Deputy Briscoe is in possession and has 23 minutes left.
Private Members' Business. - Local Government (Building Land) Bill, 1982: Second Stage (resumed)
Debate resumed on amendment No. 1:
To delete all words after "That" and substitute the following:—
"Dáil Éireann declines to give a second reading to the Bill
(i) in view of the probability that its provisions are repugnant to the Constitution;
(ii) because of the actions which the Government have taken in the Budget to ensure that a major part of the increased value of development land will accrue to the public through the substantially increased capital gains taxes on disposals of such land; and
(iii) because the Government intend to take whatever additional measures may be necessary to ensure that land is made available to local authorities for development free of any element of speculative gains, in line with the aims of the Kenny report, and to review the provisions of the Local Government (Planning and Development) Acts, 1963 and 1976 in regard to the zoning of land by local authorities and the operation of section 4 of the City and County Management (Amendment) Act, 1955 in relation to planning decisions.".
—(Minister for the Environment).
I should like to say at the outset that the Labour Party should not make the dangerous assumption that they have the monopoly on social conscience in this House. The reintroduction of this Bill has little to do with conscience, and the emotive language used by its supporters masks a poverty of original ideas and a limited grasp of the complex interaction of economic factors in our country. I am as much aware as the members of the Labour Party of the speculation in land on the periphery of major urban areas which has reached an unacceptable level. The answer, however, is not to swing to the opposite extreme which would create chaos in our local government system and could seriously jeopardise the building industry. The answer is not to make a futile attempt to rescue this flawed Bill. Indeed, we have had little evidence to suggest that the Labour Party are sincere in their alleged preparedness to discuss amendments to the Bill. This Government are already responding to the problem of controlling building land prices in a manner which is most suited not only to the provisions of our Constitution but also to the pace of our economic development and to our system of administration.
I believe that most members of this House welcome enthusiasm and innovation in our efforts to overcome severe problems in our society. These qualities need to be tempered by reason and foresight, if we are to achieve lasting solutions. I do not think that any of these qualities are evident in the promotion of this Bill. It is not new; it selects elements of the Kenny Majority Scheme, thereby reducing further the value of an already doubtful proposal. Above all, there is no indication whatsoever that the Labour Party have given any realistic consideration to the consequences for everyone of introducing this disruptive measure into our existing administrative framework. The re-introduction of this Bill is not just a misguided attempt to win popular support. It is — to use Deputy Higgins's adjectives of last week where they properly belong—a seedy and subversive exercise.
It is not unreasonable to await the Attorney General's considered views on the legal and constitutional aspects of the Kenny Report in the light of recent Supreme Court judgments of major constitutional importance, before rushing headlong into a discussion of legislative proposals. In the meantime, it is surely logical to examine proposals based on the Kenny Majority Scheme in the light of the advice and interpretation already available to us. But we do not believe, as both of the main Opposition parties seem to believe, that talk is a substitute for action. Any reference to the Minister's statement in this debate last week should be enough to demonstrate that this Government are approaching the problem of building land prices on a most comprehensive scale.
Fianna Fáil, as the Minister has indicated, are developing a comprehensive set of measures designed to tackle on all fronts the building land prices problem. Our approach has been to give detailed consideration to ensuring that it does not involve any of the disadvantages which are inherent in the Labour Party proposals. The taxation measures announced in the budget will have the effect of returning to the community a considerable proportion of windfall profits resulting from the provision of local services. It is more realistic in our present economic circumstances to generate revenue than to establish an elaborate system which would require very considerable capital investment. In addition, our taxation proposals have immediate effect, whereas the Labour Party proposals are so fraught with problems that I cannot see them operating effectively, either now or in the future.
The other options which the Minister has undertaken to examine are an earnest of his concern to find a workable solution to this difficult problem. It is not our policy to indulge in unrealistic theory, or to let our imagination run wild in contemplating results before we have even assessed the value or the potential of the measures which we would propose to adopt. We have acknowledged that there is no easy solution to the problem and the Opposition parties are being less than honest in their reaction to the Fianna Fáil approach if they do not agree that it is both sincere and responsible as a basis for dealing with land price control.
Deputy Higgins referred to the National Economic and Social Council, Report No. 55 "Urbanisation: Problems of Growth and Decay in Dublin" stating that "the Council suggested that something should be done about the Kenny Report and if that was felt to be insufficient something better than it should be adopted". He did not dwell on the council's recognition that there were "considerable difficulties involved in resolving this controversial issue" or on its acknowledgement of the suggestion that unless very large areas were designated so as to include virtually all land within reach of expanding towns and cities, fresh anomalies could and would arise between landowners within and outside the designated areas. Do the Labour Party seriously consider that this Bill is something better than the Kenny scheme?
Yes.
If they do, I must reiterate my colleague's question—why the delay in introducing it?
Shortage of arithmetic on this side of the House.
Deputy Higgins also failed to mention that the NESC Report published early in the Coalition's recent term of office pressed that "decisions should now be taken as a matter of urgency" and in spite of Deputy Quinn's acceptance in June 1980 of the possibility of improvement, his party evidently consider the Bill to be above criticism.
That is not true.
The Deputy will have an opportunity to speak.
On Committee Stage as we suggested?
Yes. Deputy Higgins also made wild allegations in this House last week about so-called subversive suggestions by the Minister. The Minister did not in any way suggest a diminished role for the Legislature, as Deputy Higgins suggested in his speech. Instead, he acknowledged the role of the highest court in the land in interpreting the Constitution, and suggested that the House should not waste its time debating a Bill which ignores recent Supreme Court decisions of major significance, and even disregards the basic principle of the Kenny scheme which was designed to validate the jurisdiction to designate an area. Deputy Higgins should not be complaining about a tedious re-run of the old objections that were prepared for the Minister in 1980. This is a tedious re-run of an old Bill and Deputy Higgins has failed to grasp that the Minister's reservations are based partly on constitutional interpretation of very recent origin.
I feel that I have said as much as I can on this subject and will make way for others, to give them more time to speak on the subject. I am sure there will be further contributions from the Opposition, although I am waiting to see someone from Fine Gael coming in who supports this measure. I understand from last week's debate that they are not coming in and that they stated in a peculiar way why they are not. Even Fine Gael are not supporting the Labour Party on this measure, I understand.
I do not know why Deputy Briscoe has come to the conclusion that Fine Gael are not supporting this measure. They have not said that ——
Yes, they have.
No, I do not know what attitude they will adopt, that will be a matter for Fine Gael to decide but a careful reading of Deputy Barry's speech on the Bill indicated that he called upon the Labour Party to withdraw it. He did not indicate what the attitude of his party would be in the event of this Bill coming to a vote. The Labour Party will not be withdrawing this Bill. The Bill was put forward by the Labour Party on a previous occasion; it was put forward by the party last week and this week and the Labour Party will continue at every available opportunity in the future to highlight the position that has arisen on the question of building land.
There are three distinct aspects to the Bill and to the question of building and development land. The first is the question of the taxation of speculative gains, the second is to ensure orderly planning of large areas for development and the third is to determine the ultimate price of land for housing purposes, both in the public and the private sector. There is no doubt that the recent improvements in the question of taxation are to be welcomed. They are an improvement on the previous position but the Minister in his speech conceded, as is obviously the case, that that is not an answer to the problem. It is more in the nature of attempting to treat the symptoms of the disease rather than tackling the disease itself.
A very important aspect of this Bill involves what might be described as orderly development. We are not talking here about development of small groups of five or ten houses but about large-scale developments, highlighted by the problems that we faced over the last decade, namely the construction and development of new towns. The population and demographic changes in the country over the last decade are the problems we have to face and we will have to face them again.
In the Dublin area alone we have had to build three new towns. Those towns have been developed so far under the free enterprise system staunchly advocated by the Minister and by Fianna Fáil. The result of that kind of development, where the building of a new town has been concerned, has left a lot to be desired. It has led to ribbon development and it has left the degree and stage of the development to the discretion of the industrial builders and developers. Take the case of the new town of Tallaght, which now has a population of 75,000 people. What have we there as a result of the free enterprise system? The town has been built to a population of over 70,000 but the heart of the town, the town centre, is still missing. The land for it is reserved and drawn on the map but the area that should be occupied by that town centre, by all the facilities and infrastructure that 75,000 people in a new town need, is not there. That has arisen from the basic, inherent defect in a large-scale development under the existing system. You may say you will have a new town in Tallaght, that the land is zoned for this purpose; you may invite the land owners to make planning applications to build on that land and they get planning permission to do so, but having got the planning permission, there is nothing in the system which obliges them to put that planning permission into practice.
They are not required to provide on that land that for which they obtained planning permission. They do that, if they do it at all, at a time and in a manner which suits the developer's financial purpose and is in no way designed to or aimed at the probable needs of that new developing town. That does not enter into the consideration of the developer. He does not ask if they need shops, a cinema, a library, a church or a health centre. That is not the criterion under which the developer in the free enterprise system operates. He decides which aspect of the development for which he has planning permission will produce the most immediate and highest degree of profit for him. It is on that basis of operation and progress that he proceeds to carry out the development. The local authority are helpless in this situation. All they can do is zone land for different purposes and hope and pray that the developers in some haphazard fashion will ultimately come forward and provide what they have planned. In fairness it must be said that, no doubt, eventually that will happen. I am sure all the infrastructure and the town centre that are needed in Tallaght, which I take purely as an example, will be provided. But can we wait that long?
This is the basic directive of the Bill, that that element of haphazard development in a large-scale development is taken out of the system, that the local authority are the guiding active hand in procuring and achieving that development because the local authorities, having acquired the land that is necessary, will then dispose of it by building contracts to developers in part and will develop such part as it may consider appropriate. The point is that in the situation envisaged by the Bill, the local authority are in the saddle. They control the development and make events happen, not awaiting them to happen at the will and whim of the individual developers. When the local authority specify or give out a building contract, in some cases for private houses, in other cases for local authority houses, for shops, factories, a library or for any of the purposes that make up a new town, the contract then specifies a time. The local authority decide they have the needs of the community at heart and they decide what is needed in the development of that town at that stage in its development. Being in control of the situation, they are in a position to specify by contract with the builders and developers what is to be built, how it is to be built and when it is to be built. The question of orderly development is a key and important aspect of the Bill because it can only be achieved by the local authority taking effective control of that development.
The financial aspects attached to land are a key factor of what is envisaged in the Bill. There is no doubt that developments of this nature — this is implicit in the speeches made by Deputies on all sides — developments of this scale, have produced substantial profits, and the question that arises for determination here is whether these profits should accrue to the community through the local and other public authorities or should accrue to private landowners whose land fortuitously happens to lie in the intended path of the development?
I first want to make one point clear, that there is no element of expropriation in this Bill. That emphasis has been put on it by Fianna Fáil, but the Bill makes it clear that every landowner whose land would be designated under the Bill would receive its full existing use value in addition to the full cost to the landowner of the relocation. Yet it is suggested that the existing use value is not adequate. By some stretch of the imagination it is contended that the landowner should receive not the existing use value but double, treble, quadruple or up to ten times the existing use value.
Is that what it is contended, in justice and equity, should be received by a landowner in that situation? We must look at the question of where this constructive increase in the value of that land comes from — whence comes that windfall? I will examine that in some detail.
You could have a case in which a man might achieve windfall profits from his land, admittedly without any effort on his part but in a situation in which taxpayers' money has not gone towards the creation of that windfall. Take the case of oil or minerals being discovered on a man's land. A man who finds such wealth gets a windfall profit purely fortuitously because he did not do anything to improve the value of the land, yet the value improved. That is a windfall, but the kind of windfall we are talking about in the context of the Bill is very different because we have to look at the question of what is it that increases the value of that owner's land.
It is not something that just happens. It is not the normal increase in the price of farmland. It arises in a very special way because of the fact that his land fortuitously is found to be in the path of development and it becomes serviced with water, drainage, roads, all provided out of public funds. That is the factor that causes the increase in the value of the land.
In the course of his speech on this Bill the Minister said that during 1982 he would allocate £87 million for public water and sewerage schemes. That money that he is to allocate — I am sure he will — was provided by the taxpayers: it was they who provided the Minister with the £87 million to be allocated, as he put it, for that purpose. The bulk of that will come from the PAYE sector of the taxpayers. We therefore reach this situation: PAYE worker, and taxpayers generally, pay their tax week in, week out, and the money ultimately gets funnelled into the hands of the Minister for the Environment and he will allocate £87 million to be expended, as the Minister indicated, on public sewerage and water schemes, going out into new virgin territory, land which was agriculture-based only.
It is that expenditure of taxpayers' money that under the system we have been operating produced the increase in value of that land, and what has happened is that the unfortunate taxpayer, like the young man setting out to buy a new house, will be paying many thousands of pounds extra for his house, the price increased artificially by development works for which that man has paid in the first place as a taxpayer. He is caught on the double, because it is his money, the tax he paid, that enabled the development of that land, yet the landowner who did not contribute anything to the development will get double, treble, quadruple the price of the land.
I do not know by how many thousands of pounds the cost of the house would be increased by the development, but we know it is very substantial, anything between £4,000 and £6,000. It is entirely outrageous, unjust and inequitable that the taxpayers, having provided the Minister with £87 million to carry out those developments, should find themselves having to pay later thousands of pounds more for their houses because their own money has been expended to increase the value of that land.
This applies not only in the private sector. It applies to local authority houses because the local authorities, in the calculation of rents and sale prices, when they come to sell houses, find that the land cost is as important and serious a factor as it is in the private sector.
The proposals in the Bill are moderate and it escapes me why any reasonable person would oppose the Bill. This is a situation that cries out to high heaven for something to be done about it, but what is the response of the Minister? He calls the Labour Party's attempts at equity in this form "cynical and dishonest". Deputy Briscoe called it "seedy and subversive". Where does the true cynicism lie here? Fianna Fáil recognised that there was a scandalous situation on the question of building land in 1971. They decided — I do not know why — they would do something about it. They commissioned a report which came through in 1973 as the Kenny Report. I do not know why they troubled to commission the report for all they have done to implement it. They must have had some doubt as to the constitutionality or otherwise of the proposals they had in mind because with great foresight they brought on to chair the committee the Supreme Court Judge, Mr. Justice Kenny, one of the most eminent lawyers in the country. It can be safely presumed that any proposal he would put forward or lend his name to would be prefectly legal and constitutional. Having got the report they did nothing about it.
The Minister levelled the same criticism against the Coalition Government of 1973 and rightly so. I accept that criticism and the fact that the 1973 Coalition Government did nothing about it reflects no credit on them. They brought in many worthwhile measures and many excellent reforming measures but I regret that the implementation of the Kenny Report in some form was not one of them. The fact that they did not do so may well have been a factor in many members of the Labour Party having reservations about participating in a second Coalition. Be that as it may, the second Coalition programme had provision in it for implementation of measures along the lines of the Kenny Report. I should like to think that had they the opportunity of staying in power for longer than the six months they did, they would have implemented it.
I wish to make some comments on the Minister's amendments to the Bill. One of his amendments indicates that the Government intend to take whatever additional measure may be necessary to ensure that land is made available to local authorities free of any element of speculative gains. The words used are interesting, "additional measures" it states. That presupposes that the Government have already taken some measures to ensure that land was made available to local authorities free of all elements of speculative gains. I know of no such measure in existence at present which enables local authorities to acquire land free of the element of speculative gains. I am curious to know what the Minister means by additional matters.
The Minister throws out a complete red herring and that is the question of the constitutionality of the Bill. He uses different expressions on different occasions. On one occasion he said there was a probability that it was unconstitutional. On another occasion he said there was no doubt but that the scheme proposed in the Bill is unconstitutional and on yet another occasion he said there were serious doubts about it. He does not give the source of his advice. Are we to take it that it is his personal opinion whether it is constitutional or not? It is interesting to note that in the course of his speech he indicated that he sought the advice of the Attorney General in the matter. That is the proper course to adopt because the Constitution, to which the Minister rightly pays such high regard, provides that it is the Attorney General who is responsible for advising the Government; yet he takes this line on the unconstitutionality of the Bill although admitting that he has not got the advice of the Attorney General to hand.
The Minister took it on himself to quote the decision of the Supreme Court on the Act dealing with rent restrictions as a basis on which the Supreme Court would hold this Bill to be unconstitutional. That decision was an entirely different situation because what the Supreme Court held was that the Act dealing with rent restrictions had the effect of depreciating the value of a house in the hands of the landlord. There is nothing in this measure to do that. This measure ensures the full use value of the land so that this situation is not comparable in any way with the decision of the Supreme Court.
The designation of the land ensures that it keeps its normal use value. The Minister made the point that it should be the court which should designate the land rather than the local authority as specified in the Bill. If the Minister felt that was his only objection, that matter and other consequential matters could be dealt with by a number of amendments to this Bill which the Labour Party would be happy to examine on Committee Stage.
Today on the Bill dealing with litter, the Minister produced seven pages of amendments to the House. Litter is another word for rubbish so that we have a situation where on a Bill dealing with rubbish the Minister is prepared to introduce seven pages of amendments but in the case of a Bill to provide homes for young people at a reasonable price he is not prepared to put forward any amendments and throws out the very valuable principles enunciated in this Bill — a case of throwing out the baby with the bath water.
The key explanation of the Government's attitude to the Bill is not really concern about its constitutionality, not that they have any real intention to implement the Kenny Report or anything like it, not that they are convinced that any other system of bringing equity into land sales is possible but simply that they do not want this Bill, mild and modest in its intentions though it is, on the Statute Book. This leads to the inevitable conclusion that they are concerned only to represent the few, those who have made and continue to make indecent profits from their land solely as a result of the expenditure of public money to service those lands.
The Minister spoke about inducing financial institutions to acquire the land and hold it for release to local authorities. He will have little trouble in inducing them. They would be interested in the profits that could be made on those developments and would require very little inducing but what comfort would it be to a young couple trying to buy their house at an unnecessarily inflated price to know that it is a financial institution that is now exploiting the situation rather than a landowner?
The Minister expressed the hope that his remarks would be seen as an indication of the bona fides of the Government in relation to the building land question. I am afraid not. Pious platitudes and statements of intent are no substitute for action. There is little merit in Deputy Brady pointing out that we are all concerned to ensure that land at reasonable prices for the purpose of house building is available and maintained. That is not the case at present and this Bill would mark major progress towards that end.
Deputy Barry was hopeful that an all-party committee might prepare legislation acceptable to all. It must be quite clear from this debate that it would not be possible on this subject to achieve agreement on all sides of the House. There are conflicting interests here. The time for action is now. If we miss this opportunity it will be quite a considerable time before the opportunity to achieve equity in this field is presented to the House again.
I must agree with the last speaker when he says the time for action is now. I must add that the time for action is probably long overdue. The fact that the Kenny Report was brought in in 1973 and has been ignored by successive Government ever since shows it is high time we had some action on this problem. The last speaker also went into great detail on the Bill, its implementation, and how it would deal with the situation. At the end of his contribution he referred to the heart of the matter when he mentioned the plight of young couples and young families who are the real victims of the neglect in this area for so long.
I have been a member of Dublin City Council for the past three years. The most serious social tragedy not just in our capital city but throughout the country must be the scandalous housing situation.
Hear, hear.
No public representative could claim to be unaware of this scandal. Every TD or councillor who meets his constituents in clinics or otherwise must be shocked at the plight of the unfortunate families who are forced to seek assistance from politicians to get what should be a basic human right in any civilised society, a home of their own. That families should find it necessary to go through the demoralising process of approaching politicans brings shame on all of us who are elected to serve these people. The scandal is all the greater because successive Governments on both sides of the House have failed to take effective steps to end it.
Dublin City Council have a housing waiting list of more than 7,000 families. Many thousands more on the corporation's transfer list are living in substandard and grossly overcrowded conditions. These statistics reflect the increasing difficulty experienced by a large section of our society in their attempt to obtain adequate living accommodation. What should be a primary social right is now beyond the means of many of our people. Of course, the tragic housing situation is one of the hallmarks of poverty and contributes greatly to many other social ills today.
I have referred to the situation as I see it as city councillor and now TD, because it is against that background that we must view those who profit from this situation. Perhaps the principal contributory element in the increasing cost of housing, both in the local authority and the private sector, as we all know is the very high cost of building land. The speculation and profiteering in building land is a crime. I can find no other way to describe it. It is a crime against our society. Those who profiteer in this manner are criminals in a far more real sense than many of those serving sentences in our prisons today.
The victims of those profiteers are the unfortunate families who exist in the most disgraceful conditions and whose children suffer in a way which makes a mockery of the constitutional demand that all the children of the nation should be treated equally. I can describe these speculators only as being on the same level as heroin dealers. Both profit from the misery of their victims. Both profit from the most vulnerable sections of our society. For the land speculator and the heroin dealer our existing laws seem to be inadequate so far.
I have no hesitation in putting these vultures in the same category. Between them they constitute all that is worst in our society today. There can be no justification whatever for the publicly structured scandal of speculation in building land while so many people live in such shameful conditions as a result.
For these reasons I must support the Local Government (Building Land) Bill, not because it provides all the answers but because it is an attempt to tackle a problem which has been ignored for far too long. That the Kenny Report has been set aside for so many years by various Governments would lead one to believe that both major parties in this House have vested interests in land speculation and are simply not interested in dealing with the problem. How deep those vested interests are may well be seen when the vote is taken on this Bill.
Hear, hear.
Even at a time when workers are told they must moderate their wage demands, at a time when a most inequitable tax system weighs heaviest on PAYE workers, the small minority of individuals who rake in enormous fortunes at the expense of the homeless are to be protected, apparently, by the two main parties in Dáil Éireann. Local authorities throughout the State, including Dublin City Council on several occasions, have called for the implementation of the Kenny Report or alternatively, significant measures to deal with land speculation. It seems to be fairly safe to call for the implementation of the Kenny Report or for a building land Bill if you are on a city council or a local authority. It seems that when people are in power and have the ability to deal with the problem they choose to ignore it. The vested interests appear to be determined to prevent any such measure being implemented.
To say this Bill is unconstitutional is an excuse only, of course, and a facade to hide behind when voting against the Bill. The same excuse is used for not implementing the Kenny Report. We all know the only way to test the constitutionality of the Bill or the report is to implement it. The tests are in the courts.
The Minister referred to the capital gains tax and the proposed special fund to enable local authorities to acquire a building land bank. In the recent budget we had £91 million allocated to Dublin Corporation. These measures have to be welcomed. There is no question about that. They can be welcomed only in the context of the disgraceful neglect of the past decades when nothing was done and the scandalous disregard of previous Governments for the housing problem. I regret to say the measures proposed by the Government are too little and too late. Indeed, the Bill is probably only a half measure.
In his statement the Minister referred to the dangers of introducing what he called a radical measure. In my view if ever a situation demanded a radical solution it is that obtaining in respect of profiteering in building land. I hope this Bill will go some way towards the provision of such a solution.
As Minister of State in this Department with special responsibility for housing I feel it incumbent on me to contribute to this debate in relation to the problem of building land.
The Minister for the Environment has already pointed out to the House that the Bill before us is exactly the same as that introduced by Deputy Quinn two years ago. In those circumstances I thought it might be appropriate to review the contribution I made to the debate on that earlier Bill when I expressed many serious reservations about its effectiveness in overcoming the problems it purported to solve. My remarks at that time are on the record of the House. Like Deputy Quinn I see no point in reiterating the arguments I made two years ago. I propose therefore to confine my remarks on this occasion to a number of points made by Opposition speakers on Tuesday and Wednesday of last week when the present Bill was before the House. I intend also to deal with a number of efforts by Deputies on the Opposition side of the House to distort the remarks made by the Minister for the Environment last week and to correct some misconceptions about the effect of this Bill.
At the outset I should like to refer to certain figures mentioned in the media since this Bill was first published in 1980 by Deputy Quinn and other members of the Labour Party about the estimated reduction this Bill, or a Kenny-type scheme, would effect on house prices. Leaving aside constitutional and other difficulties applicable to both these schemes — assuming for a moment that either of them was implemented — one might ask what reductions could be expected in the price of housing or in housing rents. In regard to housing rents I would point out that at present these are considerably lower than the economic cost of providing a house and, leaving aside altogether the site cost, even the maximum rent payable would not cover the cost of construction. Therefore there is no reason to suggest that either the scheme proposed under this Bill or a Kenny-type solution would reduce the level of local authority rents.
Enormous figures have been mentioned about the effect the provisions of this Bill would have on the price of housing. I understand that a possible saving of an amount up to £5,000 on the price of a house was mentioned on the radio recently. This type of outlandish suggestion can be described only as either demonstrating complete ignorance of the finances governing the housing market and a misunderstanding of what these types of schemes are intended to achieve or as a deliberate attempt to puff up the effects of the Labour Party proposals in order to gain their acceptance by the public.
If the Minister does not agree with the figures why does he not refute them?
I have never interrupted other speakers here.
I do not wish to be disorderly, I am simply inviting the Minister, since he has produced figures——
Deputy Quinn knows that he is not in a position to make such invitation. He is interrupting the Minister who is there for 30 minutes. There is a time limit on his contribution.
I am endeavouring to improve the quality of the debate.
Well, now, that is——
The best information in regard to undeveloped housing sites available at present was produced by An Foras Forbartha at the request of the Department in 1980, which shows that the average price for all undeveloped sites in the Dublin area was £4,000. The relevant figures for 1981 are not yet available but it is unlikely, in present economic circumstances, that this figure will have increased a great deal. Therefore a suggested saving of £5,000 on the price of a house would mean probably that not only would local authorities give away sites for nothing but that they would throw in up to £1,000 with the site for good measure.
The average area of a site is an eighth of an acre. Therefore the Minister is not comparing like with like.
However, it is difficult to estimate what are average site prices at the lower end of the housing market. Prices vary widely. In areas where a local authority would be likely to designate land under the majority recommendations of the Kenny Report, it is estimated that the average cost of undeveloped land is considerably lower than the figures published by An Foras Forbartha. Furthermore, figures for land cost would be considerably less outside the Dublin area. I think everybody would realise that to be the position. However, neither the majority recommendations of the Kenny Report nor the provisions of the Bill before us envisage the transfer of land acquired by a local authority for anything like its existing use value paid by the local authority. If local authorities were to transfer land to builders at its existing use value instead of recouping, for the benefit of the public good, the increase in its value attributable to the provision of services by them, this would mean that they would be giving to the individual new house purchaser the benefit of the full increase in its value. There would then be nothing to stop such a purchaser reselling the house at a later stage keeping the profit for himself. To prevent that happening it is necessary not only to control the building land market but also to control the second-hand housing market. Of course this would be completely impossible. Also it would be very difficult to prevent individual house purchasers who might benefit from such a scheme from selling their houses at a profit.
Deputies will remember a few years ago when a new tenant purchase scheme for local authority tenants was introduced and an attempt was made to claw back a percentage of the house price. However, this had not been revised because of the opposition to the original proposals. In addition to examining the site costs, An Foras Forbartha have studied the housing market.
One could conclude from this work that if land was less expensive in the Dublin area it would not necessarily result in lower house prices. Instead, purchasers would be enabled and would probably choose to purchase larger, better equipped new houses. This is because most purchasers of houses go to the absolute limit of their resources when buying. Any increase in productivity in the building industry over the years was not matched by lower house prices. It enabled a builder, however, to provide better equipped houses to meet the changing demands. It is highly probable, therefore, that if there are any savings made in the price of land this would result in a change of a preference by prospective house buyers for better constructed or larger houses. This is the general pattern in the smaller country towns where building land is cheaper than in Dublin.
An Foras Forbartha have also examined the relationship between new house prices and annual industrial earnings between 1970 and 1980. In 1970 the ratio of average new house prices to the average industrial earnings was 5.7. In 1971 this average was 5.5; in 1979 it was 5.4 and in 1980 it was 5.3. This shows that new houses were cheaper relative to income in 1980 then they were in 1970. It is wrong to say that house purchasers at present are worse off than the house buyers at that time, before the Kenny Report was even commissioned. This does not mean that we should become complacent. It is important that we get the basic facts right.
I turn now to the points raised in the debate by various Deputies. First was the question of land acquisition for local authority housing. I assure Deputy Sherlock and any other Deputies who are interested, that no change is at present contemplated in the procedures which have been established over the years as regards the forward acquisition and the selection of land by local authorities for their house building programmes, and in the manner of financing the acquisition. When he spoke last Wednesday in the House in relation to these matters, Deputy Sherlock expressed concern about the terms of a memorandum on the procedures to be followed and standards to be applied by local authorities in the provision of dwellings which was issued to all local authorities by my Department in April 1982. There is nothing original or new in the memorandum. It simply reiterates, in considerable detail, the various guidelines which have been applied to the local authority housing programme over the years prior to it and since the implementation of devolution procedures in the early seventies. For the first time all the various instructions have been included. The time was right for such a memorandum as it had become apparent that the escalation in the cost of local authority houses was due to a considerable extent to a lack of compliance with established procedures on the part of local authorities. It is possible that local authorities might have thought that those requirements had lapsed with the passage of time. This, however, is not the case. Indeed, the need for them was never more apparent than now, having regard to the steep increases in costs being experienced.
Adherance to such guidelines, for example, might have helped to reduce the cost of the many schemes built in recent years when site development works proved to be very expensive due to bad site selection or inefficient lay-outs resulted in the high cost of roads, footpaths and other relevant matters. I am sure that we all agree that any economies that can be achieved in the cost, without lowering the standard of houses, should be achieved. This would ensure that we get the best possible return in the number of houses of exceptionally high standard from any given allocation of money. I am sure that those at present on local authority house waiting lists would thank us if by doing so we built more houses and thereby lessened the waiting lists.
In the area of site selection, the guidelines require that the sites should be properly assessed by the authority in accordance with the general Department recommendations and subject to consultation with the Department's inspectors. I feel sure that Deputy Sherlock agrees that those procedures, which have been developed down the years, are still appropriate if we are to try to ensure that bad site selection will be eliminated.
The other aspect raised by the Deputy concerns the financing of land acquisition for local authority housing. The cost of forward acquisition for many years has been borne temporarily by local authorities by overdrafts or by other approved short-term loans which are generally obtained from the private lending agencies. The cost does not form part of the local authority housing capital until a housing scheme commences on the land when any holding charges incurred can be recouped from the appropriate scheme of a loan. My approval to the financing of such a purchase is necessary in each area where purchase is involved.
It has been the policy down the years that local authorities should confine such forward land projects to what is necessary for a reasonable housing programme. The practice that has been adopted in more recent years has been that new land acquisitions should be confined to what is necessary for the housing authorities: a five-year building programme. I am prepared to approve appropriate financing for proposals for acquisitions. However, I should add that in his contribution to this debate last week the Minister pointed out that the Government are in favour of forward land acquisition on as wide a scale as is possible. It is recognised that that would be of considerable benefit in ensuring that development value would be returned to the community and that the provincial services would not result in speculation gains accruing to a small minority of people. This approach has many advantages in the long term but in the short term the implications of diverting capital into land acquisition require very careful consideration. Because of this the Minister indicated that the Government will be considering the possibility of inducing financial institutions to acquire and hold land which they would release at a later stage to local authorities to enable them to meet their future requirements.
I wish to deal now with a number of points relating to section 4 of the City and County Management (Amendment) Act. It is the intention to review the operation of this section in relation to planning. In his contribution to the debate the Minister stated that there appeared to be general grounds for concern about the way in which the section is being used in a limited number of areas as a means of discarding reasonable and necessary planning. The Minister indicated that he would have to ascertain what can be done to meet that situation.
Deputy Barry said that he agreed with the Minister's view, that he, too, had considerable reservations about the uses to which section 4 are being put in a limited number of areas. However, we then had the extraordinary spectacle of Deputy Barry going on to accuse the Minister of having issued threats to the basic rights of the elected members of local councils and of suggesting the removal of the fundamental democratic rights of these elected members. The Deputy said that he could take no other meaning than that from what the Minister said. Of course, the Minister did not say that and neither did he suggest it. He was at pains to point out that section 4 was regarded by him as an important part of the balance between the reserve and the executive powers of local authorities and that he would be reluctant to see planning decisions removed from the scope of this provision.
Against this background it is a gross distortion to say that the Minister is proposing the outright abolition of section 4. The suggestion is unfair, misleading and dishonest. Deputy Barry spoke in much stronger language about what he termed the abuses of section 4 in a limited number of areas. At one stage he referred to disgraceful abuses in this context. But the Deputy does not appear to be prepared to allow any action to be taken to deal with what he describes as disgraceful abuses but Deputy Barry has been long enough in the House and has enough experience as a Minister not to jump to the conclusion that if a particular statutory provision is not operating in all areas as it should be, the only option is to abolish it. That is not the case. We are examining a whole range of options with regard to the operation of section 4 in the planning area but I do not wish to preempt the outcome of the review that the Government intend to have carried out. Consequently, it would be inappropriate to spell out what all these options are.
I might mention two other rather obvious possibilities. One would be to require a majority of more than one-third of the local membership of the council which is what is now required for the passing of a section 4 resolution relating to a planning application while another obvious possibility would be to preclude repeated applications for permission for development that have been refused on appeal except where there had been a material change in circumstances or until the specified period had elapsed. I am sure that Deputies, if they put their minds to it, would come up with a list of further possibilities.
The Minister in his speech said he intended to examine the provisions of the Planning Acts in regard to the zoning of land by local authorities. In a comment on this Deputy Barry said he would be loth to see any more powers taken away from elected representatives but the Minister did not say he was going to take away any powers from the local representatives. Finally, I should like to repeat what I said in 1980, that I am very anxious to tackle the problem of high prices for building land. I do not see the Bill as the answer to the problem. In fact, there is no easy answer to it, but the way forward is that proposed by the Minister last week and not the simplistic approach suggested by the Labour Party. The Minister's proposals are reasonable and represent a positive step forward. They are very important from the housing standpoint and will not disrupt the building-land market, something that should not be contemplated by any Government in present economic circumstances. The Minister's proposals are realistic and take account of the constitutional and other legal problems which Deputy Quinn and the Labour Party always seem to ignore no matter how many times they are told.
The best way to describe the introduction of the Bill by Deputy Quinn is to say that it is like a video show because it is a re-run of what was before the House two years ago. I was not a Member of this House then but I am aware of the views expressed by the Deputy on that occasion. I wonder why the Labour Party did not introduce a similar Bill during the seven months they were in Government.
I can assure the Deputy that it was not for the want of trying.
That may be so, but there can be no doubt that his fellow soldiers of destiny then were not prepared to accept his views in regard to land development. There is no way, as Deputy Barry said, that Fine Gael could support a piece of legislation which would be against the constitutional rights of people to private property. The Minister has outlined his reasons why the Bill is unconstitutional and the decision in regard to the Bill dealing with rents on private property supports the Minister's view. Deputy Quinn is wasting the time of the House because he knows his proposed legislation will not be accepted. However, it is his belief that introducing it now is a good political ploy before the Dublin West by-election. It is my view that it will not be sufficient to cod the electorate in that constituency. That constituency has a great housing problem and a great variety of houses, from the corporation houses in Inchicore and Ballyfermot to the £200,000 houses in Castleknock. A lot of development could be undertaken by local authorities, particularly in Dublin.
Deputy Quinn is entitled to his own ego trip in relation to this matter and I will not deny him that, but I wonder if he has considered the effect such legislation will have on building land throughout the country. Deputy Quinn viewed this matter in the context of the Dublin area but his proposals would have major repercussions in every town and village. Lands acquired by local authorities would eventually prove to be a major burden on their resources. The Bill does not deal with the financing of the takeover of private property for development. There would be a difficulty in rural areas and farmers could be put out of business if local authorities decided to acquire part of their farms. Half of a farm may be compulsorily acquired but the remainder of the holding may be worthless to the farmer as an agricultural unit. That would downgrade the value of that property for agricultural purposes.
That is not possible under the Bill. The Deputy has misread the provisions in it.
Those who read the Bill will know that I am correct. The Deputy has suggested that the local authorities should have the right to decide where the boundary should be. There is nothing to prevent local authorities deciding that a line should be drawn right through the middle of a farm resulting in that farmer being put out of business.
The Minister must approve of all plans. The plans go on public exhibition and a farmer would have an opportunity to make his case.
The Deputy has now admitted that what I said is correct because he has told the House that it would be a matter for the Minister to decide. We have had enough interference by various Ministers and, no doubt, Ministers from the Deputy's party interfered in cases when they had the right to do so in regard to planning permission. I am sure the Deputy will agree with me in regard to that. The Deputy's proposals could be detrimental to such an extent that people may conclude that private enterprise is the best means of development even if supply and demand is the ruling price criterion.
Deputy Quinn in the course of a radio interview expressed the view that the cost of a site would be effected by these proposals and he mentioned the figure of £5,000. That is not true.
I was referring to the price of a house and not the price of a site.
I presume the cost of a site must be taken into consideration in the cost of a house. Deputy Quinn, an architect, is aware that it is necessary to have a site to build a house.
Debate adjourned.