National Building Agency Limited Bill, 1963: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Byrne

When the debate was adjourned last night, I was commenting on the fact that the effect of this Bill is to turn a £100 State company into a £100,000 State company, a company registered under the Companies Act and I remarked that, to my mind, the Companies Acts do not provide a suitable form of control or lay down suitable procedures for the operation of State companies. We have many State companies in this country, about 50 in all. Some of them are registered under the Companies Act and others are set up by statute which contains all of their powers and lays down in words how they are to be operated.

In the schedule to this Bill, it is provided that the accounts of the company shall be submitted to the Oireachtas and the Minister is given power to require such reports as he may consider fit in regard to the policy and operation of the company. In that context, it is appropriate that we should suggest to the Minister the ideas which occur to us. We have many of these State companies which have come into being on a hit or miss basis, not on any doctrinaire grounds but to cater for some particular purpose in most cases not catered for by private enterprise. In that context, I have taken issue with the Minister when I queried the function of this National Building Agency in the provision of housing finance to industrialists. What can the Agency do in that context that cannot be done by existing means, by the building societies?

To return to the question of the control of State companies in general and the National Building Agency in particular, I want to know if, some years hence, the Minister's successor is queried on the operations of this company, are we to be told that the Minister has no responsibility in the matter, that he will take the line which the Minister for Transport and Power takes when questions are put to him in regard to the operations of CIE or the ESB? I want to know if we would be put in the position of not being able to ask parliamentary questions relating to the operations of this State company? That is an undesirable state of affairs. Our State companies must be made accountable to Parliament, and must be made subject to the appropriate democratic procedures.

If I may give an example of the sort of thing which we must strive to avoid, I would quote the precedent of a few years back when Radio Éireann was given autonomy. One of the first efforts of the newly autonomous Radio Éireann was to appoint a professional architect to advise them on the building of Montrose. He invited a certain number of builders to tender for that work which was never publicly advertised. We do not want that to happen with regard to the National Building Agency. We want to ensure that normal procedures are followed, that all contracts will be advertised for public tender and that there will be no question of dispensing this undesirable form of patronage.

When the Minister for Posts and Telegraphs was questioned regarding that matter, he replied that he had no responsibility for the actions of the Authority, that it was a matter for the Board. Will it be a matter for the board of the National Building Agency, in respect of which the Minister cannot be called to task in this House, if similar activities are engaged in? That is an undesirable state of affairs and we should make it clear that it is one this House will not tolerate.

The Companies Acts are completely unsuitable for providing procedures for the control of State-owned companies. They are intended to cater for the control and management of companies owned by private persons or members of the public but not by the State. There is a procedure in company law for the protection of aggrieved minorities. An aggrieved minority of ten per cent may requisition the Minister for Industry and Commerce to hold a sworn inquiry into the activities of the company, such as in the case of Irish Estates, Ltd. In the case of Irish Estates, Ltd., if the holding company had not been forced by the power of public opinion to hold that sworn inquiry, this House could not have forced such an inquiry upon it.

In the case of a company such as the National Building Agency, and I cast no reflection upon its present management which I recognise is first-class, if an aggrieved minority of Deputies—or the Leader of the Opposition—thought fit in the public interest, to demand a sworn inquiry into its activities, they could not do so, because all the shares are vested in the Minister for Finance. The fundamental principle in company law of protection for an aggrieved minority is completely departed from, without providing any substitute for it, either in this Bill or any of the Acts constituting the charter of our various State companies. It is time we got down to examining the first principles we should have regard to, as regards control of State companies which have grown upon us unawares, and play such a significant role in all economies.

In many cases I concede there is much to be said for establishing autonomous bodies but I do not concede that case has been made in respect of this measure. I want to make, as strongly as I can, the case that we have not laid down appropriate procedures for their accountability to Parliament. We have a most important Committee of this House, the Committee of Public Accounts, of which Deputy Jones is Chairman, and State Departments and senior civil servants are subjected in that Committee to the most rigorous examination of their accounts as reported on by the Comptroller and Auditor General. There is no substitute for that procedure laid down in this Bill in respect of the National Building Agency.

The Bill requires that the accounts be drawn up in such manner as the Minister may direct and submitted to the Oireachtas but there is no question of the Committee of Public Accounts having any function in the matter. No opportunity is given to the Committee to query officers of the company on tendering procedure or administrative policy and such matters as fundamental principles. It is time that a body such as the Committee of Public Accounts were empowered to examine the affairs of State companies, not only their financial administration but, if possible, their efficiency and adherence to the purpose for which they were created because it seems to many of us that in many of the State companies there are examples of the operation of Parkinson's law, of jobs multiplying and so on.

This might well develop into a largescale State company because in Section 9 it is contemplated that the State interest in this company could amount to as much as £2 million. I said that I was not prepared to concede, without hearing more from the Minister, that there is a necessity for supplanting private enterprises at present catering for housing and finance, namely, the building societies, and all these industries for which the National Building Agency is catering largely, in providing houses, should be sound financial risks for building societies. If they are not, they should not be treated as such for the investment of State moneys by the National Building Agency.

It is visualised by the Minister, as he told us last night, that the mortgages held by the National Building Agency will be acceptable security for raising loans from outside sources and that the Agency in that way may not be entirely dependent on State finance, although such loans may be guaranteed by the Minister. That seems to be a very cumbersome and roundabout way of raising money for building purposes —that the National Building Agency should lend money to industrialists to house workers and should then, in turn, borrow from banks and building societies, bodies which could very well deal directly with the parties concerned, so far as I know.

The second function of the Agency is to provide houses for Gardaí and other State servants. The Minister has not convinced me that the Board of Works are not able to do a competent job in this respect nor that it is necessary to set up a separate company with expensive administration in order to provide houses for Gardaí in Templemore. I suggest that the accounts of the National Building Agency must be studied with much care because, while it appears that they are not making or losing much money, it is a fact that the bulk of their administrative expenses are recouped from other Departments and it is very easy to show a profit or break even when you are in that position.

I want to emphasise that I am not casting aspersions for a moment on the management or administration of the National Building Agency—quite the contrary: I understand they are first class, but I am not convinced that the need exists for this separate organisation which could very well develop into a large organisation. I am not satisfied that we have fully considered the need for this venture. It cannot be too strongly emphasised that all State Departments and the Civil Service generally have accepted procedures for the control of public moneys, accepted rules for advertising by public tender all contract work and accepted procedure for filling vacancies and we want to see that these standards are adhered to by our State companies and that these are not regarded, or in danger of being regarded, as instruments for the dispensation of patronage.

We have not yet seen the memorandum and articles of association of the National Building Agency and they are not available in the Library of Dáil Éireann. To that extent, our hands are tied and we are not able to give this matter the full consideration we should like to give it. For all I know, there may be a provision in the articles of association of the National Building Agency that only Corkmen or Galwaymen shall be employed therein. That is an absurd example but I mention it as an example of the need for surveillance by the Opposition. If we are to give suitable consideration to a proposal such as this, I would ask the Minister to place a copy of the articles of association and the memorandum of the National Building Agency Limited in the Library of Leinster House between now and the Committee Stage, if possible.

I notice that in section 3 the Minister is taking power to sell the shares held by the Minister for Finance on behalf of the State, if and when he thinks fit. It might be appropriate to insert a provision there to ensure that, if such shares are sold, they shall not be sold at a loss. Indeed, I am not at all sure there is any need for the provision. Our State companies have not come into being on any doctrinaire grounds but within recent years some of us have been adopting a doctrinaire approach to their continued existence. We have been taking the view that it is undesirable that the State should have such an extensive interest in industry and in the economy. The Minister for Finance has indicated that he wants to wash his hands of some of the shares he holds in profit-making concerns. The notion seems to be abroad that it is wrong that the State should hold these shares. I do not think that is right. If there is a case for the National Building Agency, or any other public venture, it is appropriate that the State should participate in such moves and, if a profit is made from such ventures, well and good. Do not let us become doctrinaire and think that it is wrong.

The Minister for Finance has been taking that line recently in regard to the Sugar Company, one of the few State companies which is making a profit and doing such useful work socially and economically. If you could get rid of the shares in CIE, there might be something to be said for this doctrinaire approach but I fail to see why we should take one line with regard to profit-making companies and another with those losing money.

As I say, I am not sure if there is any need for this provision. This £100,000 capital which is now being put into the company is, as I see it, to enable them to repay the Industrial Credit Company. It is a realistic move. A company of this size with a share capital of £100, as it has at the moment, is rather an absurdity and it makes sense to place its capital on a more realistic basis. From the terms of the Bill, I am not sure whether that capital of £100,000 is to be remunerated and if so, on what terms. I should be obliged if the Minister would enlighten me on that matter and if between now and the Committee Stage he would place a copy of the articles of association and the memorandum of the company in the Library. That would be most helpful to us.

Mr. Clinton

This is an unnecessary Bill and at the present time I would almost describe it as an undesirable Bill. It is well known that we have an enormous building problem on our hands in various parts of the country, a problem which we do not seem able to meet adequately, or anything like adequately; yet, here is an agency which is being extended. For what purpose? As I see it, it has no special pool of labour of its own from which it can draw and no special pool of contractors, and it has to go out and compete with everyone else who is trying to get building done. I do not think the type of building described is a top priority at present by any measurement. The industrial policy is wrong. It is wrong to push would-be industrialists into remote parts of the country which are not built-up and where there is not a pool of working-class people. We have in various parts created large communities of working-class people without any facilities whatever for industry in the neighbourhood. We have at the same time large numbers of people unemployed but we are trying to build up industrial centres where there are no houses and no working-class populations. That seems to me to be an unreasonable exercise at present.

The Minister has described this Agency as being an efficient agency, an Agency that has been doing a good job and providing houses economically and at the right price, in a limited way. I suggest that the best way to keep this Agency efficient is to keep it small. The example we have of the inefficiency of a big building agency is the Board of Works. I have spent two or three years trying to get small but very essential extensions carried out to schools in various parts of the county. This is an example of the big building agency that has become topheavy and completely and absolutely inefficient.

Mr. Byrne

There are dead hands other than those in the Board of Works.

Mr. Clinton

There may be. Deputy Byrne has brought out the fear of political patronage of all sorts being dispensed and that fear is not without foundation. On several occasions, architects have complained to me that unless you are known to be a strong Fianna Fáil supporter, you have not got a hope of getting a job from the Board of Works. Many contractors feel that the same applies to the giving of contracts. If that is the yardstick to be applied in the National Building Agency, it will be undesirable and something that can very well be avoided.

The Minister stated:

As Deputies are aware, the National Building Agency was established with the primary object of facilitating the provision of houses and ancillary services required in connection with industrial expansion where the need could not be met appropriately by local authorities.

I ask why it cannot be met by local authorities. I think local authorities, in fact, have a ready-made organisation and have powers of compulsory acquisition which the National Building Agency have not got. I would say it will run into many difficulties in various areas because of that. The Minister says needs cannot appropriately be supplied by local authorities or are not otherwise met by private enterprise. Why can private enterprise not come in here and supply the need? These houses are not being built by the National Building Agency themselves. They are being built by the pool of contractors—I expect as a result of advertising contracts — and the same people will be carrying out the work.

I cannot see what is new about this Agency. The only thing is that it is a new source of finance and of credit. As Deputy Byrne says, it is a most cumbersome way to provide it. This Bill is both unnecessary and undesirable at present.

Sir Anthony Esmonde

I find myself in full agreement with the previous two speakers. I do not think this Bill is necessary at all. My reaction to it is that it imposes further State control in the building arena. Surely we already have our local authorities who, to a certain extent, are frustrated in building by the peculiar system that obtains here under which practically everything has to be referred to the Custom House, considered there, then referred to the town and country planning organisation as to whether and where they have the right to build.

Now we shall have a National Building Agency which does not seem to have any real function whatsoever except that we are told it will build houses for the Garda Síochána and for industrial workers. It is not so very long ago that the Minister for Industry and Commerce introduced a Bill in this House. I particularly queried him to know if the Bill had any coverage for the purpose of providing grants for housing for industrial concerns that might be set up in remote areas. A member of the same Government—the Minister for Local Government—now brings a Bill into this House and states in his opening remarks that it is for the purpose of providing houses in remote areas for industrial concerns. What is the point in having two Ministers from the same Government introducing two parallel types of legislation? That is what is being introduced, in effect, in this legislation here.

I thoroughly concur in what Deputy Byrne said. Here is a National Building Agency—with all the powers of the State and with the money of the Department of Finance behind it—put into competition with private enterprise. Is it an acceptance on the part of the Government that private enterprise is not able to give us the things we need in this country? Is private enterprise not able to give us or is the investment in private enterprise not able to give us the houses for industrial concerns?

Surely, if it is economic to set up an industry here, if it is economic to site the industry itself, it should be possible, without having national planning, to provide houses in the area where the industry is located under the aegis of private building agencies. I think this is a retrograde step. It is a step we have been taking gradually here in this free country of ours. We are gradually producing legislation which gives State enterprise control over everything.

If I want to build a house anywhere, if I want—even nowadays, I understand—to change the size of the windows in my house I am subject to the jurisdiction of the local authority, with an appeal to the Minister. In other words, I am not a free agent to build or alter my property as I wish to do. Is the National Building Agency, which is affiliated to a certain extent to the Minister's Department—I understand the directors will be civil servants from the Custom House—subject to the restrictions that I, as a private individual or any building agency or private investment building society, is subject to, as well?

I want to emphasise what Deputy Byrne stressed. Is this Agency another of these concerns that will not be under Parliamentary control? I do not believe in complete ministerial control which often means control by those who advise the Minister—the bureaucrats or civil servants. However, if we are to have State investment and if Dáil Éireann votes money for this Agency— to the extent, I gather, of £100,000—I believe that Deputies elected by the people under the democratic system that exists here should have the right to come in and query it. Are we to be allowed to ask questions about this National Building Agency?

Supposing it is brought to my notice that a contract has been placed and that the contractor is possibly not, according to the best advice one has received, the person who has submitted the most suitable tender or who will build more economically or who seems to have the full qualifications. Supposing I ask the Minister a question about it. Will I be told that the Dáil had set up a National Building Agency and that he has no function in the matter? That may not be the case: I do not know. Deputy Byrne has made that very trenchant point. I want to make it, too. The Minister, when replying, should tell us about it.

The other point the Minister made in relation to this Bill was that it was for the purpose of building houses for Civic Guards. That has been done before in this country. Such houses have been built for Civic Guards and State officials down through the years. I do not know who built them, whether or not it was the Office of Public Works. However, I know the houses were built—perhaps not as quickly as they should be. Perhaps there is a growing demand for these types of houses. In what way will the National Building Agency increase the prospects of building these types of houses? Is it because the National Building Agency has amongst its directors members of the Custom House that they are all likely to agree with the suggestion that these houses should be built or not built? In other words, is it a further admission that this country, under private enterprise, is able to do nothing for itself, that everything is gradually and slowly to be turned over to the State?

Since I have had the privilege of being in public life during the past dozen years or so, I have fought against and contested this gradual encroachment by the State on everything. This Bill is just another step along those lines. It is a step to place under the control of officials or under the control of State or quasi-State companies—this appears to be somewhat more than that: it appears to be a complete State company—the affairs of the private individual. If so, I think this Bill is unnecessary and I want to protest against it because I think it is no more than another step in that direction.

Minister for Local Government (Mr. Blaney)

I have listened, but with waning interest, to that which has been said by speakers here this morning. Each speaker in succession trotted out the same sort of argument and asked the same question as to why this Agency should be in existence at all. The fact is that it has been in existence and operating for some considerable time now. That surely answers the query raised by those Deputies who want to know what it will do. It is already doing and its use should, therefore, be self-evident.

The purpose of this Bill is to provide a permanent basis for financing the operations of the Agency. The Bill has been used here for the purpose of discussing the housing situation in Dublin and throughout the country. The question was asked; are the local authorities not capable of providing all the houses needed and, if they are not, should public interest not do so? On the one hand, we have the argument that there are not enough houses in Dublin and throughout the country; on the other hand, we have it suggested that this building Agency is superimposed on and superfluous to local authority and private enterprise building. If local authorities and private enterprise were capable of meeting all needs, there would never have been any necessity to set up a National Building Agency. Local authorities and private enterprise do not cater for the provision of houses for new industries. That is the primary reason why it was found necessary to provide some machinery whereunder that type of housing could be provided. The building of houses for the Garda Síochána and other State bodies which may require housing is in large measure incidental to the purpose for which the Agency was intended in the first instance.

With regard to criticism of the Agency that it is not subject to enough control, that its accounts will not be vetted, that it is not answerable to this House and that the shareholders will not have the protection that would be given them in a normal company, all that criticism is not well founded. As has been pointed out by some speakers here, directors will be appointed. They will be subject to removal from office at any time by the Minister for Local Government. That indicates that the Minister for Local Government of the day would in fact be subject to very severe criticism, or praise, as the case might be, although that is unlikely from an Opposition, if a good job of work is done.

With regard to the fears expressed about the House having no function or an effort being made to get away from having any responsibility for what the Agency may do, all I can say is that, so far as I am concerned, I shall feel myself quite free to give to the House a full account of the operations of the Agency whenever a demand is made for such information through the normal channels. As far as I am concerned, there need be no doubt whatsoever about that. Indeed, I am sure any Minister for Local Government will be only too happy to keep the House informed.

Criticism was made that this Agency would be dispensing patronage by way of contract and in the appointment of architects. The only dispensing that has been done so far in regard to contracts is that they have been dispensed to those who gave the best value for money. That can be proved by the houses completed at figures which the local authorities could not touch or could not negotiate. That is one of the reasons why the Agency has so much freedom. Take away that freedom and you immediately take away the effectiveness of the Agency. It is absolutely essential they should have freedom to get in and get on with the job.

Mr. Byrne

But we are dealing with public money.

Mr. Blaney

The aim is to get the work done as fast as possible and as economically as possible. During its short existence, the Agency has proved itself most effective. It can get a job done, and at a price, which those who have had the job for years are not capable of getting done at anything like the same price. It is all very fine to say the Agency is in competition with local authorities. That is true only in the sense that they are drawing from the same pool of contractors and the same pool of skilled labour. It has to be remembered, however, that the contractors employed by the Agency would not be building some other houses for private enterprise if, in fact, they were not building houses under the Agency. Who will say that houses built for the Garda are not effectively helping in the housing drive? These houses represent additional housing units available to house our citizens. On that basis, the argument that we are taking away from the effort to provide houses falls to the ground.

With regard to the appointment of architects, I know one architect by name, though I do not think I would recognise him if I were to meet him right now. He is a seconded officer. Other architects have been appointed whose names I do not know. If there is political patronage, then it must be operated by the Opposition Parties, which is rather unlikely, I think, in the circumstances. The seconded architect cannot be said to be a patronage appointment. Neither can the others for that matter. If there were political patronage, then surely I should know their names. I do not know their names. I do not know them to see. I do not even know how many we are employing at the moment.

It has been alleged that this £100 is now being blown into something much bigger and only the Lord knows what it will run to in the future. If it runs into a £1 million company, I would see nothing wrong in that because, should the need arise, and remembering what a good job it is doing, it might be absolutely essential that it should grow in order to meet increasing demand. That is not to say that it will grow into a £1 million company, but, should it grow to that, then it will have improved itself in reaching that size.

It was stated that since the Agency is composed of directors from the Department of Local Government— although in fact there are two from outside Departments—it will not be subject to the same restrictions as private interests and will not have to conform to planning regulations and so on. The Agency will be subject to these restrictions. Furthermore, because of their association with the Department, they will be restricted to the letter of the law. Unlike private individuals, they will be unable to take a chance and have support later from various sides of the House. Ignorance or any other plea will not excuse them for doing something not in conformity with the regulations. So far as that fear is concerned, therefore, I can assure the House that no such preference will be given. In fact, the reverse will be the case.

Some Deputy, having first said it was unnecessary, went on to say that to be efficient the Agency should be kept small. Actually, it is quite small. The number of staff employed relative to the building operations on hand is very small. By the very nature of their function, to build houses on request, the Agency will always be relatively small in relation to the volume of work. So far as the Minister for Local Government is concerned, the wish at all times will be to keep it as small as is consistent with doing a good job.

Exception was taken to section 3. This section was considered necessary by the parliamentary draftsman to give the Minister for Finance effective power to buy or sell shares. This eventuality is very remote, but, if it should arise, the power is there. The Agency could do without this section so far as its function is concerned, but it has been put in as a long-term safeguard.

Deputy Jones wondered if the Agency would carry out operations in small centres. There is a general application of the Agency's work throughout the country. Houses for industry have been built by the Agency or are under contract in a total of 19 counties. If that figure were brought up to date, I think we could add a county or two. That indicates a fairly good spread of the activities of the Agency so far as the provision of housing for industry is concerned.

I was also asked if houses for Gardaí were being erected in large numbers in a few centres. By and large, houses for Gardaí are being built in ones and twos. In Templemore, due to the impending transfer there of the Training Depot, the number of houses immediately required was greater than in other centres. In Templemore, 23 houses are being built. That is the biggest single number in any centre. It may well be that some counties may find there are few, if any, Gardaí houses being built there, while a whole lot are being built in an adjoining county. The reason is that in the first phases of this task of providing houses for Gardaí we have to have 530 houses. It has been found to be a better approach to concentrate these houses in regions rather than scatter the efforts of the Agency.

The fact remains, however, that the work of the Agency is going ahead satisfactorily and houses are being provided for Gardaí all over the country. In a few years' time, the problem of finding houses, which faced Gardaí in the past, will be overcome. In some places it was not possible to transfer a man because of lack of suitable housing. The best feature is that the houses which heretofore were occupied by Gardaí will now be made available to other members of the community.

I was also asked whether the usual channels had been fully explored before the Agency began operations in the various areas. I can only repeat that the Agency have only begun operations where over a period the need for houses was not met by the local authority or by private enterprise. I was also asked why the building societies and commercial lending organisations might not do this work. The fact is that they just have not done it, and there is nothing we can do to impose on them the obligation to provide houses for new industries or where industries are expanding. The fact is that private enterprise is free enterprise, and they naturally like to go where they feel the pickings are best. If there are these rather neglected sites, somebody else has to do it and, by and large, the role of the National Building Agency is that they do it if the gap does exist, and it does exist, as Deputies know, in many parts throughout the country.

There is a growing use being made of the Agency by industrialists. At the start there was quite an amount of interest displayed. There were a great number of inquiries. Some of them proceeded to the stage of erection of houses by the Agency. Others faded out. From my information, those who displayed an interest at the start and lost interest after a bit are again beginning to become actively interested and are coming back now that they have seen what the Agency has done and is doing for some of their colleagues elsewhere. In that way the use of the Agency and the work it can do is expanding in the industrial sphere. That is a good thing. It is a good thing that we should have an Agency such as this to go in and meet the demand fairly effectively as well as economically and quickly.

I do not think there is anything further that I should have mentioned at this Stage that cannot be dealt with more effectively on Committee Stage. Finally, I would just say that the Bill, generally speaking, is a Bill which makes financial provision for the operation of the Agency, that the Agency is necessary, that the fact that it exists and is operating at the moment is proof positive that it has a role to play and, in my estimation, it is an expanding role. The more it expands, the better all round for all of us. That the need for the Agency should grow is indicative of growth generally. All of us feel—if we do not feel it now, we certainly will feel it in the time ahead— that this Agency is not only necessary but that it has been doing a good job and can do an even better job in a more widespread way in future.

Dáil Éireann debate -
Thursday, 5 Dec 1963