When we adjourned, I was trying to get clarification of a point in relation to this amendment. Supposing an extension of a boundary occurs from the corporation outwards into a county area and cottages are thereby brought in to the new boundary, cottages that have not been vested, are the corporation then obliged to provide a vesting scheme in respect of these cottages and is the Minister obliged to continue the subsidy? I know it is fairly clear from the wording of the amendment that where houses vested under the 1936 Act come in, all the obligations will be continued in relation to those houses. Where, however, they come in without being vested, are the corporation obliged to provide a vesting scheme and is the Minister obliged to continue the subsidy?
Private Members' Business. - Housing Bill, 1965: Recommittal (Resumed).
As far as some people are concerned, they have a belief that they have, in fact, rights they never had in the area prior to its being taken over. For instance, in relation to the non-payment of annuity, the corporation under whose jurisdiction they have newly come have not the same rights and may not exercise the same restraints as the county council would have. That is one of the features we are trying to rectify here. With regard to those who are not vested, they would still do their purchase from the council out of whose jurisdiction they have departed.
Is it not more or less indicated in the amendment that "all the provisions of the Act of 1936 shall continue to apply in relation to the cottage"? If all the provisions continue to apply, then one of the provisions is this tenant purchase scheme. It says here that the new authority takes over all the responsibilities that existed under the 1936 Act.
The tenant has a year after coming in to do the purchase from the county council from whose jurisdiction he has departed and thereafter, the council would have the right of transfer to the corporation.
But is it a fact that this must take place before the transfer takes place? I know that before we handed over cottages in County Dublin, we had to put them into proper repair and have them vested before they were even accepted by the corporation.
I wonder would the Minister clarify another point for us? I am referring to people who are brought in by reason of an extension of boundaries to an urban area. A person, a member of the family, is acquiring an interest in a cottage. The Minister is well aware of the fact that the process is a slow one. Administration can be slow. Will it be confined to a period of 12 months or will people have a right to exercise it at any stage, people who had intended to apply for a purchase scheme.
Once the application is put in, there is no obligation in regard to time. It may or may not be 12 months, or longer.
Twelve months would not apply then.
So long as he has made his application.
Within the 12 months?
Yes.
There is a section which lays down that after a date following the passing of the Bill into law, unless the cottage is vested within a specified period, and, irrespective of whether or not it is the fault of the local authority or of the tenant, that is not done, surely new conditions would apply to the vesting and surely they would apply to the cases Deputy Jones and Deputy Clinton have instanced. There is no point in saying everything will be OK, once the application is made because this other section will, I think, govern the whole thing.
It is again, even on that basis, a question of when the application is made. It is the time when the application is made that matters rather than the restriction of time.
Is there not a period of 18 months after the passing of the Act?
The obligation in that section is really an obligation on the local authority to provide the facilities whereby the purchase may be made. Provided a tenant with his present rights wants to exercise those rights, it provides that his rights will not be taken from him.
I am glad the Minister clarified that point because it was not clear when we were dealing with the Committee Stage. If the Minister says that, I accept it. The argument on Committee Stage was that a local authority, by failing to provide the necessary money to carry out repairs, could prevent the tenant from purchasing the house. The Minister will remember that but if he says that is not so now, I am glad to hear it.
I do not recollect it, but once the qualified person makes the application, the county council is by law compelled to complete that application.
Even if the time is passed.
Yes.
I move amendment No. 99:
In page 64, line 22, after "reserved" to insert ",whether before or after the commencement of this section,".
The purpose of this amendment is to make it clear that the purchase annuity for the purchase of a cottage will be based on the current rent except where a revision takes place on account of current rates or because of differential or graded rents.
What is meant by current rents? Is this normally based not on the current rent but on the economic rent?
Not necessarily on the economic rent.
It will be based in future on the current rent except in cases where the rate has increased or where an increase has taken place under the differential rent scheme. If the change took place when the man was out of employment, it would be favourable to him but if it took place when he got a short period of employment at high wages, it would be unfavourable to him.
If a purchase scheme were made 20 years ago, as some were, it could be that at that time the rent was 5/-, or even 2/6 per week. Following on that, the purchase annuity, regardless of today's rent, would be half of the rent at the time of the purchase scheme. What we are saying is that the rent will be based not on what the rent was at the time of the making of the purchase scheme but rather on what it was at the time of the application to purchase.
The cost of producing the house has not increased in the meantime but I can see an instance in which the State has additionally subsidised the house in the meantime. Is it on that that the justification will be based for increasing the purchase rent, the fact that the State has additionally subsidised the house since that time?
I think I am being rather unfair to the amendment itself in not saying that in addition to the changes I have mentioned, it can work in reverse to the advantage of the purchaser. That can happen in a case where the rent might be less rather than more at the time of the beginning of the purchase scheme. You could have your graded or differential rents related to incomes and a change of tenant from the time of the making of a purchase scheme could bring about a situation in which the earlier tenant was paying a rent of £1 or 30/- per week related to his circumstances and the change of circumstances relating to that change of tenant might bring about a situation in which the graded or differential rents would be at this time less than the original rent paid by the first tenant. In this event he would benefit in the same proportion as the other chap would have lost.
That would be on the existing rather than on the old rent?
Yes, with a certain number of exceptions.
Purchase schemes are normally based on the economic rent. If we have a new scheme of houses and a purchase scheme is prepared, it is prepared on the basis of the economic rent. In this instance, we are looking at houses built some years ago. Say that at that time the economic rent was £2 a week and the purchase rent was 25/-. A purchase rent fixed today for one of the houses in that scheme that did not accept a privilege should be based on the economic rent, plus what the State put in since by way of additional subsidy. That is the truly equitable approach to this problem but this amendment is one that could prove to be inequitable in certain cases. Under it you could have a case in one scheme of houses where a family that was well-off could purchase the house at a smaller figure than a family that was not well-off.
Take a case where the purchasing annuity is £10 and the vesting period is a ten-year lease. Does this section determine the purchase price of that house?
I do not think this is the section that deals with that matter. What I should probably try to make clear is that Deputy Clinton made the point that the cost of producing a house will not have changed.
Yes, that it did not change.
Naturally, it would not have changed. The cost of producing an equivalent, however, has changed a great deal. If a purchase scheme has been in operation for all these years under these advantageous terms, why did they not avail of them? Was it because it was cheaper or better value to be in at the low rent? Surely the reasons could not have been financial reasons unless the gain was in the direction of maintenance costs? There is also this to be said in clarification, and I may have misled the House somewhat in this connection, that the changes in rents would only affect the annuity when it occurs outside—I am afraid I said this incorrectly to the House before—of a differential or a graded rent scheme.
So there is not a hope of anybody getting a better bargain?
There could be.
I could not understand how they could. At present they buy it under one of two arrangements. If it is pre-1948, they buy it at 50 per cent and if it is post-1948, they buy it at 75 per cent. Under the new arrangement, the position seems to be that if they do not purchase it within 18 months of the appointed day, they can be stuck for whatever is an economic rent at the time, which is a different thing altogether. I do not know whether there is any significance in this or not, and perhaps the Minister could help me, but a number of cottages have been built recently and no attempt is being made by the managers to have a vesting order made for them. We notice that they do not appear on the Order Paper at all. I have not seen them for quite some time. In my own constituency houses have been built in the past 12 years and they have not been listed. Does this mean that there is a little game being played to ensure that tenants will be put in the position that they cannot buy the houses at 75 per cent but will have to wait until the new Act comes into operation and will be stuck for the high rent? Is that the situation?
In so far as failure to make these purchase schemes is concerned, it was clearly a dereliction of duty on the part of the local authority. The legal position is that purchase schemes are obligatory in law within a year of the completion and hand over of the cottage, in respect of all such cottages up to 1st January, 1966.
The Minister is aware that no purchase scheme has appeared on the Order Paper, having been laid before the House, for a considerable time. I am sure the significance of this must have struck the Minister. Obviously, county managers are arranging to make a few shillings on the side for the county.
I am innocent of the implication.
The Minister has helped to make my case. He said that if a tenant has failed over a number of years to take advantage of a purchase scheme which is in existence, the reason must be that it was cheaper to be a tenant and not a purchase tenant. That may be, but the case I have been making is that it represents an additional subsidy which I agree should be taken into the calculation, but surely the equitable way to deal with this would be to add the additional subsidy to the original cost and then calculate the economic rent at present rather than leave it to a manager to decide: "We must `up' the rent of these houses". We had a case where the manager decided to rocket the rents and a purchase scheme is to be based on the present rent which is now described as the present economic rent. This could be quite unfair to the people living in those houses. The houses were built at a particular figure and had many shortcomings because the Minister was extremely anxious to keep the price down—as he always is—and the standards were low. Only kitchenettes were provided and these people feel that they have to add kitchens. The rent decided on by the manager is, in my view, too high. The new purchase arrangements will be based on that and not on the economic rent.
I move amendment No. 103:
In page 66, between lines 55 and 56, to add the following section: Section 46 of the Land Act, 1923, shall be construed as if the references to the original holding included references to a cottage in respect of which an annuity has been fully paid, or has been redeemed under section 3 of the Labourers Act, 1965, or section 98 of this Act."
Section 46 of the Land Act, 1923, deals with the provision under which the Land Commission may exchange holdings for the purpose of facilitating improvement or enlargement of uneconomic holdings throughout the country. It is held that council cottages do not come within the terms of section 46 and the purpose of the amendment is to bring the cottages within the provisions of the section.
They are to be like Mohammed's coffin, suspended in mid-air. If they cannot come within the section, where do they stand?
They do not stand, according to the interpreters of section 46 of the Land Act, for the purposes of the Land Act.
If the section does not apply to them, what is the actual legal position? As the Minister knows, this will affect quite a number of houses which have been dealt with before, apart from the thousands that will be dealt with under this Bill.
That is a matter which, to my mind, is not absolutely appropriate to this Bill, but because it is the nearest and readiest vehicle to hand to rectify what is said to be an omission in the Land Acts, so far as council cottages are concerned, we are putting it in.
I agree that if it is necessary it should be put in but it would be interesting to know where we stand.
Do not ask me about that.
Would the Minister say whether this clarifies the position which was raised on the Bill originally, as to whether or not under the Land Acts a tenant of a labourer's cottage can obtain an addition to the plot for consolidation purposes? You have this question of consolidation occurring if the purchase scheme has been completed. We raised this point before. The question could arise as to whether the Land Commission would agree to sub-division again or detachment of the plot on which the cottage stands. Does this set it right?
What we are dealing with is not consolidation but exchanges which would arise in the case of migrants under the Land Acts. We are advised that at the moment section 46 does not enable a vested or purchased cottage to be exchanged for the purpose of the tenant moving to a holding, as often happens, from another type of abode. We are rectifying that in the Bill because it is the one most readily to hand.
The Minister mentioned migrants but does this not affect everybody? Does it simply apply to people coming from the west of Ireland to County Meath, for instance? If somebody in County Meath has a vested cottage, does it apply to him also?
Yes.
For exchange purposes?
Yes. Exchanges is the subject we are dealing with here. It does not matter what way they are going.
Very few of them go the other way, even to Donegal.
Some of them come back.
I had not noticed that. The Minister said it does affect exchanges, irrespective of where the plot is?
Certainly.
Will this cover the provision of houses for people in small holdings who made the exchange later?
The statutory restrictions do not and will not apply to that type of housing.
I move amendment No. 120:
In page 82, to delete lines 46 to 49.
The purpose of the amendment is to drop the obligation on the arbitrator in compulsory acquisition cases to take into account any increases in value of any premises belonging to the same owner arising from the demolition of any buildings the subject of the compulsory purchase proceedings. This concession is considered equitable since only an owner involved in the compulsory purchase proceedings was being asked to make any allowance towards such increase in value. In addition, in cases where a diminution in value arises, due to the actions of the housing authority, the arbitrator was not obliged to have regard to it. It was one-way traffic, so we have knocked that out.