The Tánaiste is in possession and he has 20 minutes.
Private Members' Business. - Construction Industry: Motion (Resumed).
The following motion was moved by Deputy Molloy on Tuesday, 24 May 1983:
That Dáil Éireann condemns the decision of the Government to reduce the 1983 Public Capital Programme by £220 million and deplores its failure to fulfil the promise by the Minister for the Environment to provide £100 million extra for the construction sector and now calls on the Government to recognise the serious jobs crisis that has arisen and to introduce urgent measures to stimulate the private and public sector to avoid the collapse of the construction industry.
Debate resumed on amendment No. 1: To delete all words after "Dáil Éireann" and substitute:—
"recognises the difficulties experienced by the building industry, appreciates that these difficulties are the result of the general economic recession, coupled with the failure of Fianna Fáil Governments to deal with the realities of the economic and financial situation, and supports the initiatives which the Tánaiste and Minister for the Environment has taken and proposes to take to promote the sound development of the industry and to ensure that employment in it can be maintained at the highest sustainable level."
—(Minister for the Environment.)
Last night I was saying that, despite the attempts by the Opposition to create the impression that the Government were not playing a sufficient role in terms of——
I am sorry to interrupt. but could we have a copy of the Minister's speech?
I am working from notes. I will speak very slowly.
That is all right.
It is quite obvious that the Government have maintained a wide range of incentives for house building and house improvements. It has to be said that, in common with the building industry as a whole, house construction in the private sector was in decline right through 1982. I accept that the building industry has been going through a tough time, and I also know that the boom times are not about to reappear around the corner, no matter what sort of financial scenario the Opposition may like to paint, or what kind of Alice in Wonderland solutions they come up with.
This administration are not in the business of government by gimmickry. I am satisfied the industry is well aware of that fact, and accepts that its problems are no longer susceptible to facile solutions. More than everything else what the industry needs is a period of sound economic management achieved through responsible government and realistic policies. We are providing that kind of government. It is in the real interests of the building industry as well as of other sectors that we should continue to do so.
Sustained and staple development is the key requirement. Contrary to what Fianna Fáil apparently believed in when in office, it is not just the current year that matters in the context of the building industry. It would serve the industry not at all if, for example, ill-considered and ad hoc financial measures were to be applied this year and were later to compromise the Government's ability to apply necessary measures in the years ahead, not only in relation to the building industry but to the other sectors as well. I want a strong and staple building industry and I intend to plan for it through the medium term and into the long term. No matter what the Opposition may say, there is no other option, and anything else is not on.
I am pleased that, in his remarks last night, Deputy Molloy adopted a far more reasonable approach than he did when speaking on the Department's Estimate on 12 May, and that he did not repeat his allegation that the Government were setting out deliberately to destroy the construction industry. At the same time, it is quite obvious that there was a definite inconsistency running through the attitude he adopted. He indicated that no one on his side of the House was seeking to insulate the building industry from the effects of the recession. Having said that, he proceeded to make a number of suggestions and criticisms which, if acted on, would undoubtedly result in the industry being treated as though the difficulties which are affecting all sectors of our economy did not exist in relation to the building industry.
As an example of what I mean, he called for a further £320 million to be added to the Public Capital Programme. How can he reconcile this suggestion with the restrictions on public expenditure which affect all sectors and which he should know are a central element in rectifying the imbalance in our public finances and in putting the country back on the road to economic recovery? To my mind the Deputy's suggestion in this regard is not worthy of serious consideration, given our present financial situation. I do not see how the Deputy can say he is not trying to insulate the industry from what is happening in the rest of the economy when he makes suggestions of this kind.
The same point can be made about a number of Deputy Molloy's other suggestions and criticisms. The essential point is that they all add up to the same old tired remedy of simply throwing money at the industry and hoping the problems will go away. As I said last week when replying to the debate on the Department's Estimates, this may have served as an investment policy in the past when Fianna Fáil were in office but it is one of the main reasons we are now crippled with such a burden of past borrowings. What Fianna Fáil did in the past few years was to bring this country to the verge of bankruptcy. We can be forgiven therefore for looking askance at Deputy Molloy's suggestion that we should look at what they proposed to do in 1983. What this Government did was to maintain public spending at the highest possible level consistent with the financial problems we inherited.
I must say I was somewhat amused at the Deputy's suggestion about increasing housing grants. As I said last night, the decline in the private housing sector was evident right throughout 1982. Despite this, as far as I am aware the question of increasing housing grants was not even considered by the Fianna Fáil Government during that period. In fact, the only change they made in the assistance available to private house purchasers was to spread the payment of mortgage subsidy over five years as against three years previously.
Deputy Molloy referred to the reduction the Government made in the amount of the Public Capital Programme abolished by the Fianna Fáil Government. This reduction amounted in all to £220 million but, contrary to the impression conveyed by Deputy Molloy, not all of this money related to building and construction. A figure of £120 million related to the global contingency provision which was mentioned in the previous Government's capital programme. Of course, while this money was undoubtedly mentioned in that programme, no indication was given as to how it was to be spent. In fact, a statement was included to the effect that it would be allocated in the light of the budgetary outlook. Those words are delightfully vague. I have no doubt that this global provision was just window dressing and that it was never meant to be provided or indeed to be spent. As regards the £100 million referred to in our Programme for Government, the simple answer is that when we came into office the money was not there and there was simply no possibility of providing it having regard to the financial constraints.
Why did the Minister promise it on 17 January when he had been in Government for two months?
We have been through this before and I asked the Deputy to provide me with one iota of evidence that I said that either publicly or privately. No evidence was produced on that occasion and I presume the Deputy has not got the evidence now.
It was in the Fine Gael-Labour Programme for Government.
The Minister without interruption.
The Minister promised it at the Labour Conference at Limerick. It swayed many to vote for coalition.
I did not and could not. On the question of employment I did not, nor indeed could not, give an undertaking to maintain employment at the level then obtaining when I met representatives of the building industry in January. Such an open-ended commitment in a period of deep recession would have been unrealistic and irresponsible. I said I would undertake to take initiatives to stimulate private investment and I made it clear that I could not give any indication of the level of budgetary support which would be available in 1983.
What we need is an efficient, productive and responsible building industry capable of serving the needs of industrial and social development. We also need the employment the industry provides, the output it gives, and the activities it generates in other sectors. Since it is a service industry responding to demands originating in a wide range of different sectors, there are always likely to be periodic fluctuations in its level of activity. As far as possible our aim should be to anticipate those fluctuations and, within the constraints of financial and fiscal policies, to seek to minimise their impact. When the swings in output are of the order experienced in recent years, and when they coincide with a period of unique budgetary difficulties. With the best will in the world, no Government can hope to offset them completely. The sooner the Opposition appreciate that fact and get down to some kind of constructive consideration rather than indulging in fanciful exercises involving the expenditure of moneys which are simply not available, the better it will be for the industry.
In that context, in the past number of weeks I have met the unions, the CIF, at both local and national level. I think the people in the building industry itself have an understanding that the peaks in this industry are as dangerous as the valleys. As I outlined last evening, once peaks have been achieved the strains it places on the industry in terms of resources, available tradesmen and others, renders it very difficult to fulfil the demands made on it. Some time later, we find ourselves, in terms of imports and materials being supplied to the industry, unable to keep up, as happened with the particularly high peak of 1979. In fact, I think we are now suffering from the backwash of that peak. The industry itself is now fully aware of the dangers of such peaking and would not want to see us putting the industry on such an insecure and false footing at any time in the future. They more than anybody else realise that they want the industry to have a reasonable level of demand, of employment, rather than going into these unreal peaks, as happened in 1979.
It is not the peaks about which we are worried now, it is the valley. How far is the Minister going to let this industry go?
Deputy Molloy inferred that sufficient funds are not available to the Housing Finance Agency to enable them to meet the demand for loans.
No, I said there was a cutback of £10 million.
He based his allegation on the £10 million reduction in the provision for the Housing Finance Agency in the Public Capital Programme. Let me say that, in regard to the 1982 Estimates for 1983, lest there be any misunderstanding about it, the Housing Finance Agency themselves are well satisfied that the sum of £50 million being provided will be more than adequate to meet the needs without causing any delays in meeting requests for payments of loans.
Because of the finance not being taken up.
Opposition Deputies should not continue to interrupt.
The agency are at present meeting their demands for payments within a week. So far this year payments by the agency averaged £4 million per month. Therefore, on present forecasts the £50 million provided should be adequate. If the situation changes and it appears that more than £50 million will be required, certainly I shall have no difficulty in looking at the demand with a view to increasing the amount available, if necessary, to enable them to meet any further needs arising.
I have already spoken on the Housing Finance Agency and their success story. It is now accepted that the agency fill a very important gap in the availability of mortgage finance and, furthermore, that they have succeeded in channelling funds into housing which hitherto went elsewhere. Yet it is not so long ago that it was quite obvious that it was being set up in the teeth of opposition, even ridicule at the time by Fianna Fáil. Therefore the type of comment made now is difficult to understand. On 30 April last the agency had approved about 3,000 loans valued at £55 million. In the eight months since the first loan was paid a total of £32 million has been paid to borrowers. It is important to clarify the facts in relation to the agency and to make it quite clear that the agency will have ample funds to meet any commitments they have for this year.
They can show a cutback in local loans.
The suggestion was advanced that we relied on the figures provided by Fianna Fáil for the SDA loans. Deputy Molloy suggested that there are now 40,000 building workers unemployed.
44,000, I believe, today.
4,000 since yesterday? The real situation, which we must clarify, is that it is not as bad as this. In fact there may have been an increase in the number of unemployed workers declaring themselves to be building workers but, as is generally known, this tends to be a residual category of general workers who do not fit into any of the other categories on the register. In fact the present number employed in the industry is about 20,000 lower than it was during the peak employment period in 1979. This is a far closer indication of the number of building workers who are unemployed rather than the figures we were given yesterday.
That is an extraordinary contortion of the facts.
Deputy Molloy had forty minutes, he has ten minutes later on and this is certainly not good enough.
In relation to the question of claw-back on stock relief — I think Deputy Molloy expressed his concern at this being the most pressing problem affecting the industry — as has already been clarified from the proposed amendment to the Finance Bill which has been circulated, the effect of this amendment will be to defer the claw-back for a further 12 months. Through my contact with the industry over the past number of months I have known that this aspect was worrying them, particularly in a time of recession when builders' ability to pay the claw-back is severely curtailed. This is also something that will have to be looked at in the context of the next 12 months to ascertain if it is the best method of providing what that sets out to do.
The point was made in relation to the inflow of cash to the building societies. There are sufficient difficulties besetting the industry without dreaming up any new ones which do not exist at present. The situation is that the net inflow of funds to building societies is progressing at a very high level. I would emphasise the word "high". The societies have adequate funds to meet demand.
The Minister has about three minutes or a little more remaining.
A Cheann Comhairle, on a point of order, I want to ask the Minister one question——
That is not a point of order. We must abide by the rules of debate. This is quite unreasonable. Deputy Fahey will resume his seat.
All right, Sir, I agree with that but I just want to say——
I will not let the Deputy say anything, sit down.
In that case I am wasting my time around here.
Deputy F. Fahey withdrew from the Chamber.
In the first four months of the year the net inflow of funds to building societies totalled approximately £65 million in comparison with less than £50 million in the same period last year, an increase of 30 per cent. In the first two weeks of May net inflows were holding at an average of £4.2 million a week, which by any standards is a healthy trend. Certainly there should be no difficulties encountered in relation to mortgage finance from the building societies because the cash is available and, as I have just stated, inflows are adequate to meet demand.
I might refer briefly to the present state of the housebuilding industry, which obviously forms an integral and important part of the construction industry, and its future for the next 12 months or so. The building societies account for 70 per cent of the loans paid by all the main lending agencies and so are a reasonable barometer to use when considering the state of the housebuilding industry. In the first quarter of 1983 the five main building societies, who account for 95 per cent of all building society transactions approved loans for 4,600 houses valued at £105 million. In the preceding quarter the number of loans approved by the societies was almost identical and was valued at £100 million. That has to be contrasted with the equivalent period of 1982 when approvals by the five societies were for only 2,800 loans, valued at £60 million — much the same level of activity as in the final quarter of 1981. Therefore, not only are the forebodings of Deputy Molloy without foundation but the position is brighter than it was about a year ago for the building sector. Loan approvals by the main building societies were 3,500 more in number and £85 million more in value in the six months to 31 March 1983 than for the same period in 1982.
In conclusion, I might say that in the foreseeable future the outlook for the housebuilding industry, as far as the availability of adequate mortgage finance is concerned, is certainly promising. It is important that that become known rather than any other impression that might be given through statements made in this House, because the evidence is there clearly to substantiate these facts.
Will the Minister admit that there will be a serious drop in the number of house completions this year?
I support the motion moved last night by Deputy Molloy. I speak on this motion not just to indulge in a political point-scoring exercise. It is one of the most relevant motions to come before the House for some time. There is no doubt that we have enormous problems and we would point out that the construction industry, which is experiencing the worst of the recession, is the sector which must be tackled by the Government in a positive manner in order to arrest the ills which afflict that industry and thus tackle the unemployment problem.
We do not pretend that the problems in the housing and construction industry arose during the past few months but they have been exacerbated by the recent budget. A formidable figure of 10 per cent of the working population are directly or indirectly affected by the construction industry. The unemployment level is 20 per cent compared to 13 per cent in the country generally. There is no indication that any improvement can be expected in this area unless positive Government action is taken to direct resources into that industry. No other sector of the economy can make a greater contribution to the reduction of unemployment based on increased investment.
There is a lack of understanding of the cyclical nature of the construction industry on the part of the Government and the vicious decline in the home market can only be stemmed by the Government's abandoning their short-sighted approach and taking positive action to boost the industry. Unless this action is taken now a number of construction companies will go bankrupt this year and next year. Many accept that some kind of hairshirt is needed if we are to bring the economy back into shape but at the same time we have no wish to commit economic suicide.
We deplore the decision of the Government to reduce the 1983 Public Capital Programme by £220 million and the failure to fulfil the promise by the Minister for the Environment to provide an extra £100 million for the construction sector. That is the keynote of this motion. Government policy is not suited to the needs of the construction industry.
Deputy Molloy referred last night to the Minister's promise to give an extra injection of £100 million to the industry. Certainly the people to whom he was speaking on 17 January last got the clear impression that this was what he was saying, although he is saying the opposite now.
The Committee Stage of the Finance Bill is now being taken and this Bill has a very great effect on the construction industry. Even at this late stage the Government could assist the industry by abandoning the introduction of advance corporation tax. Above all, our stock relief legislation should be brought into line with UK standards. Those matters could be catered for in the Finance Bill. I understood the Minister to say that he is giving a 12 months' lease of life to the stock relief situation. One would hope that he would extend this beyond 12 months.
It is significant that only last Thursday Mr. Ken Rohan, chairman and chief executive of the Rohan Group, in the course of his remarks to shareholders at the annual general meeting was somewhat critical of Government policy and he mentioned stock relief legislation. In relation to advance corporation tax, he stated as follows:
ACT will further reduce the chances of controlling unemployment as funds are taken away from the healthy tissue of industry and used for less efficient purposes by Government. It is another example of political expediency taking over from practical common sense. Today a company needs every single pound of its hard-earned profits to hold employment levels and reinvest for future growth. ACT will defer capital expenditure as cash resources become even more scarce through the continued depression in Irish industry.
This is something which the Government can arrest in the Finance Bill. We have put down a number of amendments and the Minister for Finance, in consultation with the Minister for the Environment, should seriously consider them.
The plight of the construction industry is an enormous scar on the country. We have official unemployment figures of 188,000 but there are always another 4,000 within the system who are not officially listed, as well as another 19,000 excluded from payment and 20,000 small farmers who are available for work. The actual figure is about 230,000 and that does not include those who lost their jobs during the past few weeks as a result of the closure of Telectron, Dunlop, Ranks, NIKE and other companies. The Minister disputes Deputy Molloy's figure but there is no doubt that there at least 40,000 people unemployed in the construction industry. It is reckoned that one in every two persons in the industry will be out of work by the end of the year. The same applies to the associated ancillary industries.
The native raw material supplier to the construction industry is Irish Cement. Irish Cement has its Platin operation in my constituency. It has its other operation in Limerick. Before Christmas it operated on two units. Since Christmas it has been operating on one unit. At the moment there are negotiations with Irish Cement for the purpose of reducing by 81 the numbers employed. In other words in Platin 81 will go into voluntary retirement. In Limerick the figure is 169. That is a total of 250 people in a basic native raw material industry which supplies the construction industry. These can be added to the figure I quoted earlier.
The situation is catastrophic. Irish Cement had its problems because of the importation of cement. Basically now the problem is the lack of demand in the building industry. That lack is not due to bad weather. The industry is going through a recession and it is not being helped in any way by Government policy and certainly not by the Bill we have been discussing today. The attitude of the Government is wholly negative. Cement sales are down 18.3 per cent from May 1982 to May 1983. We talk about the indirect employment in the construction industry. I live in a town which is called the home of furniture and, when the building industry is on the ground, my home town, Navan, is on the ground. We liked to claim we furnished the nation with both furniture and carpets. Never before in my lifetime have I seen the furniture industry with its back to the wall.
I remember the recession in the 1950s. There was mass emigration out of Navan. Coincidentally that was during the Coalition Government of 1954-1957. There is no emigrant ship today. Today there is high unemployment because the furniture factory is laying off workers week in and week out. They are under extreme pressure from the banks and the Revenue Commissioners. The stores they supplied are no longer able to sell their products because of the recession. They cannot sell because houses are not being built and so there is no demand for furniture or carpets. Never has the furniture industry in Navan had it so bad.
In February last the unemployment figure in Navan was about 930. The latest figure on 29 April showed unemployment had soared to 1,274. If the construction industry does not get off the ground there will no longer be a furniture industry in Navan. That is why I tried to impress on the Minister the need for a positive capital injection into the construction industry in an effort to cure the situation before the disease gets any worse. For the first time the carpet industry, which opened in 1938, has had to lay off 105 people. That was one of our saddest experiences in Navan. It was the backbone of the town for many, many years and it meant a great deal to the economy of practically every family. Now 105 workers have been let go and 105 families have been affected. It has been a traumatic experience. In the furniture industry the lay-off is reckoned at 50 per cent of the 800 work force.
In this context one has to remember the subsidiaries, such as the joinery, the carpets, the fireplaces and so on and so forth. These have all been affected adversely. I have been speaking to those who were engaged in the building industry who now travel to Dublin to try to get work. There is no work for them and they are becoming totally demoralised. They never drew unemployment benefit before but they now have no other option. After a meeting last night a man approached me a little diffidently to ask me if I could find him a job. He had been in the building industry all his life and had never been unemployed before.
Something must be done immediately to remedy the situation. There must be some arrangement beneficial to the construction industry to help it get off the ground again. I heard the Tánaiste here some time ago say he hoped to have 30,000 new starts in houses this year. Where will they be? There is not much sign of them at the moment. How they will be achieved before the end of the year is beyond my comprehension. Despite the injection in local authority housing a report this month predicts a downturn in local authority houses. I refer to the report of the Quarterly Economic Policy published in May. Summing up the situation the report says: “It seems clear that there will be a very significant fall in local authority housing activity in 1983 in spite of the increased 12 per cent allocation and this implies a very large price effect for local authority housing. The answer in some respects is contained in the revised Public Capital Programme where it is stated that the cost of each completed local authority house this year will be in the region of £35,000. That report would seem to indicate that despite the 12 per cent increase we are in for a downturn in local authority housing this year.
The Minister mentioned last night that he was asking local authorities to be more flexible in their attitude to planning applications and that he intended to ask his new Bord Pleanála to be more flexible also. It is hard to understand why local authorities in some counties have not been flexible and indeed have been difficult. They have been stultifying the construction industry. A circular was sent to all local authorities a couple of weeks ago recommending that not alone should they not give planning permission on national primary roads but that they should not give it on national secondary routes either. I would suggest to the Minister of State that when An Bord Pleanála is being formed it should not consist entirely of architects and engineers. There should be some lay people on it to give their opinions as well.
I rise in support of the amendment to this motion. I would like to try to make my contribution in the spirit in which Deputy Molloy said he would address himself at the outset of his remarks yesterday. The Labour Party and Fine Gael in Government do not believe that the construction industry belongs to any one particular party nor are we prepared to go down the road of attempting to turn it into a political football. Having welcomed the initial remarks of Deputy Molloy, I found the tone of what he had to say subsequently — and, indeed, what Deputy Fitzsimons said — very counter-productive towards the industry which more than any other depends upon State assistance and private investment. Deputy Molloy himself said that confidence was a key issue in the performance of the industry and its perception by the public and by potential investors. I would respectfully suggest to the Deputies on the far side that they should carefully look at the way in which they have presented arguments over the last two days and test it against that particular correct assessment of this industry.
The reason why confidence is so important is because accurate statistics are extremely rare in this industry. I do not want to repeat the saga, of which Deputy Molloy is painfully aware, of events that took place in this House in the 1970s over allegations and statistics and the ongoing row that existed over house starts and house completions; but the fact is that the industry is woefully inadequate in factual and accurate statistics. Therefore, arguments can be used grotesquely to portray the character of the industry at any time. I will give a specific example. Deputies aligned on the other side of the House are quoting figures for unemployment in the industry based on the available statistics. They do not include the fact that in 1979 at the height of the boom, when we were scouring the sites of England for trained and qualified workers, there were 19,000 registered unemployed workers in the building industry. All of us would recognise that the statistics upon which any rational debate can take place are not as good as we would like them to be. Deputy Molloy, as a former Minister for Local Government, is well aware of that. I regret to say that when I took office less than 150 days ago with the Tánaiste there was not a substantial improvement in the quality of those statistics in a whole range of areas.
Confidence, therefore, in an industry which is not so clearly defined or clearly measured, assumes a disproportionate importance and anything that is said by anybody in a responsible position and particularly inside the national Parliament is extremely important, and I would like to refute totally what has been said by Deputy Fitzsimons in relation to local authority housing statistics. They do not match up at all to the information that we have and I would be more than happy to make available to the Deputies of the Fianna Fáil Party the figures we have. The Quarterly Bulletins which are made available to all Deputies would substantiate our case. That kind of argument simply puts pressure on local builders by their creditors and bankers and that is in nobody's interest.
Is the Minister aware of the quarterly economic commentary of May, 1983 by Durkan, Scott and Madden?
I am talking about statistics. If the Deputy wants to base his argument on commentary, that is his democratic choice. He has come into this House on a white charger defending the interests of the industry, claiming that confidence is the key factor and then he bases his argument on a commentary. We have the statistics.
It is based on statistics.
It is still a commentary. The second point that has been made by the Fianna Fáil Party is that because the industry is in such a crisis we should throw more money at it, that because private investment has declined we should, disregarding every amendment they have down to the Finance Bill, find money anywhere and simply throw it at the industry.
Put back the money you took out.
They want us to throw money at the industry in some indiscriminate fashion in the hope that some of it might stick and in the aspiration that the bit that did stick would produce growth and in the dream that the bit that did stick and produce growth would at the end of the day produce tangible jobs. If Fianna Fáil call that planning or responsible Government, we do not go down that road with them. When Fianna Fáil won office in 1977 with the Santa Claus manifesto unemployment was at approximately 100,000 and the state of the national debt was approximately £4,000 million. They threw money at the Irish economy — and in particular at the building industry — indiscriminately, without judgment, without planning, without any set of criteria that could be described as rational on the basis of providing jobs and growth. When we came back into office before Christmas unemployment in round figures had virtually doubled to nearly 200,000 and the total national debt was £12.700 million. They want us still to get money from whatever source and simply throw it at the economy.
I worked in the building industry from 1977 to 1981 and I saw the chaos that their kind of planning produced on site after site. I saw the chaos it produced in relation to builders' providers — the complete distortion of the market, the complete distortion of supplies and increase after increase in inflation rates for contracts and tenders. That was bad enough, because it established costs which were not realistic; but it also opened the door for a rash of building construction imports which by their nature do not import easily because of their size. But the magnetic force of Fianna Fáil's overheating of the economy was such that today Fianna Fáil's legacy is not just the level of unemployment, because after 150 days in office we will not accept responsibility for the mess we found, but we now have the monster of £350 million worth of building materials which could be produced all over this country — bricks, roof-tiles, basic cement, and even timber — being imported each year. Some of them are being imported by active members of the building industry who today want us to find more taxpayers' money to invest in their industry because the level of private investment has dropped. That is a road down which we can no longer afford to travel. We simply will not go further and further into the quagmire from which we are trying to extricate ourselves.
Is the Minister critical of his colleagues in the architectural sector?
I am, and I have told them so on a number of occasions and in ways they had never heard from previous colleagues who described themselves as being members of the Republican Party.
It is about time the Minister started to do it.
Throwing money at the industry has been the traditional recipe from Fianna Fáil. Not only is it not a solution, but it makes the disease worse. It created artificial peaks from which the fall was inevitably deeper and more dangerous. Regrettably that is where we are now. Our amendment recognises those difficulties. It recognises the problems in the industry. But the solution is not more of the same things which aggravated the problem in the first instance. It is to attempt, with dialogue and discussion with the construction group of trade unions, the CIF and the Building Materials Federation, to get some form of even keel planning into an industry that never had it before.
How do we propose to do that? First of all, the PA Consultants Report, which is emerging, will give us a substantial picture of the industry and ways in which it can be managed. Second, as was said at the meeting on 17 January, it is our desire that, following the publication of the report in its final form, in consultation with all sides in the industry to attempt to establish some form of planning council or group that will attempt to regulate the volume of State investment in the industry.
I say formally to Fianna Fáil, who described themselves as the guardians of private enterprise, as Deputy Molloy did yesterday, that the industry cannot have it both ways. It cannot have 100 per cent State investment on the one hand and 100 per cent private control over its accounts, its performance and its standards. If the industry wants increased State investment above and beyond the 70 per cent we are currently funding — no other industry gets that kind of relief or that kind of direct investment that this and previous Governments have put into it — instead of talking to us through newspaper advertisements less than a month after we had taken office, we should have a proper serious dialogue on a continuing basis.
Money is not the only problem in the industry. Because Fianna Fáil saw it as a money problem they allowed numerous other problems to compound and get worse, aggravating a very bad situation. An Bord Pleanála have been responsible, directly or indirectly, for a substantial increase in delays within the industry, so much so that we found since taking office that delays within An Bord Pleanála could last between nine and 15 months. The impact of those delays was that a builder or a developer had his available working capital tied up in options and property that he had owned and had no available capacity to diversify to another site. These delays were imposed on the building industry by maladministration and non-functioning of the entire system. As the Minister has indicated, we are moving to remove that type of delay.
Nothing was done by the previous Fianna Fáil administration to remove delays. Many other things were done in relation to that board but nothing to make it perform efficiently and effectively from the industry's point of view. All three Deputies across the floor know precisely what I am saying.
Another delay was in the processing of building by-law applications in Dublin Corporation. This is another area in which we are moving to have the situation improved and the processing of applications expedited. The previous administration did nothing about this. Even when a builder had a site which clients were ready to occupy, there were self-imposed constraints not related to money and which cost a lot of money if not rectified. We are moving on that.
We are moving to improve building standards, safety standards and standards of insulation which would reduce running costs in relation to heating. The draft building regulations which started in 1967 with An Foras Forbartha languished in the Custom House during four years of secure Fianna Fáil administration. That was another delay in terms of getting value for money in the buildings we constructed.
All of these delays will be removed as quickly as we can in the next four years. The House will very soon have an opportunity to debate the Bord Pleanála Bill and the building regulations legislation, which will contribute towards improving the operations of the industry and the value for money which the community must get if it is to continue to fund the industry to the extent of 70p in every pound spent in the industry. We would be failing in our duty as people who allocate funds for the industry if we did not require and look for that kind of standard.
Let me refer briefly to what Deputy Molloy repeatedly referred to last night as "money allocated by Fianna Fáil". I thought Fianna Fáil had financial problems. The newspapers and Mr. McKay indicated they had.
What about the Labour Party?
We do not have those problems, fortunately, any more. I got the distinct impression that Deputy Molloy was implying that any money voted in this House was money allocated by Fianna Fáil.
The published Estimates when Fianna Fáil were in office.
In the middle of the election campaign. They were impartial documents produced in the calm period of responsible Government. I think most people, the kids in the street, recognised just what fiction Fianna Fáil turned out in columns of money in the last two years. Deputy Molloy uses the phrase "money allocated by Fianna Fáil". The inherent arrogance in that slip of the tongue is incredible.
The Minister is being facetious.
I am not. It was inherent arrogance which is incredible.
This is the Minister's answer to the major crisis in the industry?
Indeed, it is not. I am dealing with the Deputy's claim that the Public Capital Programme was reduced by £200 million. The election document published by the outgoing minority Fianna Fáil administration suggested a figure of £1,324 million for the Public Capital Programme. It was like a cheque written against a blank bank account — there was nothing there to substantiate it. The actual figure we provided for this year was £1,251 million for the Public Capital Programme. I quoted earlier the figures in the Fianna Fáil election Estimates in 1982. The figure for 1982, when Fianna Fáil were in office, was £1,278 million. At the close of 1982 the election Estimates published by Fianna Fáil suggested that the figure they would make available if re-elected would be £1,324 million, including the global contingency fund, the figment of the imagination that did not exist. We made available this year £1,251 million and that is a decrease in real terms of 5.5 per cent on what was actually provided and spent last year.
The reason I am tortuously dealing with those figures is to nail a particular lie. First, the election Estimates of November 1982 must be seen as that and cannot be quoted as anything else, but more important — I am not trying to score political points in relation to this — in terms of the perception of confidence by the industry, the capital sum available this year under the Public Capital Programme is 5 per cent less than it was in 1982. I regret, and the Government regret, that it is less but there are real constraints. To talk in terms of £200 million being taken from the Public Capital Programme is not factually correct and it simply fuels the flames of doom and gloom and lack of confidence in an industry that does not need that kind of talk.
The figures are there in the budget for 1983——
The context in which those Estimates were published in November is clearly understood by all.
I want to tell Fianna Fáil, workers and employers in the building industry and the materials federation that we recognise the extraordinary difficulties the industry face. Part of those difficulties would have been faced by the industry anyway, because of the cyclical nature in which it had been operating, and part of those difficulties are a reflection of the recession, as Deputy Fitzsimons said when he described the difficulties experienced by the furniture industry in Navan.
The old solutions of throwing money indiscriminately at the building industry not only are not effective and do not produce the result for which Fianna Fáil hope, but they are options which are no longer open to us because in early days we spent all available capital and borrowed even more, and simply do not have that provision to fall back on. Within less than ten days of being out of office, Deputy MacSharry, former Minister for Finance, before Christmas signalled in his speech that the Government would have difficulty borrowing money abroad to finance even minimal levels of public capital works and current account deficits. Every Fianna Fáil Deputy, every accountant and every child knows that option is not there.
The private sector were making money available for decentralisation and that Government cancelled it. Why say that the private sector were not willing to invest?
The private sector said they would build an office block and rent it to the State provided the taxpayers, everyone in this Chamber including members of Fianna Fáil, paid the rental levels for the office block in perpetuity. That is private investment, a gilt-edged guaranteed tenant in advance?
The Coalition were looking for private investment, and there it was.
We were looking for an effective and proper use of non-tax revenue either borrowed or raised on the domestic market.
The civil servants did not like decentralisation and that is why it was dropped.
No. Over a year ago Fianna Fáil bitterly opposed the Housing Finance Agency on the grounds that it would not work. Today numerous Fianna Fáil councillors are still objecting and trying to persuade prospective purchasers from taking up HFA loans.
We were prepared to put more money into that scheme than the Coalition were.
Fianna Fáil fought it tooth and nail in this House and in the Custom House.
This Government cut it back by £10 million.
Fianna Fáil fought it tooth and nail in this House and nearly choked it to death in the Custom House. If the Deputy wishes I will bring in the files.
That is a false and weak argument. I realise the Minister is on very weak ground.
I am on very firm ground because I have the facts. Fianna Fáil did not succeed in choking it to death. In its first public issue, more than any other fiscal instrument it has been dramatically successful in attracting private pension fund money on terms the public can afford, and not on the giveaway kind of proposals Fianna Fáil were suggesting. We recognise that the pension fund, which are workers' savings for their retirement, can be constructively utilised in a manner that will provide not only secure pensions for the beneficiaries themselves but also make effective contributions, particularly to the construction industry. We are actively pursuing ways in which those moneys can be channelled in a productive and economic manner into our industry.
I reject the motion.
The Minister said he worked in the building industry; so did I. I was involved in the practical and administrative sides of the industry. It is all very fine for the Minister to quote statistics here but is he in a position to convince the people engaged in this industry that this Government are doing everything they can to help? I know from experience that the building industry is in the same position today as it was when the other Coalition Governments were in power. The Coalition were in power from 1948 to 1951 and from 1954 to 1957. During 1957 many people in Dublin closed their doors and boarded the emigrant ship never to return. The situation today is exactly the same as it was in 1981 and 1982 when we had a Coalition Government.
The Minister and his Minister of State continually referred to statements made by Deputy Molloy. This Government are comprised of two parties, Fine Gael and Labour, with the Minister and his Minister for State belonging to the Labour Party. The building industry is in total chaos. The function of this Minister is to create confidence in the industry. Let us look at builders' suppliers — Chadwicks and other firms. If the Minister rings these firms he will be told of the number of people who have to be let go each week. There is no point in the Minister coming here saying the position will be all right when legislation is introduced in the near future. The only legislation mentioned by the Minister or the Minister of State is that connected with a change in the planning board. Do the Government believe that by introducing such legislation they will instill the necessary confidence in builders to invest their money in the industry? The building industry needs an injection of money now.
One need only read the press to become aware of the plight of that industry. Large amounts of capital have been made available to rescue Irish Steel, NET, Aer Lingus, CIE and Irish Shipping from mounting debt and demoralisation of their work force. A great deal could be done in this case even, with a small amount of money. However, the Government are not prepared to give this.
We allocated £75 million for sewerage and sanitary services and not one member of CIE or of the Opposition Party gave any recognition of that.
They are all down in Kerry. There is not enough staff to put these services in operation.
There was total silence.
They are breaking their necks in the planning office in Kerry County Council. They have not enough staff in the Minister's own constituency to design the equipment that has been approved. This money might never be spent.
I paid the Minister the courtesy of listening to him. I paid him the compliment of having some experience in the building industry and ask him to listen to me.
I shall.
That is what it is about. We have had crises in the building industry before, lay-offs and unemployment and some of our officers and tradesmen seeking work elsewhere but never before have we had a problem in the building industry which aroused so little concern in the Government of the day. We read and hear of reports of some building organisation doing well. However, we forget that the profits of these companies have been earned abroad. If the building industry is to improve, can we expect the companies with considerable experience in that industry, who have played a major role in its development here, to return to this country? Do we still believe, as Deputy Kelly has said, that there is virtue in emigration and the emigrant is better off for his experience abroad? If we were still to subscribe to that, the social circumstances could be alarming. In many instances it brings about serious family problems. A reduction in apprenticeship is another consequence and this is something to which I have given considerable attention over the years. There is a significant deterioration in the morale of the workforce and, worst of all, a real possibility that if and when the recession passes, the start-up in the building industry will be unnecessarily slow — and all because of lack of concern on the part of the present Government.
During the election campaign of the Fine Gael and Labour Parties, they campaigned to be in Government and to do a better job. They are now in Government and now is the time to do so. There is no use blaming Deputy Molloy or Fianna Fáil. It is now up to the Government to inspire those engaged in the building industry to have confidence in it. I hope that the legislation which the Government intend to introduce will, as promised, play an effective role in improving the situation.
The Coalition Government reduced by £220 million the capital allocation for building and construction in the Estimates prepared by Fianna Fáil while in office. At Limerick before the election the Minister promised £100 million from the contingency fund to be used especially for building and construction work. This promise was reneged on in the budget. The effect of the cutbacks on employment is felt not only among the builders but among the builders' suppliers and the furniture and electrical firms.
Fianna Fáil always had a reputation for showing interest in the building industry. That industry was in a healthy state under Fianna Fáil but Coalition Governments have not been helpful to it. This fact has always been recognised by builders and builders' workers. Fianna Fáil stood solidly behind the building and construction industry down through the years and have proved their attitude in providing £220 million more public capital this year than the Coalition Government are now providing. That is what counts. It is what ensures employment in the building industry. I demand that the cuts in the public capital programme be restored and the promise in relation to the £100 million at the Limerick Labour Convention be honoured for the sake of those employed in the building industry and the thousands depending for their jobs on the industry, which jobs are now in jeopardy, I demand this for the sake of the people and our economy in general.
The Government recently introduced fees for planning applications. I ask the Minister to consider waiving these fees in relation to planning applications for community centres and halls. The Minister and his Minister of State will realise the amount of good work done by these committees. Community centres play a very important role in the life of the parishes. Planning applications for these centres should be exempt from planning fees.
I call on Deputy Molloy to conclude the debate.
When we in the Fianna Fáil Party put down this motion, our intention was to avail of the national Parliament to highlight the difficulties which now confront the construction industry. I went to some lengths last night to detail the extent of the serious crisis affecting this industry in regard to jobs and future employment and the continuation of this industry as a viable national industry which, after all, up to now has been our second major industry. We availed of the opportunity to have this debate in the House because it was the one place where one would expect the man who sits at the Cabinet table with responsibility for all our construction sector to listen to the debate. Here is the reality. It has been a matter of great disappointment to this side of the House and to the industry outside and those workers who have already lost their jobs or whose jobs are threatened that the man who has responsibility for their industry did not think it worth his while to hear the full argument put forward by the Fianna Fáil spokesmen. That is regrettable. I have the utmost respect for the Minister for the Environment as a person, but he is negligent in his duties in not being here to hear about the crisis in the industry.
When the Minister was here, the Deputy continually interrupted him.
I interrupted the Minister on a few occasions, not continuously. That is an overstatement.
The Deputy showed him the yellow card about three times.
There has never been a debate in this House over the years which has not had interruptions. The Minister of State has interrupted and this contributes to the debate. It helps to bring the point home. If we cannot convince those on the Government benches, what hope has the industry outside this House of convincing them? As an Opposition party, we are fulfilling our responsibility by highlighting the serious crisis in the industry. The brief contribution by the Minister and the contribution by the Minister of State unfortunately did not show a clear admission that this industry is in a serious decline. There is no use in talking about peaks and valleys in the industry. That has been standard Minister for Local Government-Minister for the Environment waffle for the past 20 years. We all accept that this industry is affected when there are peaks and valleys. Last evening the Minister admitted that it was impossible to avoid that but we are talking here about the decline of the industry, its decline into a bottomless pit and into a situation whereby by December of this year half the operatives in the industry will be out of work. At the moment 1,000 operatives are becoming unemployed per month in the building industry.
The Minister's answer is that the statistics are not accurate, that the industry is notorious for the unreliability of statistics relating to its activities. If the Government must resort to criticising the collection of statistics, it must be clear to the country that they are not prepared to face up to the difficulties of the industry, that they are not prepared to take action to arrest the decline. It is not our concern to say that everything is fine when Fianna Fáil are in Government while the reverse is the case when the Coalition are in power. I have no intention of becoming involved in that simplistic type of argument, the type of argument which is reflected in the speech of the Minister for the Environment. Instead of coming in here to read a script prepared by someone in the Custom House, I should prefer the Minister to stand up and tell us what he intends doing for the industry to pull it out of the serious decline into which it has fallen.
If some of the measures the Government are taking in the Finance Bill are not changed, the building industry will go into further decline and if that happens no amount of money will save it. We are not advocating throwing money willy-nilly at the building industry.
The Deputy's party did so before.
When the Coalition were in Government previously the then Minister for Finance, Deputy Bruton, gave a commitment to have the Estimates for 1983 published in advance. We welcomed that commitment but the Minister did not adhere to it. However, we carried it through when we were returned to office. I trust that it will be the policy of the Coalition to continue to publish the Estimates before the commencement of the financial year. We are now approaching the end of May and we are only at the stage of discussing the final stages of the Finance Bill. Local authorities only got their information about allocations a few weeks ago. We are all anxious to have that situation put right. It is both unfair and facetious of the Minister of State to seek to make some kind of major debating point about that. We published the Estimates in advance.
But they had no basis in reality. They were merely figments of Fianna Fáil's electoral imagination.
There has been a deliberate Government decision to cut back on the capital allocations in the Estimates published at the time Fianna Fáil were in Government. It would be facetious of me to say that Fianna Fáil allocated moneys because that would sound as if I were talking about 13 Upper Mount Street allocating the Public Capital Programme. If one's argument must fall to that level it shows how weak one's position is. It indicates that the Labour Ministers who now control the Custom House are completely failing at Cabinet level to get any cash, any decisions or any incentives so far as the construction industry is concerned. Fine Gael have no say in the Custom House. They control Government buildings. The failure of Labour in this Government in regard to the building industry is something they will have to carry in speaking to their workers and supporters outside. Labour will have to find answers to the questions that the families of those workers and supporters are asking about job losses.
We have admitted that there has been a falling off in the building industry for some time but what we are crying out here for are measures from the Government to arrest the decline. Instead, they introduced a budget which spelled further disincentives for the industry, which is catastrophic and which destroyed confidence.
We are appealing to the Government to have sense and to withdraw some of the dreadful provisions in the Finance Bill, provisions that will result in driving money away from the industry and also in a big loss of moneys to the building societies. Who will be prepared to invest money in the building societies knowing that there can be given to a tax inspector the facility to go in and examine all accounts? The tax inspector will not have to produce any reasonable argument to support his case. He need only go to the High Court and say that he is not satisfied about the returns in a certain case. The Government by allowing for accounts in banks and building societies to be scrutinised by a tax inspector are destroying the confidentiality of the relationship that has existed traditionally between the banks and the building societies and their investors. That confidential relationship was the cornerstone of building society growth.
The Government boast about all the money that has been flowing into the building societies but by their policy announced yesterday, they are ensuring that this money will flow out now.
In my constituency the number of houses built in 1980 was 440. In 1981 the number fell to 360 while in 1982 it was 280 but for this year it looks as if it will be 180. As I said last evening, one of the largest builders in my constituency was completing about 240 houses per year. His out-turn now is down to 45. He used to have 35 blocklayers working for him. Now he has one. A lot more is needed from the Government than the simplistic attitude of throwing cash at the industry and hoping some of it will stick.
What about the 70 per cent?
Why did the Government go back on their word to the building industry in regard to extending the provisions of section 23? The Government did not tell the industry that there would be involved a requirement to increase from a two-bedroomed to a three-bedroomed the type of apartment that would be required in order to qualify under section 23. That amendment is rendering meaningless the extension of the benefit under that section. Very few builders will be able to avail of the incentive that the section provides because of the requirement that I have referred to. The planning permissions that are in are not for three-bedroomed apartments. It will take from six months to a year to get the permission but the demand is for two-bedroomed apartments. The section 23 incentive which was introduced by Fianna Fáil was successful but the Government are negativing it. Every step they are taking is destroying the industry. They are dismantling every incentive that we introduced and in addition are creating new disincentives. Their actions are bringing nearer to despair those people who have spent their lives working in the industry. These are people such as carpenters, electricians, plasterers, blocklayers and so on who took such pride in their work and who helped to build our housing stock, our factories and our schools. It appears that so far as the Government are concerned the skills of these workers are no longer required, that they can be thrown on the unemployment heap. The Government are ensuring that that will happen as fast as possible.
The Deputy is well aware that by his alarmist talk he is undermining confidence in the industry.
I have listed all the measures that I consider to be disincentives in terms of the construction industry. I have listed proposals. Last evening I offered several suggestions and asked for some reaction from the Government. Their reaction has been negative. The Minister for the Environment was here for only half of my speech but this did not deter him from reading from a prepared script criticising what I had said. That script was written before I stood up to speak. All of this is an indication of how this Government regard the real problems affecting the people. I regret that we have had no response from the Government. This has been a no-joy debate.
There is no indication that the Government are remotely aware of how serious is the problem in the construction industry.
Amendment put.
The Dáil divided: Tá, 74; Níl, 69.
Tá
- Allen, Bernard.
- Barnes, Monica.
- Barrett, Seán.
- Barry, Myra.
- Barry, Peter.
- Begley, Michael.
- Bermingham, Joe.
- Birmingham, George Martin.
- Boland, John.
- Bruton, John.
- Bruton, Richard.
- Burke, Liam.
- Carey, Donal.
- Collins, Edward.
- Conlon, John F.
- Connaughton, Paul.
- Coogan, Fintan.
- Cooney, Patrick Mark.
- Cosgrave, Liam T.
- Cosgrave, Michael Joe.
- Coveney, Hugh.
- Creed, Donal.
- Crotty, Kieran.
- Crowley, Frank.
- D'Arcy, Michael.
- Desmond, Eileen.
- Donnellan, John.
- Dowling, Dick.
- Doyle, Avril.
- Doyle, Joe.
- Dukes, Alan.
- Durkan, Bernard J.
- Enright, Thomas W.
- Farrelly, John V.
- Fennell, Nuala.
- Flaherty, Mary.
- Flanagan, Oliver J.
- Griffin, Brendan.
- Harte, Patrick D.
- Hegarty, Paddy.
- Hussey, Gemma.
- Kavanagh, Liam.
- Kelly, John.
- Kenny, Enda.
- L'Estrange, Gerry.
- McCartin, Joe.
- McGahon, Brendan.
- McGinley, Dinny.
- McLoughlin, Frank.
- Manning, Maurice.
- Mitchell, Gay.
- Mitchell, Jim.
- Molony, David.
- Naughten, Liam.
- Nealon, Ted.
- Noonan, Michael. (Limerick East).
- O'Brien, Fergus.
- O'Brien, Willie.
- O'Donnell, Tom.
- O'Sullivan, Toddy.
- O'Toole, Paddy.
- Owen, Nora.
- Pattison, Séamus.
- Prendergast, Frank.
- Quinn, Ruairí.
- Ryan, John.
- Shatter, Alan.
- Sheehan, Patrick Joseph.
- Skelly, Liam.
- Spring, Dick.
- Taylor-Quinn, Madeline.
- Timmins, Godfrey.
- Treacy, Seán.
- Yates, Ivan.
Níl
- Ahern, Bertie.
- Ahern, Michael.
- Andrews, Niall.
- Aylward, Liam.
- Barrett, Michael.
- Barrett, Sylvester.
- Brady, Vincent.
- Brennan, Mattie.
- Brennan, Paudge.
- Brennan, Séamus.
- Browne, John.
- Burke, Raphael P.
- Byrne, Hugh.
- Byrne, Seán.
- Calleary, Seán.
- Colley, George.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Ger.
- Coughlan, Cathal Seán.
- Cowen, Bernard.
- Daly, Brendan.
- De Rossa, Proinsias.
- Doherty, Seán.
- Fahey, Francis.
- Fahey, Jackie.
- Faulkner, Pádraig.
- Fitzgerald, Gene.
- Fitzgerald, Liam Joseph.
- Flynn, Pádraig.
- Foley, Denis.
- Gallagher, Denis.
- Gallagher, Pat Cope.
- Geoghegan-Quinn, Máire.
- Gregory-Independent, Tony.
- Harney, Mary.
- Haughey, Charles J.
- Hilliard, Colm.
- Hyland, Liam.
- Kirk, Séamus.
- Kitt, Michael.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leyden, Terry.
- McCarthy, Seán.
- McCreevy, Charlie.
- McEllistrim, Tom.
- Mac Giolla, Tomás.
- MacSharry, Ray.
- Molloy, Robert.
- Morley, P.J.
- Moynihan, Donal.
- Nolan, M. J.
- Noonan, Michael J. (Limerick West)
- O'Dea, William.
- O'Hanlon, Rory.
- O'Keeffe, Edmond.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Malley, Desmond J.
- Ormonde, Donal.
- O'Rourke, Mary.
- Power, Paddy.
- Treacy, Noel.
- Tunney, Jim.
- Walsh, Joe.
- Wilson, John P.
- Woods, Michael.
- Wyse, Pearse.
Tellers: Tá, Deputies Barrett(Dún Laoghaire) and Quinn; Níl, B. Ahern and V. Brady.
Amendment declared carried.
Motion, as amended, agreed to.