Dáil Éireann debate -
Tuesday, 23 Jul 1974

Vol. 274 No. 10

Committee on Finance. - Adjournment Debate: Local Authority Finance Statistics.

Mr. Molloy

I am grateful for the opportunity to raise this matter on the Adjournment. I was not completely satisfied with the answer given by the Minister to Question Nos. 7 and 8 today. I would like to point out that I am under a handicap in that the answer to the questions I put was given in the form of a tabular statement which was circulated after Question Time. I would like to record a certain degree of dissatisfaction about the fact that the answer was so given. The amount provided to each local authority was not shown. I only got the total sum. The figure I queried today is in relation to house purchase loans and supplementary grants.

The Minister in his Estimate speech last week said that the provision for local authority loans and supplementary grant schemes in 1974 was £20.85 million. The amount for a full year would be £27.8 million in 1974-75. On 19th July the Minister announced that there would be an extra £9 million bringing the total for 1974 to £29.85 million. That is for the transitional nine-month year ending on 31st December next. That is the figure which I received in reply to my questions today.

I asked the Minister the date on which the local authorities were informed of the allocations under the house purchase and supplementary grants headings. The Minister's reply, gave the date which has not been corrected since although I directed the attention of the secretary of the Ceann Comhairle's office to it and asked her to convey it to the Department of Local Government, as 8th June, 1973. In a note at the bottom it was stated they had not been informed at all. The Minister pointed out that under these headings £17.4 million was provided in the Estimates for 1974. He is adding £9 million to that to bring it to a total of £26.4 million. The Minister states that this would be £35 million in a full year.

The House will appreciate that this is an extraordinary turn about in the method of providing finance for the construction of private houses when one considers that the provision by the State last year under both headings was £25.49 million. It looks as if the figure will be in the region of £38 million this year, showing an increase of £13 million. I will refer to that figure later. Why did the Minister not refer in his Estimate speech last week to the inadequate amount of money which he had provided for the Local Loans Fund? In his Estimate speech last Wednesday the Minister stated that the Government had taken positive measures to provide finance for houses through an increased public capital programme. We were led to believe last week that the situtation was under control and that positive measures had been taken by the Government to deal adequately with the situation. In fact, the Minister went further and offered an insult to those who were concerned about the financial provisions being made for the housing industry by saying that people who were commenting on the housing industry should know better. Whose job is it to know better. He said they were misinterpreting statistics.

The day after that the Minister announced an extra £9 million for local authority housing loans. After not even four months of this financial year there is an admission by the Minister that something has gone wrong with his budget estimates for housing for 1974. It ill-becomes the Minister to refer in the terms he did to the people whom he felt should know better and who are commenting on his housing policy. These people have many pertinent questions to ask him. Why has the Minister not increased the maximum loans for local authority loans from £4,500? Why has he not increased the maximum income limit from £2,300? Why has he not taken action on the crisis in the building societies? One building society has gone out of business in this country.

I raised this matter on the Adjournment to ask the Minister to inform the House of the source from which this money is to be provided. The Minister's statement said that the extra finance would be provided by savings in other public expenditure. That is a vague sentence. This conveys nothing to the ordinary, intelligent person reading the statement issued from the Minister's office. It is incumbent on the Minister to inform the House where the cutback in expenditure is to be effected. He should tell the House whether the £9 million will involve a reduction in Estimates which have already been presented to this House for other Government Departments and were accepted by the House in good faith as firm Government commitments.

An Ceann Comhairle

The Deputy is straying into an area which is clearly the responsibility of the Minister for Finance.

Mr. Molloy

The Minister issued the statement which appertains to the question in that it affected the amount involved. The Minister is answerable to the House for whatever moneys are provided for housing. This comes under the Department of Local Government.

An Ceann Comhairle

The source of the money would be a matter for the Minister for Finance.

Mr. Molloy

The whole question has been raised by the Minister's statement in relation to savings.

An Ceann Comhairle

The Minister will have no responsibility in that matter.

Mr. Molloy

This is very relevant. It is not fair to interrupt me. The Minister made the statement. I did not make it. Any interpretation put on it does not lead one to a certain answer. If this affects areas other than local government it is a serious matter. If it affects other Government Departments it is also a very serious matter. If it is to involve a mini-budget in the autumn to raise £9 million for local authority loans, we are entitled to know what new taxes are to be imposed on an already overburdened public. We are entitled to this information. We are entitled to know where the money will come from. The records of this House now show that £28.5 million will be provided for local authority loans and supplementary grants in 1974. The House has not authorised the expenditure of all this money. This position is highly irregular and is in need of immediate clarification.

The Minister knows that the average gross price of new houses in the Dublin area for which loans were approved by all agencies in the fourth quarter of the year 1973-74 was £8,358—those figures were given by the Minister's Department—yet the maximum local authority loan still remains at £4,500. If a person's income is £3,300 approximately, he will qualify for a loan of £4,500. If his income is less, then he will get a lesser sum. People are being forced to make up the difference between the average price and a sum somewhere in the region of £3,500 and £4,000. They are being forced to go to the banks to seek a second loan at an interest rate ranging from 16 to 18 per cent. This is very dear money for people buying their own homes.

An Ceann Comhairle

I hesitate to interrupt the Deputy especially in a debate of a limited nature of this kind, but what he is saying does not relate to the question raised. He has strayed from the subject matter of the questions which I gave permission to raise on this Adjournment. He is seeking to broaden——

Mr. G. Fitzgerald

It is making money and——

An Ceann Comhairle

Deputy G. Fitzgerald must not interrupt the Chair. The Deputy has gone beyond the scope of the question altogether.

Mr. Molloy

I will come back to this if the Chair thinks I am straying from the question. I do not believe I am because all these matters are relevant. This is a very big field and I do not want to——

An Ceann Comhairle

If the Chair had realised that it covered such a very big field it would not have given approval to raise the matter on the Adjournment.

Mr. Molloy

The Minister knows that a solution to the building finance problem today will not be solved by allocating an imaginary sum for local authority loans. He knows also that there are houses lying idle. He knows, too, that there are threats to the building industry. In the past three weeks three building contractors have gone bust. I have already mentioned that one building society has gone out of business.

An Ceann Comhairle

This is not relevant to the question.

Mr. Molloy

The Minister has taken no action in the present difficulties to alleviate the hardships which are being experienced by so many people. His only comment was that the building societies' lending rates are still under review. In the present serious financial situation which has developed in the private house building industry there is the ironic situation of the Minister fiddling while Rome is burning.

The total house purchase loans and supplementary grants for the nine-month period is £29.85 million. For loans alone the Minister speaks of an amount of £35 million for the full 12-month period to the end of March next. Then there is the plus for the supplementary grants. If we put in a figure of £3 million for that, which would be a very small figure, there will be a total of £38 million for 1974-75. Last year an amount of £25.4 million was provided for grant-aided houses, local authority loans and supplementary grants. An increase of roughly £13 million is being provided by the State. That could be deemed satisfactory, and indeed acceptable, if this additional money was being provided by way of a Supplementary Estimate. Even with that assurance one could still question the housing policy of the Minister where an additional £13 million is being made available by the State to provide 750 fewer houses than last year. An ironic situation has developed. The official Government policy seems to be to reduce the number of privately constructed houses. The number of completions last year was 17,400. The target for this year, according to the Minister's figures, is 16,650. Therefore the Minister is aiming to reduce the number of private houses by 750 this year and a further 750 in the following year. This is a deplorable policy.

The Minister appears to be trying to upset an established industry with established traditions and practices. The industry had been experiencing continuous growth for several years. For the State to deliberately hinder that progress and set about a policy to reduce the number of private houses being built is deplorable and must be exposed. This is a threat to the men employed in the industry and is the real reason for the crisis which was deliberately brought about by the Government today.

On their own admission the Government, because of their interference, are now obliged to provide an additional £13 million. The end result of all this extra money is a reduction in the number of private houses being built. In his reply the Minister made no reference to the fact that he had increased by 1 per cent the interest rate on these loans. It is not referred to in my question or in the reply. I do not wish to dwell on it too long but I would ask the Minister to clarify for many people who had their local authority loans approved whether the increased rates of interest will apply to their approved loans, even though they have not yet received payment. If that is so I would ask the Minister to reconsider the matter rather than throw that burden on people who have budgeted for certain payments over the period ahead. As the Minister knows, most of them are young married people and this would upset their budget plans for the repayment of their loans. This would mean difficulties and hardship for them. I do not think the Minister should thrust that on them. The Minister's statement gave the impression that as and from a certain date—last Friday— any loans shall bear the additional 1 per cent. Some loans were approved six or seven months ago and the people are waiting for the first payment. It would be unfair to them if they were expected to pay the extra money.

Those are the points I wish to raise. I should like clarification of the additional £9 million which the Minister's statement, issued through the Government Information Services, deals with in a very vague manner. It was said in that statement that most of the additional money being provided now will be found from savings elsewhere in public expenditure. In an economy which is rife with inflation, where costs are escalating month by month and week by week, it is extraordinary that a Minister should suggest that he can effect savings to the extent of £9 million to provide money for an industry which is tottering on the brink of disaster. If this is the best the Government can do it is a sad reflection on the person who sits in the Minister's office at the moment and on each individual member of the Government——

An Ceann Comhairle

The Deputy must now conclude.

Mr. Molloy

The Minister was sniggering and giggling during the course of my contribution——

An Ceann Comhairle

The Deputy's time is up. I must now call on the Minister.

Mr. Molloy

——while the livelihood of many people is in danger. This behaviour ill becomes the Minister.

Minister for Local Government (Mr. Tully)

Over the last few weeks Deputy Molloy's contributions on this question of the housing programme have been funny. Tonight, they have been hilarious. He does not even know the simple rudiments of how housing is financed. He has juggled with figures which obviously he does not understand and yet, he expects to be treated seriously. As a matter of fact, over the last week-end I saw a newspaper report where he was asked about the £9 million and his comment was: "Of course, I knew it was not going to be drawn". Somebody who knows as little about finance as all that would be much better if he did not try to recover the mistake he made last week because we know why this question is down on the Adjournment. He thought he was going to pick his own time to come in on the debate on the Department of Local Government; obviously he did not want to come in for one reason or another.

Mr. G. Fitzgerald

On a point of order, is the Minister allowed to attack a Deputy personally in this House?

An Ceann Comhairle

Deputy G. Fitzgerald, please leave these matters to the Chair. The Deputy ought not interrupt in such an unruly fashion in a debate that is limited.

Mr. G. Fitzgerald

Is the Minister allowed to make personal attacks on a Deputy?

An Ceann Comhairle

If Deputy Fitzgerald persists I shall have to ask him to leave the House. This is a limited debate. Deputy Molloy had 20 minutes; the Minister has less than ten. I am appealing to Deputy G. Fitzgerald's ingrained sense of fair play to cease interrupting or leave the House.

Mr. Tully

Then he decided he would try to get in on this debate by asking to raise this matter on the Adjournment. He seemed to say with one voice that, of course, there was extra money being provided, a lot of extra money being provided. He then said: "the supposed £9 million" but he was not quite sure whether it was going to be provided or not. Then he talked about a Supplementary Estimate. I am afraid that perhaps I led him into that today during Question Time because of course, there is no Supplementary Estimate required. This £9 million represents non-voted capital expenditure. Therefore, the question of a Supplementary Estimate—as Deputy Molloy will probably understand— does not arise at all.

Mr. Molloy

Why did the Minister say there might be a Supplementary Estimate?

Mr. Tully

Deputy Molloy asked so many questions which had very little relevance to the matter.

Mr. Molloy

Where is the money coming from? That is all I want to know.

An Ceann Comhairle

Will Deputy Molloy please desist?

(Interruptions.)

Mr. Tully

The non-voted capital moneys for which I am responsible are for local authority housing, house purchase loans and supplementary grants, sanitary services, environmental and other services. The total expenditure on these services has jumped from £47,640,000 in 1972-73 to £98,210,000 in the current 12-month period. This of course, is the figure for 12 months equivalent to the nine months. The fact is that the Government have, in two years, provided for a doubling of the expenditure on these services. But we have Deputy Molloy coming in here tonight complaining. He talks about the building industry falling down, on the brink of collapse. I would suggest to Deputy Molloy, that, during the recess, he should check on the debates of last year when he said exactly the same thing. Despite the fact that he said this, we built 6,500 houses more than the best Fianna Fáil ever did, and we paid for them too. Deputy Molloy's petty little prodding here in this House——

(Interruptions.)

Mr. Tully

——will not injure the building industry because, despite the fact that perhaps he has a closer association with the building industry than I have, I know a heck of a lot more than he does.

Mr. Molloy

The Minister ought to say out fairly and squarely what he is hinting at.

An Ceann Comhairle

Deputy Molloy ought not interrupt. The Deputy had 20 minutes without interruption.

Mr. Tully

If the cap fits Deputy Molloy he ought to wear it. If it does not, he should not bother putting it on.

Mr. Molloy

Where is the money coming from?

Mr. Coughlan

Oranmore.

(Interruptions.)

An Ceann Comhairle

Order, please.

Mr. Tully

When acount is taken of the other services—in answer to Deputy Molloy's question—that is, road grants, local improvement schemes, amenity grants and of the voted provision for housing grants, the total, including the non-voted capital mentioned earlier had gone up from £70 million to a total of £129 million. That is an increase of £59 million——

Mr. Molloy

Where are the £9 million coming from? That is the question I came here tonight to ask the Minister.

An Ceann Comhairle

Deputy Molloy, please.

Mr. Molloy

That is why I came——

Mr. Tully

Perhaps we will raise the beer tax and collect a little more on it. The position is that despite——

Mr. Molloy

Where is the money coming from?

Mr. Tully

Despite what Deputy Molloy is attempting to say, the building industry did very well last year; better than they did ever before. They themselves told me that so far this year they have done better than they have ever done before and they agree that they can trust this Government to make available whatever money is needed to keep them going.

Mr. Molloy

That is an untruth because I know what they said to the Minister.

An Ceann Comhairle

I must ask Deputy Molloy to desist. I gave you the right to come in here on the Adjournment and not to shout down a Minister when he seeks to reply.

Mr. Molloy

On a point of information——

An Ceann Comhairle

Please, Deputy Molloy, time is precious on this debate, as you know. Please resume your seat.

Mr. Molloy

Am I entitled to ask a question on a point of information?

An Ceann Comhairle

Usurping the Minister's time.

Mr. Molloy

Am I entitled to ask on a point of information?

An Ceann Comhairle

No.

Mr. Molloy

I thought Standing Orders allowed any Deputy to raise a matter on a point of information.

An Ceann Comhairle

The Deputy is usurping the Minister's time, which is grossly unfair. I will permit him to raise a question if time permits at the end but not now.

Mr. Molloy

Just two seconds——

An Ceann Comhairle

No. Resume your seat, Deputy. Resume your seat, I will permit you to raise a question at the end.

Mr. Tully

It is quite obvious from the antics of Deputy Molloy that he knows he made a fool of himself coming in here tonight. He knows he is not able to make an argument here in favour of what he has been blathering about. That is the only description I could give it.

Mr. Molloy

The people who know know.

Mr. Tully

I do not mind what Deputy Molloy was told by those who may be close to him in the building industry. They told me they were satisfied and the Deputy can tell them that tomorrow morning if he meets them. The same people told me they were satisfied that the building industry was doing well and they were satisfied that this Government would again provide the necessary money.

Mr. Molloy

The Minister would say anything to get out of a hole.

Mr. Tully

I am telling the truth and if Deputy Molloy learned to tell the truth occasionally it would do an awful lot of good.

Mr. Molloy

The Minister ought address his remarks through the Chair.

Mr. Tully

But we have this situation where Deputy Molloy feels he can come along here, and I do not know who he thinks he is impressing, and say that the building industry has gone to the wall.

Mr. Lemass

Untrue.

Mr. Tully

Deputy Molloy came along and said: "You will not do it this year". Despite what both Deputy Molloy and Deputy Lemass say we will build our quota of houses this year. We are providing——

Mr. Molloy

Where are the £9 million coming from?

An Ceann Comhairle

Deputy Molloy, this is grossly disorderly.

Mr. Tully

The £9 million are being provided by this Government and they are not running away from it as Fianna Fáil did and do not let Deputy Molloy or anybody else try to tell me——

(Interruptions.)

Mr. Tully

They did not give two damns if all the workers in the country were unemployed as long as it suited them. As far as we are concerned, we are going to keep that industry going. If Deputy Molloy is so anxious to have the limits and amounts increased why did the Government of which he was a Minister do nothing about it for 15 or 16 years?

Mr. Molloy

We did not have the inflation there is now, with house prices gone up £3,000 in some cases.

Mr. Tully

The Deputy does not want to hear the reply. I can give this assurance as far as the building industry is concerned—they have nothing to fear.

The Dáil adjourned at 11 p.m. until 10.30 a.m. on Wednesday, 24th July, 1974.