Vol. 365 No. 14
asked the Minister for the Environment given the deteriorating situation of the construction industry underlined clearly by the recent figures for falling cement sales, and given the importance of the sector in the overall industrial economy, if he considers it appropriate to take steps to stimulate the industry; and if he will make a statement on the matter.
17.
asked the Minister for the Environment if, in view of the serious state of the building industry, he will as a matter of urgency, introduce a range of incentives to boost construction activity which could result in creating worthwhile employment; and if he will make a statement on the matter.
I propose to take Questions Nos. 6 and 17 together.
I would refer Deputies to the reply to Question No. 12 answered on 12 February last which set out various measures taken by the Government to generate additional construction activity. Since then, the following measures, which are calculated to provide a major stimulus for the industry have been announced:
1. The release of approximately 26,000 applications under the House Improvement Grants Scheme from the need for prior inspection. The improvement works represented by these applications are estimated to have a value, in terms of potential construction activity, of some £100 million, involving about 6,000 man-years of work. The estimated value of the construction activity represented by all the house improvement grant applications received since the inception of the scheme is now in excess of £250 million, involving more than 10,000 man-years of work;
2. The extension of the special tax reliefs available under the inner city development programme to designated areas in Galway and Waterford. This programme is specifically designed to generate investment in new building and in reconstruction and development work.
The Government are fully conscious of the importance of the building industry. About 70 per cent of the industry's output is publicly financed and much of the remaining 30 per cent is induced by Government incentives. Public capital expenditure affecting the industry was up by 4 per cent last year and this year's provision shows a further increase of 3 per cent.
An upsurge in private sector investment remains the key to full recovery in the industry. Many of the measures taken by the Government — such as the new improvement grants scheme and the designated areas incentives — are designed to stimulate such additional investment. Taking the likely effects of these measures into account together with the favourable trends now developing in regard to inflation, interest rates and real incomes and the expansion in economic activity following this year's budget, I consider that the outlook for the industry is brighter than it has been for some time.
Would the Minister agree that the production and use of cement is a barometer for an industry capable of providing necessary employment? The situation that the Minister outlined is not in accordance with the facts. There has been a drop of 5 per cent in cement sales in 1985 over 1984 and in the first three months of 1986 there has been a drop of 15 per cent over the corresponding period in 1985. That being the case, would the Minister agree that what he has said appears not to be the incentive that the industry so badly needs?
No, I would not agree.
The Minister outlined the value of the grant applications on hand for the reconstruction scheme announced last October as being approximately £250 million. In the Book of Estimates the Minister has a figure of £24 million for this scheme for this year. How does the Minister intend to pay even a proportion of the grants if he only has £24 million in the Estimate, even assuming that a certain amount of work would not be completed until next year? If only half of it is completed this year, it will cost about £125 million compared to the £24 million which the Minister has in his Estimate.
The Deputy may have misheard the reply. The point I was making was the estimated value of the total construction work generated by the applications to hand is in the order of £250 million. One of the purposes of any grant scheme such as this is to provide an incentive and a stimulus for the industry and it is estimated that the multiplier effect of the grants will generate total activity in the order of £250 million. We are not in the business of promising hundreds of millions of pounds.
Under the grant scheme a person is entitled to two-thirds of the estimated cost of the work. That would be around £170 million, working on the figure of £250 million that the Minister is talking about. Even with a conservative figure of £150 million worth of applications in, where does the Minister intend to get the money to pay those grants? Even if £75 million worth of grants were due this year, how does the Minister intend to pay for it with the £24 million that he has in the Estimate?
I am afraid the Deputy's calculations are faulty and his assumptions misplaced. Consequently it is difficult for me to try to reply to them on a factual basis.
That sort of smart comment will not hide from the public the fact that the Minister's letters of approval are not worth the paper they are written on. How many grants does the Minister estimate will be paid by the £24 million?
The Deputy seems to misunderstand the scheme entirely. There are a variety of different grants available for different types of work which are subject to a maximum in each case. The maximum is a certain monetary sum or two-thirds of the cost, whichever is the lesser. The Deputy is suggesting that, irrespective of the amount of work carried out the Government would undertake to pay two-thirds of the cost. I am sorry to burden the House by going into the matter in detail. I thought Members of the House had a better grasp of the scheme generally than it appears they have.
The Minister just has not got the money in the kitty.
The simple fact is that this is——
Deputy Farrelly should not interrupt the Minister.
The simple fact is that this is the single most successful house improvement scheme ever introduced by a Government and that is indicated clearly by the level of response and demand from the general public. There are sufficient and adequate funds available in the Estimate for my Department to pay all grant applications which fall due for payment this year. I am tremendously pleased with the success of the scheme and the response of the general public and it ill-behoves Deputies to cast aspersions on the scheme in this way.
The Minister just has not got the money.
It reminds me of the old £9.60 a week. There are thousands of applications——
I am getting a lot of applications——
Nobody is being paid.
Somebody has to pay for it.
When I asked the Minister would he regard the percentage drop in the sales of cement as a barometer of activity in the industry the Minister said he would not. Is the Minister saying that what I said is incorrect? If the grants are so successful how does the Minister reconcile that with the drop in the sales of cement?
The Deputy's earlier question was whether I would regard changes in the level of cement sales as an accurate barometer of the industry. I said that I would not, and I repeat that.
I am not going to have this question all afternoon, it is unfair.
It is just one simple question.
It is necessary to say this again. The Chair is under pressure from the Whips to make progress at Question Time. I consider that in accordance with my discretion I have been reasonable on this question and I do not propose to allow any more supplementaries.
It is a very important question.
Am I to understand our Whip is putting pressure on you?
The Whips are not entitled to put pressure on you.
The Whips are entitled to draw the Chair's attention to the new scheme for questions under Standing Orders.
The last answer by the Minister was that the sales of cement are not a barometer of activity in the industry. Are all these improvements being done with mud rather than cement?
