement and I feel that if that were to happen there would be, perhaps, a corresponding reduction in the Estimate for Social Welfare. There should be a pronouncement that the more people farmers employ the more rebate they will get. I hope and trust that the Minister will go into this question in a few weeks and that people generally should not be deprived of their rebates.

The man who employs for 48 weeks of the year should have a sufficient qualification for the rebate of rates, and rates are at present so very high —ceiling high—that this is a very important matter. In my opinion, high rates are responsible for much of the unemployment on the land at the moment. They absorb a vast portion of the farmers' income, but whether that can be helped or not I do not know. I believe that the Minister should consider the question of the 48 week period; that corresponds to the 11 months in many case. In recent years I know as many people are not applying for the contract as heretofore, because of the fact that overtime, Sunday work and all that is catered for in that time, but I think it would be a good thing if a contract of service for 11 months were found possible as between farm worker and farmer. I would advocate that arrangement at all times because it lends itself to more production, more stability on the land and, consequently, to enrichment of the economy as a whole.

Mr. Blaney

The various points raised by speakers on both sides are not really new, in so far as my mind on this matter is concerned. Taking Deputy O'Donnell's suggestions and queries in regard to the matter, he feels that we should have, if anything, some permanent form of legislation. Possibly I could agree with Deputy O'Donnell but I would point out, of course, that if we were to revert to the permanent legislation readily at hand, we would immediately reduce the grant very considerably—in fact, reduce it from roughly £5 ½ million, the figure at which it is at the moment, to something under £2,000,000.

Again, while we might devise some other system and bring in a new, permanent legislative system, we are backgrounded by various recommendations that seem to have caught the imagination of the general public, which I shall refer to later. Those recommendations are not in favour, indeed, of even temporary relief and continuance on a temporary basis, but are more inclined to suggest we should direct these moneys in other directions.

Deputy O'Donnell has also referred to a question which has been mentioned by, I think, all other Deputies who have spoken, the question of the break in employment, whether or not there is a rigid law carried out by our various local authorities in regard to the full 12 months period required to be properly worked, or that employment should be for a full 12 months without a break and the fact that where breaks do occur, there does not seem to be uniformity in the manner in which they are dealt with by local authorities.

I can only reiterate what has been said by practically all former Ministers for Local Government, including Deputy O'Donnell and the present Minister for Agriculture, in recent years—that, in so far as I and my office are concerned, we do look for a reasonable approach to this matter and we do not consider unreasonable the excuse of a month if there is illness, if there is a change of worker and a month or a few weeks elapse in getting another worker to replace the worker formerly employed. I reiterate that I consider those things to be reasonable and that illness in such a case should be considered. That brings us to the point that some of our auditors—not all of them—take a very strict, stern, and rigid view of this matter and will not allow any such procedure to be adopted. If it is adopted by a local authority, and an auditor takes this particularly rigid view, a surcharge will in all probability be made.

It has been suggested further in regard to that matter, if we have the views I have expressed on the matter, that we should advise or direct the auditors. I think the House will appreciate that auditors, as a profession, are in a very vulnerable position and to suggest that in their operations as auditors and adjudicators on matters of public expenditure they should be subject to directions from a Minister, or from a Department, is not possibly in the best interests of the profession or of the esteem and the high regard for their integrity in which they are now held but, for what it is worth, I want to say again that I believe in approaching this in a reasonable manner. If there are auditors who hold they must take a rigid view, then a surcharge can be made. As a result, that surcharge can, and I am sure will be, appealed to my Department. Again the view I am expressing should surely give to the managers and to the local authorities an indication that, if such does happen, their appeal very likely will not fall on deaf ears, if the case is a reasonable one.

Many of our people, in fact, are operating in this reasonable manner of recognising the fact that it is hard to replace a labourer quickly, that labourers will come and go and also that labourers can, like everybody else, get ill and may not be able to continue their work for the entire time. Where that happens, we recognise it. I recognise it and, as far as I am concerned and where I will be concerned should such changes arise, they will be dealt with in a sympathetic manner in all these cases. More than that I cannot say on that subject at the moment.

The question has also been posed by Deputy Lynch in regard to the £5 valuation limit. I could possibly be very sympathetic personally on this matter, but a few arguments were placed on record here when this matter was discussed and debated on a previous occasion. In fact, I could nearly quote those arguments. One had reference to an occupier of land with a valuation of up to £20 receiving a preliminary allowance in respect of that land and it was argued that an occupier of land with a valuation of over £20 should not also receive an employment allowance in respect of employing him; in other words, a preliminary allowance would already have been allowed and then to allow a man, who had received that benefit on his own valuation under £5, to qualify for an employment allowance would seem to be doubling the benefit under this Act. In addition to that, if we were to remove or extend the limit, particularly if we were to remove it—naturally the tendency always is to shove it up from £5 to £10 and possibly the demand next time is £10 to £20—ultimately the logical conclusion would be to remove it altogether.

If we were even to raise the limit it could be held that it would not be fair to the agricultural labourer who has no holding of any description and no land at all. However, all these arguments could be knocked down if we wanted to take a straight line through that this is something that we should give and the more we give the better it would be for all concerned. I in my own personal capacity would, like many other landholders, be very glad to see a further and a wider extension of all these benefits but in all the approaches to this matter I have had to have regard to the general background of opinion that exists. That opinion is pretty strong and popularly held by various members of our community.

In referring to that I should like to quote from the first report of The Capital Investment Advisory Committee, dated 22nd January, 1957. Paragraph 15 recommends:

(i) Grants to local authorities in relief of rates on agricultural land should be discontinued. These grants, which in the present financial year are estimated to amount to £5.6 million, are not economically justifiable as at present applied since they are made available indiscriminately and are not directly related to increased production. It is a historical fact that the very substantial relief afforded to the farming community by land purchase and relief of rates has not led to any increase in agricultural production. We believe, however, that moneys diverted from such grants should continue to be made available to the farming community but in a way calculated to raise production, namely, by the provision of vouchers for fertilisers and lime.

That is the Capital Advisory Committee's rather definite recommendations, recommendations which as a whole have been well received by those of our people who think about these things.

Later we have the much acclaimed and rightly acclaimed report Economic Development, paragraph 6, chapter 12 of which says in relation to State Aid to Agriculture:

A strong case exists for:—

...(f) gradually transforming the Agricultural Grant into forms of aid more directly serving to lower production costs, e.g. subsidisation of fertilisers and increase provision for research (especially in relation to pasture and soil improvement), education, advisory services, development of progeny testing and marketing. A beginning should be made by fixing the Grant at £5 million, thus freeing over £600,000 for subsidisation of phosphates.

I might mention that the Government in the meantime has devoted and earmarked a considerable amount of money for the things recommended and yet we have not in fact reduced the Agricultural Grant in order to do that. Paragraph 14 goes on to say:

"The suggestion in paragraph 6 regarding the Agricultural Grant is not novel. Much attention has been focussed recently on this subvention and on the question of its efficacy as an aid to agricultural production. The employment allowance (some £1.3 million out of a total of £5.62 million) is a wage subsidy, introduced in the early thirties as an inducement to farmers to increase the amount of their hired labour. It was never an effective inducement and in the conditions of to-day is a complete anachronism. The number of workers in respect of whom the allowance is given has declined by over 30 per cent. since its inception though it might perhaps be claimed that it slowed exodus; it is more than likely that the allowance is claimed fraudulently in many cases and there is no evidence that it has ever had any beneficial effect on production."

When we have discussed the various arguments and the various extensions of the present proposals that might be regarded as beneficial let us revert, a matter to which I adverted at the commencement, to these reports which have been circulated and which as I say, have been widely acclaimed in general and with that background, to have regard to the situation where in the idea seems to be that the allowances should be reduced in one part, that they should be stabilised at a fixed figure lower than the figure now being paid or that they should be diverted and given to the farmers in some other manner. That is the background that is there and while we may have our likes and dislikes in regard to these proposals now before the House, I do feel that in continuing and agreeing to continue these provisions for the period of the next three years, we have, despite our objections to the various details, done well to have maintained our position against the background I have outlined. There is nothing further I can say on this matter and I commend the measure to the House as it now is.

Mr. Corry

Is the Minister aware that our competitors across the Border in the Six Counties and in Britain pay no rates on agricultural land at all?

Mr. Blaney

The Minister is aware of quite a few other things that exist there.

Question put and agreed to.

Agreed to take remaining stages to-day.