At a time when we have the dubious banner of being at the top of the EEC inflation league, with prices rising more rapidly here than even in Britain, with the inflationary rate in the building industry at 32 per cent, this type of argument has no relevance. It would be an insult to the intelligence of the people. We are entitled to a constructive reply. The continued repetition of this type of case will indicate to me, and I am sure will also indicate to the public generally, that the Minister simply wants to cloud the issue so that he can put on the long finger the very necessary action which must be taken by him and indeed which should have been taken by him long ago.
The two main planks in the Minister's case have been that he built more houses annually and he spent more money on the building and construction industry than was the case under Fianna Fáil. He seems to conclude from this that he has done his share. Be that as it may, the fact is that during Fianna Fáil's term of office the building industry was in a healthy condition. There was steady progress with increasing employment whereas today there is a decline with all the signs that the decline is accelerating. In normal times this would be a serious situation but in the highly inflationary abnormal times in which we are living it can be a disaster.
I now point to the factors which are causing anxiety because they show clearly a downturn in production which is having a detrimental effect on employment both in the industry and in auxiliary industries. Cement sales have always been regarded as one of the best indicators of the output of the construction industry. There is a particular reason why cement should be a good indicator because, unlike most materials, it cannot be stored indefinitely on a building site. The builder, therefore, orders cement only as he needs it and his current orders for cement reflect his current intention in regard to work.
It is not possible to distinguish the sales of cement for house building as distinct from other sectors of the industry but for the purpose of the case I am making the total sales on the home market are what matters. The sale of cement in 1973 was about 1.6 million tons which was an increase of 13 per cent compared with 1972. We left office in 1973, but it is only fair to say that even the most biased supporter of the Coalition would have to concede that this increase must be attributed to the building work in hands at that time and to the preparatory work being done on other schemes of houses and construction work generally in our last year of office. It is interesting to note that in 1974 the sale of cement on the home market fell to 1.56 million tons, a drop of 3 per cent and that since the second quarter of 1974 there has been a continuous decline in the amount of cement sold. In February, 1975 as compared with February, 1974 there was a decline of 12 per cent in the sale of cement on the home market and in March, 1975, the latest month for which I have figures available, there was a decline in the sale of cement, compared with the figure for March, 1974 of 36 per cent. Certainly that gives food for thought. When we come to judge the health of the building and construction industry, these are the really significant figures. The fall in sales of cement, which was very significant in February and March, 1975, underline the employment situation.
I shall now deal with this aspect of the matter. Since August, 1974 there has been a continuous drop in the number of persons employed in the private sector of the industry. It is worth nothing that this sector accounts for 75 per cent of the employment in the construction industry.
In April, 1974, there were 62,119 persons employed while, in April, 1975, the number had dropped to 56,802. If we take note of the number employed in that sector of the industry in April, 1974, the drop of 5,317 is a very serious matter indeed. The week before last we castigated the Minister for Industry and Commerce because of his failure to protect the footwear industry, and rightly so, pointing out the serious loss of jobs due to lack of initiative and effort on his part. When we take note of the fact that the number who lost employment in one year in the building industry is greater than the total employed in the whole footwear industry, we begin to appreciate the magnitude of the loss in employment. The reason that the volume of protest in the case of building workers is less is that they are scattered around the country in relatively small groups, and have not the same strength to be found in a more closely-knit working force.
Just as I protested on behalf of the footwear workers here, on a previous Private Members' Motion, I protest now in the name of the building workers. We, in this party, demand that the Minister take immediate and effective steps to alleviate their condition. Might I point out also, as I did previously in a supplementary question that these include both skilled and unskilled workers.
Let me now deal with the problem of unemployment in the building industry. To put it mildly, the trend in this respect is very depressing. In March, 1974, 13,509 building workers were listed as unemployed. In March, 1975, the latest date for which I have figures available, the number had increased to 19,887, which is a rise of 6,378. This is practically a 50 per cent increase in unemployment in one year. Since April, 1974, the pattern has been very clear. Month after month more and more building workers became unemployed. There was no sudden increase in the numbers unemployed; there was a steady erosion over that period. It was clear to everybody what was happening. On site after site, men were being let go in a steady stream. Yet over that long period the Minister continued to assert that there were no problems in the industry. We were deluged from every possible publicity avenue with figures of 25,000 and 26,000 houses. As I said before the Minister with the help of a well-oiled, politically orientated misnamed Government Information Bureau bombarded our people with these figures. I will admit that, for a time, he succeeded in lulling the unthinking into the mistaken belief that all was well, while thousands of unfortunate building workers were being handed their cards and were joining the queues outside the employment exchanges, forgotten completely by the Government and by the Minister for Local Government whose responsibility they are. At the same time the Coalition continued to bask in a rather euphoric type of acclamation from those who did not understand the position then but who I have no doubt understand it now.
The cruel fact of the matter is that whatever the number of houses built, 20 per cent of the total direct labour force of building and construction workers is unemployed today and no playing around with figures will change that one bit. These are people trying to exist now on social welfare, at a time when the inflation rate has reached a fantastic level. It is high time the Minister accepted the facts so apparent to everybody else and did something to help these workers back into employment.
In a speech the Minister made during the week he used selective figures to show that there was an increase in the number of workers employed building local authority houses. That was completely misleading and of very little assistance to the unemployed. These are workers who simply were transferred from private schemes to local authority schemes. Might I also add that the very increase mentioned by the Minister was neutralised on the same day, in the same newspaper, by the news that one single building and construction firm had cut its workforce from 2,093 to 991.
I have dealt with the fall in the sales of cement in the home market and with employment and unemployment in the industry. I have shown that there is a general contraction in the industry. There are, of course, other indicators of the malaise in this industry. There is less demand for materials, for timber, for concrete, bricks, chipboard, PVC piping to name but a few. The result is that many factories producing building materials and requirements have introduced short-time working and many of their workers have been laid off. Due to a slackening of business, builders' providers have cut back their staffs. It should be noted that the unemployment figures I have given relate only to those directly employed in the industry. Were we to add the numbers who lost employment in ancillary industries and in shops which retail building materials, then the number of unemployed would be very much greater. Evidence of the statements I have made relevant to unemployment in the industry, and ancillary industries, can be found in the annual reports of the public companies engaged in the industry and also in the CSO employment and unemployment statistics.
I have given the facts. The Minister and the Government continue to insist that there is no problem in the industry. It is high time they faced up to their responsibilities, accepted the situation and took the necessary remedial steps. Of course, were I to judge by the attitude of the Minister for Industry and Commerce in respect of the boot and shoe workers, I could not be very confident that the Government would do very much to help. Economists and others experienced in such matters all accept the beneficial effect of a resurgence in the building industry. I have no doubt that if the Minister faces this in a realistic way, very considerable benefit can accrue to the economy generally.
I have concentrated on the general situation in the industry. In a nutshell the picture presented can be described as reduced demand and, as a result, much smaller numbers of people employed; a Government which completely fails to face reality assisted by a hard-working publicity machine which has succeeded in focusing the attention of the public on certain aspects resulting in a complete overshadowing of the real position. I hope I have, by my contribution today, pierced the propaganda bubble to some extent. If I have I will feel I have been of considerable service to those who are at present unemployed in the industry.
The Minister claims to have built over 26,000 houses in 1974-75. I do not propose to query these figures as such. That would be an exercise in futility and would not change attitudes—some would believe it and some would not. However, I must point to the fact that there was a consistent fall in the sales of cement over the same year. There was a large fall in the numbers employed in the building industry over the same year; sales of building materials were drastically cut back. Unemployment increased considerably in ancillary industries and in the retail stores. Allied to this, the Minister—when opening the Childers Estate at Dungarvan, in reply to critics who claimed that there was serious unemployment in the house building sector, said that house building accounted for only 40 per cent of the total output of the construction industry.
My interpretation of that statement is that the Minister was saying in effect that employment in the other sector of the construction industry was all right and would counterbalance any loss there was in the house building industry. If this interpretation is correct and if the Minister's statement that he built more houses in the local authority area than ever before is a fact then clearly the area that is in real trouble is the private house building sector. It is in that area that most of the workers have lost employment. Having stated that much it is for the public generally to come to their own conclusions.
To get back to the figure claimed by the Minister of over 26,000 houses completed, as I said I do not propose to query that, but I am saying that even if these figures were correct, they do not in the circumstances represent any exceptional achievement. The efforts of the Minister to boost his own figures by comparing his figures with an average of the number of houses built over a five-year period by the Fianna Fáil administration shows that he does not really regard it as a real achievement. This effort by him points to an element of uncertainty and doubt in his mind which forces him to make the best comparison possible instead of simply relying on his own figure or making a proper comparison such as comparing the 1973-74 with the 1972-73 figure.
The Minister's comparative figures take the form of 25,000 houses built by him in 1973-74 as compared with 14,000 houses averaged over a five-year period of the Fianna Fáil administration. There is no way of legitimately comparing a single figure with an average figure. Let me also add, that it is equally true that there is no way which the Minister could have completed 25,000 houses in 1973-74 had they not been in the course of erection or in an advanced stage of planning while Fianna Fáil were in office.
Perhaps an analogy, which may in a sense be a personal one, comes to mind, that is the claim of the Minister for Education to have reduced the pupil-teacher ratio in 1973 and 1974 without any reference to the fact that the Fianna Fáil administration was responsible for the extra teachers. Of course neither the Minister for Local Government nor the Minister for Education would worry about making his claim over such awkward facts as that.
I did not propose to devote much of my time to that aspect of the matter but as the Minister for Local Government has devoted so much propaganda effort to it I should at least put the real facts on record. The real facts are that 25,365 houses were completed in 1973-74 under the present Minister and 21,647 houses in 1972-73 under the former Minister, Deputy Molloy. There is much more to it than that. Further facts are the basis of the present critical situation which faces the industry.
In 1971-72 15,921 houses were completed. In 1972-73 21,647 houses were completed, an increase of 36 per cent. In 1973-74 25,365 houses were completed and the rate of increase had fallen to 17.2 per cent. Last year, 1974-75, there were 26,509 houses completed, an increase of less than 5 per cent over the previous year and if one is to judge by the hints and the leaks and by the kites that are being flown the number of houses to be built next year will be in the region of 25,000, which would be a reduction on the previous year. It is well to note that during the Fianna Fáil time in Government there was a progressive increase in house building and a firm foundation was laid at that time for the 25,000 houses.
During the Coalition term of office the fall in the percentage increase has been quite considerable and this, in my view, is the basic cause for the present critical situation and for the rising unemployment in the industry. Anybody with any knowledge of industrial development knows that steady consistent planned growth, at whatever level, is vital to the health of the industry and there is no such thing as standing still and retaining your position. Once the growth stops decline sets in. If the Minister fails to recognise that and fails to make money available the situation will become progressively worse.
Whatever inflationary millions the Minister may quote for housing finance is now the major problem in the industry. It is a problem which has been facing it for the past year. Without finance builders cannot build. Without finance individuals cannot buy houses. Without purchasers builders will not build. Again, speaking at the opening of a housing estate in Dungarvan and later in the Dáil, the Minister said that he would not provide local authorities with all the money they had applied for for local authority housing because they had not the necessary preparations made to enable them to spend it.
I think, knowing the situation as he did in relation to unemployment generally the Minister should have seen to it that the proper preparations were more advanced. In any case his statement seems to imply that even if he had more money available to him at this point he would not be able to use it in that sector. That is one reason we emphasised private house building in the motion. The private sector of house building on which we must rely to quite an extent to provide increased employment is greatly in need of finance to overcome the critical problems facing it.
The average cost of a house purchased by means of a loan from a local authority is £7,500 and I take those figures from the quarterly bulletin. If this house is purchased from a speculative builder the State grant is included in the price. The purchaser to be entitled to a supplementary grant must have an income of less than £1,950 and if he is a man with a family of a certain number the limit is £2,350. Now, if we assume that the purchaser is a family man and he is entitled to a supplementary grant, then the net price of his house will be £7,175. The maximum local authority loan available to him is £4,500. To purchase the house he must find £2,675. His income qualifying limit is £2,350 so that the balance to be paid on this house is greater than a year's salary and, of course, I do not have to state that this is absolutely unreasonable.
The question now arises as to where he will get the £2,675. I note in a booklet, A Home of your Own, issued by the Department of Local Government emphasis is laid on savings as the key to house purchase and I agree, generally speaking. Is it likely that a family man earning less than £2,350 would be able to save more than his own annual salary? If we stretch our imagination to the limit and assume that he saves £1,000—mind you, this is some assumption at the present time on an income that is less than £2,350 —the question arises as to where he will get the remaining £1,675. If he is lucky and there is a credit union functioning in his area he may get some of it there but in the main he is thrown back on finance companies. Banks, as a rule, are not willing to lend money for this purpose. Even if they did the position would not be much better. The finance company loan is always short-term with a very high interest rate and the repayment of principle and interest is backbreaking. The repayment on a £4,500 SDA loan is something over £9 per week but the repayment on the remainder of the money is exceptionally high.
When we raised this matter on previous occasions the Minister's counter argument to this case has always been that all the money which was made available for SDA loans was fully taken up and that, therefore, there was no need to increase the loan levels. Of course the simple answer to that is, at a time when the unemployment situation is so desperate in this country, to say to the Minister that he should increase the amount of money available and if the present allocation is fully taken up then obviously if more money were available the extra money would also be taken up and very particularly so if the loan level were increased.
Of course, we are all fully aware of what the Minister wishes to imply in the answer he gives but what he is saying in effect is that if all the money made available for SDA loans is taken up by purchasers or people building their own houses with income limits of £2,350 and with maximum loans of £4,500 why increase either?
If people, in such circumstances, take up these loans then surely they must be satisfied with the situation. Of course, the answer to that particular query is that where a man with a family is concerned the hardships these conditions impose on him are exceptional and grossly unfair. The efforts to meet the total rent bring pressures to bear and the resulting stress and strain cause severe anxiety and worry and sometimes cause the marriage to break up. Families are sometimes deprived of proper meals because of the outlay on the house, with detrimental effects on the children's health. Sometimes the wife must go out to work or continue to work after marriage. I have no objection to married women going out to work if they so desire but I have a decided objection to wives having to go out to work because of economic necessity. It is the business of the State to ensure that the necessity will not arise, and where the State fails in a matter such as this it is failing in a constitutional obligation. Making better loans available would help to discharge this obligation.
On many occasions we stressed the fact that the loans were too low. This is not the first time that we have proposed to the Minister that they should be increased. One might ask why people put this type of burden on their shoulders. Of course, the fact is that they have no alternative if they are to have a home of their own. The number of houses built by the local authorities is about one-third of the total number of houses completed each year and, therefore, for many people the alternative to waiting for a considerable number of years for a house is to provide one for themselves through loans and grants. In effect, the Minister is failing, on the one hand, to provide sufficient local authority houses and, on the other, he is keeping loans and grants at such a low level that people are forced into going ahead with the house even at the expense of spending years afterwards struggling even to exist.
I want to stress that when I am talking about the price of a house I am talking about the house alone and not the furniture and other necessities. I should like to ask the Minister to explain an important matter relating to the financing of local authority houses which has arisen from the figures within the Quarterly Bulletin. The Quarterly Bulletin of Housing Statistics of 31st December, 1974, gave total expenditure on housing in 1975 at £101.55 million, including £51 million for local authority housing. A footnote there states that these figures do not include the additional £7 million for local authority housing which was stated to have been made available since the budget. The March figures in the Quarterly Bulletin should therefore read: total expenditure, £108.55 million, including £58 million for local authority housing. In fact, they read: total expenditure, £104.55 million and for local authority housing, £54 million. I should like to know from the Minister where is the missing £4 million.
Some time ago I asked the Minister, in a Dáil question, the average percentage increase in the price of all houses serviced for loans from all lending agencies from May, 1973, to 31st March, 1975. The figure he gave me was 37 per cent. On the same day the Taoiseach gave me a figure in relation to the construction industry, generally of 58 per cent. There is a discrepancy here. However, if we deal only with the 37 per cent how can the Minister possibly, in all justice, continue to hold that the loans and grants introduced in May, 1973, can still be adequate in June, 1975, when the increase in costs must now be 40 per cent at least? How can he claim, if he regarded £2,350 as the maximum income to qualify for a local authority loan in May, 1973, that this is still sufficiently high when he is fully aware of the enormous increase in living costs since then? To enjoy a standard of living equal to that enjoyed by a person with an income of £2,350 in May, 1973, today one would need a greatly increased money income. In effect, the Minister is debarring from SDA loans many people from a category who were entitled to loans two years ago. It is not just or fair that this discrimination should be continued.
With regard to those who are borrowing from building societies—the building societies need more money —one of the big problems facing them is that because those with over £2,350 per annum have no alternative but to borrow from building societies an inordinate amount of their income goes out on housing each week. If we were to assume that the weekly repayment is £15 per week and the income about £45 per week, which is roughly the figure of £2,350, then 33? per cent of their income goes on housing. This is very unreasonable. I noted from some research I did that in America they regarded 15 per cent of the income as being reasonable to spend on housing and above that needed some assistance.
I have shown that all the indicators point to a downturn in the building and construction industry with a consequent grave effect on employment and the hopes of many who are anxious to build or buy their own houses. The Minister stated at the opening of the Childers estate in Dungarvan that the full claim by the local authorities for money for housing would not be granted because the sum sought was more than the local authorities should possibly spend. If this is so then we gave him advice about six months ago and on many other occasions as to where extra money could be used to the benefit of the person who wished to build his own house and to the benefit of the building worker. We suggested that the Minister put more money into private housing. So as to encourage more people to buy their own houses, to build their own houses and to put more people into employment, we advocate a number of things. Firstly, we propose that the loan limit be increased to £6,000. I have heard an objection to this proposal and, indeed, the Minister referred obliquely to this during replies to supplementary questions.
The objection was that the borrower would not be able to pay back the interest rate on the principal because the total would be too high. Of course, this argument might be valid if a new house could be built for £5,000. But the fact is that a new house cannot be built for less than £7,500 and, therefore, the borrower must look for more than £2,500 over and above the local authority loan. I stress that this extra money he needs does not include furniture or other necessities. The combined payments in such a case would be far and away above the repayment on the £6,000 SDA loan.
We are also proposing that the qualifying income limit should be increased to at least £3,000. I do not think there is any need for me to justify this when we consider the violent increase in living costs. We advocate that all new house and reconstruction grants should be increased by 50 per cent. With regard to the building societies the existing mortgage interest rates should be reduced by the removal of income tax liability on building societies. Fianna Fáil believe that there should be a fundamental reappraisal of the whole area of housing finance, and we are doing just that.
There is a serious unemployment problem in the industry and in auxiliary industries. Repeating again the number of houses built and the totals of money spent by the National Coaltion does not alter this situation. We are proposing that a worth-while injection of money should be made into the construction industry with emphasis on the private housing sector to ensure that the unemployment situation will be improved and a guarantee to many people who are in need of houses and who are anxious to buy or build their own houses that they will be able to do so. More money, of course, must also be made available for general construction purposes, to build more schools, more Garda stations and to erect more factories. More money must be made available for water and sewerage purposes, for road building and so on.
I suggested previously that, in this architectural heritage year, we should invest in labour intensive work of reconstructing old buildings and converting them to other uses. I do not have to go into the advantages of increased spending in the building industry. Apart from the fact that it would increase employment quickly, it has the added advantage that the main raw materials are home produced. This, at a time when we have balance of payments problems, is something which should weigh heavily with the Minister.
In prevailing circumstances if the Minister takes the various proposals we have put forward and puts them into effect, they will have worthwhile effects on the building and construction industry and on the economy generally.
