The Chair and the House will be aware that I do not lightly raise a matter on the Adjournment nor do I do it very often, but I think the reply to this question was such that it must be ventilated in the House. With your permission, sir, I should like to repeat the question I asked:
To ask the Minister for Local Government if he is aware that the effect of certain circulars issued by his Department recently will be either to increase the rents of local authority houses to an unbearable level, or to increase rates beyond the capacity of ratepayers; if he will make a statement on the matter; and whether he favours meeting any deficit arising by greater subvention from his Department or by increase of rents and rates.
I am aware that the fixing of a rent is entirely the responsibility of the local authority, but in discussing this, I must relate certain circulars from the Department of Local Government and actions of the Minister to the effect they would have on the position of a local authority in this regard.
First, I should like very briefly to explain the deficit principle. The deficit principle, as most of us here know, is that in respect of people from condemned houses and certain priorities such as those living in houses where there is TB, the Government shall meet two-thirds of the loan charges, principal and interest repayments, in respect of the rehousing of these people, for the period of the repayment. There has always been a maximum amount in respect of which the Minister will pay. That maximum over the years has approximated to the cost of the house. The maximum to-day stands at £1,650.
The difference between the position to-day and the position over the years is one which can be explained by a very practical example. There is in Drogheda town a new housing scheme known as Balls Grove, and it was built in three sections which were occupied sectionally as they were built. Section one cost £1,650 a house. Two or three years ago the Minister was paying by way of principal and interest, up to £1,500 per house, so that there had only to be met by the local authority the balance of £150 without help from the Department.
Section two cost £2,070, and the limit of subvention from the Department at that stage was £1,650. Section three, where the last tenants have just gone into their houses, has cost £2,600 per house, and the maximum the Minister will pay by way of subvention still stands at £1,650. This means that from somewhere, be it from the rates struck by the local authority, be it from the tenants of these houses or from any other tenants, there must come the full repayment charges on the extra £950 as well as the normal repayment charges on the aforesaid £1,650.
The Minister sent a circular to the local authorities. I refer to Circular No. H.3/66 of 30th March, 1966, and this circular was most important: It was headed: "Modification of Deficit Principal: Review of Rents". This meant that for the first time if a local authority chose to charge a rent which resulted in there being a decreased deficit or no deficit at all in an old housing scheme, which were the houses which cost less, they would not lose by way of subvention from the Department. They would gain this amount as profit or as a surplus which they could devote to any other purpose such as the reduction of rents elsewhere.
I suggest that the wording of that circular—which I shall not quote here because I do not want to delay the House any longer than necessary—the Minister is exerting undue influence on a local authority to increase the rents of old houses by not providing the wherewithal for the new houses. Therefore, in respect of that new housing scheme the local authority must (a) get it from the local rates, which would be financially impossible, or (b) from a rent which would be beyond the capacity of the ordinary working man to pay.
I would refer the Minister to the second part of my question where I asked him whether he favours meeting any deficit arising by greater subvention from the Department or from increases in rents or rates. I submit that that question was not answered. I want to know which he prefers.
This deficit principle in respect of which there have been two distinct types of deficit has been of itself a cause of annoyance and trouble. It has been met by certain local authorities by subvention from the rates. I do not want to go into absolute detail on this matter, but there were cases in Drogheda town where rents on the same type of houses were different because the people who had got the subvention got two-thirds if they came from a condemned house or had, unhappily, an illness such as TB in their old house before they left it, but if they did not come from a condemned house, or from one of these priority classes, they got only one-third subvention. The unrest because of this was such that we had to meet the difference from the rates and reduce the rents of all the tenants in these schemes.
As a result of the Minister's circular of 30th March last, the accountant has produced what would be a viable situation for Drogheda town. In the same area of Balls Grove to which I have referred, there would be for identical houses a maximum rent ranging from £3 6s 2d to £4 19s 4d where the figures at the moment are £1 6s 3d and £1 9s 11d. I suggest this is undue pressue brought by the Minister, which cannot be condoned.
While the Minister by circular desires to force the hand of the corporation into increasing the rents of the old houses, there has not been over the past few years, since the new housing Bill was mooted—and that is quite a few years ago—any enthusiasm on the part of local authority officials to offer houses for tenant purchase. Therefore those tenants who brought out their houses some years ago are now "untouchables", whereas the other tenants who perhaps over the past four or five years have desired to buy out their houses are in the position of having the rents of their houses doubled. There is also the anomaly that because of the pressure on the local rates and because money was scarce, the repair and maintenance of old houses was minimal. It is found now that the tenant who spent a large amount of money improving the house which he has occupied for many years will have his rent increased, even though he has not been a burden upon the ratepayers.
To give an indication of what the trend is in these three sections of the Ball's Grove estate, I shall recount what happened in three instances. In the case where the cost of the house was £1,650, the rent plus rates at the moment stands at 34/5d per week. They are now moving to differential rents within that section. In section two where the cost was £2,070, the rent stands at 41/6d, including rates. If the rents on the new section were compiled by the same method as in the other two sections, the rent would work out at something like £4 10s, which no ordinary worker rearing a family in a provincial town can pay. What has been done is a stop-gap; for the moment the entire scheme has been placed on a differential renting system and we have turned aside from the idea of increasing the rents on the old houses. The result has been that section three will place an impost, unless something else happens, of 6/-in the £ on the Drogheda rates and the rents in the Ball's Grove estate will range from 19/- to 60/- a week, inclusive of rates. This means the hand of the local authority is being forced, improperly forced.
I hold that the idea behind the whole industrial structure here in the fixing of wages has been that from the Central Exchequer the industrial worker and his agricultural counterpart got his house at a reasonable figure. That meant, perhaps, that an easier settlement could be made with that worker from the point of view of the wages he felt he could expect. There is now a complete departure from that principle. No matter what the Minister may say the position is that his circular places local authorities all over the country in a position in which they have a choice and that choice is increasing rents on old houses in which the standard of accommodation is inferior and which have, in many cases, not been maintained properly because of financial stringency, up to a level approximating to those charged for new houses in which there are undoubtedly better amenities. Added to that is the fact that, where these old houses have been maintained, maintenance has been done by the tenants themselves.
I hold the Minister has not answered my question in a proper manner. I have tried not to be either antagonistic or destructive in my approach to this matter and I hope now the Minister will improve upon his answer earlier today.
