asked the Minister for the Environment if it is the policy of the Government to encourage an increase in the number of building societies in this country; if the proposal by the Irish Life Assurance Company to establish its own building society was specifically approved; and if, with a view to rationalising the societies and eliminating unnecessary duplication and waste, he will take steps to amalgamate all existing societies into a single State-owned building society, possibly under the auspices of Irish Life.
Ceisteanna—Questions. Oral Answers. - Building Societies.
11.
It is the policy of the Government to allow the Registrar of Building Societies to decide, within the powers conferred on him by the Building Societies Act, 1976, whether or not to register a proposed new building society. The registrar may refuse to register a proposed society if, in his opinion, the registration would not be in the interest of the orderly and proper regulation of building society business. Provision is made for an appeal to the High Court against any such decision by the registrar. I understand that the registrar has under consideration an application for the registration of a building society by the company to which the Deputy refers.
As I indicated to the Deputy in reply to a similar question on 8 November 1977, as reported at column 363, volume 301, of the Official Report, I do not consider that, in present circumstances, there would be any advantage to be gained by the amalgamation of all existing societies into a single State-owned building society. The Building Societies Act, 1976, provides adequate powers for the regulation of unions or mergers of societies or transfers of the engagements of one society to another. It is not open to me to take the initiative in these matters and I do not see any present need to seek such power.
Is it not a fact that the whole question of house purchase, the cost of house purchase for young people and the difficulties of raising the money is becoming a national scandal? Would the Minister not agree it is absurd for the Government to permit another company to add to the multiplicity of costs already existing which must be paid by the consumer? In the circumstances, would he decide either to allow Irish Life to go ahead and form a State company and use it to absorb the other companies, or else not to add to the absurdity of the many costs already existing which must be paid by the consumer?
It is not a function of mine or my Department to allow or disallow a new building society. That is the function of a different Department. It would be very difficult for anyone to say that in principle a new building society should not be allowed because of the amount of money being made available by building societies. Last year £120 million was made available for housing. Another building society might be helpful. I am just expressing my opinion. It is not my function to allow or disallow it. It is the function of the Registrar of Building Societies who is not attached to my Department.
Facing the reality of the case I have made about the difficulty for young people in getting loans, surely the Government should not allow completely fraudulent competition between these people, the existing cartels in relation to fixing prices and mortgages? It is the duty of the Government in those circumstances to step in and see that there is some form of control of mortgages so that young people can be helped in buying the most essential need of all, probably, that is, shelter and a home.
I would not agree with the Deputy that there are fraudulent practices.
Serious competition?
Serious competition but not fraudulent. Competition is not always a bad thing. It can be good too.
There is no competition.
They are making money available as quickly as possible. In 1977 £120 million was made available which was a sizeable amount towards the cost of new housing. In general the building societies have worked well.
Is it not a fact no attempt is being made to introduce this famous free enterprise competition in relation to the supply of mortgages? The result is cartels and fixed mortgages. No matter how many building societies are established, all they do is add to the end cost which must be paid by the consumer.
So far as I am aware their own expenses are very reasonable.
Has the Minister been consulted at any stage by the Minister for Finance who, I understand, is the majority shareholder in Irish Life, about the advisability from a housing point of view of the establishment of such a building society? Have the Government, who hold the majority shareholding in Irish Life in trust for the Irish people, given any indication at any time to the board of Irish Life of their attitude to such a proposal as is now before the Registrar of Building Societies?
I am not aware of any indication having been given, and I have not had consultations with the Minister for Finance on this matter.
Perhaps it would not be a bad thing if such consultation were to take place. The rationalisation and organisation of house building funds should be the concern of the Minister. In view of the questions and answers which have crossed the floor today, would the Minister consult with the Minister for Finance and the board of Irish Life to see how this proposal would benefit house purchasing?
I am prepared to discuss it with the Minister for Finance and to tease it out.