First of all. I should like to refute the allegations made by Deputy O'Donnell. He stated that we now have strikes daily and clearly gave the impression that the situation in relation to industrial disputes is far worse now than it ever was before. This is not so. Statistics and figures can prove this. There were far fewer man-days lost in 1978 than in 1976. Those figures speak for themselves.
I should like categorically to refute the allegation Deputy O'Donnell made that fewer houses will be built in 1979 than were built in 1978. This allegation is completely without foundation. I am convinced that the number of houses completed in 1979 will be at least as high as in 1978. More and more mortgage finance is available for private housing from building societies and other lending agencies. A record number of applications are being received for SDA loans by local authorities and applications for the £1,000 new house grant are pouring into my Department at an increasing rate. All this indicates that the number of houses completed in 1979 will be at least as high, if not higher, than in 1978.
There is now an air of confidence in the house building industry and in the construction industry as a whole. I am saying this to refute the allegation made by Deputy O'Donnell in relation to housing. The one and only reason which might prevent the construction industry from moving on to greater levels is the scarcity of skilled labour. During the term of office of the National Coalition there was a lack of confidence in the building industry, particularly during the latter part of that period. At that time young people were not prepared to become apprenticed to the various skills and trades within this great industry and it has been only within the past year-and-a-half that interest has been shown again in this area.
I intend concentrating on matters relating to my Department as they are affected by the budget and to refer to such matters as job creation, environmental improvement, local improvement schemes, group water supply schemes, planning and development, private housing, housing grants, mortgage finance, house price control and the national house building guarantee scheme. The services of the Department of the Environment figure prominently in the strategy of the Government as outlined in the budget. The extent to which central government resources are devoted to local services can be demonstrated best by a few figures. The local authorities who operate under the umbrella of the Department will spend this year an amount in the region of £610 million. Of this amount the local authorities will raise on their own accord more than £170 million. The massive injection of funds by the Government to the local authority sector, as disclosed by the figures I have given, produces a twofold effect. First, it enables local authorities to provide the services the community need and which are so essential for the economic and social development that the Government are striving for. In addition, ratepayers are being cushioned against the burden of meeting the cost of the services from which they benefit. Briefly, that sets the scene in terms of the implications of the budget for the local government sector.
In a debate like this one could not hope to deal comprehensively with every aspect of Government policy at it affects the services provided by the Department and by local authorities. Therefore, I shall concentrate on the aspects I have outlined. Unemployment has been pinpointed by the Government as a real threat to the future of our country. The need for the creation of employment is a main theme of the White Paper. This primary objective of Government policy is reaffirmed forcibly in the budget. The Government's efforts so far have been singularly successful. For instance, by the end of 1978 the target of nearly 23,000 jobs under the job creation programme almost £600 million has been provided for spending on building and may be very proud. The overall employment target for 1979 is to effect a decrease of 25,000 in the numbers out of work. The main expansion of employment will come from the industrial sector. The building and construction industry, overall responsibility for which rests with the Department of the Environment, will be making a significant contribution. In the public capital programme almost £600 million has been provided for spending on building and construction. This is an increase of 27 per cent on the 1978 spending. Consequently, the increase in the average level of employment in the industry in 1979 should be significant.
The Department will be concerned very much with part of the £20 million job creation packet announced in the budget. The Department are being allocated £5.2 million for spending equally on road works and environmental improvement schemes. These extra allocations are particularly welcome both from the point of view of the jobs that will result and of the benefits that will accrue from the projects which local authorities will be able to carry out. It is expected that the funds for the special programme on road works will provide the equivalent of about 275 jobs of one year's duration. This in itself is significant. An extra £2.6 million for environmental improvement schemes increases the total allocation for these schemes in 1979 to £4.28 million and will enable local authorities to undertake further desirable improvement works this year.
There is a need for special attention from the environmental point of view in the Dublin inner city area. The Government have earmarked £.5 million of the new allocation for work in this area. The environmental improvement schemes programme fits in well with the role of the Department in the promotion of activities and projects of environmental benefit.
Last year a sum of £4 million was provided in the budget for a scheme of environmental improvements. This scheme was designed to provide short-term employment equivalent to 1,000 jobs of a year's duration, of which 75 per cent were earmarked for young persons. The collection and execution of works remained the responsibility of local authorities. The general guideline was that these works should be of environmental, recreational or amenity value to the community. The type of projects selected include the provision of playgrounds and parks, the provision of car parks and other amenities at scenic areas, the cleaning up of derelict sites and the carrying out of operations to improve environmental standards generally.
Because of industrial action on the part of certain local authority staff members the authorities were not able to spend the full amount allocated in 1978. However, by 31 December 1978 they had expended £3.1 million. At peak 2,000 persons were employed on works under this programme. Included among these were more than 1,600 young people. In all during 1978 there were provided the equivalent of 750 jobs of one year's duration under this programme. Accordingly, it is fair to say that the programme has had a substantial impact in terms of the employment of young persons as well as the carrying out of much useful work to the benefit of the community. Happily, the Government have been able to continue the programme in 1979. It is my hope that local authorities will be able to avail of the allocation to the fullest extent possible. In this way useful employment will be given and this will also make a further contribution to the raising of environmental standards.
I am very pleased that the Government have been able to make provision this year for a local improvements scheme to the extent of £2.75 million. This is £1 million more than the 1978 allocation and compares with only £1 million provided in the 1977 budget. County councils will be able to expand work to a very significant extent under this scheme. It is designed to aid agricultural production by assisting land owners to carry out improvements on accommodation roads, bog roads and minor drains. Substantial social benefits are also derived from the works undertaken. Road access to houses and farms is improved. One would not want to underestimate what this means in terms of acceptable living conditions for rural dwellers. Works under the scheme have a high labour content. They provide a valuable supplement to the income of land owners and land holders in underdeveloped areas. The vast bulk of expenditure on the scheme takes place in the western counties. This is now one of the most popular schemes being operated by county councils.
As regards group water supply schemes, the availability of piped water supply is a further major factor in ensuring acceptable living conditions in rural areas. It is a service urban householders may take for granted, yet many rural homes lack this basic amenity. The census of population in 1971 showed that about 154,000 houses, nearly all in rural areas, had no piped water supply. The position has substantially improved since then. Piped water has been installed in many existing dwellings with the aid of grants. Older houses which lacked piped water supplies have gone out of use. Virtually all new houses built in the intervening years have a water supply. It is estimated that at the end of 1977 the number of houses without piped water supply has been reduced to about 63,000 or just over 40 per cent of the 1971 total.
There has been a tremendous upsurge in the number of private group water schemes undertaken by local communities with the help of the generous grant assistance available. A total of 68,500 rural homes have to date secured piped water supplies from group schemes. In 1978 alone piped water was provided in nearly 10,800 houses by way of group schemes. This was an all time record. Group schemes gave access to piped water supplies to about 8,500 farms in 1978.
We must realise that group schemes are now big business. An estimated £6 million was invested in these schemes last year. The future prospects for group schemes are bright. At the end of last year schemes were in progress which will provide piped water in an additional 9,000 houses approximately. A further 206 schemes, which will eventually serve more than 7,000 houses, have been designed.
Irish farmers must modernise their holdings if they are to meet the challenges and avail of the opportunities offered by our membership of the European Community. A piped water supply is an essential part of farm modernisation plans. So far, an estimated 48,000 farms have been given access to piped water from group schemes. The farmer quickly recovers the cost of joining a group scheme from improvements in the yield and quality of milk, higher stocking rates on the land, the potential created for the construction of modern farm buildings and the use of modern farming methods and equipment, including milk cooling equipment.
The success of the group scheme movement is first and foremost due to the organisers, trustees and committees, all of whom work for their local communities on a voluntary basis. My Department and the county councils have been glad to give financial assistance and expert advice to groups undertaking these vital co-operative projects. Total co-operation in carrying out group schemes can lead to the launching of other community projects on a co-operative basis.
I have the highest admiration for all those associated with the organisation of group schemes in their areas. The community at large owes them a great debt. The EEC have recognised the importance of piped water supplies for agricultural development. To date the EEC Commission have allocated grants totalling nearly £1.2 million to 99 group schemes from the European Agricultural Guidance and Guarantee Fund, FEOGA. In addition FEOGA grants totalling £4.5 million have been allocated to 75 public water schemes undertaken by county councils, usually to facilitate group scheme development.
Our physical planning structure is an essential ingredient of the Government's economic development programme. Material progress, unless properly controlled, carries certain risks for the environment. We have to be on our guard to ensure that no form of development can be allowed to exploit our physical resources. We had to get good quality in planning and design. On the other hand, trivial and unreasonable environmental opposition cannot be allowed to frustrate or impede the Government's policies to secure development and more jobs. We must strive therefore to achieve balance and consistency between the laudable targets of taking maximum advantage of developing opportunities and the need to ensure the preservation of high environmental conditions.
There is no fundamental conflict or incompatibility between those two aims. Services such as housing, roads and sanitary services, which are so essential to our present and future employment requirements, make great demands on resources. It is therefore essential that priorities for investment in these sources are soundly based. This is where the local development plans have their role to play. Each planning authority is obliged to make and keep its plan up to date. It provides the framework within which development can be promoted. All planning authorities have made development plans and the majority of these plans are currently under review for a second time. This review is essentially an examination and an updating of the plan in the light of the planning authority's experience in implementing it over the previous five years.
I am very conscious of the need to ensure that the planning system is used to promote desirable developments rather than merely as a method of negative control. Planning authorities were requested in September last to facilitate developments which would expand employment opportunities by speedy process of planning applications in relation to such projects. Top priority should be given to applications for planning permission where job opportunities are concerned.
It is perhaps true that undue emphasis has been put on the negative aspects of planning legislation. Enforcement of planning controls has tended to get more prominence than the wide-ranging positive powers of planning authorities to promote economic activity. The local authority has a lot to contribute to the Government's national development programme. I have said before, and would like to repeat again, that I should like to see each planning authority look on themselves as a development corporation and their developments plans should take cognisance of this very important role.
With regard to private housing, the provisions made in the public capital programme for the financing of housing reflect the continued priority the Government are giving to housing. It is a basic plank of the Government's housing policy that as many families as possible are helped and encouraged to provide their own houses. The provision for private housing grants in 1979 is twice what was paid in 1978. During the past week we have had two debates on housing, one in the Seanad and one in this House.
With regard to new house grants, this year we are providing £13 million for new house grants and practically all of this will go to recipients of the £1,000 grant for first-time owner-occupiers. A small proportion will be needed to pay off outstanding grants under the old grant schemes that are payable where a house was completed before 1 January 1979. We expect that more than 12,500 people providing houses for themselves will benefit by the £1,000 grant this year. Last year some 12,000 applications were approved and 7,140 were paid. The shortfall in payments was not due to any delay on the part of the Department in arranging inspections and in paying grants. Rather it appears that the houses were not being completed at the rate suggested by the level of approvals and applications from July 1977 onwards. It seems likely that the large number of grant approvals carried over from 1978 will come forward for payment this year.
Last year we introduced an improved package of financial assistance to philanthropic bodies engaged in providing houses for the elderly. I am conscious of the invaluable work of such bodies. I hope the availability of the new package of loans, grants and subsidies will encourage and assist public bodies in looking after those people, who tend frequently to be forgotten. The voluntary bodies will have considerable freedom to manage their new projects.
With regard to house improvement grants, these grants, including the provision of individual water supply and sewerage facilities, are expected to absorb about £17 million. The intake of applications during 1978 was double that of the previous year under the old restrictive and totally inadequate schemes. Last year more than 30,000 grants totalling £12,500,000 were approved and payments came to £6.15 million. The substantial level of grant assistance available for conservation and improvement works continues to stimulate a very high level of interest from house-holders. This is an encouraging trend from the viewpoint of overall housing policy. It ensures that the present housing stock, an immense national asset, is maintained and improved and that the standards of habitability, amenity and comfort of our houses are improved. If the present level of activity in this area continues for another year, we will have more than made up the ground lost due to the niggardly and short-sighted policy pursued by the previous Government in regard to such grants.
We must also bear in mind that substantial increases have been made available with regard to water and sewerage facilities for private housing. The grant has been increased from £125 to £350. This, combined with the water and sewerage grant, comes to approximately £950, which is almost equivalent to the £1,000 new house grant. These grants have a useful purpose in that they help to maintain the existing housing stock. Were it not for the grants at least 5,000 houses would fall into disrepair each year.
With regard to mortgage finance, if people are to purchase their own homes the availability of such finance is essential and this is a major preoccupation of the Government. Preliminary statistics indicate that a record amount of mortgage finance was available during 1978. In the first nine months a total of £160 million was advanced by the major lending agencies as against £123 million in the corresponding period in 1977. It is estimated that the total for 1978 was in the region of £220 million, or nearly 30 per cent more than in 1977. Prospects for 1979 appear even brighter. Building societies continue to provide the bulk of mortgage finance for private housing. The net inflow to the societies is running at an exceptionally high level at present. It is hoped that sufficient mortgage funds will be available from the societies in 1979.
The importance the Government attach to the local authority house purchase loans scheme is evidenced by the further increase from £7,000 to £9,000 in the maximum loan which came into effect on 1 September 1978. Since the Government took office in July 1977, the loan limit has been doubled and the income limit has been increased by nearly 50 per cent. These increases have led to a substantial increase in demand for loans. To meet this increased demand a total of £43.5 million has been provided for house purchase loans in this year's public capital programme. Both loan and income limits are being kept under constant review in accordance with the Government's commitment to assist people who are unable to obtain loans from other lending agencies.
In his budget speech the Minister for Finance announced a further measure designed to improve the supply of mortgage finance. Trustee saving banks are to be empowered to grant house loans. These banks operate on the basis of an overall limit on lending by them of 15 per cent of the balances due to depositors. This limit will still apply but since their aggregate lending has generally been well within the limit there is worth-while scope for the giving of house loans. This is a very welcome development. The commercial banks continue to make a valuable contribution in the field of mortgage finance. While the contribution from assurance companies is disappointing, I am confident that the total amount of funds available from all sources will be sufficient in 1979 to meet the needs of the various sectors of the community.
It is estimated that in 1978 the certificate of reasonable value system achieved price reductions affecting 1,334 houses and the amount involved was almost £1.2 million. This amount is by far the highest figure of saving in any year since the system was introduced in 1973. The operation of the system brought even greater benefits to purchasers of grant-type houses than the figure I mentioned might suggest. It is a legitimate claim that the system has the greatest effect before the builder submits his price for examination. The price it is intended to charge must be justifiable before it is submitted for scrutiny by my Department. I am aware that concern has been expressed both inside and outside this House about abuses of the CRV system and I have already told the House that I am aware of certain unsatisfactory aspects. I should like to reiterate that the forthcoming housing Bill will contain comprehensive provisions to clarify and strengthen the legal position relating to CRVs and to prevent abuses of the system. That Bill is in the course of preparation and is expected to be circulated shortly.
The national house building guarantee scheme offers purchasers of new houses a six-year guarantee against any major structural defects. The scheme was launched in January 1978 and has now completed its first full year of operation. My Department were closely involved in the development of the scheme. The housing grant inspectorate of the Department provide the essential inspection service for all new houses covered by the scheme. While the Department have no part in any decisions made by the guarantee company and have no responsibility for the guarantees given, they are represented at all meetings of the board of the company by two officers with observer status. I regard this scheme as a significant step forward in the area of protection for house purchasers.
Some time ago I asked the various lending agencies to support the scheme. I was glad to note recently that the major building societies have decided to back the scheme and from January 1980 onwards they will advance loans only for new houses which have the guarantee. The level of activity in the first year is, perhaps, somewhat disappointing. The number of builders who have been registered is 352. Cover was extended to a total of 3,781 houses, not all of which have yet been completed. However, it is always difficult to get a voluntary scheme like this off the ground with any degree of speed. The vetting of the financial and technical competence of builders can be a slow process. I am confident that the support of the building societies will provide the necessary stimulus and that this year will see a considerable expansion of the scheme.
Local government affairs in the widest sense have figured prominently in the deliberations of the House since this Government took office. During last March and April we had a very wide-ranging debate on the Environment Estimate. All this shows that the services provided under the auspices of the Department of the Environment are crucial to the well-being of individuals and of the national economy as a whole. It is manifest that in making their budgetary decisions the Government have not been found wanting in giving various local services an equitable share of national resources.
I should like to deal with some points raised by previous speakers. Many contributors to this debate have queried our plans and targets. I would ask the House to contrast the plans and targets of this Government, as set out in the Green Paper and the White Paper, with the non-existence of any plan or target when the Coalition Government were in office. We know where we are going and we have aims and goals which we are determined to achieve. We have leadership and unity of purpose in this regard—two vital assets in any party or Government. Let us contrast this situation with that which existed when the Coalition were in office. They had no plans or targets and had nothing concrete to present to the EEC in support of applications for additional funds and assistance. They were just doing what they were told to do by the EEC in the absence of plans and targets. This Government's targets for the economy in 1978 were demanding. Many people thought we aimed too high, but the record is there. The growth rate was about 7 per cent, a rate which for the second year running was the highest in the EEC. That figure was almost double the average achieved in the OECD and almost triple the average in the EEC. This was a remarkable performance by any standard and one of which the community as a whole can be proud.
We must also bear in mind that we had the biggest annual increase in employment in decades. In this our experience was quite unusual by international standards. Figures published by the EEC Commission show that unemployment in the Community as a whole rose last year. In contrast, it fell here and by a much bigger amount than in those other member states where it was also reduced. The dynamism of the various sectors of the economy was illustrated by the fact that, as the latest figures show, industrial exports were higher by 17 per cent in value last year and agricultural exports by 18 per cent.
Since the increase in average earnings per worker in 1978 worked out at over 16 per cent and since the average increase in consumer prices was 7.6 per cent, it must be realised that real earnings per head rose by about 8 per cent. These are among the largest rises in the standard of living of the average worker ever recorded here. We must also bear in mind that, while this rapid growth in nominal and real earnings may have given satisfaction to those who enjoyed it, the inflation rate for 1978 could but for the high growth in incomes have been about 1 per cent lower and we could have achieved even more than the 17,000 net jobs achieved.
The recent White Paper describes the policies directed towards attaining the Government's employment targets. The main growth in employment this year is expected to come from the continued expansion of industry and the inflow of new projects through the efforts of the industrial promotion agencies. The capital resources at the disposal of these agencies this year amount to more than £131 million, which is 38 per cent more than that spent in 1978. The Government have reorientated their spending programmes so as to increase their contribution to job creation. The 1979 public capital programme and non-capital Estimates provide for substantial job creation in the public sector and in the building and construction sector. The Government's foremost social priorty will continue to be the creation of employment. Job creation benefits not only the individuals concerned but their family circle as well.
For social welfare recipients an integral part of the Government's programme has been to maintain living standards at least in line with the cost of living. Excessive income increases do not make this task any easier. They put up the cost of living and, by making industry less competitive, hamper the reduction of the numbers of claimants for unemployment benefits. I am sure the public at large wish social welfare recipients to continue to share in our growing economic prosperity by a further real improvement in the allowances payable to them. I was glad that the Minister was in a position to improve substantially the position of social welfare recipients. As we are aware, there is a general increase of 12 per cent in the weekly rates of short-term social welfare payments. These payments include unemployment benefit and assistance, disability benefit and maternity allowances.
In the social welfare context the Government see old age pensioners and other long-term recipients, including widows, as deserving of special consideration. It must be realised that their capacity for work and their living requirements are very much affected by advancing years. As a recognition of this I am glad that the Government decided to increase their allowances by 16 per cent. This will mean a total increase of £4.50 a week in the maximum old age contributory pension for a married couple of pension age who are under 80. It is worth noting that the additional Exchequer cost of the proposals relating to the increases in social welfare, all of which will become effective from the beginning of April, is more than £40 million in a full year and over £30 million in 1979. I am sure all taxpayers do not begrudge this transfer of funds to the less well off sections.
I was glad that the Government were in a position to make further improvements in the position of veterans of the War of Independence. There are 18,500 veterans still alive. It was decided that the means test ceiling should be raised by £100 and this will give an automatic increase of that amount. Over and above that they will receive increases as a result of the annual revision of public service pensions. It is worth noting the extension of the telephone rental subsidy scheme for veterans and it is also worth noting the doubling of the funeral grants payable in respect of holders of duly awarded service medals. As most of us are probably aware, prior to this the funeral grants were payable only in cases where deceased veterans were in receipt of special allowances.
I welcome the Government's positive policy on decentralisation. This is something about which we have heard much but about which nothing was done by the National Coalition Government. The previous Fianna Fáil administration successfully decentralised sections of a number of Departments in co-operation with the Departments and the unions concerned. The policy of decentralisation will have many advantages both for Dublin city and for the provincial towns to which the various decentralised sections of Departments will go. We must remember that having all the State's Departments in Dublin, their sections and subsections based in Dublin, and a continuous rapid growth in the population of the city give rise to many problems. It leaves problems in relation to traffic, transportation, housing and many environmental problems. The policy of decentralisation to which the Government are committed will go a certain distance toward alleviating these problems. At least it is a policy that will ensure that these problems are not aggravated.
On the other hand, the provincial towns fortunate enough to have the privilege of providing accommodation and houses for the decentralised sections of Departments will benefit considerably. These benefits will work in two ways: the people who will go to take up permanent residence and employment in provincial towns will be happy to do so in the knowledge that the amenities there will be valuable from many points of view. The quality of life from many points of view may well be better in these towns than where these people live at present. I am sure they will find educational facilities available. Decentralisation will be a major boost for these towns because it will create additional employment in the building and construction industry sector in the building of office blocks and office accommodation and the provision of nice new homes for the persons concerned. I am confident that this policy is and will be very popular.
I am satisfied that the budget is a good, sound, solid, logical budget based on well-thought-out plans and strategies. A considerable amount of work, thought and time went into it and I believe it will go down as one of the best ever budgets. Its main purpose is to provide a climate for job creation, for getting more people off the unemployment register and providing more jobs for young people for the benefit of the community as a whole.