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Dáil Éireann debate -
Wednesday, 19 May 1982

Vol. 334 No. 8

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 Managment (Amendment) Act, 1955 in relation to planning decisions."
—(Minister for the Environment).

As I was saying last night, we can all see the effects this Bill would have on the constitutional rights of the people, and were it to become law every section would be tediously dragged through the courts by various property owners. If we look back at the recent Supreme Court decision on the Rent Act we can see there is unlimited scope for landlords and property owners to take this Bill through the courts section by section. If this Bill became law I wonder what effect it would have on the financing of these proposals by local authorities. I have grave doubts about the problems that would arise about the agreement on the figure reached for the purchase of land. I could see continual court proceedings by people who would feel their constitutional right to private property was being seriously affected.

The suggestion that the local authortites should decide the boundaries would give the local authorities a power they do not want. I do not think they would like to make the decision where a boundary fence should be drawn. A farmer could find that his land on the outskirts of a town or city was being divided. In that case who could decide what was adequate compensation? Only the public market can decide the actual value of property. That has been demonstrated very clearly in the past few weeks when we saw what happened to property speculators.

If this Bill were to become law it would be very detrimental to the environment of this city and every town, big or small. I can see Deputy Quinn's reason for bringing in this legislation, but he knows this type of legislation would not bring about the sort of movement with regard to planning and development that would be for the benefit of the ordinary citizen who wishes to acquire his own house. I often wonder if the Kenny Report, which is now almost ten years old, would be sufficient to deal with the problems facing us at present.

I can see problems arising because of class distinction in housing development. This is very sad. A site in one part of the city can be ten times the value of a similar site in another part of the city. I often wonder if a major housing development, having a mixture of working class, middle class and possibly corporation houses, would be successful. This class distinction has led to certain problems for young people coming from various parts of the city when they were seeking employment, because it has been proved that it is much harder to get employment in some corporations or institutions if you have the wrong address. That is why a long and hard look must be taken at all housing developments in the State, especially in Dublin and other major growth centres.

Many Opposition speakers, especially in the Labour Party, tried to persuade us that Deputy Quinn's proposals would be for the betterment of the country, particularly when it comes to reasonably priced houses for young people. If the Deputy looks at the land market he will see there is a reasonable amount of land available at reasonable prices. Land prices have slipped back in real terms in comparison to what they were three of four years ago. Various properties adjacent to the city were bought because the owners hoped for huge profits when the land was needed for development. Many of those properties are still lying undeveloped because at present it would not be financially beneficial for the owners to place the land on the market.

If we should look at the prospects of redesignating certain areas which should be acquired under this Bill we will see major problems. We will have to decide which land should be used for residential purposes or industrial development and see how best both can be blended. The disorderly development which has occurred around the city throughout the years has led to tremendous problems especially for people trying to get in or out of the city. The development allowed along our main link roads will pose great problems for road development in the future. The lack of an orderly road development programme will have to be taken into account in any further development plans. Deputy Quinn did not mention that in his proposals.

It is worth quoting again from paragraph 101 of the report since the Labour Party have been so obdurate in this debate. The Kenny majority advises:

... that the jurisdiction to designate an area must be conferred on a court established under the Constitution if it is to be valid,

and recommended that the jurisdiction should be conferred on the High Court. Many reservations about this advice have been made, based on considerations of the costs involved, the time involved and the potentially unwieldy nature of such a scheme. Nevertheless, it is the basic precondition for constitutionality, even in the view of the Kenny Committee, whose work has been superseded by more recent constitutional interpretation. The Labour Party speakers have not provided, perhaps because they could not, any satisfactory explanation of their reasoning on the question of area designation and I cannot understand how they envisage placing such an extraordinary burden on our local councils. I say that for the second or third time.

We have all heard enough about the rezoning of land in and around this city during the last six months to leave local authority members beginning to wonder if they are doing something that is totally wrong, even if they believe it must be done for the development of the area. The amount of land rezoned in and around the city especially in the past few months would lead one to believe that at the moment enough land has been earmarked for development to serve the needs of this city for the next ten to 15 years. Every section of Deputy Quinn's Bill would be questioned when it came to the courts. He mentions that the Minister for the Environment would have the decision on what land would be acquired and that the last appeal by people whose land was being taken under this Bill would be to him. That would place an undue burden on the Minister. I believe that the Minister was glad to be no longer the last person to be appealed to under An Bord Pleanála. Our courts would not be in a position to decide where the boundary line should be drawn.

Various Deputies have referred to local authorities calling for the implementation of the Kenny Report. The people who called for that action are those who did not examine the consequent repercussions. Many, especially on the Opposition benches here, see it only to be used where land is a must as far as the development of an area is concerned. The local authority of which I am a member could never see a need for implementation of the proposals in the Kenny Report. That may be due to the fact that it is one of our least populated areas. In rural areas and on the outskirts of our small towns there is on occasions need for compulsory purchase orders. In using those powers we have always found that the opposition came, not alone from the owner of the property, but from the people living in the adjoining area, who felt that the compulsory acquisition might have an undue effect on their environment and on that of the surrounding area. With reference to the pricing structure, Deputy Quinn's Bill proposes to give 25 per cent on top of the market value for any property. However it is hard to decide the market value of property when someone is being forced to sell and forced out of business. It is hard to estimate the total loss with regard to future earnings especially in connection with farms which could be fully developed and might be a greater asset to the community if left to be worked by the farmer concerned.

There are many other issues which Deputy Quinn's Bill fails to recognise. The Bill would result in very real difficulties for local authorities and their officials. I could forsee a major staffing problem, with local authorities having to put a large number of skilled senior officials on this type of work. We all know that it takes a long time to train local authority senior officials. We have seen the difficulty when new sections were established within the local authorities, needing a top official to spearhead the active work. How many people would the Deputy hope that it would take to run a section with responsibility for the implementation of the proposals of this Bill? Even within the Dublin city area, with Dublin Corporation and Dublin County Council, how many officials would it take to carry out a proper survey of the land available, or to become available, if this Bill were allowed through this House?

There is a known, definite need for re-examination of the position with regard to property for development around the country. Perhaps some of our banking institutions should be asked to provide some of the funds which they provide for speculative purposes to enable local authorities to build up a land bank for future development. We talk about their excess profits, but if some of these were put into proposals such as this, the banks would be justified in holding their excess profits.

We are all in agreement that there should be a restructuring of our policies for land development. The long-term holding of land by local authorities is a burden which they are not at present in a position to carry. They have a serious shortage of funds and, if we implemented Deputy Quinn's proposed Bill, we would only bring further hardship on them in the shape of the finance which would have to be found for this purpose.

(Cavan-Monaghan): When I spoke in this House on a similar Bill introduced by the Labour Party in 1980, I said that the Bill could be fairly summarised by saying that it proposed to solve the problem of exorbitant housing prices by controlling the price of building land. That is the motive and the principle behind the Bill and, on the face of it, they are a principle and a proposal with which one could not disagree. There is no doubt but that the present cost of housing has risen far beyond the financial capacity of young married couples and others. In 1976, according to the Quarterly Bulletin of Housing Statistics issued by the Department of the Environment, the average price of a house amounted to approximately £12,000. We find that, by the end of last year, that average price had increased very substantially to £33,000 — in other words, the price of a house almost trebled between 1976 and 1981 according to official figures. One of the main reasons for the exorbitant cost of houses is the cost of building sites. There are other factors that must be taken into consideration also, such as the cost of money, the amount of profit to be made by professional people, the amount of profits made by builders but there is no doubt that the price of building land is one of the main causes of the prohibitive price of houses.

In the late sixties a commission was set up under Mr. Justice Kenny to report on the control of building land and to suggest ways of maintaining it at a reasonable level. That commission reported, I think, in 1972 and the document known as the Kenny Report found its way into many Government Departments and many people's bookshelves. But the recommendations of that Kenny Report have never been implemented. One of their recommendations was that the maximum price of building land should be frozen at the market price of agricultural land — or whatever other purpose for which the land was being used; in other words, that it be frozen at its current use value — plus 25 per cent. It must be said that the Fianna Fáil Government when in office before looked at that report with a view to implementing its provisions or doing something about it and that the National Coalition Government, when in office, also considered the position arising out of the Kenny Report. I want to go on record as saying two things: first of all, even if the Kenny Report recommendations were accepted as constituting a solution to the problem, I do not think they could be implemented under the present Constitution. I want to make a general comment before coming to that. I want to go on record as saying that neither myself nor my party stand for the exploitation of housebuilders or house purchasers by land owners. I do not stand for windfall profit from the sale of land. I do not stand for speculation in the sale of land. I went on record before as so saying, and I repeat it. At the same time I do not stand, nor does my party, for the confiscation of land or its compulsory acquisition at a fraction of its market value. I believe that landowners should receive fair and reasonable compensation for their land. I believe also that in recent years there has been scandalous speculation in building land in and around Dublin city and other large urban areas, scandalous speculation by people who acquired land in the knowledge that services would be provided and it could be used as building land. Apart from such speculation there have been considerable windfalls occasioned by people selling land at many times its ordinary value, selling it as a scarce commodity.

I believe that the proposal in the Labour Party's Bill is not, as Deputy Ellis said, to pay present use value plus 25 per cent, but to pay present use value. That is not sufficient.

Plus relocation expenses.

(Cavan-Monaghan): I do not think that is sufficient. Neither do I think that the proposal in the Kenny Report to pay agricultural value plus 25 per cent is sufficient. I do not believe that that constitutes adequate compensation for the owner whose land is being taken from him under compulsory powers and against his will.

When I spoke here before I said I believed there should be a curb put on the amount that can be charged for building land, that there should be a ceiling placed on it, but that, on the other hand, fair compensation should be paid to owners. If the amount of fair compensation is still too high then the State should enter in in some way or other and subsidise it. When I spoke before on this subject I said I thought the proposal put forward by the Labour Party was unconstitutional and would not withstand the scrutiny of the Supreme Court.

Mr. Justice Kenny was a member of the Supreme Court.

(Cavan-Monaghan): He was until quite recently. I stated then that I believed that the Bill introduced by the Labour Party would not withstand the scrutiny of the Supreme Court but said that I would not labour that point.

Since 1980 the constitutional rights of owners of property have been tested on three occasions in the Supreme Court in regard to the control of rents. I want to go on record now as saying that, having regard to the decision of the Supreme Court in the Madigan and Blake cases and the referral of the last Rent Bill to that court, there is no chance of this Bill, as it stands, withstanding a Supreme Court action. I would stake my general legal knowledge and experience on it and I would not mind having a good bet on it that there is no chance of this Bill standing up to a Supreme Court case. If that is so we are taking the risk of delaying the control of rents further. When the Fianna Fáil Party were in Government they set up the Kenny Commission and having had an opportunity of considering the Kenny Report they did nothing about it. I must also admit that the Coalition Government were unable to deal with it either. I believe the reason for that is that the Kenny Report is unworkable.

The Government put down an amendment to the Bill introduced by the Labour Party. I believe that amendment is really a bit of shadow-boxing. It proposes to shelve the matter further by leaving the matter in abeyance on the promise of the Government to take whatever additional measures might be necessary to ensure that land is made available to local authorities for development free of any element of speculative gains. They do not talk about windfalls. There can be highly exorbitant prices charged for land. The Government also say in their amendment: "in line with the aims of the Kenny Report". If the Kenny report is workable and is a solution why did they not solve the matter when they were in Government on two occasions since that report was published?

The Government's amendment is put forward now to get the Fianna Fáil Party out of a difficulty. When we were last in Government we investigated fully the possibility of introducing a Bill to deal with the matter on the lines of the Kenny Report. I am absolutely certain, notwithstanding what Deputy Mervyn Taylor says about Judge Kenny being a member of the Supreme Court, that this Bill will be rejected by the Supreme Court. Judge Kenny was a member of the Supreme Court who shot down the Rent Control Acts which operated here for the last 25 years. He was a member of the Supreme Court who shot down the Rent Act introduced by Fianna Fáil the year before last. He was a member of the Supreme Court who rejected the Rent Control Act introduced by the Coalition Government last year. All those Acts were rejected by the Supreme Court on the grounds that they interfered with the rights of private property. It was stated in one of those judgments that the just rent for a private house is the market rent. That is the reason why I say that the Supreme Court are certain to reject this Bill.

The Bill gives the full price.

(Cavan-Monaghan): It gives the full price for restricted usage. It does not give open market price. I am not in favour of open market price because that is the sky is the limit. I do not want to be misrepresented. I am against that because it is unfair and is an exploitation of people who want houses. I also want to go on record as being in favour of the owner getting a reasonable return for the land which is taken from him. I will go further and say that if it is necessary for the State to make an input into the price the owner of the land has to get, then let the State do so.

This matter is being made into a political football. Each party are trying to solve it on their own but no party have succeeded in doing so. Different Governments are at it for the last ten years but still the speculation goes on, the exorbitant prices are charged, the price of houses is soaring and the people are not in a position to finance those houses.

When the Deputy Leader of this party, who is spokesman on the Environment, spoke earlier in this debate he appealed to all parties in the House to agree to the establishment of an all-party committee to report within a limited time on ways and means of controlling the price of building land. He appealed to the Government to give the lead, to stand up and say they are prepared to set up an all-party committee to consider the problem of high land prices and to report to the House on how best they think the problem can be solved. I want to repeat that invitation. I ask the Minister for the Environment to agree to the setting-up of an all-party committee of Members of the Oireachtas to consider the evil of unlimited prices being charged for building land and to make suggestions to the House how that problem can be solved. I want the Government to give an undertaking that on receipt of that report it will be dealt with immediately.

This Bill has many shortcomings and it has some defects which could be cured in Committee. The major flaw in the Bill is that it will not get through the Supreme Court. There is no use in putting on the Statute Book something that we know beforehand the Supreme Court will reject. In doing that we are delaying the cure, delaying the day when the evil of exorbitant land prices can be dealt with. That is my view and it is the view of my party. Until something is done about the situation people will continue to speculate in land because land is a necessary ingredient in house building. The location of land is very important. Land is not a movable property. It attracts large profits when it is in and adjacent to urban areas. There is an onus on a Government who set up a commission to deal with this problem, who received the Kenny Report and who now apparently concede that the recommendations will not work, to do something about the situation.

What is the point, after nearly ten years of considering that report, of coming here and asking the House to accept a pious undertaking that something on the lines of the Kenny Report will be done about the problem? That is what this amendment means. I might add that the only people in this House who have ever done anything about trying to prevent people from making exorbitant profits out of land have been Fine Gael and Labour when in government. We introduced capital gains tax in the 1973-74 period. That was a tax to prevent people from being free of any liability to tax on huge profits and who, consequently, were making tens of thousands or even hundreds of thousands of pounds per year tax free. Admittedly, the capital gains tax did no good for the house builder but at least it resulted in getting some money out of the pockets of those who had reaped the gains on the sales of land for building.

When Fianna Fáil returned to power in 1977 they virtually revoked the capital gains tax legislation by tapering off the amount of tax that could be collected. But, again, the National Coalition attempted in the budget they brought forward this year to reintroduce the capital gains tax system with a substantial increase in respect of development land. We have clean hands so far as land speculation and windfall profits are concerned because we tackled the problem by way of taxation and in accordance with the Constitution. Fianna Fáil pulled the teeth out of that tax system at the first opportunity.

I appeal again to the Minister for the Environment to agree, even at this stage, to set up, without qualification, an all-party Oireachtas Committee to report within a specified time — and that should be a short time — on the problem of land prices and to recommend to the Government methods of solving the problem. I have asked before, and I repeat the invitation, that the Government give an undertaking that, if they are still around, they will act promptly on the Kenny Report.

The housing situation nationally is a scandal. Young people are being forced either to buy or build houses which they are not in a position to finance. This is because not enough local authority houses have been built down through the years. We must build more rather than fewer local authority houses. Because of the present situation young married couples must enter into commitments far beyond their capacity to meet, with the result that both husband and wife must work in order to finance such undertakings when in many cases these young married women would much prefer to be at home looking after their homes and families. The idea and philosophy behind the Bill is sound — to make housing land available at a reasonable price, but the vital defect and flaw is that it will not do the job because it will not get through the Supreme Court. I do not think we should play politics with this topic above all other topics. The solution is to adopt Deputy Barry's suggestion and I hope the Minister gives that undertaking.

Ordinarily the Minister of State would have 30 minutes but there is not 30 minutes available because the proposer of the motion, or somebody on his behalf, must commence the reply at 8.15 p.m. The Minister of State has a maximum of 25 minutes.

I should like to ask the basis for calling the Minister of State at this stage because there has already been a Fianna Fáil and Fine Gael speaker. I would have thought that it would have been a Labour Party speaker now. The mover of the Bill has a right of reply at 8.15 p.m.

The Deputy will appreciate that the Chair does not have to explain the reason he called the Minister of State. He understands that normally we move from one side to the other. The Deputy will also appreciate that if I were to call a Member of the Labour Party now it would mean that from now until 8.30 we would have representatives of that party only. I have called the Minister of State.

(Dublin South-East): On a point of order, I should like to know if the time being taken up now will be allocated to me?

No, the Minister of State must conclude at 8.15.

There has been no Labour Party speaker tonight and there will not be other than the formal right of Deputy Quinn to reply to the debate at 8.15. Earlier we listened to a Fianna Fáil speaker——

There are other Fianna Fáil speakers ready to offer.

——and we also had a Fine Gael speaker. In the normal course of events in Private Members' Time at this stage a speaker from the Labour Party would be called. I must ask the Chair to explain why that is not being done.

The Deputy should not ask me why not. I have indicated to the Deputy that I have called the Minister of State who has already had two or three minutes of his time taken from him. The Deputy should give way to the Minister of State so that we can proceed with the debate in a normal and orderly fashion.

I will give way but I want to give notice that I will raise the matter with the Committee on Procedure and Privileges because I believe strongly that the Chair has made a serious error of judgment.

(Dublin South-East): It falls to me, on behalf of the Government, to make the final contribution to the debate on this Bill. It has been a rather unusual debate, with only one or two speakers from the main Opposition party and relatively few other contributions from the Opposition benches. It follows that virtually all that can be said by this side of the House has already been said. It is clear, however, that much of this has not sunk in and I offer no apology——

If the Minister worked out the time in half hours he would see that there could not have been any more than two speakers from Fine Gael and both slots were filled.

(Dublin South-East): For the information of the Deputy I have a list of who spoke during the debate and the time taken by the speakers. I did not interrupt any speakers.

If the Minister of State worked out the time allotted to the speakers he would see that there could not have been any more speakers from Fine Gael.

The Minister of State should overlook any interruptions. The Chair will deal with them. The Minister of State, without interruption.

(Dublin South-East): I hope that will be the last interruption.

I am anxious to set the record straight because there is an inference in what the Minister of State has said which is unworthy of him.

(Dublin South-East): In addition, I will be dealing with some of the points raised by Deputies and which my colleague, Deputy Connolly, did not have time to touch on last night. Because of its fundamental importance I want to deal with the issue of constitutionality first. It is an abdication of the responsibility of this House to attempt to discuss the constitutional issue in regard to the control of building land prices in a few glib and shallow sentences. The Government are not waving the Constitution as an impediment to socially desirable legislation, and we would resent Deputy Higgins's imputation of cowardice and dishonour all the more if it was not so obvious that he was relying on rhetoric rather than research in his contribution to this debate. It is a matter of plain common sense to acknowledge the Supreme Court's interpretation of the Constitution in recent times and to examine legislative proposals which may have a significant impact on rights guaranteed by the Constitution in the light of that interpretation. No Deputy — on this side of the House at least — would question the obligation of the House, to the best of its ability, to legislate within the framework of the Constitution, and the procedure of reference of Bills by the President to the Supreme Court has, in the past, been used sparingly and in special circumstances. We have taken great pains to explain the constitutional basis upon which we object to this Bill. The Labour Party, in the absence of any other arguments, have introduced the red herring of propriety in an attempt to frustrate any constitutional discussion. This is an extraordinary example of irresponsibility, and an argument which is likely to bring the standards of this House into disrepute.

Before I leave the issue of constitutionality, it might be beneficial to examine, for a moment, the essential features of a decision on a reference to the Supreme Court under Article 26 of the Constitution. The court, in its recent judgment on the reference of the Housing (Private Rented Dwellings) Bill, 1981, gave an exposition of these features and of the ways in which such a decision is unique, in the manner in which it is reached and in its consequences, in order to dispel an apparent misapprehension as to the nature and extent of the court's jurisdiction in this regard. It drew attention to the fact that its function under Article 26 is to ascertain and, if appropriate, to declare repugnancy to the Constitution in a referred Bill or in specified provisions of a referred Bill. I now quote from the judgment on the Housing Bill reference:—

It is not the function of the Court to impress any part of a referred Bill with a stamp of constitutionality. If the Court finds that any provision of the referred Bill or of the referred provisions is repugnant, then the whole Bill fails, for the President is then debarred from signing it, thus preventing it from becoming an Act. There thus may be areas of a referred Bill or of referred provisions of a Bill which may be left untouched by the Court's decision. The authors of the Bill may therefore find the Court's decision less illuminating than they would wish it to be.

We should be quite clear, therefore, that reference to the Supreme Court is in no way a substitute for the vigilant attention of this House in examining closely every aspect of a Bill such as the one we have before us. Equally, we should keep in mind the precise, and in a sense limited, context within which the Supreme Court makes its judgment.

The Supreme Court has also pointed out that under Article 26.2.1 its decision is reached after hearing arguments by or on behalf of the Attorney General and by counsel assigned by the court. The article does not refer to hearing of evidence, and evidence has not been heard in any of the references made to the court. Instead, the matters argued, in all references, have been dealt with as abstract problems. In deciding a reference, therefore, the court, to use its own words, "acts on abstract materials in order to cope with the social, economic, fiscal and other features that may be crucial to an understanding of the working and the consequences of the referred Bill". This procedure is of crucial importance when the provisions of Article 34.3.3 of the Constitution are taken into account. This Article provides that:—

No Court whatever shall have jurisdiction to question the validity of a law, or any provision of a law, the Bill for which shall have been referred to the Supreme Court by the President under Article 26 of this Constitution, or to question the validity of a provision of a law where the corresponding provision in the Bill for such law shall have been referred to the Supreme Court by the President under the said Article 26.

The Supreme Court's awareness of the implications of taking a decision on the basis of abstract arguments which may never be questioned again in any court emerges very clearly in their judgment on the Housing (Private Rented Dwellings) Bill, 1981. I would be most concerned that a Bill when enacted could have unforeseen consequences in practice when it would be immune from any challenge. This House should accept that the Supreme Court have laid down the parameters of their jurisdiction and it is our responsibility to ensure the passage of legislation which will work effectively and efficiently.

The Bill before us is undoubtedly flawed. I cannot see the logic of suggesting, as Deputy Higgins did that if found to be unconstitutional "it would be a perfect record of what representatives in this assembly had considered necessary to bring before their fellow elected Members". Our approach is far more positive and far less time wasting.

Deputy Mervyn Taylor is a lawyer and one would have expected him to be reasonably careful in examining the remarks made by the Minister for the Environment on the question of constitutionality and in commenting on those remarks. Instead, however, the Deputy chose to criticise the Minister for using different expressions in regard to this aspect of the problem and for expressing a view on the constitutionality of the Bill. He agreed that it was right to seek up-to-date advice from the Attorney General on the constitutionality of the Kenny scheme but seemed to say that it was wrong to express any view on this Bill, which departs in substantial ways from the Kenny scheme, until that advice is available.

In his speech last week the Minister was at pains to point out in straightforward non-technical language why he felt that this Bill was clearly not consistent with the Constitution and why he felt that, in the light of developments in constitutional law since 1973, there were, at the very least, serious doubts about the constitutionality of the Kenny scheme itself. It is difficult to argue and debate matters such as this in the House but I am confident that if Deputies study the Minister's remarks, when they are printed in the Official Report, they will appreciate the force of his arguments and will agree that Deputy Taylor was totally wrong.

Deputy Taylor claimed that the Rent Restrictions Act judgment had no relevance to the present Bill because the Bill does not contain any element of expropriation of property rights and would allow all owneres to receive full current use value. This, however, ignores a 1972 Supreme Court judgment in which it was held that the value for which compensation must be paid is the value to the owner, being the market value or full price of the lands, plus every element of value which the land has and all the advantages which that land possesses, present and future, including hope value.

Several Attorney Generals have been asked for their views on this problem right back to the mid-sixties and all of them have said that, while there was no constitutional bar to the compulsory acquisition of land, in the interests of the common good it would be very difficult to acquire any such land at anything less than the full market value, plus adequate allowances for disturbance etc.

In addressing the House last week the Minister spelled out the substantial changes which the Government have proposed in relation to the application of capital gains tax to gains from disposals of development land. I find it very difficult to accept the attitude of some Labour Party Deputies in relation to these measures. Deputy Quinn, for example, suggested that such measures could well have an inflationary impact on land prices in areas adjoining urban centres and that the end cost of land would be dearer rather than cheaper in the short-term until the market readjusted itself. This is, undoubtedly, an arguable point, but I should emphasise that the Minister's speech last week stressed that an approach based on taxation was not of itself a complete answer and that it was for that reason that other options were being considered by the Government.

It is very strange to find a Labour Party Deputy finding fault with a severe new capital gains tax regime. It is particularly odd to find such a Deputy finding fault with what has been described as the 30 per cent withholding tax which has been introduced as part of the package of capital gains tax measures. Surely it is obvious to Deputy Quinn that the objective of this particular measure is to counter avoidance of tax and, while the details of the withholding arrangement are still being considered, and will be included in the Finance Bill when it comes before the House, it seems very odd to find criticism of an anti-avoidance measure of this kind coming from the Labour Party who have been calling for a crack-down on speculative gains for quite some time.

Is the Minister sure it will be in the Finance Bill?

(Cavan-Monaghan): The Finance Bill will be worth reading.

(Dublin South-East): It begins to look as if the Labour Party want to have their cake and eat it. Can it be, I wonder, that they are finally beginning to realise that there really is a need to encourage enterprise and that the sort of penal rates of taxation for which they have been clamouring for years would, if applied throughout the economy, stifle enterprise, effort and achievement of all kinds and bring about stagnation in the economy? The capital gains taxation package put forward by the Government seems to me to be a reasonable one which achieves a proper balance between, on the one hand, the need to tax income and gains of all forms in an equitable manner and, on the other hand, the need to avoid creating a situation in which nobody would be prepared to sell land voluntarily because of the small net return any such sale would bring to him.

Deputy Higgins in his contribution admitted that it was obviously better to tax gains made on disposals of land than to permit tax-free speculation, but he then went on to criticise this approach for the reason that it involved acceptance of the principle of speculation. This, indeed, is a rather extraordinary argument. Does it mean, for example, that one should not tax cigarettes and tobacco because to do so would mean acceptance of the principle that people should be allowed to go on smoking, thereby damaging their health? Does it mean that it is wrong to levy a tax on private motor cars because this involves acceptance of the idea that people are entitled to go on driving in private cars rather than use public transport?

Many taxes levied on gains or on other forms of income or commodity are open to criticism for the reason that the person on whom the tax is initially levied will attempt to pass on the tax, or to recoup himself in some way. But we cannot allow this to prevent us from levying taxes on gains where such taxes are clearly called for. Such taxes, alone, are not the solution to the building land problem and the Government have not suggested this. But to criticise the Government because they had the courage to tackle the problem of taxing capital gains, which in effect is what Deputy Higgins has done, is a nonsensical approach which does little to advance the basic thesis which the Deputy was attempting to put forward in his contribution to the debate.

The Minister, in his speech on this Bill last week, set out a package of measures which in addition to the capital gains tax changes are clearly considered——

(Interruptions.)

(Dublin South-East): I am doing my best to finish my contribution and to facilitate the Deputies. There is very little to recommend that type of conduct from the far side of the House.

(Cavan-Monaghan): What type of conduct? I am sympathising with the Minister of State in his difficulty.

(Dublin South-East): The Minister in his speech on this Bill last week set out a package of measures which in addition to the capital gains tax charges are being considered to deal with the building land question. These are: (a) control of site costs through the CRV system, (b) increased emphasis on water and sewerage programmes, (c) forward land acquisition possibly involving financial institutions, (d) review of CPO law and possible introduction of pre-emption system, (e) review of planning laws, especially provisions regarding rezoning, (f) review of operation of section 4 in relation to planning decisions.

The Minister also said last week that the question of building land prices was one of the most intractable problems faced by governments not only in this country but throughout the western world, and that there is no easy solution of the problem. He stated that there was a real need for a more informed public debate on the whole issue. However, before any proper debate can take place it is necessary that public representatives and others interested in the subject are aware of all the facts of the issues involved, not only the facts that were available to the Kenny Committee a decade ago but also information on all major developments that have taken place in the meantime. It is only when such information is available that the issue of building land costs can be debated properly. The Minister intends to produce a factual discussion document on all aspects of land problems which then could be debated in this House together with the proposals for dealing with the problems. It should be perfectly clear to the House that the Minister and the Government do not intend to sweep the matter under the carpet. It is our intention to deal with the problem using all the means at our disposal.

This Fianna Fáil Government, having regard to the general public concern, to the debate and to concerns expressed by Deputies, will establish this select committee to examine all aspects of the building land in question. The discussion document to which I have already referred and Deputy Quinn's Bill will, I suggest, be of assistance to the committee. It is the Government's wish that the work of the committee will lead to early agreements on the legislative approach to this problem.

I thank the Minister of State. That is very sensible.

I call on Deputy Quinn. I would like to explain that my attention has been drawn to the fact that this is a six-hour debate and it did not commence until some minutes past seven o'clock tonight.

I would like to give Deputy Kemmy three minutes in which to make a contribution and then I will make a comment.

I thank the Leas-Cheann Comhairle and Deputy Quinn. I tried to get in before but it was difficult for me to do so. I will take just three minutes.

I found an air of unreality about much of this debate during the last two weeks or so. The use of land, particularly building land, is a matter of great urgency in our society at present, but this urgency has not been reflected in the debate in this House. All too often in the past land has been treated in Irish society in isolation from people, especially in isolation from the rights of people to housing. Land has always been canonised in Irish life in the past, and given the reverence shown towards it, we have not shown the same reverence to our people in that we have sent a million of them out of the country to other countries. For historical reasons land has always been given an exalted place. This attitude must change because we have a young and fast-growing population who have two basic needs, a need of employment and a need of housing. We must have housing for our people as a right, not as a privilege. We must have housing at reasonable prices and reasonable rents, but this is not happening. We have gross exploitation of housing and housing land. This exploitation is not done by faceless people; it is done by people in this House and their supporters who are wealthy and influential. The exploitation is having the effect of making house prices exorbitant and putting them beyond the reach of young people who seek accommodation, and this applies even to rented accommodation.

The Kenny Report was an attempt, and an attempt only, to find a remedy for this matter. It was only a very small step on the way. We have been told by Deputy Brady, Minister of State, and by the Taoiseach that the market value of land is sacrosanct and takes pride of place above everything else and that you cannot tamper or interfere with that. I reject that notion because the Constitution has been invoked in this matter and speculators are hiding behind the Constitution clause. It seems that property is in some way superior to the rights of people to housing and to the common good. That is not right. The Constitution should be merely a framework and a guide to living. It should not be some sort of sacred document that cannot be tampered with. Speculators are taking advantage of this clause in our Constitution to make vast profits at the expense of our people. It is totally unacceptable that people can make millions of pounds from the rezoning of agricultural land to building land while tens and hundreds of thousands of people have not housing and cannot afford it. It is totally wrong that a small, privileged group of people can make vast profits, sometimes as high as £15 million, while other people cannot afford the price of a flat or a mortgage on a house.

This motion before us is a small step forward in the matter of curbing the exploitation of building land. If we are to have cheaper housing and cheaper accommodation in general we must have control of building land. The rights of people must be respected. The right to housing is above the right to make profits. I support the motion as a small step forward.

Deputy Kemmy, I am afraid that your interpretation of three minutes does not coincide with mine. You have got four. I ask you to give way to Deputy Quinn now.

All right. People before profits.

I will try to summarise as quickly as I can. This is important legislation. Every Member in this House has claimed to agree with the objectives, and that something should be done, but that the Labour Party Bill contains flaws. We all know from the changes in administration over the last four or five years that there is no other such Bill, even in draft, available to whoever happens to have the good fortune, or perhaps misfortune, to be Minister for the Environment.

I have listened to the arguments from all sides of the House and I believe that there is a clear solution to this problem. We have that solution. The technical arguments that have been put forward have not been sufficiently well detailed to indicate clearly why certain sections of this Bill could not work. Perhaps that is the difficulty in a Second Stage debate. One of the problems in a Second Stage debate is that, while people range over the principles, they do not get down to the details. The Minister in his amendment and in his contribution tonight through Deputy Brady, Minister of State for urban affairs, has gone a considerable way towards recognising the need for a comprehensive solution. They have responded to the proposal originally put forward by Deputy Barry to have some kind of committee. Our immediate answer is that if the Government give us Second Stage tonight we will automatically go into Committee.

In view of the unique problems with regard to constitutionality we should get the formal view of the Attorney General on the matter. The proposal of the Minister is a unique advance on anything this House has witnessed since the Kenny Report. He has suggested a select committee of both Houses of the Oireachtas to examine all aspects of building land. It is suggested that that committee would have referred to it this Bill, the considerable documentation available to the Minister and the formal views of the Attorney General which are essential because of the repeated claims regarding constitutionality, views that have so far come from everyone but the Attorney General. That proposal would see our Bill being advanced in the House. The Labour Party could claim credit for having influenced not only the hearts of Members but their minds also in relation to the need for a technical solution.

We are interested in a solution that will give justice to people. We are not interested in scoring party political points and I want to make that clear. As Deputy Kemmy has said, we are talking of something that is a matter of life and death to many people, the ability to have a home. Therefore, we want this Bill to be agreed in principle, which, I think, is the essence of what the House is saying tonight. We want a select committee of the Oireachtas to be established, with access to the expertise in the Minister's Department, to the Attorney General and to individuals throughout the country and to draft legislation that will meet the constraints of our Constitution as they are perceived. That is the way we are interpreting the views of the various parties, of Deputy Gregory, Deputy Sherlock of The Workers' Party, and Deputy Kemmy.

I do not wish to interrupt the Deputy in the time available to him but I should like to confirm for the Deputy and for the House that it is my intention to proceed, as was said by my Minister of State, Deputy Brady, with the appointment of a select committee of the Oireachtas in this session and that this Bill, together with the documentation to which I have referred, and the advice of the Attorney General, will be available to that committee with a view to preparing proposals that will form the basis of a legislative solution of this question.

Naturally I welcome what the Minister has said. It is a major advance to have a committe to consider this thorny problem. I suggest that we get together and draw up terms of reference for the select committee which is the more proper way for the House to proceed. However, I think we could discuss that outside the House.

It is not something we could discuss across the floor of the House.

That is so but to keep the matter right I think we should discuss it.

We will discuss it with all parties.

I would like Deputies to allow Deputy Quinn to proceed without interruption.

I should like to quote for the benefit of the House the Long Title of our Bill which sets out the terms of reference. The title reads as follows:

AN ACT TO PROVIDE, IN ACCORDANCE WITH THE EXIGENCIES OF THE COMMON GOOD AND FOR THE FURTHERANCE OF THE PRINCIPLES OF SOCIAL JUSTICE FOR THE BETTER CONTROL OF THE SUPPLY AND PRICE OF BUILDING LAND, AND FOR THAT PURPOSE TO MAKE BETTER PROVISION FOR THE ACQUISITION AND DISPOSAL OF LAND BY LOCAL AUTHORITIES; TO MAKE FURTHER PROVISION AS TO COMPENSATION IN RESPECT OF LAND ACQUIRED BY LOCAL AUTHORITIES; TO PROVIDE FOR THE ESTABLISHMENT OF A LANDS TRIBUNAL AND FOR OTHER MATTERS CONNECTED WITH THE MATTERS AFORESAID.

That is what we are proposing. We believe that the grounds for a solution of the problem are set out in that title. Of course the Bill can be improved. We are taking in good faith the repeated assurances of Fianna Fáil and Fine Gael that they want to see a solution of this problem. The socialist Deputies know quite clearly what is the solution. We are telling Fianna Fáil and Fine Gael that in the select committee there will be an opportunity to put down in detail and without any time constraints all the proposals that would go towards eliminating land speculation and profiteering. For the time being the Labout Party will go along with that proposal but I am clearly putting down a marker to Deputy Barry on behalf of Fine Gael and to the Minister for the Environment that this Bill is not withdrawn. It stays on the Order Paper and if we cannot reach agreement the Labour Party will yet again come in and move a Bill that I hope will be stronger than this one.

If that is the feeling of the House, we can say to people in housing queues and to those who are homeless that, at the instigation of the Labour Party and supported by socialist Deputies in this House, we have agreed to a proposal originating from Fine Gael and confirmed by the Minister in a generous response, to go into a select committee while this Bill stays on the Order Paper. Regard will be had to this Bill and to other matters with a view to seeing if we can produce a legislative solution to the problem of building land. If that is the agreement of Fine Gael and the Government, perhaps in the time available this evening they will signal that they are agreeing to this.

I have already indicated to the House, and this was done earlier by my Minister of State, that the Government intend to set up a select committee before the end of this session and that the Long Title of Deputy Quinn's Bill will form a substantial part of the terms of reference: I am not saying the base of the terms of reference or in detail but quite substantially. We know what is the problem and we know what is the solution. The work of the committee will be with regard to how we get to the solution. The Government are determined to get a solution to this vexed problem. I can assure the House of my good faith in this matter and I have shown that by indicating the setting up of a select committee.

I have one question.

As the Chair has taken questions from other Deputies the Chair is happy to take a question from Deputy Sherlock.

Is the decision to withdraw the Bill based on an agreement that there will be no vote this evening? The people depend on central Government for a policy to control the price of building land and for other purposes. As a result of the failure of successive Governments——

I am afraid the Deputy's question is becoming a statement.

The Kenny Report was to inquire and report on this matter. Their recommendations were reasonable. But, let me say with the greatest impact that I can muster, that the decision to withdraw this Bill at this time——

The Bill was not withdrawn.

I am sorry, Deputies Sherlock and Quinn. Could I ask Deputy Sherlock to resume his seat.

——can only have the effect——

Would Deputy Sherlock resume his seat?

Let there be no question about it but that both Fianna Fáil and Fine Gael, on this——

Deputy Sherlock is disorderly. So far as the Chair is concerned the order to conclude Private Members' Business at 8.30 has been reached and that debate is now adjourned. I wish to inform the House that Deputy Alan Dukes has been given permission to raise on the Adjournment the question of EEC Farm Prices.

I am sorry I did not get an opportunity to respond to what was said. It was originally suggested to this House that an all-party committee be set up with this purpose. It is a real advance to say that that has been done here tonight, and I would like to thank the Minister and Deputy Quinn for agreeing to it.

On a point of order, I think Deputy Sherlock has perhaps misunderstood what has happened. The Labour Party have not withdrawn their Bill. The Labour Party, with the support of the socialist Deputies, have got a concession from both Fine Gael and Fianna Fáil to put down in detail the kind of Bill they want. I am saying very clearly that, if the Labour Party do not like it and it does not go along the lines that we believe in then we will be re-tabling this Bill and we will be calling a vote on this Bill. A concession has been extracted from the Government and from Fine Gael which we appreciate and it will be up to them to perform. If not, the socialist measures in this Bill will be voted upon in this House and I know that we will have the support of The Workers' Party.

The vested interests of the property owners are before the mind of the Government——

(Interruptions.)
Debate adjourned.
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