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Dáil Éireann debate -
Wednesday, 3 May 1978

Vol. 306 No. 2

Private Members' Business. - House Building Costs : Motion.

The following motion was moved by Deputy T.J. Fitzpatrick (Cavan-Monaghan) on Tuesday, 2 May 1978:
"That Dáil Éireann expresses alarm at the unreasonable increase in the cost of house building and deplores the Government's failure to take remedial action".
Debate resumed on the following amendment:
To delete all words after "Dáil Éireann" and substitute the following:
"expresses confidence in the steps taken by the Government to regulate house building costs".
—(Minister for the Environment.)

I intend to do something which the Minister did not do yesterday and that is stick to the facts, which are very startling. It was revealed to me today by way of written answer that, whereas we were expressing concern yesterday at the rate of increase in house prices the true depths of that increase and its horrific dimensions were not fully appreciated.

In the six months from June, when the Fianna Fáil Party were elected, to the end of that year the price of houses increased at an annual rate in excess of 40 per cent. That figure is made up of an increase in the price of new houses of 21.5 per cent from June to December and in the price of secondhand houses of 21.1 per cent.

These are not my figures. They are the Government's figures. They lead me to one conclusion only. Not merely is there no control on the price of housing or the rate of increase, but there is no interest in controlling or even being apprehensive about the rate of increase. On the contrary, I suspect there is pleasure in some Fianna Fáil quarters at the rate of increase which is militating against young couples all over the country and is in direct conflict with the promises of the now Government party at election time when they said in their manifesto they would give people an opportunity to buy houses and make it easier and cheaper for them to keep their houses.

The Deputy did not believe that, did he?

It is on record. I am dealing with facts. I want to reiterate that the increase in the price of new and secondhand housing is unprecedented in the history of the State. Even in the worst days of recession in the decades since we got our independence, the highest percentages I can discover were considerably lower than in excess of 40 per cent on an annual basis. That is the current fact. No amount of evasion, argument or diversion of attention will take away from that fundamental fact. It is a scandalous fact.

A second fact is that within three months of the £1,000 grant scheme coming into operation, it had been totally eroded and the cost of new, and secondhand houses which it did not concern, had increased by in excess of £1,000 per house. Within three months the £1,000 grant, that wonderful Utopian gesture which was held out to couples all over the country, was meaningless. On 5 June in the Sunday Independent, and in many other papers, there was a full page advertisement under the benign and smiling eyes of the now Taoiseach which said Fianna Fáil would give a £1,000 grant to first time house purchasers. It is there in black and white. It was in copies of the manifesto issued all over the country. It was not in the official manifesto, a limited number of copies of which were printed.

It was in the Fianna Fáil Party paper.

It was said by their spokesmen and couples all over the country were deceived callously and deliberately into believing they would get a grant of £1,000 as soon as Fianna Fáil were in Government, in many cases to help them with their deposit. They were lies. This was one of the most inflationary gestures in relation to houses in the past number of years. The outcome was to put into the pockets of certain Fianna Fáil builders very substantial sums of public money.

There are mercenaries associated with Fianna Fáil and they rule the roost. They are now reaping the harvest of the support they gave prior to last June. There is no concern in that party about the rising cost of houses. If there were, the Minister would have made some gesture to show he was concerned about it and to show he meant to take action about it. Instead, he fell back weakly and defensively on his record. The record is there for all to see, an annual rate of increase in excess of 40 per cent.

Deputies need not take my word about the £1,000 grant scheme. One of the principal spokesmen, a member of the executive committee of the Construction Industry Federation was quoted in the Evening Herald of 21 March this year as saying that ironically the system which was intended to help first-time buyers had turned around to act against them. He said they found there were major problems involved in the administration of the scheme and they were unhappy with the way it had worked so far. He said more, but time does not allow me to quote him. What did he mean by that? He meant that, although there are approximately 11,000 applications before the Government, a paltry number of hundreds have been paid out, usually after enormous effort by a variety of people often including public representatives.

This must also be considered in the context of an extraordinary tightening up on the issue of certificates of reasonable value which I find questionable and which should be looked at more closely. The strategy in the White Paper dealing with housing is clearly calculated to encourage more people away from the local authority sector— a legitimate aspiration if they so wish— into the private sector, not to create more homes but to create more profit for people whose roots are in Fianna Fáil. This leads me to one conclusion. Leaving as much political bias out of it as any party politician can, any reasonable person must conclude that if we are witnessing a rate of increase of the order which I not only suggest but state as a categorical fact on the Government's own figures, there must be a full public inquiry into the soaring cost of house building in order to defend home owners, decent builders who are entitled to their profits and who are creating jobs, and people who are publicly concerned, such as we on this side of the House. Nothing less will suffice.

There can be no justification for that rate of increase. It will not taper off. Only last week we heard the head of a major building society say in resigned tones that there will be a similar increase over the next six months. There is no reason to believe the mercenaries in Fianna Fáil who are holding the reins at present will let go for a considerable time. A vast rip-off is going on and people are pocketing vast sums of public money. By my estimate as much as £10 million to £11 million has gone into the pockets of major builders associated with Fianna Fáil.

If that is not the truth I want the Minister to deny it and to explain how prices have increased by in excess of 40 per cent. There is no explanation for it. When you take the various strands together, when you look at the reneging on the promise given to young people to give a grant to first time house purchasers, young people who want to live here, who want to believe in parliamentary democracy and who, I have no doubt will now want to join the Fine Gael Party or the Labour Party, you realise they were misled shabbily and callously.

The only way to clear the air is to have an open inquiry into where the money is going. No responsible politician and no responsible builder will fear such an inquiry. We do not. I wonder can the Minister say the same. The White Paper on national development has been quoted occasionally. I want to say very sincerely that the references to housing in it are not accidental. They are part of the Government's strategy. Some months ago I was naive enough to feel it had a misguided social bias. Now I see a deeper level of meaning for the increased scrutiny which local authorities will be requested to apply to housing applicants. In the White Paper I see part of a strategy not to further boost home ownership by decent couples trying to establish a fundamental constitutional right but to put more money in the pockets of certain people. It is shoddy and shameful. If the Minister wants to deny anything I have said, I will be very pleased to hear him.

I should like to support the amendment which the Minister moved last night. The facts and figures quoted by him on that occasion showed how equivocal was the basis underlying the motion and, to any fair minded person, would have vindicated the amendment.

Deputy Fitzpatrick and Deputy Keating expressed consternation at the scale of the increases over the past year in the cost of house building and tried to convey the impression of a Government completely complacent at this trend. Obviously the sponsors of the motion did not relish the facts presented by the Minister, especially that during the year ending 31 March 1978 the house building cost index rose from 145.5 to 160.4, an increase of only 10.2 per cent compared with an increase of 22.2 per cent in the 12-month period ending 31 March 1977 and an unprecedented 36 per cent in the first year of the last Coalition Government.

Does the Minister have to go back that far?

One cannot beat the truth.

Imagine going back to the first year of the Coalition.

Deputy Keating finds these facts so unpalatable that he dismisses them as history. If he cannot listen to the truth he should leave the House. History remains on the record for future reference.

It is clear that the Deputies opposite have taken only a superficial glance at the trend in new house prices. Since the change of Government last July, new house prices have increased by approximately £2,500 on average. By introducing the £1,000 new house grant and raising the loan limit under the SDA scheme, the Government made available an extra £3,500 for most SDA cases. Deputies Fitzpatrick and Keating failed to recall what happened between 1973 and 1977. Let me refresh their memories. Between June 1973 and June 1977, the average price of new houses for which loans were approved by the main lending agencies increased by about £7,500. During that period the Government failed to increase the SDA loan limit by a penny; they made no adjustment in the new house grant and they imposed stringent income and valuation restrictions on eligibility for their new house grants.

Deputy Fitzpatrick last night selectively quoted the increases recorded in the house building cost index for the second, third and fourth quarters of 1977. He conveniently ignored the fact that in the first quarter of 1977 building costs went up by 7½ per cent—an all-time record for any period of three months.

At no stage have the Government sought to cloak the way in which house prices have increased during the past year. The facts are in the records published by my Department. As the Minister pointed out yesterday, house building costs cannot be considered in isolation. In particular, trends in the level of housing costs must be considered in relation to the normal outgoings on the part of a house purchaser and the level of his income. Over the past 12 months the average income of adult male workers engaged in transportable goods industries has increased by about £700 a year.

The average gross price of houses for which loans were approved during the quarter ended 31 March 1977 was £13,500. The interest rate on loans advanced by building societies at that time was 13.95 per cent, so that over a repayment period of 25 years a purchaser receiving a 75 per cent loan would have to pay £1,467 a year. The average price of new houses for which loans were approved in the quarter ended 31 December last was £15,784, an appreciable increase, but interest rates charged by building societies had decreased in the meantime to 9.5 per cent, so that loan repayments on the basis of a 75 per cent loan would have decreased to £1,247. It is highly relevant also to remember that since the beginning of the present year and in pursuance of their election manifesto the Government have ended the rates burden on residential property. This is an important aspect of the situation.

There is no question of the builders of any grant-type houses or flats making exorbitant profits because the price of each dwelling has to be submitted for scrutiny to my Department and a certificate of reasonable value issued before the grant is payable.

They are not being issued at the same rate.

I should like to repeat the advice which the Minister gave yesterday to house purchasers to make sure that they see the certificate of reasonable value before committing themselves to purchasing a house and also to make sure that they are not paying more than the price approved on the certificate. This advice cannot be repeated too often.

They are not issuing certificates.

They are being issued faster than the Deputy thinks. There can be no doubt that the CRV system has had a beneficial effect on house prices since its introduction. Since the beginning of the present year alone it has resulted in reductions in proposed house prices totalling some £200,000—savings secured for house purchasers. Yet that figure, impressive though it is, is by no means a full measure of the effectiveness of the controls. Builders have been compelled to adopt a more disciplined approach to costing and pricing their houses because they know that prices which are unreasonable or unjustifiable will not be approved.

And the consumer pays stamp duty as a result.

One cannot have it both ways. In addition, the controls have been instrumental in persuading many builders to adopt fixed prices— not including price variation clauses in the contract—while the house building cost index and the fact that price variation charges may be subject to Departmental scrutiny have helped to ensure that purchasers are not being exploited under these clauses.

Deputies Fitzpatrick and Keating alleged that the CRV system is being used to avoid paying grants and that there is a cut-back in the number of CRVs being issued to achieve this end. Nothing could be further from the truth.

Taxes are being collected by not issuing them.

Deputy O'Toole will have his opportunity later.

There is no basis whatever for this allegation. In the first four months of this year 692 certificates were issued compared with 474 in the same period last year—an increase of almost 50 per cent. These are facts and figures which are in the records and they can be checked. In those four months the average time between the receipt of a properly documented application for a CRV and the issue of a decision was 21, 17, 21 and 16 days respectively. Steps are being taken by my Department to increase the professional staff dealing with applications for CRVs in order to process the applications more expeditiously. In the light of the Deputies' allegations I have had a random check made on current applications for new house grants. This clearly establishes that only an insignificant proportion of applications are held up because a CRV has not been issued.

Deputy Fitzpatrick suggested that land speculators are circumventing the CRV controls by selling sites to small builders at exorbitant prices; these builders then establish the price they have actually paid and base their applications for CRVs on that consideration. While considerable weight is given by the Department to such evidence, it is not necessarily accepted if, for instance, the site price is considered to be unreasonably high having regard to other information available regarding site values in the same or a comparable area. Therefore, if a builder pays an exorbitant price for land he cannot assume that this will automatically be accepted in full for CRV purposes.

Why not control the price of building land?

While site prices are increasing this trend should be put into proper perspective. A comparison of CRV applications made about three or four years ago and some current ones shows that the developed site cost as a percentage of the total price remained at about 23 per cent in both instances. This is a very interesting statistic. During the recession site costs remained fairly static despite rapid inflation and, therefore, lost real value.

Deputies opposite have cast doubts on the effectiveness of the £1,000 house grant, and they have been particularly critical of the long time the grants have been taking to mature for payment. Let me give a few figures that will indicate what has been happening. Since the scheme was introduced last July and until the end of April 1978 more than 11,700 applications for the grants were received; 6,672 have been approved and 1,794 have been paid. Many more are in the course of payment. The rate at which payments are being made has been growing steadily, and last month alone 570 grants were paid.

Not in my constituency. They have not been paid in an inner city constituency for second-hand houses.

The Deputy should not interrupt the Minister. He had his opportunity to speak last night and he should not interrupt now.

The Minister is being provocative, but I shall try to restrain myself.

I have every confidence that the £11 million provided in the Estimate for the scheme will be spent by the end of the year. If Deputy Keating or any other Deputy has a problem in relation to a grant application I shall be very glad to discuss the matter with him and we can then sort it out.

The experience in regard to the flow of payments following the introduction of the new scheme of grants is exactly the same as that which occurred in 1932 when Fianna Fáil launched a new scheme of housing grants. Only 803 grants were paid in the first year of operation, but that number quadrupled in the following year and was 4,777 in 1934-35. Again, when Fianna Fáil promoted the Housing Act, 1948, which greatly increased the existing housing grants, the number of payments in the following years grew sharply. History is repeating itself now. I have no doubt that the £1,000 new house grant scheme is a fabulous scheme, and it will provide a tremendous incentive in the coming years for people to build their own houses.

Deputy Fitzpatrick criticised the fact that the grant is not paid until a house is completed and occupied. He raised this issue previously when speaking on the Vote for the Department of the Environment. It is a condition that the house must be for the applicant's own occupation and the applicant must be qualified in so far as he has not previously built or bought a house for his own occupation, so payment cannot be made until the house is occupied. However, the arrangement should not give rise to any appreciable hardship. It is common practice for applicants to arrange to have the grants paid to them c/o a bank or a builders providers. Banks normally will facilitate house purchasers to the extent of the £1,000 once the applicant produces a copy of the certificate of approval and agrees to authorise payment being made c/o the bank.

Will they get that service free?

I have told the Deputy that he should not interrupt.

Deputy Fitzpatrick condemned the provision in the Finance Bill, 1978, which enables the Minister to make inquiries from the Revenue Commissioners in checking on the eligibility of applicants for the £1,000 grant. There is nothing exceptional about this provision.

It is absolutely new.

A similar power is contained in the Social Welfare Acts. It is not the intention that the tax returns of every applicant will be checked systematically. The provision is intended only to give the Minister power, in the occasional case where he may have doubts about an applicant's eligibility, to inquire whether his tax record confirms that he did not purchase or build a house previously. The ordinary applicant making a truthful declaration has nothing whatever to fear from this provision. There is absolutely no evidence that eligible persons are foregoing the grant on this account, as alleged by the Deputy.

Concern was expressed last night at the drop in recent months in the net inflow of funds to building societies. It is true that there has been a drop but nevertheless the inflow for the January-March 1978 quarter at £21.3 million was well up on the total of £17.8 million in the corresponding quarter last year. The inflow of £5.7 million in February 1978 was disappointing. This increased to £5.9 million last month, and present indications are that the level of inflow will pick up somewhat to reach a total of £7 million for this month. As the Minister indicated last night, the position in this respect is being kept under review.

Listening to Opposition Deputies one might conclude that the Government should increase public capital expenditure on housing. Looking back at their own record, we find that total public capital expenditure on housing dropped from £115 million in 1975 to a miserable £99 million last year.

What has that got to do with the 40 per cent increase in costs?

The Deputy must have regard to the facts. This year the Government have increased the provision for public capital expenditure on housing by over £41 million as compared with last year. That is a significant amount in any language. Surely it is not being suggested that additional moneys should be provided from the public purse? The provision of such moneys might well tend to over-heat the situation and to generate further price increases.

Of course the Opposition do not mention that house completions this year will probably be about 2,000 up on last year and show an increase of more than 2,500 on the level of completions achieved in 1976. So far this year new house completions are more or less on target. During the first quarter of 1978 an estimated 6,730 dwellings were completed compared with 5,673 in the corresponding period last year. This trend is encouraging.

Housing output generally represents about 40 per cent of the total output in the building and construction industry. Nobody will dispute the fact that the industry is in a healthier state now than it has been since 1973. To illustrate this point, I should draw attention to the trend in domestic sales of cement, which give a good general indication of the state of the building and construction industry from time to time.

On a point of order, while the Minister is making a very fine speech on housing and the Department of the Environment I do not think he is dealing with the motion, which concerns house price increases.

The proposer of the motion dealt with housing and all its aspects. I tried to stop him but I could not. I do not think I should try to stop the Minister or any other speaker doing the same so long as they are dealing with housing. I do not think Deputy O'Toole was here when the proposer of the motion spoke, but he covered the full ground of housing.

He did it very well.

I am not saying whether he did it well or not. It is not up to the Chair to comment on whether he did it well or not.

That is all right as long as I get the same latitude.

In 1977 home sales of cement increased by 1.1 per cent compared with 1976. Sales for the period from 1 January up to 23 April are a massive 16.8 per cent up on the corresponding period last year. The latest year on year increase is 8 per cent. The case for pumping more state money into house building or indeed the building and construction industry over and above that provided in January last has not been established. There is no better criterion than the sale of cement. Any such action would not alone push up house prices but would also create rather than solve other problems in the industry.

The Deputy again raised the now familiar phrase of the Coalition for local authority housing based on their misrepresentation of or inability to interpret what was said in the White Paper on local authority houses. I can assure them that their lament is premature. The local authority housing construction programme is alive and doing remarkably well. We came into this year with 8,962 dwellings in progress, compared with 8,281 at the end of December 1976.

The number of men employed on the programme at the latest date for which returns are available, 28 February 1978, was 6,454. This shows an increase of 664 on the 5,790 employed on the corresponding date last year. Yet we are supposed to have run down the local authority programme. Since the Deputy appears to be claiming that the increased number of houses in progress at the end of last December was somehow attributable to the efforts of the previous Government, I might emphasise that the number of houses in progress at 31 July 1977 was 8,159. By 30 September 1977 it had risen above 9,000 and stood at 8,862 by the end of last December.

It is no harm, however, that Deputy Keating seems to have woken up to the fact that there has been a change of Government and that private housing is once more getting proper encouragement and emphasis. I think it well to spell out again for him and for other Opposition Deputies who persist in reading what they politically want into the White Paper reference to local authority housing that no decision has been taken to run down the local authority programme; that, on the contrary, the PCP allocation this year is a full 9 per cent up on 1977; that the design of the houses being built and the quality of the construction has never been higher; and that increased emphasis is being given to the total housing environment, not just the houses, in planning new schemes.

One other matter needs clarification. Certain press reports, which appeared today, of comments which a CIF spokesman, and the manager of their National House Building Guarantee Scheme are alleged to have made about NBA schemes, seem to imply faults in design and low standards in the houses being provided by the National Building Agency. I should make it clear that the quality of the design and construction of NBA houses being built at present is the best in the history of the State, and is generally superior to most comparable private housing schemes.

I have, naturally, a special interest in Kerry. There have been public comments too about the inadequacy of moneys made available to Kerry County Council for their housing programme. Taking account of the high level of existing commitments nationally, the special provision made for the local authorities in the Dublin area, and the consequent tightness of the balance available for new work, Kerry County Council have done reasonably well.

I do not think that Kerry County Council comes into this motion.

(Interruptions.)

The Minister is only following the lead given by the previous speakers.

I did not refer to Kerry in my remarks.

No, but the Deputy went a long way into Dublin. The Minister of State without interruption.

I know the Minister fully appreciates the degree of housing needs in Kerry and is most anxious to give them more capital when the resources are available. Deputy Keating had not the correct figures when earlier this evening he claimed that house prices increased by an annual rate of 40 per cent between June and September 1977. The average gross price of new houses for which loans were approved by the principal lending agencies increased from £14,306 in the April-June quarter to £15,784 in the October-December quarter, representing an increase of 10.2 per cent or an annual rate of 20.4 per cent.

I believe that the motion put down by the Opposition was put down in haste and without due consideration given to it. It was badly timed. Obviously they did not check their facts; they did not check the records; they did not take into account the effect which the £1,000 grant is having on the house building programme in general. They did not take into consideration the substantial increase in loans being made available by local authorities now under Fianna Fáil. They did not take cognisance of the fact that when they were in Government and had a chance to do something about it they did a most despicable thing on 1 January 1976 when they withdrew, without any notice whatever to the public, grants for the vast majority of our people who would be building homes for themselves despite the fact that many of those people had their application forms filled, had got planning permission, had their applications fully documented and were ready to submit them to the then Department of Local Government for approval. They found out that there were no grants available for them. That was the most despicable thing that was ever done in the history of housing in the country.

Fianna Fáil commenced the housing grants programme in 1932 which led to revolutionary changes in the building of houses in the country. It led to an increased number of houses being built at a greater rate year by year. It is now a question of history repeating itself. I have no doubt that this year and in the years to come we will see more houses being built by both the public and the private sectors.

I should like to speak in this debate more to the amendment put down by the Minister for the Environment than to the Motion put down by my colleague in the Fine Gael Party. The Minister is not a year in office, and I accept that in a fourlap race coming round the last bend for the first lap one is only beginning to show form.

The Minister's amendment and the wording of it are the grounds upon which the debate should be fought. When the Division Bells are rung the back alley here will suddenly fill as the top of the canyons fill with Indians coming out in the sun apparently from anywhere and everywhere, so the decision is not in any doubt.

A Deputy

Eighty-four greased wheels.

The Deputy did not have to grease them.

Deputy Quinn is in possession. He should be given a chance. They are 84 Deputies: they are not greased wheels.

Let me take away any possible insult implied in that.

Deputy Quinn did not use the expression, as far as I know.

The Minister has called the ground upon which he wants to debate this. He talks about confidence. He expresses confidence in the steps taken by the Government to regulate housebuilding costs, and last night he spent most of his time raking over the coals of history. The Minister of State, who is leaving the Chamber now, talked about history repeating itself. Since the completion of the quotation is, "Once in tragedy and the second time in farce", I suggest to the Minister that I will deal with his record on the basis of what he and his colleague in Government do. If he wants to talk about the past let us swop places. I will go back to the Seanad, the Minister can come back to this side, and we will talk about what was happening in the past on that basis.

We are dealing with the here and now and with the promises of a Government who have a massive democratic mandate. The members of my party and I know what we did in Government and we make no apology for that. We are dealing now with the Minister who has responsibility for it, and he is asking us to express confidence in his ability and that of his Government to regulate house prices.

I do not believe it is possible to operate any governmental system without some attitude to social values, and in order to find that values system in the present Government I went sequentially through the documents that would be relevant to that. The manifesto upon which the Government obtained a mandate—though they had not indicated that they were going to change the name of the Department—contains a statement on page 26 which I quote:

A forward looking and socially committed Department will be the centre of our Local Government policy. An immediate injection of an extra £30 million for the building and construction industry will create 5,000 new jobs in the first year of Government. Because Fianna Fáil believes that as many families as possible should own their own homes, it will be made easier to buy a house and——

wait for this:

——cheaper to keep it.

That is what they said before they got in. In the White Paper National Development 1977-1980 the phraseology is pretty much the same. The priority of concern was also the same. “Infrastructure Development” is the title of section 5 on page 41 and we start, not with a socially committed Government or Department, but first the building industry, then housing, then private housing, and then local authority housing. On page 42, paragraph 5.7 they state under “Private Housing”:

It is the Government's policy to help and encourage as many as possible to provide their own homes. Finance for house purchase loans is now more readily available than it has been for a long time and interest rates generally are much lower. The new £1,000 grant for first time owner/occupiers of new houses will considerably ease the other major problem of potential house buyers, namely the raising of a deposit.

That should sound familiar. I continue:

The Government believe that in the period to 1980 private sector institutions must continue to provide the bulk of the mortgage finance needed for private house purchase.

Finally, in terms of getting some indication of what the Government's policy is, the Minister in his Estimate speech on 9 March reported in the Official Report, Volume 304, column 1227, stated, and I quote:

It is a basic tenet of the Government's housing policy that as many families as possible should be helped and encouraged to provide their own houses.

Not many people in this House would disagree with those suggestions, but we are being asked tonight, in effect, to express confidence in the Government's ability, through their policy of regulating housebuilding prices, to achieve the objectives outlined in those three statements which, taken sequentially, run over a period of approximately nine months.

What did we get last night from the mover of the amendment? We got nothing of that. We got figures. Now I am neither a Minister O'Donoghue nor a former Minister Garret FitzGerald. I have to see figures in black and white before I can do my sums fully, and I do not think I am abnormal in that regard. We did not get anything from the Government side or from the Minister that would give me any confidence to suggest that he has the ability to regulate house prices. We got no analysis of the housing market, no analysis of housing demand, no analysis of what the population increase is, of what the headship rate is, of what the regional breakdown of that headship rate is, of what the impact of that headship on a regional basis is likely to be in areas of rapid urban growth. Therefore we do not know in real terms what the demand is.

We know, taking a quotation from another section from the White Paper on national development that the estimates, going back to an NESC publication, talk in terms of something between 21,000 and 28,000 necessary to satisfy housing demand. I have seen a similar aggregate figure produced for the Dublin region expressed in terms of what Dublin Corporation and Dublin County Council refer to as the Dublin sub-region. I defy any public representative in this Chamber to relate the achievements of those aggregate figures to the endless housing queues that will arrive at any one of our clinics, and then to say to somebody, "You will be housed on the basis of aggregate demand being supplied. Mind you, it will not be on the basis that you need it, but it will be supplied nevertheless".

The words of the Government policy were about houses and homes. Making a house into a home needs a certain number of factors to be available, and I will return to that point. The Minister who moved this amendment gave us no analysis of what demand for housing is in real terms and no kind of breakdown of that demand. I would be the first to admit—with regret— that we did not have a 1976 census, the first figures of which would now be coming through and which would provide some of that. For a Government who are so full of ideas about creating new jobs something parallel to the 1975 Labour survey might have done this job and would have given us some indication—particularly in the key areas of growth which have already been identified—as to the real extent of the demand.

The Minister can come back to me on that and say that local authorities effectively, by processing their housing applications, have a fair assessment of what the housing demand is. I would say "Not so" if that is going to be the reply, because it is dealing with only one-third of satisfied demand at the best of times. If you take a figure of 24,000 houses, and indeed if you go to the figure that is likely to be built this year of 26,500, it is less than one-third. We are being asked by a Minister to vote confidence in him on the basis of his ability to regulate house prices. We get no profile in his speech of what the demand is.

The other component is the costs. We get no analysis of what constitutes housing costs or of the factors which go up to make them. There is more involved than merely the building costs. Last evening we were given figures in regard to the house building index but with respect I might say that we were not given much that made sense. Housing costs include the cost, self evidently, of land, labour and materials. In these days of increasing urbanisation and rapidly expanding suburbs there are involved also, if one talks about turning a house into a home, transport costs and the cost of providing neighbourhood facilities.

I would have thought that a Government that aspired to regulating building costs and to turning into reality the social objectives outlined in the manifesto and upheld in the national development plan, would at least begin to try to do the sums in regard to the costs involved. One would have thought that a Government that were so endowed with the benefit of a think-tank in Opposition plus the benefit of many years' administrative experience of Government would have been able to start attempting to assess what the real cost is of providing houses. I am not talking merely of four walls and a roof but of all the other factors such as serviced land, schools, churches, neighbourhood centres and so on.

In my innocence I asked a question of a Minister who, strangely, is very silent these days. Does anybody remember the Minister for Economic Planning and Development? I asked that saviour of the soldiers of destiny the following question as reported at column 1300 of the Official Report for 9 March:

.... if his Department have undertaken any studies whereby the cost of providing housing in expanded suburban areas can be properly compared with the cost of providing infill housing in existing built-up areas.

The Minister said that the reply was in the negative, and I shall not waste the time of the House repeating the remainder of his reply since most of the members were present then anyway. The Government do not know the relative cost in toto between suburban housing and infill city housing but they say that the high cost of inner city housing and the subsidies it entails must be subject to critical review, that the high cost of inner city housing cannot be carried on indefinitely. I could put on the record the precise wording from the White Paper but I shall not use my time in that manner.

I should be fascinated to hear the Minister tell us how it is proposed to have a critical review of something in respect of which the Government have not had the full picture. How can they review critically the cost of providing one form of housing as against another?

We have the information and we are undertaking the review.

Perhaps when the Minister for Economic Planning and Development comes out of hiding and is told that the winter is over, he may revise or redraft the national development plan.

The Minister is not hiding. He has been on official business for the past week.

(Cavan-Monaghan): He is not around as often as he used be.

Until such time as the Department affirm authorship for that report I will not level it at the door of that Department. The question was addressed to the Minister for Economic Planning and Development and the answer came from him. The net effect of that kind of review, in the absence of adequate facts and figures, will put off the provision of such housing. In my quotation from the manifesto I referred to Fianna Fáil's objective of trying to keep down the cost of running a house. If you push people out to the suburb to areas where there are no facilities and over a stretch of inadequate roads for which CIE have increased their fares recently by 20 per cent, you are not reducing the cost of housing. An example of what I mean relates to Dublin County Council's development plan. This is a county council that is due to grow in terms of population size from a base figure in 1971 by 300 per cent by 1991; that is the scale of growth and the demand is being aggravated by forcing housing into the suburbs on the basis of totally inadequate costing. Families going to live in those new suburbs find that there is need to build a church and a primary school, and in real terms this requirement for each family in an area of 5,000 people or 1,200 families per the county council's development plan based on the Share figures for the Dublin archdiocese is £1,000 per family based on 1972-73 figures.

These, then, are some of the factors that are involved in the real cost of housing, but these factors were not recognised in the reply given to me by the Minister for Economic Planning and Development on 9 March. Neither was there any indication last night from the Minister who is responsible for regulating house prices that he is aware of these factors. Yet, he asks us, by way of amendment, to vote a motion of confidence in his ability to regulate house building costs. How can we vote confidence in anybody who appears not to know the full equation?

If I am doing the Minister an injustice I shall be happy to be corrected. It is early days yet. We are not out of the first lap of this year, and if the Minister has information that will answer some of the questions I have asked I shall be very glad to hear them. The problem is on too large a scale for us to be playing party politics with.

What is the social impact of what has occurred since Fianna Fáil were returned to power in terms of their housing policy? I would suggest that there has been an impact in two areas among many. The abolition of rates on domestic dwellings makes for cheaper running costs for all houses. That was a popular move. Perhaps in terms of the necessary reform of an updated system of property taxation it was long overdue, but its immediate effect was regressive in terms of the redistribution of wealth. They abolished car tax on cars of up to 20-horsepower but people owning cars of a greater horsepower than that would hardly need help.

That is not correct.

I accept the correction. I am making the point about the net effect of the parcel of housing policy provided by Fianna Fáil, that my assessment—and I do not believe enough dust has settled to fully assess it—is that it has been inflationary in terms of the immediate input, in terms of the capital cost of housing. The shift of resources in real and absolute terms away from the local authority sector into the private sector and in some cases into the private sector that did not need it——

Correction again. That did not happen. There are increased allocations this year——

(Cavan-Monaghan): Not at all. They were houses we started.

Let us not have an argument. Deputy Quinn is in possession and he has about eight minutes left.

The net effect of the car tax measure plus the rates has been inflationary, but there has been another measure, or another lack of decision from the Minister, which also has disastrous implications for the cause of keeping the running costs of houses within a socially acceptable range. I am paraphrasing the objective of the manifesto. I am referring to the draft regulations for builders. The Minister, in the perfectly reasonable ideological choice that he and his Party made, decided that the private sector should be boosted, a perfectly reasonable choice if you happen to represent the private sector. I would have thought that the least the Minister could have done would be to ask that the private sector house building section maintain, if not increase, the standard of housing insulation that is applied to local authorities, and that he would have brought into effect much sooner the draft building regulations, because outside some major urban areas there are no building bye-laws regulating the construction of houses.

If I may contradict myself and just refer to the fact that the Minister in his role as Opposition spokesman was extremely vocal on the question of energy and energy conservation and indeed was a very good spokesman in that field, it is my regret that he seems to have forgotten a lot of what was said when he occupied these benches and talked about such a policy. In terms of energy conservation and consequently of attempting to attain the objective of keeping down the cost of housing, two decisions, one a positive one and the other an omission or non-decision of the Department, to date have directly resulted and will directly result in increased energy costs which are a component in running any house whether you are travelling to or from it or whether you are trying to keep it warm, and that is going to make it dearer to live in your own house and that is not keeping down the cost of houses.

The Government are asking us to vote for an amendment in the name of the Minister for the Environment expressing confidence in their ability to regulate house prices. The Government have demonstrated since they came into office their clear bias in favour of the private sector. I would have thought that the least we could have expected from that Government would be some understanding of the way in which the housing market operates and that the least we could have expected from a Minister, not of Local Government but of the Environment, would be some overall analysis, first of all, of the problem and, second, concern and, finally, would it have been too much to expect that some of the social objectives outlined in the manifesto might have been readily demonstrated by concrete policy measures? They are absent. I regret that they are absent because I do not think that housing lists are a political football. The kind of mentality that wrote the section on housing and on local authority housing contained in the national development document is the mentality in real political terms that has never had to face a young couple and try to explain to them why they must continue sleeping in a bedroom at home with a brother and sister in it in the interests of national development.

The Minister for State at the Department of the Environment talked about history and the great role of the Fianna Fáil Party in terms of housing.

In 1932.

My colleague, Deputy Corish, refers to 1932. My parents were not even married in 1932. Nineteen thirty-two is a long time ago and the recent history of the role of housing within the Fianna Fáil Party is not one that I would boast about in terms of what was done in the early 60s.

I will conclude by saying that we are faced with a population growth of totally unprecedented proportions relative to the collective experience of this House. One does not have to be a professor of economics to realise that that growth will have an extraordinary impact on the demand for housing and that that impact, in an open market situation, where the private sector is encouraged, will create havoc with the cost of houses. Some of the components of housing supply such as serviced land and materials and uncontrollable items such as the weather, as the Minister recognised in his Estimate speech last year, are factors which cannot be turned on like a tap. The net effect in a squeeze market will be rapidly escalating prices in the kind of society that we unfortunately have and which Fianna Fáil are happy to operate whenever the market comes to play on something as basic as housing, which is enshrined in the United Nations declaration as a basic human right. When the market gets its hands on that commodity it is always the poor and the weak and the defenceless who go unhoused and who have to wait until the private sector has been accommodated first. I do not know where it is written down that that should be. I do not know what law or what divine right says that that is how it should be, but that is the way it happens, and this Government in what they said tonight, in what the Minister said last night when moving this amendment, and in what they have done since they came to office, have given no indication whether with regard to land prices, with regard to controlling the cost of materials or with regard to seriously and responsibly operating the CRV system, that they will in any way change that market system. They are doing it at a time when the country's population is growing at a rate we have never seen before. How can we have confidence in a Government to regulate house prices when we have already seen what they can do before the first lap is over?

I would like to express my confidence in the Minister, in the measures he is taking and in those he will take in the future. Deputy Quinn has said that Fianna Fáil promised to make houses easier to buy and cheaper. I would refer Deputy Quinn for a start to some of the measures which have been taken by the Minister. He has stimulated the building industry and, therefore, we will have more houses in this year—26,500 in 1978 is the target. He has provided more finance. He has indicated that the amount of the SDA loans will be increased from £17 million to £39 million, an increase of £22 million this year, and that building societies project an increase of £30 million—a total increase of £52 million for housing from those sources alone in the year.

The Minister has also given assistance to the first time house purchasers with the £1,000 grant. He has helped those buying houses through SDA loans by increasing the amount of the loans to £7,000 and the income limit to £3,500. He has made it cheaper for houseowners to keep their houses because he has abolished rates. Building society interest has been reduced and SDA loan interest has been reduced from 12½ per cent to 11½ per cent. The cost of electricity which comes into these houses has been reduced, ground rents are being eliminated and existing ground rents have gone virtually. The CRV indicates the Minister's intention in this sphere of activity. I say "well done" to the Minister. He has made an excellent start and we can have every confidence in him.

In regard to the future, Deputy Quinn said we should not look on these matters as a political football. I will not do that but I would have expected to have heard from Deputy Quinn some constructive suggestions if he has not been looking at it as a political football. I was glad to hear the Minister say he will give us a review of the situation in his Estimate speech. My main concern is in relation to first time purchasers on low or moderate incomes, in particular those who will be buying houses in the £8,000 to £16,000 bracket. The present SDA loan of £7,000, plus the grant of £1,000 and, perhaps, savings of £1,000, give a total of £9,000.

I suggest that the Minister might consider bridging the gap between that £9,000 and the present average house prices by looking at the possibility of a two-tier system of home loans for people with incomes of less than £5,000. There could be SDA loans of, say, £3,000 on a fixed interest rate for 35 years, with building societies or other financial institutions providing the balance. Such a system will be needed in the future. Though I have every confidence in the effectiveness of the steps the Minister has taken, I suggest that he would consider the possibilities I have been putting forward.

It is important that the full burden of the increased SDA loans should not be left on the State. I suggest that the financial institutions should be asked to contribute to a home loans fund and that they would be helped to contribute to the administration of such a fund through a home loans board. I was glad to hear the Minister saying last night that he will examine the Kenny Report on the price and availability of land and that he intends to take any practical steps he considers feasible. He has made an excellent start and I am confident that he will continue along those lines.

Despite what the Minister of State has said, this motion, to which my name is appended, was put down in a serious manner as a result of the unreasonable rate of increases in house prices. I am intrigued by the Minister's amendment, which states that confidence should be expressed in the Government and their ability to regulate house building costs.

Some months ago in the House I sought without success to have housing included in the ambit of the Consumer Information Bill, now an Act. Vague reasons were given for my lack of success. The end result is that houses and housing costs have been increasing at an alarming rate. We have been accused of dealing in fiction. No later than today, as Deputy Keating has stated, the percentage increases—I am quoting from an official reply given today—in the average gross prices of houses in the Dublin area for which loans were approved by the main lending agencies since June 1977 was 8.8 per cent in the case of new houses and 8.6 per cent in the case of previously occupied houses in the three months ending 30 September 1977. In the following three months the percentage increases were 12.7 and 12.5 respectively. Information in respect of the quarter ending 31 March last is not yet available, and God help us when it becomes available. I have been reading from an official reply, and I put it to the Minister of State, not now here, that it is far removed from the increases he suggested.

(Cavan-Monaghan): Or from what the Minister suggested yesterday evening.

This official reply told us of the enormous increases in house prices. Indeed there was a misprint: one percentage was given as 2.7 instead of 12.7.

We corrected it.

We are grateful for the correction. The figures speak for themselves. Housing is a very serious area of activity for any Minister or for the people of any society because of its far reaching social implications. On assuming office the Minister stated— it had been already stated in Fianna Fáil's manifesto—that as far as it was possible people would be encouraged to own their homes. In this country we have a proud record of house ownership. We have the highest percentage of home owners in any country probably in the world. It has been a tradition with us. Encouraging people to own their homes is a worth-while aspiration, but encouraging is only part of it. Forcing them is a different matter—forcing people who are not capable of meeting the financial demands of agencies to pay for these homes. That is what I object to, and the Minister cannot deny that force is being applied. By virtue of the fact that he has ploughed millions of pounds into the private sector, the public sector is paying the price, the price being a reduction in public sector housing, social housing. I will quote two or three examples from figures given by the Minister in a tabular reply some weeks ago.

I am glad the Minister of State is here now because one of the examples I will give concerns his county. The demand in County Kerry for work to be started before 31 July is £1.017 million and the allocation made is £470,000. In my county—in case the Minister of State would think the Minister for the Environment had anything against him—we looked for £969,000 and we have been told we will be getting £290,000, less than one-third of what we need. It shows that the money being pumped into the private sector is costing the public sector dearly.

The total allocation to Kerry is £1.6 million.

That money is to finish off the work begun by people who were on that side of the House and who are now on this side.

Should they have been left unfinished?

Deputy O'Toole should be allowed to speak without interruption.

I agree. Deputy Woods mentioned interest costs and the ESB. Deputy Woods is an intelligent man who knows exactly why the rate of interest came down and ESB rates came down. It was not because of any effort on the part of his colleagues but because of world trends in world markets and changing money values. The Minister for the Environment smiles. Does he believe his colleague, the Minister for Industry, Commerce and Energy, who stood up in those benches and said that, as a result of consultation with the board of the ESB, he was proud to confirm a reduction of 5 per cent? We all know that 5 per cent reduction came about as a result of forward purchasing by the ESB.

And fuel oil.

And fuel oil. These are facts concerning the rate of interest of the ESB. When we were on that side of the House we were castigated for holding down the level of SDA loans to £4,500. I looked up the records. The main problem according to the Opposition was that the unfortunate house purchaser had to make up £2,500 to £3,000, which represented the shortfall between the SDA loan and grant and the cost of the actual house. I took myself away from here for an hour and a half today. I visited three auctioneers' premises. Deputy Woods mentioned a figure which I will now confirm. I must have checked some 20 or 30 houses in the three different establishments. The average three-bedroomed semi-detached house is selling in the region of £14,000 to £16,500. When one looks at the £7,000 —this enormous amount of money now given as a loan—what is the shortfall? One is talking of a shortfall of £7,000 to £9,000. This is what has happened, and the Minister and his Government do not seem to know this is what has happened and is happening. The increases taking place now are going very quickly beyond the reach of the ordinary person who should, and I emphasise this, be really looked after by what I call social housing. These are being forced into these £15,000, £16,000 and £17,000 houses because the Minister simply does not care and will not provide social housing. Remember, the National Coalition Government provided on average 25,000 houses per annum, and that at a time when the country was in the middle of a very, very severe world recession.

We are providing houses.

We are told these are fine days and we never had it so good. Actually the Government should be providing one and a half times the number of houses we provided. If the concern so loudly expressed in certain documents were implemented we should be talking now of 28,000 to 38,000 houses. These are not being provided, and unfortunate purchasers are forced into £15,000 and £16,000 semi-detached houses, people who should be going into local authority housing.

As a public representative I am sure the Minister has come across applicants for this famous £1,000 grant. We know now that so many obstacles are placed in the way of these applicants that this grant is of no use to them.

What are the obstacles?

Many potential applicants are even scared to apply. The reason is because the Revenue Commissioners have now been directed in the Finance Bill to stick their fingers in the pie. People will become aware of that next week when the Finance Bill comes up for discussion here.

That is completely misleading.

The fact is the Revenue Commissioners may provide information to the Minister of State in respect of applicants for this £1,000 grant, and that information is in respect of houses they may have previously owned.

What is wrong with that?

It is breaking the confidentiality that should exist between the Revenue Commissioners and their clients. That is utterly wrong. The aim obviously is to frighten off people who might apply for this grant.

That is not so.

If they have nothing to hide they need have no fear.

Deputy O'Toole, without interruption.

The Minister has said that he is investigating the possibility of implementing some portion of the Kilkenny report. This is welcome information, and such an investigation will be worth while, but I am not so sure that it will be welcome to his colleagues, and they will probably act much more swiftly now than they intended. The Minister of State said that because builders had to pay high prices for land they need not assume they will get a CRV. In yesterday's business section of the Irish Independent we had a case where the board——

On a point of order.

——of a certain company purchased land from their chairman who happens to be a Member of this House and a colleague of the Minister.

Deputy O'Toole should not bring in matters which refer to the ordinary business of any Member of this House.

It is public knowledge.

(Interruptions.)

Such matters should not be discussed in this House and that is that.

Surely public matters are matters of concern to all.

They may be. They can be referred to without bringing in personal matters relating to Members of this House. Would Deputy O'Toole please conclude?

On a point of order.

The Minister of State, on a point of order.

To put the record straight, what I said was that if a builder——

Deputies

Sit down.

(Interruptions.)

The word "automatic" is very important.

(Interruptions.)

Will Deputy O'Toole please conclude?

The only effort made at price control in housing is the non-issuing of CRVs which means that the applicant must pay more stamp duty.

Amendment put.
The Dáil divided: Tá, 72; Níl, 45.

  • Ahern, Bertie.
  • Ahern, Kit.
  • Allen, Lorcan.
  • Andrews, David.
  • Andrews, Niall.
  • Aylward, Liam.
  • Barrett, Sylvester.
  • Brady, Gerard.
  • Brady, Vincent.
  • Briscoe, Ben.
  • Brosnan, Seán.
  • Browne, Seán.
  • Burke, Raphael P.
  • Callanan, John.
  • Calleary, Seán.
  • Cogan, Barry.
  • Collins, Gerard.
  • Conaghan, Hugh.
  • Connolly, Gerard.
  • Cowen, Bernard.
  • Cronin, Jerry.
  • Daly, Brendan.
  • Davern, Noel.
  • de Valera, Síle.
  • de Valera, Vivion.
  • Doherty, Seán.
  • Fahey, Jackie.
  • Faulkner, Pádraig.
  • Filgate, Eddie.
  • Nolan, Tom.
  • Noonan, Michael.
  • O'Connor, Timothy C.
  • O'Donoghue, Martin.
  • O'Hanlon, Rory.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • Fitzgerald, Gene.
  • Fitzpatrick, Tom (Dublin South-Central.)
  • Fitzsimons, James N.
  • Fox, Christopher J.
  • French, Seán.
  • Gallagher, Dennis.
  • Gallagher, James.
  • Gibbons, Jim.
  • Herbert, Michael.
  • Hussey, Thomas.
  • Keegan, Seán.
  • Kenneally, William.
  • Killeen, Tim.
  • Killilea, Mark.
  • Lalor, Patrick J.
  • Lemass, Eileen.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Leonard, Tom.
  • Leyden, Terry.
  • Loughnane, William.
  • Lynch, Jack.
  • McCreevy, Charlie.
  • McEllistrim, Thomas.
  • Meaney, Tom.
  • Molloy, Robert.
  • Moore, Seán.
  • Morley, P.J.
  • Murphy, Ciarán P.
  • O'Malley, Desmond.
  • Power, Paddy.
  • Reynolds, Albert.
  • Tunney, Jim.
  • Walsh, Joe.
  • Woods, Michael J.
  • Wyse, Pearse.

Níl

  • Barry, Peter.
  • Barry, Richard.
  • Begley, Michael.
  • Bermingham, Joseph.
  • Boland, John.
  • Bruton, John.
  • Burke, Joan.
  • Clinton, Mark.
  • Cluskey, Frank.
  • Collins, Edward.
  • Conlan, John F.
  • Corish, Brendan.
  • Cosgrave, Michael J.
  • Creed, Donal.
  • Crotty, Kieran.
  • D'Arcy, Michael J.
  • Deasy, Martin A.
  • Desmond, Barry.
  • Donnellan, John F.
  • Enright, Thomas W.
  • Fitzpatrick, Tom (Cavan-Monaghan).
  • Flanagan, Oliver J.
  • Gilhawley, Eugene.
  • Griffin, Brendan.
  • Harte, Patrick D.
  • Hegarty, Paddy.
  • Horgan, John.
  • Keating, Michael.
  • Kenny, Enda.
  • Lipper, Mick.
  • Mannion, John M.
  • Mitchell, Jim.
  • O'Brien, Fergus.
  • O'Brien, William.
  • O'Donnell, Tom.
  • O'Keeffe, Jim.
  • O'Leary, Michael.
  • O'Toole, Paddy.
  • Pattison, Séamus.
  • Quinn, Ruairí.
  • Ryan, Richie.
  • Taylor, Frank.
  • Timmins, Godfrey.
  • Treacy, Seán.
  • Tully, James.
Tellers: Tá, Deputies P. Lalor and Briscoe; Níl, Deputies Creed and B. Desmond.
Amendment declared carried.
Motion, as amended, agreed to.
The Dáil adjourned at 8.45 p.m. until 11.30 a.m. on Thursday, 4 May 1978.
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