Dáil Éireann debate -
Wednesday, 23 May 1979

Vol. 314 No. 8

Private Members' Business. - Housing Finance: Motion (Resumed).

The following motion was moved by Deputy T.J. Fitzpatrick (Cavan-Monaghan) on Tuesday, 22 May 1979:

That Dáil Éireann deplores the hopelessly inadequate allocation of finance by the Government to housing authorities in respect of new house starts for the current year.

Debate resumed on amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

"welcomes the generous provision made in the Public Capital Programme for the current year for the maintenance of a high level of activity on the local authority housing construction programme and notes an anticipated increase in the total number of new house completions this year arising from the Government's national housing programme."

—(Minister for the Environment.)

Minister of State at the Department of the Environment (Mr. J. O'Leary)

I want to support the amendment moved last night by the Minister for the Environment to the Fine Gael motion. The Minister's speech can have left little doubt about the lack of any genuine foundation for the allegations made in the motion or about the validity of the case put forward by the Minister for the amendment.

I do not propose to reiterate the telling facts and figures in the Minister's speech, apart from pointing out again that the motion "deplores the hopelessly inadequate allocation of finance by the Government to housing authorities in respect of new house starts for the current year" while, in actual fact, final allocations for new work in the present year have not yet been made. Instead I want to deal, in the time available to me, with specific points made by the Deputies who have spoken so far.

Deputy Fitzpatrick took the Minister to task—incorrectly, as he will realise if he reads the text of the debate—for using 1977 as the base year for all comparison purposes.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): That was somebody else. I did not say anything about that.

Mr. J. O'Leary

As if to show how the matter should properly be handled, Deputy Fitzpatrick himself chose to go back no less than a decade and quoted from the White Paper "Housing in the Seventies". That was a document of which the Fianna Fáil Government of the time, which published it, were proud and with good reason. I would strongly recommend to the Deputy that he should read right through the White Paper and not merely dip selectively into it to produce an odd statement or statistic which he feels might now be used against the present Administration.

"Housing in the Seventies" reviewed the national housing situation in a most comprehensive way. It enunciated Government policies and objectives to deal with problems, especially unfit and overcrowded housing conditions, and it outlined an imaginative programme for the ensuing decade which would upgrade our national housing standards and, in the process, eliminate most of what was unsatisfactory in living conditions throughout the country. I make no apology for harking back to the White Paper. Unlike Deputy Fitzpatrick, I do so not to denigrate but to remind the Dáil that the basic principles and objectives promulgated by the Government in 1969 still hold good and still guide the 1979 Government in determining national housing policies. We are still completely committed to the principle that, as far as the resources of the economy permit, every family can obtain for their own occupation a house of good standard at a price or rent they can afford.

The Fianna Fáil election manifesto of 1977 and that recently published in connection with the local elections reiterate and, in so far as is necessary, update the policies stated in "Housing in the Seventies". Deputies would be well advised to go back to the 1977 manifesto and see for themselves how all the commitments to improving housing conditions made in that document have been fulfilled during the intervening two years.

One final point which I feel should be made before I turn to deal with the specific statements made by the Opposition Deputies relates to the allegation that this Government are set on a policy of downgrading the local authority housing programme and building up the private housing sector. I would ask Deputies to look back on our record in this regard over the years. While Fianna Fáil held the reins of Government output in the local authority sector rose every year from 1961 onwards, with one slight pause between 1967 and 1968, when completions fell by 34 dwellings or less than 1 per cent. Contrast this with the record of the Coalition Government when local authority output was built up to a peak of 8,794 houses in 1975, largely as a result of the programming and planning undertaken prior to 1973 but which then plummeted to only 6,333 houses in 1977 a fall of nearly 20 per cent.

The present motion by Fine Gael Deputies sounds rather cynical when one remembers that this 20 per cent drop in output was due to the denial of adequate funds for the programme by the then Minister for Finance, a member of that party.

A desire for home ownership is one of the most deep-rooted traits of Irish people. While this Government are completely committed to providing the necessary capital to enable local authorities to house families in genuine need and who lack the resources to house themselves, they have also given practical evidence that, in so far as possible, even persons of modest means will be encouraged and assisted to house themselves rather than become, or remain, tenants of local authority dwellings.

The financial incentives made available since Fianna Fáil resumed office in 1977 are most impressive. They include the elimination of the income and valuation limitations on eligibility for housing grants which the previous Government had introduced and which had practically phased out the grants the introduction of the £1,000 new house grant for first-time owner occupiers, the abolition of rates on houses, big increases in the loan and income limits under the SDA scheme, a liberalisation of the low-rise mortgage scheme and an increase in the maximum loan, an increase in the subsidy payable on sites provided and developed by local authorities for private housing, a much more generous system of house improvement grants and further tax concessions in respect of money borrowed for the construction or improvement of houses and also in respect of the employment content in reconstruction work.

Deputy Fitzpatrick asked how it will be possible in 1979 to maintain the same level of activity with a percentage increase in the public capital programme allocation for local authority housing which, he alleges, will be insufficient to match the cost of inflation.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): 6.1 per cent.

Mr. J. O'Leary

The answer is that the actual increase in the amount of money available for expenditure on the local authority programme is about £5 million more than the difference between the public capital programme allocations for the two years, because the total of the debit balance of housing authorities at 31 December 1978, which must be met within this year, was £5 million less than at 31 December 1977. This is a very important point. This reduction in the debit balance will offset the effects of increased inflation of costs to a very large degree.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): Adding that to it what is the percentage increase for 1979 over 1978?

Mr. J. O'Leary

I will give the Deputy the figures and the facts.

Mr. O'Toole

Will the Minister give us the percentage increase?

Mr. J. O'Leary

Deputy Fitzpatrick complained that the Minister did not give him statistical information which he had requested in written replies yesterday to two Parliamentary Questions and which he required for the purposes of this debate. I would like the Deputy to know that the preparation of the material which he requested will take some weeks, since it will involve research into separate annual files for each of almost 90 local authorities for 11 financial periods. I hope that the information, when it is eventually available, will be of sufficient value to the Deputy to justify the considerable commitment involved for staff already under heavy pressure on other urgent work.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): Is the Minister aware that people have been waiting for houses for seven years?

Mr. J. O'Leary

Deputy Fitzpatrick and Deputy Quinn made a lot of play about the difference between the figure of 27,392 quoted by the Minister in his contribution to the debate last night as the total number of approved applicants and a total derived by Deputy Fitzpatrick from the answer to a recent Parliamentary Question on the subject. The inference was that the House was being deliberately misled. I want to contradict any such implication categorically. The Minister gave correctly 27,392 applicants as the most up-to-date figure available to him of the total number of applicants on approved waiting lists at 31 September 1978. The 35,000 figure quoted by Deputy Quinn is the total of all applications submitted to local authorities at 30 September 1978, including unapproved applications, on the basis of returns made to him at the time of the answer to the question.

Obviously, in the interests of orderly programming, which Deputy Quinn so assiduously seeks, the Minister was concerned to give the number of applications accepted by the authorities and not a gross figure including everybody who sought a local authority house, whether eligible or not. Incidentally, Deputy Fitzpatrick gave the impression that housing authorities are operating an income limit of £70 a week for local authority housing eligibility. There is no prescribed income limit and it is left to each housing authority to make a judgment on the basis of each individual case, taking all circumstances including income into consideration.

Deputy Fitzpatrick spoke with feeling about the needs of small families, including parents without children, who are badly in need of housing. I agree that concentration on larger families for many years has tended to keep pushing individuals and small families into the background. It is the Government's policy that housing authorities should give greater attention to the genuine needs of smaller families who are badly housed, particularly the elderly and the disabled. I would hope that the lessening of the proportions of larger families on approved lists will now encourage authorities to make better and more specific provision for smaller families who genuinely need their help.

Deputy Fitzpatrick asked for information about the categories of persons to whom low-rise mortgages have been made available. The low-rise mortgage scheme as originally introduced in November 1976 catered for the following categories of persons:

(a) an existing tenant or tenant-purchaser of a local authority house who will surrender his dwelling to the local authority on receipt of a loan to purchase a private house;

(b) families of three or more persons who, at least one year prior to seeking the loan, had applied to and been accepted by a local authority at that time as being in need of rehousing on the grounds that their existing accommodation was dangerous, structurally unfit or seriously overcrowded and that their financial circumstances were such that they could not reasonably be expected to provide proper accommodation from their own resources and who are still in need of rehousing:

(c) a person who has been allocated tenancy of a new local authority house and who wishes to purchase that house.

In February 1979 the Government agreed to amend the scheme to include two-person families which consist of one parent and one child and who are otherwise eligible to qualify under category (b). At the same time it was decided to confine applications under category (a) of the scheme to persons who had been tenants or tenant-purchasers of a local authority house for at least six months.

Information received from the local authorities show that at 31 December 1978 loans had been paid to 557 applicants under category (a) and to 534 applicants under category (b), while 97 persons who have been allocated new local authority houses have chosen to purchase them under the low-rise mortgage scheme.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): How many people were taken off the housing lists who had not been offered tenancies?

Mr. J. O'Leary

Under category (b) the number is 534 families, a substantial figure.

Deputy Quinn in his contribution charged the Minister and his Department with incompetence in the way money made available for housing was being used and gave the House a lecture on the application to the programme of socialist theories and beliefs. He suggested that the Minister should shift money from the private sector to local authority housing. His socialist equation had only two main factors. He ignored a third very important factor, the taxpayer. One of the main limitations on the expansion of local authority housing is the current accumulating and already enormous, cost of State subsidies which fall so heavily on the taxpayers. The Government must hold a reasonable and fair balance between the needs of families for social housing and the burden which taxpayers generally can bear as a result of social housing.

Deputy Quinn, while free with his charges of incompetence, saw nothing wrong apparently, in applying contradictory principles to his approach to local authority housing and to the building industry. He deplored, roundly, overheating in the building industry and demanded an end to the peaks and troughs which, he said, have plagued it, but in the same breath he blandly berated the Minister for being concerned about overheating in the local authority housing construction sector, and decried the steady progress achieved in recent years in this sector.

The Deputy asked for better use of available resources to get the best value for money, but no doubt he will be ready enough to make a special case for the excessive costs involved in central city housing development.

In considering the question of the competence of the Department in the housing area, one might examine the relationship between housing targets and performance. Since 1964, every medium-term national housing target has either been achieved or exceeded. This achievement required close monitoring of the various elements of the national housing programme and changes in policies to meet the situation. Since 1973, the number of new houses built each year has been within 8 per cent of 25,000 a year. On the basis of information available from the Economic Commission for Europe, there is scarcely any other developed country which has managed to remain so close to a national housing target during the past six years. As far as the housebuilding sector is concerned, it is widely accepted that peaks and valleys in building activity were minimal during this period.

On the other hand, there were valley periods in the building industry. But these occurred during the Coalition's recent period in office before Deputy Quinn entered this House. Output in the building industry was increasing steadily from the mid-1960s up to 1973 when it reached a peak. Output dropped by about 1 per cent in 1974 and by a further 7 per cent in 1975. It increased by 4 per cent in 1976 and by a mere 2.5 per cent in 1977.

Mr. Tully

May I interrupt the Minister? His figure for 1974 is wrong. In fact, there was an increase of 6 per cent, not a drop of 6 per cent.

Mr. J. O'Leary

The information available to me from the construction industry is that output dropped by about 1 per cent in 1974 and by a further 7 per cent in 1975.

Mr. F. O'Brien

The Minister must have been misadvised or misinformed by his advisers.

An Lean-Cheann Comhairle

No attack on the Minister's advisers should be made. The Minister is responsible for any statement he makes in the House, not his advisers.

Mr. J. O'Leary

I was not misinformed.

Mr. Tully

The figures are 6,072 and 6,746.

An Leas-Cheann Comhairle

The Minister should be allowed to make his own speech.

Mr. J. O'Leary

With the agreement of representatives of the builders and the workers, the Government gave a major boost to the industry in 1978 and again this year. The Deputy failed, of course, to say that between 1973 and 1977 direct employment in the industry fell from 85,000 to 77,000. Since July 1977 direct employment in the industry has increased by about 7,000. There has also been a further increase in employment in ancillary industries. I make no apology for lifting the industry up off the gutter and shortening the dole queues.

I have already referred to the massive support given by the Government to the industry since 1977, in consultation with representatives of builders and workers. I could have taken the easy option of providing for a modest growth rate of 4 per cent to 5 per cent a year, but this would not have eased the record level of unemployment in the building industry when the Coalition left office. At present the question of the training needs of the industry is being specially examined in consultation with the industry.

One of the primary reasons for the scarcity of skilled labour in the industry is the fact that there was a decline in the number of houses built during 1976 and early 1977. There was a lack of confidence in the industry. Since late 1977 that confidence has been restored. People did not go into apprenticeships in the industry at that time, but they are now doing so and, within a short time, we hope to have a skilled labour force capable of handling the industry again.

Deputy Quinn said the abolition of rates combined with the £1,000 grant was a fantastic subsidy to people already housed. There is no doubt but that the abolition of rates is of great financial assistance to people already housed. That was one of the Government's aims at the time. What the Deputy forgot to emphasise is that tenants and tenant purchasers of local authority houses also benefit from this decision. It is, however, nonsense to talk of the £1,000 grant being a subsidy to people already housed. This grant is payable to first-time owner-occupiers of new houses and flats. If a person already owns a house and decides to change house, he will not qualify for the grant.

Deputy Quinn also referred to a shortfall of over £11 million in 1978 in capital expenditure in the non-local authority housing sector and said money should have been applied to local authority housing. The shortfall in expenditure occurred mainly on SDA loans. The main reason for the shortfall was that it was difficult to anticipate the effect of the increases in the loan and income limits made by the Government in July 1977. The previous limits had remained unchanged since September 1973. It was decided not to apply the savings to the building industry because it was clear that the level of activity in the industry was already very high when the savings became apparent. In fact total capital expenditure on housing increased by £29 million last year. Further, the diversion of the SDA savings to local authority housing would give rise to an unwarranted increase in housing subsidies.

The Deputy did not, of course, refer to the saving of some £16 million in SDA loans in 1976. Total capital expenditure on housing dropped that year by £10 million relative to the previous year. At that time the building industry badly needed a boost.

Deputy Tully challenged the accuracy of figures I quoted showing changes in output in the building industry. We referred in this context to changes in the completions of local authority dwellings. I was quoting figures based on output in the entire building industry of which local authority housing is only one component.

Mr. Tully

I thought this debate was about local authority dwellings.

Mr. J. O'Leary

The housing programme was at a low level. The morale of those involved in the construction industry was very low before Fianna Fáil returned to office. Since July 1977 the Government have increased substantially the allocations to local authorities for housing. They have also provided a tremendous incentive to people to build their own houses, persons who would otherwise be still on the local authority waiting lists.

Deputy Fitzpatrick said he knew a family who waited for seven years to be rehoused. I was speaking to a knowledgeable person in South County Dublin today who told me that at a recent meeting the council were quite justified in allocating a house to a young married couple with a child a few months old. He told me that in that area there are about 800 houses in the pipeline. There is no serious problem there because they know the finance is on the way. The Government have already allocated money for existing commitments to housing authorities. They have already allocated money to allow them to make starts and to continue with the programme up to 31 July. It will then be reviewed and they will get more money to enable them to carry on. There is no such thing as a scarcity of money for the housing programme. There is no such thing as a scarcity of money for the construction industry at present.

Mr. O'Toole

The Minister's final statement is very welcome. It is a pity the Minister for Finance is not present in the House. There is no scarcity of money for anything according to the Minister of State at the Department of the Environment. I will not get involved in arguments about ideology. I suggest that the Minister is in need of a large injection of reality. For the past 30 minutes this House has been given a treatise on how people should provide their own houses.

The motion reads:

That Dáil Éireann deplores the hopelessly inadequate allocation of finance by the Government to housing authorities in respect of new house starts for the current year.

The amendment proposed by an tAire Comhshaoil reads:

To delete all words after "Dáil Éireann" and substitute the following:

"Welcomes the generous provision made in the Public Capital Programme...".

—and so on. We are talking about the provision of houses for people who cannot provide this basic facility by themselves for themselves. This is the point at issue. Giving us large chunks of a speech concerning the building industry and telling us how healthy it is and how unhealthy it was when the National Coalition were in office, whether that is right or wrong, is totally and absolutely irrelevant. It has nothing to do with the provision of social housing. It will not promote that cause one iota and I ask the Minister to desist from that kind of evasive speech in relation to this serious social issue.

He gave us some figures and when challenged on these figures by a former Minister who should know what he is talking about—and I am sure does know what he is talking about—he told us he was dealing with the figures for a calendar year. We are back to the evasive terminology which has become part and parcel of this House recently. When challenged on figures, Ministers and Ministers of State tell us they are talking about annualised figures, about calendar year figures and everything else but not about actual, real figures. We end up on this side of the House not even knowing what Minister are talking about. I am afraid that the Minister of State is not too sure at times what he is talking about.

The reality of the current situation is the following figures which I think are the correct ones. In 1977 for local authority housing the sum of £74.1 million was provided. In 1978 a sum of £80.77 million was provided, which represents an increase of 8.25 per cent. In 1979 the sum of £86 million was provided, representing an increase of 6.1 per cent. In his speech last night the Minister mentioned that £90 million had been made available, but he failed to give information about the extra £4 million. My guess is that it may have come about because of the extra money available to the Department through the withdrawal of the VAT refund facility——

Mr. J. O'Leary

It was a special overdraft accommodation for local authorities.

Mr. O'Toole

Even with an extra £4 million which would bring the percentage increase——

Mr. Tully

Is that repayable out of this year's figures or was it paid last year? Who pays it?

Mr. F. O'Brien

The poor unfortunate taxpayer.

Mr. O'Toole

That increase would bring the figure roughly to a 12½ per cent increase. It has been admitted in this House by the Minister that inflation in actual building itself amounted to 28 per cent in the past year. That does not take into account the major inflationary element, namely, the cost of land. One could think of any figure there depending on the area and one could end up with an increase of 30 per cent to 50 per cent on land alone. There is an admitted inflation figure of 28 per cent given by the Minister, but we are now told that we are getting £5.23 million plus overdraft accommodation for an extra £4 million which brings the amount to about 12 per cent. That is not nearly enough even to stand still and keep up with inflation let alone to make inroads into the soaring numbers on the housing lists.

The Minister mentioned some figures concerning the housing lists. In a reply concerning approved and unprocessed applications on hand for the local authorities at 30 September 1978 all the county, urban and county borough areas are given. The reply states that the number of approved applications was 27,515; the number of unprocessed applications was 7,569, which means a total of 35,084. From my interpretation of what the Minister of State said, he is assuming that none of the 7,569 unprocessed applications will be approved. I interpret that from the figures he gave. If that is so, there is a major shortfall in what is being provided as against the total applications. From the inflation figures quoted and the moneys made available that gap is widening at an even greater rate.

The Minister also gave figures concerning the major improvements made by his Government on the private sector front. In fact, the figures for housing applications show that people whom one might expect would be providing their own houses are now being driven on to the local authority lists because of the fiercely escalating costs. The Minister knows that. I am sure he has advised people on the completion of application forms for SDA loans and has told them where to go to get the shortfall of £4,000, £5,000 or £6,000, together with Government grants. These are the facts so far as the provision of a house is concerned for a young couple starting out in life.

In my own area in east Mayo, and I am sure in Kerry, there are people now joining the local authority housing queue who would not have dreamt of doing so three, four or five years ago because there was still a ray of hope that they might be able to provide a house for themselves. This is a major social problem. The Minister has spoken about the White Paper. It would seem that Fianna Fáil White Papers on housing policy during the years have all been for private ownership of houses. We all concur with that, but the anomaly arises when that same party or Government come along and put private housing beyond the reach of the person whom they were encouraging to own a private house, putting him back on the local authority list and then not doing enough to ensure that he gets a house. At that stage they renege on their responsibility and social obligations. We are now facing a major social problem as a result of this double-think which has been evident during the years and which is gaining momentum at the moment in the policy adopted by this Government.

The position with regard to the provision of social housing by local authorities is now evident. There are two factors involved: the provision of land and the provision of money to purchase that land. As a member of a local authority I have sat for hours through meetings. I have taken part in debates concerning the purchase of lands for road widening and for houses. Much time was spent discussing what should be bought and how much. At the end of the day somebody asked "Have we money to buy this land?" only to discover that the answer was in the negative. That is happening now with the result that land banks are not there, particularly in major urban areas where the price of land is escalating out of all proportion. Yet, we are not in a position to increase our land banks. It would be another way of getting people off the local authority housing lists if moneys were provided by the Exchequer to local authorities to purchase land, service it and sell serviced sites. This would be an incentive to people to build or purchase their own homes whether on a cooperative basis or as individuals availing of the grants of which the Minister boasted a while ago. A serviced site at a reasonable cost would be a very strong inducement to people to build or purchase houses and would serve the double purpose of at the same time having people taken off the local authority housing lists.

Despite the final word of the Minister of State asserting that there was money available for housing and the building industry, I do not think that is a reality. The money is not there either for housing or the building industry to the extent needed. The Minister knows that and should refrain from making wild assertions in the House in the hope that on the eve of an election it may gain some votes. That sort of statement has lost all credibility coming from the Minister and his party.

The Minister spoke boastfully about the provisions made available in the last 20 months or so in the private sector and about this famous—or is it infamous?—£1,000 grant. That has nothing to do with the people to whom the motion refers, people who need, not a £1,000 grant but a £10,000, £11,000 or £12,000 grant to provide themselves with a house. That is the reality. The red herring of the £1,000 together with the provision of a £9,000 loan and a low-rise mortgage scheme do not face fairly and squarely the problem confronting the country and particularly the Minister of State responsible for housing. It is totally irrelevant and does nothing to justify the Minister's actions. It does not do himself justice as a person or as a Minister.

I wish to refer now to the present position in regard to incentives for the provision of private dwellings by people themselves. I shall be very brief on this because I think it is irrelevant and I mention it only——

An Leas-Cheann Comhairle

It arises on the amendment. All building is included in the amendment, as I read it.

Mr. O'Toole

The Chair is quite right. The cost of financing a house by the private individual availing of the £9,000 SDA loan runs at £128.37 per £1,000. We know what £9,000 would provide; it would not provide a dwelling house. Everybody knows that the most modest type of dwelling house at present and any site around that house involves from £14,000 to £19,000. Taking the lower figure of £14,000 there is a shortfall of £5,000 which, on the seven-year personal loan basis in any bank, costs about £23 per week. Add to that the £22 or £23 repayments on the SDA loan and the total repayments will be somewhere in the region of £46 or £47 per week. To become eligible for that £9,000 loan your income must be under £77 per week: I understand the means have been increased from £3,500 to £4,500. So, a young couple, with or without a family, are being asked to pay £46 or £47 weekly in mortgage repayments out of a total income of £77. It is unreal, illogical and anti-social to expect such a system to work. The damage accruing to society in general from that kind of pressure on any young married couple must be disastrous. Yet the Minister of State can boast of the fact that this sort of pressure is being put on that couple without making any provision to see that something is done to curb the massive increase in the price of building land and housing costs generally.

Last year, for example, I am told that the price of imported timber decreased. That is a major element in any house and yet we have massive increases in the overall costs of housing. The only conclusion I can reach is that somebody somewhere is making an absolute "kill"—be it the developer or the builder. I do not know where to point the finger but it should be pointed at somebody. Houses are being built for £19,000, £17,000 and £18,000 which could be built for £10,000 and £12,000. An enormous rake-off is taking place somewhere and the Minister should see where and why it is taking place.

We have a very strong rural bias and should seek to ensure that people born and reared in rural areas should be allowed to live there. From my experience in certain local authorities there is a trend—I appreciate the reasons for it but they do not justify the end—for people, particularly old people, to be forced out of their rural environment into town housing schemes. This is a very tidy and possibly less expensive way of housing people because in these schemes water and sewerage facilities and so on are laid on. It is quite cheap to build houses in these circumstances. It is very unfair to expect people who have spent their lives in a rural setting on their own land to uproot themselves and go into a town. They may be small towns but to such people they are conurbations to which they will never become accustomed. That is what is happening. I would ask the Minister to ensure that such pressures as are being brought to bear by certain sections of his Department would be terminated forthwith.

Mr. Barrett

I agree with the Deputy. No pressure comes from my Department.

Mr. Tully

The Minister will not give them the money to build on such sites.

Mr. O'Toole

Would the Minister accept that there is now a limit on the money available to build a rural cottage? If it goes above a figure which is in the region of £10,000 it will not be built irrespective of the site works involved, which may be substantial.

As a local representative I know of cases where the local authority have failed, having tendered for a contractor two or three times, to get a contractor to build a house on a particular site in a rural area because, despite the estimate given, the Department will not sanction the amount of money which the estimate comes to. It may be subtle pressure but the pressure that counts is non-availability of funds. If a person cannot get a rural cottage provided for him by the local authority he has no option but to uproot himself and go into a housing scheme. That is happening and I do not care what the Minister says. I am sure the Minister will agree with what I am saying. He may not be responsible for this personally but as Minister he must bear responsibility for it.

Mr. Barrett

We have not turned down any.

Mr. O'Toole

Can the Minister explain why a local authority has tendered three times for a contractor to build a house and nobody has come forward because as local authority officials pointed out to me, the amount of money made available for the building of that particular house was not sufficient to meet the estimate of the contractor?

Mr. Barrett

It is their own decision.

Mr. O'Toole

The Minister must have some responsibility in the provision of funds for these houses.

Mr. Barrett

We have not turned down any.

Mr. O'Toole

Is there a limit on the provision of funds for a particular local authority rural house?

Mr. Barrett

No.

Mr. O'Toole

There is no limit for the cost of a rural cottage?

Mr. Tully

There is of course.

Mr. Barrett

The unit costs are agreed from time to time.

Mr. O'Toole

It is a simple question. Is there a limit on the cost of a rural cottage?

An Leas-Cheann Comhairle

This is not Question Time. We are getting away from the motion in talking about the location of houses.

Mr. O'Toole

They cannot be built in the air. A house must be put somewhere. Location is important.

Mr. Tully

Some people are building them in the air.

Mr. O'Toole

The Minister has failed to answer the question about whether there is a limit on the cost. There is a limit on the unit cost. If the unit cost is the cost of the house, then I accept that the Minister has said there is a limit on the cost of providing a rural cottage and that limit is fixed from time to time. I know there is a limit. It is depriving people of houses in their own localities. The Minister is aware of that.

Local authorities have responsibilities but they cannot go beyond the amount of money made available to them. Their obligations and demands for the provision of housing cannot stretch further than the money made available to them. Two into one will not go.

I should like to reiterate the major problems facing us. From his speech last night the Minister seemed to indicate that he is happy with the progress being made, despite increasing numbers on waiting lists and despite the fact that people who should be providing their own houses are coming onto local authority housing lists due to the indifference and apathy both of the Minister for the Environment and the Minister for Industry, Commerce and Energy to control the price of housing materials. These are serious matters which must be confronted by somebody sometime. The present administration are either unwilling or incapable of doing so.

Mr. Tully

This evening a Government spokesman made a reference to the fact that Deputy Quinn, speaking last night, reflected on the Department's officials in regard to housing. I should like to make it clear that that was not his intention. There is no way in which anyone who knows anything about housing or about the Department of the Environment would reflect on the officials. No matter what Government are in office, they are an excellent set of officials who do their job well and there is no intention to reflect on them.

Officials will do what the Minister tells them and the Minister will, in the main, do what the Government tell him to do. What we are talking about is not what the officials or what the Minister did but what the Government told him to do. What is the Government's policy on local authority housing? That is very clear to anyone who is interested. The Government's policy was enunciated on 17 December 1975 and again on 26 January 1976 by the Taoiseach, then Leader of the Opposition, when he said that what was wrong was that too many local authority houses were being built in proportion to the total number of houses being built. That is the policy of the present Government. While the previous Government were in office and I had the honour to be Minister for Local Government, we decided on two things; one was that we would attempt to build 25,000 houses per year. I congratulate the Minister for the Environment on achieving the building of 25,000 houses last year. Unlike my predecessors in office and the Fianna Fáil speakers when I was in office, I am prepared to accept these figures without any question; the figures given are correct. This is a great achievement. Twenty-five thousand houses per year; over a period of the life of the Government which was slightly over four years, we built 101,000 houses.

Our second achievement was to build local authority houses for those who needed them. This is where the present Government and we differ. The present Government, quite obviously, do not want to build local authority houses for those who need them. The Minister of State at the end of his speech made what I would consider a rather sneering reference to the cost of centre city housing. I would point out to him that all over the years Fianna Fáil fell down on centre city housing and fell down for a number of reasons. One of the main reasons was that the then Fianna Fáil Ministers for Local Government had not the courage to sign CPOs for the purpose of making available land in the centre city when houses could have been built at a reasonable cost. In the 1960s when these CPOs were presented for signature, the Ministers would not sign them, and houses which could then have been built for around £1,000 are costing an awful lot to build. Instead of signing the CPOs and building the houses there the then Fianna Fáil Government decided to move housing out to the perimeter and to build satellite towns.

Most of the people living in these satellite towns are quite happy and are living in an area where they are at home. People living in the city centre wanted to remain there and the people who now live there want to remain there. It is ridiculous for anybody—and particularly ridiculous for a Minister of State—to talk about the colossal cost of building sites and building houses in the city centre. Do not forget this; those people who moved out to the perimeter of the city and are working in the city have to travel every day on already overloaded roads and streets. The State, or somebody else, had to build schools for them, provide doctors, provide churches, provide shops. All these things had to be provided in the new areas, while the ones already here in the city centre were left idle.

I want to tell the Minister quite plainly that, no matter what the cost, the centre of this city and of all other cities and towns in this country must be built up. That is where people should live, if they want to live there. A cost analysis would show that, in the main, it is as cheap, or cheaper, to live in the city centre as in the perimeter.

I am very proud of one thing. During my term as Minister, I persuaded the Government to agree to provide the necessary money to Dublin Corporation who were, mind you, willing enough to say that they wanted to build in the city centre but had made no move to do so while Fianna Fáil were in power, obviously because they knew they would not get the money to do it. I persuaded the Government to give me the money, and the Minister last night was rather apologetic about the amount of money being given to Dublin City and County and Dun Laoghaire for building houses. Let me say to him that there is no necessity whatever to be apologetic about that. Dublin City and County and Dun Laoghaire are the areas where there is most trouble about housing and this is where the money must be spent, whether he, or I, or anybody else likes it. I am not speaking as a Dublin man. We must cater for those with the most needs. We got barracking enough from the present Government when they were on this side of the House. They had all the answers; they have only the questions now.

When Fianna Fáil took over, we had reached the stage where we had not seen the end, or a prospect of the end, of the demand for local authority housing, but at least we were making a genuine effort to provide houses for those who needed them. When Fianna Fáil took over, in the first year they built 7,263 houses. I do not think the Minister, or his Minister of State, or anybody else, would attempt to claim that that was Fianna Fáil planning. In 1977 they built 6,333; in 1978 they built 6,073. What did they build in 1979? Would anyone like to guess that it would be down another thousand? These are the people who tell us that the building industry is doing well under a Fianna Fáil Government. One of the tricks used by the present Government over many years is that when anybody tries to corner them on their bad record in housing, and they have a bad record in housing, they always come back to the old one, the building industry. Would somebody try to explain? I have not the time to explain fully what the building industry covers. The Minister is well aware—perhaps more aware than most people here because of his position—that the building industry covers so many things that housing is a relatively small part of it. The sooner the Government realise that the real crux is local authority housing the better. They are bragging about all the money going into the building societies. Nobody is as glad as I am of that, and that this money is being used for housing.

Do not forget, when we took over back in 1973 there was not a lot of money going into the building societies and there was not an awful lot of that money being provided for building local authority houses. It took a deal of work and time to bring around the present position. I put through a Bill which modernised the building society law, which was 102 years old and which allowed a State guarantee for building societies which the present Minister, to his credit, introduced at the appropriate time. We would have done it. Some people might say that if we had been politically astute enough we would have done it before the election, but it was not necessary guarantees from these building societies and the necessary terms worked out. The present Minister did this and it brought a colossal amount of money into the building societies. Funds which were not available to the building societies before that are now available and I am glad to see that. A large amount of the money being spent in building houses is coming out of the building societies, not out of State funds. The sooner that is remembered, the better.

I come now to the question of the SDA loans and the low-rise mortgages. I introduced the low-rise mortgage scheme in November 1976. The position then was that it would apply to a man and his wife who were on the housing list with the local authority for 12 months and had one child. I still differ from the officials on their interpretation of one child at the time. My interpretation of it is that one child applies to the time when the loan was applied for. I should have seen that difficulty and I did not. When the time came to change the scheme it was changed to a parent and child and it completely ignored the greater demand, in my opinion, of the two parents, or the two people who perhaps had no family, had only just got married, or were married for a number of years and had no children. Why were they not included? I will tell you why. The low-rise mortgage scheme costs money and that is one thing this Government do not want to spend on the type of people who would avail of it.

We are told that if they do not want to avail of the low-rise mortgage, the SDA loan up to £9,000 is available to people with up to £77 a week. They would be the people who would be able to avail of the scheme. With £77 a week you can borrow a maximum of £9,000 if the local authority are satisfied that you are a suitable person to give £9,000 to and are able to repay it. Take a man with a couple of children who has £77 per week gross. Consider his outgoings or whatever he has to pay before he brings any money home. His take-home pay may be £68 a week and the repayment over a period of 30 years is £22-odd a week for his £9,000 loan. What is he going to live on? While he has that £9,000 loan what does he do? Not many years ago local authorities would have sites. They would take over land on which they intended to build local authority houses and they would rent or sell those sites to prospective house builders who qualified for them at a couple of hundred pounds a site. Now the lowest amount which would be charged for one of those sites is something in the region of £2,000 and it may well be up to £3,000. Take that from the £9,000 and where do we find ourselves? What is the person going to build the house with? He may go to the bank with his letter from the local authority saying that they intend to give him a loan of £9,000 when he has the house completed. That is no good to the man who is going to build the house. He must have money in his hand as the house goes on and so he goes to the bank and if he is lucky he borrows a few thousand pounds on the strength of the guarantee from the local authority. He finishes up paying that, starting to repay the £9,000 loan when he gets it from the local authority and if he is lucky enough to finish his house—God knows how he will do it—he then has to furnish it, start off a life, try to keep his family and pay for their upkeep with less than £77 a week.

I was criticised when I was Minister because I would not increase the income limit for the loan and I would not increase the loan. A very good reason to me at the time was that, while house prices were nothing like they are now, those who do not understand and those who have never had to live on a small income cannot see the point that there is no use in saying to somebody, "You can have a loan of that amount of money" if the person is not in a position to repay it. You are simply dangling something in front of him which is of no use to him. Instead of doing that I made the decision, which the Government accepted, that the proper thing to do was to build houses for those who really needed those houses, and we continued to do that.

The present Government are determined that they are not going to build houses for local authority tenants, that the amount of subsidy which they have to pay on it is far too high. The Minister and the Minister of State talked about the amount of additional money which was given by the State to local authorities. Even if you count the £4 million extra which the local authorities were entitled to borrow, it does not bring any more than about 10 per cent while the increase in the cost of houses last year was approximately 28 per cent. The result is that we are giving to the local authorities from the Central Fund less real money than they were getting three or four years ago and what is being said to those local authorities by the State is, "It is all right, you do not have to build houses. We do not expect you to." Fianna Fáil never believed in giving good housing to the working class. They are useful only on days like 7 June, but this will be remembered on this coming 7 June and for a long time to come.

Mr. F. O'Brien

I am glad to have the opportunity to speak on this motion because the Government have been speaking around it and not about it. We should get down to the basic facts of life and the reason why this motion was put down, which was to make more money available for local authority housing. Certainly we have had an increase in the allocation of funds for local authority housing, but when one weights inflation against our allocation we are in a minus situation in a big way. The Government cannot deny that. We are heading slowly for a housing crisis in this country, particularly in urban areas and most particularly in Dublin. We had housing crises before, in the 1960s, but we are heading for a major one now. This is not because people are afraid to provide for themselves. They are not; they want to provide for themselves but they get no assistance whatsoever from the Government.

In their manifesto the Government talked about the £1,000 grant. This £1,000 was a bonus for the builder and not a help to the housebuyer. Since the time that £1,000 was made available costs have escalated out of control. I am surprised that the Minister has not called for a public inquiry into the housebuilding industry regarding the profits and the extortion methods being used against unfortunate people. As a result now people cannot raise the wherewithal. If they go to a building society today for help they must have been 12 months with that building society and they must have at least £1,500 or £2,000 invested therein. If they want to buy a house that is the prerequisite with the building society. If they go to the local authority they must be earning £3,500.

Mr. J. O'Leary

It is now £4,000.

Mr. Barrett

Since last Friday week.

Mr. F. O'Brien

Dated back to when?

Mr. Barrett

Dating back to 6 April.

Mr. F. O'Brien

That is not much consolation to people looking for loans. In my view £77 a week today is not big money any more.

Mr. Barrett

Surely it is £79.

Mr. F. O'Brien

The Minister introduced a system of having to produce a tax certificate in order to get a loan. Previously at least you could go to your employer and ask for a statement of earnings and you could get a written statement that your earnings were, say, £3,850 per year. The Government raised the amount but they used despicable methods to try to stop people from getting loans. It is ridiculous. The Minister knows this. He is aware that the discrimination tactics with regard to getting a loan are scandalous.

Mr. Barrett

House prices increased in the four years under the Coalition by 110 per cent and the income limit remained at £3,250.

Mr. F. O'Brien

That was 110 per cent in four years. I came across a case where a girl bought a house in Firhouse for £11,500 and before she moved into it, within a year, the same houses went to £18,000. The Minister should inform his officials of that.

Mr. Barrett

She should have paid a deposit and signed a contract.

Mr. F. O'Brien

Luckily, she had the money. Within a year the price rose from £11,500 to £18,000, and the Minister is talking about a 110 per cent increase in four years. We are talking about 100 per cent in one year.

Mr. Barrett

No.

Mr. F. O'Brien

Certainly. The housing situation is a disgrace at the moment and the Minister knows this quite clearly and he is doing nothing about it. The amount is now £4,000. Why does he not make it £6,000?

Mr. Barrett

I went from £3,250 to £4,000.

Mr. F. O'Brien

We are talking about today and about people wanting genuinely to buy houses. People who want to provide houses for themselves are barred from doing so by the income limit. Most people who work in industry today earn in excess of the limit.

The Minister told us that the building industry is doing well. As Deputy Tully said, the building industry may be doing well but the house building industry is not doing well. The introduction of the low-rise mortgage by Deputy Tully was like a breath of fresh air. It was an innovation in the area of house purchase. I disagree with the rules that one must be on the housing list for 12 months and must have a child for 12 months. The low-rise mortgages should be available to newly-weds as they are the ones who are trying to provide homes for themselves. Why should they have to wait until they have had a child for 12 months? The rules of the scheme suggest that it was never meant to work.

The best way to encourage people to provide homes for themselves is to give them low-rise mortgage. We should also subsidise the provision of mortgages by building societies. The Government have not shown any imagination in the matter. Even the Government would admit that the £1,000 grant is useless. The Minister has not attempted to curb the escalating cost of housing.

It is clear that the Government are not interested in local authority housing. A reading of the White Paper suggests that the Government intend to cut back on local authority housing. When we were in Government we committed ourselves to the re-development of the inner city. Since Fianna Fáil came into office the only thing they have said about inner city housing is that it is expensive. Of course the cost of inner city housing is expensive. In Clondalkin the best agricultural land is being used for the building of roads, churches and schools. We have the same situation in the inner city area. Small-minded bureaucrats count only the cost of the bricks and mortar being used on local authority housing in the city instead of the overall cost in social and economic terms. They may claim that they are building in New Street, in the cattle market and so on. These commitments were entered into by the previous Government. When those houses are built I believe that Dublin will be allowed to slide into deterioration again. The Government are not interested in long-term proposals; they are only interested in expediency. They were elected on their promises and have now been in Government for two years. During this time there has been a decline in our housing programme, a decline in the commitment to regenerate the city.

Mr. Moore

That is not true.

Mr. F. O'Brien

I hear a voice from the wilderness.

An Leas-Cheann Comhairle

The voices will be silent in two minutes or less.

Mr. F. O'Brien

They have not committed themselves to inner city housing. In their current local election campaign they are saying that they are building this, that and the other. They have neither built nor planned. They have allowed the housing programme to run down because of the high inflation rate. A few years ago houses were built for £7,000. The same houses now cost £14,000, and in the city centre they cost £27,000. The Government have not investigated the rise in building costs. They have not done so because their friends in the building industry made it possible for them to be in Government. We shall see the greatest housing crisis and its attendant social problems if more money is not allocated for local authority housing.

Amendment put.

The Dáil divided: Tá, 57; Níl, 27.

Tá

• Ahern, Bertie.
• Ahern, Kit.
• Allen, Lorcan.
• Andrews, David.
• Andrews, Niall.
• Aylward, Liam.
• Barrett, Sylvester.
• Briscoe, Ben.
• Browne, Seán.
• Burke, Raphael P.
• Callanan, John.
• Calleary, Seán.
• Cogan, Barry.
• Conaghan, Hugh.
• Cowen, Bernard.
• Daly, Brendan.
• de Valera, Vivion.
• Doherty, Seán.
• Farrell, Joe.
• Faulkner, Pádraig.
• Filgate, Eddie.
• Fitzgerald, Gene.
• Fitzpatrick, Tom (Dublin South-Central).
• Fitzsimons, James N.
• O'Malley, Desmond.
• Reynolds, Albert.
• Smith, Michael.
• Tunney, Jim.
• Walsh, Joe.
• Flynn, Pádraig.
• Gibbons, Jim.
• Haughey, Charles J.
• Hussey, Thomas.
• Keegan, Seán.
• Kenneally, William.
• Killeen, Tim.
• Lalor, Patrick J.
• Lawlor, Liam.
• Lemass, Eileen.
• Lenihan, Brian.
• Leonard, Jimmy.
• Leonard, Tom.
• Leyden, Terry.
• Loughnane, William.
• McCreevy, Charlie.
• MacSharry, Ray.
• Moore, Seán.
• Morley, P.J.
• Murphy, Ciarán P.
• Noonan, Michael.
• O'Donoghue, Martin.
• O'Hanlon, Rory.
• O'Leary, John.
• Walsh, Seán.
• Wilson, John P.
• Woods, Michael J.
• Wyse, Pearse.

Níl

• Barry, Peter.
• Barry, Richard.
• Belton, Luke.
• Boland, John.
• Bruton, John.
• Burke, Joan.
• Cluskey, Frank.
• Collins, Edward.
• Conlan, John F.
• Cosgrave, Liam.
• Crotty, Kieran.
• D'Arcy, Michael J.
• Donnellan, John F.
• Enright, Thomas W.
• Fitzpatrick, Tom (Cavan-Monaghan).
• Flanagan, Oliver J.
• Gihawley, Eugene.
• Griffin, Brendan.
• Kelly, John.
• Kenny, Enda.
• McMahon, Larry.
• O'Brien, Fergus.
• O'Toole, Paddy.
• Taylor, Frank.
• Timmins, Godfrey.
• Tully, James.
• White, James.

Tellers: Tá, Deputies P. Lalor and Briscoe; Níl, Deputies McMahon and Tully.

Amendment declared carried.

Motion, as amended, put and agreed to.