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Dáil Éireann debate -
Wednesday, 9 Dec 1964

Vol. 213 No. 5

Local Loans Fund (Amendment) Bill, 1964—Second and Subsequent Stages.

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

This Bill has two purposes, namely, to raise the statutory limit for issues from the Local Loans Fund and to give power to write off from the assets of the Fund the outstanding balances of certain loans which have proved to be irrecoverable.

The present statutory limit on issues from the Local Loans Fund was fixed at £170 million by the Local Loans Fund (Amendment) Act, 1961. The Bill proposes to raise the limit to £250 million.

From the time of its establishment in 1935 up to 31st March, 1964, issues from the Fund amounted to £149 million, by far the greater part of which related to housing. Slum clearance and other re-housing schemes of urban local authorities absorbed £41 million, and the corresponding schemes of rural local authorities took £33 million. This makes a total of £74 million for local authority housing as a whole, or just half of the total issues from the Fund. Almost 114,000 dwellings were provided by the local authorities during the period.

Loans under the Small Dwellings Acquistion Acts and similar legislation up to 31st March last absorbed £35 million, the money being issued to the local authorities for re-lending to persons providing houses for themselves. The balance of the issues for housing—£8 million—related to loans to the local authorities to meet the requirements of their supplementary housing grant schemes, and to loans for housing in the Gaeltacht under the special Gaeltacht housing code.

Thus, issues for the various housing services absorbed £117 million in all. To complete the picture I may mention that Exchequer housing grants in the same period for new houses and the improvement of existing dwellings amounted to £43 million, which gives a grand total of £160 million for housing over the whole period since 1935.

Issues from the Local Loans Fund on services other than housing amounted to £32 million. Of this amount, county homes, hospitals and dispensaries took £6 million. Sanitary and other health services absorbed £20 million, of which a large part was spent on water supply and sewerage schemes. These schemes, of course, arise primarily from needs associated with housing development and so may be regarded as part of the cost of re-housing or improved housing. There is, however, a growing element in these schemes to cater for new industries and for the development of tourism as well as for new schools and hospitals. Loans for the construction and improvement of vocational schools absorbed just under £4 million. Here, too, requirements are growing steadily, reflecting the expansion in our technical education service.

I may add that the global amount of £149 million issued up to the 31st March last included a total over the past decade of £23 million lent to Dublin and Cork Corporations for housing and other purposes.

In addition to the issues actually made, account must also be taken of the substantial outstanding commitments in respect of schemes in progress and planned. On this basis, and bearing in mind that at Budget time requirements for 1964-65 were estimated at £16½ million, the existing statutory limit of £170 million needs to be increased. Some temporary falling off in issues is expected as a result of the building strike.

A sharp increase is, however, anticipated in the years ahead, according as the enlarged programmes envisaged for housing, hospitals, vocational schools, water supplies, sewerage and other services come into full operation. To meet the situation, the Bill proposes to increase the statutory limit for issues from the Fund to £250 million. This should suffice for the next four years or so, after which it would be necessary to seek further authority from the Dáil to continue issues.

A growing level of investment in building and construction is forecast in the Second Programme for Economic Expansion. It is clear that this growth will impose a heavy strain on national resources. As the figures I mentioned earlier indicate, building and construction accounts for virtually all of the issues from the Local Loans Fund, while accounting for about one-third of the public capital programme as a whole.

In this situation it is a matter of serious concern to the Government that building prices should have risen so steeply over the last few years and that they still continue to rise. The impact of these increases is felt throughout the whole community, not only by those trying to provide and maintain homes for themselves and their families but also by the taxpayers and ratepayers who have to meet such a large part of the bill for housing, schools, hospitals and other services.

I would appeal now to all those in a position to help, whether workers or employers, to co-operate in every way towards keeping costs down. Our need for more houses, schools and hospitals is great. It is obvious that the higher costs go, the more difficult it will be to meet that need. Ways should be persistently sought of increasing production and productivity in the building industry. Improvements that will cut costs are vital to the long-term success of the industry and to the fulfilment of the heavy building programmes envisaged. Given our present difficulties in the export field and our balance of payments problem, it is most important, too, that home-produced building materials should be used as far as possible.

The Bill proposes to give power to continue the issue of loans to local authorities, including health authorities, and vocational education committees. As in the past these authorities will be expected to do their best to borrow independently to meet their capital needs before calling on the Local Loans Fund. In making this comment—I made a similar comment when speaking on the previous amending Bill in 1961—I think I should draw attention to the fact that local authorities in neighbouring countries are obliged to rely much more on their own efforts to raise capital than our authorities. Here the Exchequer provided as much as 80 per cent of the loan capital raised by our local authorities in the year 1963-64.

I mentioned at the outset that the Bill also provides power to write off outstanding balances of certain loans which it has proved impossible to recover. These loans were made to farmers over 50 years ago under various last century Land Acts for the improvement or purchase of land or farm property. On the establishment of the Local Loans Fund in 1935, the balances of the loans remaining to be repaid became part of the assets of the Fund. All efforts to recover the amounts now outstanding have failed because of the death, emigration, or poor circumstances of the persons concerned, change of ownership of the land or other reasons. The only practicable course now is to write off the sums involved.

The total amount in question— £272—is insignificant in terms of issues from the Fund. To comply with the requirements of the Local Loans Fund Act, 1935, it will be necessary to provide by supplementary estimate for recoupment to the Fund of principal written off which is just over £223.

I commend the provisions of the Bill to the House.

This Bill is, of course, an enabling Bill—a Bill to enable the Capital Budget to operate. It is one that deals with only one sector of the Capital Budget and it is entirely undesirable that our Capital Budget should be considered only in sectors. The introduction of the Bill, I venture to say, therefore, underlines and stresses the necessity for the Dáil to consider the Capital Budget as one entity in the manner I indicated would take place in 1957 if I had been left in the Minister's chair. I again say, as I have said on many occasions to the Minister, that it would be a desirable innovation that we would consider our capital programme at one time as some of the obviously more immediate effects of the current Budget which, naturally, at that time, take up more attention both of Deputies in the House and the public at large.

I do not think I need to reiterate the views of this Party in relation to productive capital investment. We have always made it clear that we support as high a programme of productive capital investment as the people will support. The necessity for that becomes more obvious every day and in so far as any scheme of investment by this Government is suggested which will stand up to the hallmark of productive capital investment on the one hand, or desirable social investment on the other, the Minister and the House can be assured that those plans will have our wholehearted and constructive support.

This Bill, as I say, is an enabling Bill but I notice that in its introduction the Minister has taken the opportunity to comment on increases in building costs. The Minister must know that the increase in costs on the whole community was started—and he was warned it would start—as a result of the spiral of inflation he touched off with the turnover tax. He was warned adequately at that time that the only effect of his measure then taken was to commence a spiral of inflation the end of which no one could foresee. Notwithstanding that, he chose to keep to his course and unfortunately the prognostications and prophecies then made from these benches have come to pass in such a way that the Minister himself is constrained in his introductory remarks on an innocuous enabling Bill like this to refer to one of the effects of that very spiral of inflation for which he and the Fianna Fáil Government are responsible.

As I say, this is hardly the occasion on which to debate in full the Capital Budget when we are dealing with only one sector of it. Our views in relation to a Capital Budget are well known in as much as it was initiated by us for the first time in 1949, when it was introduced by Deputy McGilligan in the inter-Party Government, and by the many statements we in Fine Gael have made since then. I do not quite understand the write-offs there are in the Schedule. I fully appreciate the reasons for these 16 items the Minister has given.

I must confess frankly, however, that I was not aware that many of the earlier Land Acts did charge sums on the Local Loans Fund in this way and it is desirable that the Minister should tell the House whether there are any other sums outstanding to the Local Loans Fund by private individuals, or whether the entire debt now due to the Fund is a local authority debt. Perhaps the Minister could also let us know the last year in which any issue was made from the Fund to a private individual, as apart from an issue made to a local authority, which is what most of us understand as being the real function of the Local Loans Fund. In short, what I want to know is whether there is any prospect of a similar Schedule ever having to be brought in, in the future.

Investment in development has been recognised as urgently necessary in recent years. As far as capital investment in industry and agriculture is concerned, I suppose such investment is designed to give the quickest return. The tenor of the Minister's speech has been to the effect that capital investment in other things is also of extreme importance and urgency to the country as a whole. The purpose of this measure is to extend the amount that may be made available for the building of houses, schools, dispensaries, hospitals and other such structures. In recent times I have begun to think that whilst there is quite an amount of talk, particularly from the Minister for Local Government, about the building of houses, we do not appear to be getting the results one would have expected, bearing in mind his speeches here and his outside public pronouncements. It is true that the Minister for Finance in this measure is in one instance providing the money for building houses but we do not seem to be making much progress, and if one were to examine the position in various parts of the country—I do not say every part—one would find the rate of progress in house building such that it will be very many years before even those who are now applicants for houses will be provided for.

I know there are many problems attached to the building of houses, particularly by local authorities. There is the difficulty in regard to the availability of skilled labour and there is also the difficulty of the various discussions and entanglements between the local authorities and the Custom House, meaning the Department of Local Government. A great error was made some years ago when through inactivity, we allowed very valuable building tradesmen to emigrate. As far as I can see, a lot of employment by local authorities in house building is very precarious and many workers left that type of building work because they discovered there was no security of employment. Strictly speaking, this is not a matter for the Minister for Finance; it is initially the responsibility of the Minister for Local Government, but greater efforts will have to be made in house building by local authorities. An effort was made, and implemented, in 1948 and 1949 to try to induce building workers to come back from Great Britain and if the Irish building workers in Great Britain were now offered reasonable terms in wages and conditions of employment, and above all security of employment, we would find that the rapidity with which local authority houses would be built would be very much accelerated.

No matter what picture may be painted in regard to wages in Great Britain, I know from my own knowledge from talking to Irish building workers in Great Britain that even though conditions may not be quite as attractive here, they would prefer to be back in their own country if they could be guaranteed secure employment. Unfortunately in that particular trade, that is, house building for local authorities, there seems to be a policy of stop, go, stop, go and men cannot afford to wait until they are called again by the local authority and have to have recourse to the employment exchange or some other type of assistance.

The Minister for Local Government, and I am sure all members of the Government, must be concerned about this problem. There are other very great attractions in the building industry, apart from working for the local authorities. We have skyscrapers, hotels and new office buildings being erected and we have elaborate renovations being carried out, particularly in the big cities and in the provincial towns, on which many thousands of building workers are engaged and the Government will have to devise some method by which attractive terms will be offered to these building workers to ensure that the houses that are so badly needed will be built in a reasonably short time.

The forecast of building by the Minister for Local Government does not seem to me to be spectacular. It is pathetic to think that some people because they have no house here of their own, in their home towns, I will not say are forced to emigrate, but have to decide, because they cannot get anything more than one room for themselves and their wives and one or two children, to emigrate and to take a chance in Britain. That may not be widespread but it is happening.

It would be interesting if there were a breakdown of costs in regard to the building of hospitals, schools, dispensaries and such buildings. Either the Minister for Industry and Commerce or the Minister for Local Government was asked in recent weeks to give a breakdown in regard to materials, architects' fees, engineers' fees and salaries and building workers' wages. It would be interesting to discover how these have fluctuated in recent years.

Finally, I should also like to know a little more about these write-offs. I do not know why it was necessary to put the names in or why, if it was necessary, the addresses were not also put in. I presume it was to copper-fasten the write-offs, so to speak, in that the actual names were included in the legislation. I do not think it was very enlightening for anybody, and I suppose it is not intended to be.

Nobody wants to pry into the affairs of these people. We have so many John Murphys and Michael Smiths in the country that if such names were the subjects of the write-offs, they certainly would not mean anything, but the man with the unusual name could be recognised. James Ryan could not be recognised. There are many of them all over the country. But Gerard Sweetman or, I think, Brendan Corish, would be recognised. If we are including names at all, I think we should put in the addresses as well. The James Ryans could get out of any publicity there might be, but the Gerard Sweetmans and the other people with the unusual names could easily be recognised.

As Deputy Sweetman said, this is to provide for part of the Capital Budget for the next four years or so. I agree with the Deputy it is a great pity we do not find time or opportunity to discuss the Capital Budget in toto. The year before last I published a Table at Budget time setting out the Capital Budget. There was reference to it but there was not a separate debate on it. Naturally, it was in order for the debate on the Budget. Last year there was some difficulty with regard to the preparation of the Second Programme and it was not done. But I will certainly take a note and try to have it done again in future. As Deputy Sweetman realises, and I realise too, in preparing the Budget you have to consider the capital side as well. Not only do we have to consider the capital side from the point of view of raising the money but we also have to provide in the Budget for the interest and sinking fund payable on that capital fund when it comes to be spent.

The Deputy spoke about touching off the spiral of inflation. I think we will leave that for another occasion. It might lead to a long controversy if I went into it now. All I will say is that I do not agree with the Deputy.

As regards the individuals, I take it they are mentioned by name in order that they will be taken off the books as debtors. They are practically all gone away; they are dead, have disappeared or are men of no means. In the ordinary way in any other Department they would be written off and there would be no more about it. But the Local Loans Fund legislation lays down that it must be recouped anything written off. That is why we have to bring it into the Bill, to give the amount and also to bring in a Supplementary Estimate to recoup the amount taken off in this way. I am told there are no other individual debtors. As far as we know, this would appear to be the end of the operation in that direction, at least for the present.

There are not any advances made now to individuals except under the Gaeltacht housing code. I am not able to enlighten the Deputy as to what was the scheme under which these loans were made. Had I been asked before this Bill came whether such loans had been made, I would have said no. They were made mostly to small farmers for some reason or another and the debts are still outstanding.

Deputy Corish said there was not sufficient progress being made in the building of houses. I think we all agree with that. Where we differ, perhaps, is as to the cause for that complaint. There is as much money voted this year under this head as was ever voted before. It is true that costs have gone up and that must be taken into account. If the Deputy will examine the Programme for Economic Expansion for the next few years, he will find that amount is increasing each year. The money is being supplied and, indeed, used; yet we get complaints from time to time that houses are required here and there and that they are not being supplied.

The one thing I hear from time to time in discussing this matter with members of local authorities is that they find it almost impossible to get a tender. That may be due to what Deputy Corish says—that there is a scarcity of tradesmen, that many of our good tradesmen went to England and are not prepared to come back because they are afraid there is not the security of constant employment here. I think they need have no fear about that when they see the provision we are making for the next four or five years. There will be more than enough work for any tradesman to come back, but how you can get them back I do not know. The new conditions the builders are providing with regard to guaranteed employment at a certain level and also with regard to superannuation may tempt more tradesmen to come back. I hope they will.

Question put and agreed to.
Agreed to take remaining stages today.
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