For a few moments I had hoped there would be a rather unexpected interest in the comments I am about to make on the subject of housing. I am afraid, however, that like the unfortunate people who suffer from disabilities – some of whom are outside the gates of Leinster House today – the attention is directed elsewhere. It is not being focused on the very real and immediate problems that many people face, whether they suffer from disability or a lack of housing.
I wish to refer to the contribution made by the Minister when introducing the Bill, focusing on one sentence in particular, which I find quite remarkable. The Minister stated, "This Bill addresses a wide range of issues but the urgency of some of its provisions means that it is not as comprehensive as I would have liked." If the provisions of the Bill are urgent, as they are, why has it taken the Minister almost five years to introduce them? After five years in office, why is the Minister not in a position to introduce legislative measures which are, in his own words, as comprehensive as he would have liked? I have never seen a Government which after five years in office makes such a total and comprehensive admission of failure as is contained in that sentence.
This is the first specific housing legislation that has been introduced by this Government in its five years in office to deal with what is one of the worst social problems. The Bill is titled as miscellaneous. It contains a number of tidying-up provisions in relation to the shared ownership scheme, affordable housing and the reporting of information by building societies. It contains a rather strange provision in relation to the purchase of dwellings by local authorities to which I will refer on Committee Stage.
It is probable that the reason the Minister described it as urgent is the provision to increase the borrowing limit of the Housing Finance Agency from £1.5 billion to €6 billion. I support the Government's measure to increase the borrowing limit of the Housing Finance Agency and the use of such moneys to solve the housing problem. When I read the Bill first I confess I was a little surprised that the borrowing limit was being extended from £1.5 billion to €6 billion. Even the very radical measures which are advocated by the Labour Party, as distinct from the Government, to deal with the housing crisis would hardly reach €6 billion. My surprise was answered when I saw paragraph (c) of section 17 which makes clear that this increased borrowing limit is being introduced to provide moneys to local authorities “to be used by them for any capital purpose authorised by or under any enactment mentioned in the Schedule to this Act”. Not surprisingly, the Housing (Private Rented Dwellings) Act, the Local Government (Sanitary Services) Acts, the Waste Management Acts and the Water Supplies Acts, are listed in the Schedule. Under the camouflage of what it calls a Housing (Miscellaneous Provisions) Bill, the Government is bringing a provision before the Dáil to increase State borrowing. The reason the Minister described the Bill as urgent in his introductory speech is that the Government is pretending one thing to the public and doing something else in reality when it comes to borrowing.
The Minister's colleague, the Minister for Finance, came into this House on budget day and like a conjurer held up a budget and said he had balanced the books and given us a budget and a Book of Estimates with no Government borrowing. Yesterday we had a Bill in relation to energy which provides for an additional €1 billion in borrowing; today we have the Housing (Miscellaneous Provisions) (No. 2) Bill which provides for about €4 billion in additional borrowing. This Bill is not about housing at all; it is about providing a vehicle whereby the Government can borrow money to carry out the infrastructural programme that is badly needed.
The Labour Party agrees that we should borrow to carry out infrastructural projects and to implement the national development plan. In the next couple of months when we argue that point in the context of an election, people on the Government side of the House and their spin people will be the first up to the microphone to say the Labour Party is proposing borrowing. It is true that we propose borrowing for capital purposes but I wish to bring to the attention of the House that the Government in this Bill is borrowing, despite the fact that the Minister for Finance denied he was borrowing. The Government is continuing to pretend to the people that it is not borrowing funds.
It is a Bill which in reality has little to do with the housing crisis because its provisions will do nothing to address the immediate and real needs of people who cannot afford to buy a house or pay the exorbitant rents being charged in the private rented sector and who cannot feel secure in the flat or apartment they have rented because of the Minister's lack of legislation to provide protection for tenants, or people who are on council housing waiting lists. This Bill is giving a legislative basis to the shared ownership scheme, which is already in operation, and is providing a vehicle by which the affordable housing scheme can operate, which is already in operation albeit not very successfully. It gives local authorities the right to draw up some kind of priority system for the affordable housing scheme for which the Department of the Environment and Local Government has already issued guidelines and many local authorities have already gone ahead and implemented the scheme. In reality this Bill offers nothing new to deal with the housing crisis.
The Government describes itself as the longest serving Government in the history of the State. Through that time it has, by and large, enjoyed a good press, paid for by the taxpayers who must not only fund the normal public relations staff of Departments and Ministers but the various public relations agencies and consultants who are attached to Ministers and whose job is to spin the good news to the press in advance of announcements. This also covers some instances of public relations agencies who work for State agencies but who, in their off hours, appear to work as the private PR consultants of Ministers.
History will be very unkind to this Government. Every Government is remembered for some achievement or failure but this one will be remembered as the Government which put owning a home beyond the reach of the ordinary family. That historic achievement, if it can be termed such, has changed not only the nature of housing tenure in the State but it has changed Irish society fundamentally for at least a generation in the same way as British society was changed in the 1980s following the economic changes wrought by Mrs. Thatcher.
Until the Government took up office, home ownership had been the normal form of housing tenure and most young couples realistically aspired to owning their own home. In many cases council tenants graduated from renting to buying. Ireland had one of the highest levels of home ownership in Europe, at approximately 80%, and home ownership was the rock on which society was built. It was the aspiration to which the Government nominally subscribed on taking office when, in its Programme for Government, it declared as its objective the protection and promotion of the concept of home ownership.
However, when the Government took up office the average price of a house was €87,202, whereas, according to the latest figure, for September 2001, it is €169,191. Since the Government took up office, the average price of a new house has increased by 137 points on the house price index scale. In the same period, the consumer price index rose by only 20 points, from 113 at the end of 1996 to 133 in the third quarter of 2001; average earnings rose by only 35 points, from 121 in 1996 to 156 for the latest date for which figures are available and the cost of building index rose by only 49 points, from 116 at the end of 1996 to 165 in the third quarter of 2001. Under this Fianna Fáil-Progressive Democrats Government, house prices have risen by almost seven times the rate of inflation, by four times the rate of pay increases and, lest anyone think that the rise in house prices is due to the wages paid to bricklayers and building workers, by three times the rate of increase in the cost of building.
In practical terms this means that families on moderate incomes, who could afford to buy their own home when the Minister, Deputy Dempsey, and the Minister of State, Deputy Molloy, took over responsibility for housing, can no longer afford to do so from their own resources. Such families include teachers, nurses, gardaí, factory supervisors and postal workers with some overtime. They are the people who are building the economy the Government is so fond of praising and their taxes are contributing to the increased revenues the Government has had available to it to deal with problems such as housing and other public services.
Some of these people eventually manage to buy a home of their own and they do so in three ways. First, they get financial help from their parents. A financial institution recently estimated that, typically, parents are now putting up €50,000 for a child buying his or her first home. This money comes from pension lump sums or savings. A price will eventually have to be paid for it because, understandably and generously, it is money which parents provide to enable their children get a toe on the house purchase ladder. It would otherwise have been used at a later stage in those people's lives for nursing home care and retirement. At some stage somebody else will pick up the tab.
The second way in which young people are managing to get their toe on the house purchase ladder is to saddle themselves with crippling mortgages. Responding to the demand from new borrowers and to increased house prices, lending institutions have changed their lending policies in the lifetime of the Government. It is ironic that when houses were affordable the lending institutions were much more restrictive about what they were prepared to lend. When I bought a house 20 years ago the maximum loan available was 2.5 times the principal income plus what was called the subsidiary income. Now, when houses are expensive, the lending agencies have a new maximum of three times the combined income. Almost every young family which took out a mortgage in the lifetime of this Government has locked itself into a 25 year financial commitment which, in many cases, they will not be able to afford if things go wrong, for example, if either of the partners gets sick, loses a job or some unforeseen financial obligations arise.
In view of the high mortgages, both partners in a relationship must work. High house prices have abolished the right of families to choose that one parent will remain at home with children, even for a limited period, typically when the children are small. The Government has abolished that option.
The Labour Party has always supported the right of everybody to work but the Government has gone a step further in making work for parents compulsory to pay the mortgage. If there was any doubt about the Government's intention, the taxation policies pursued by the Minister for Finance, when he introduced a tax regime penalising stay at home parents, have underlined its approach. All of this has created a new crisis in child care. Parents who must work to pay a mortgage must find somebody to mind their children. There is so much demand and such limited supply that they incur an enormously increased cost. In many cases – the third consequence of high house prices – the only house a couple can buy is some distance from their place of work or family networks.
In Dublin there is a new commuter belt. It extends to Gorey – the property pages of today's newspapers advertise new houses in Gorey with a map of the east coast showing how close it is to Dublin – Athy, Mullingar – the new suburban estates which can be seen when driving through Rochfortbridge – and Ardee and is contributing to the increased traffic and transport clog with which we are all familiar. It is also increasing wear and tear on the individuals who have to drive to and from work to these new far flung traffic congested suburbs. It is putting a strain on children who do not see their parents from very early in the morning until very late in the evening and on normal human and personal relationships. This is to be found, not only in Dublin, but in other cities also.
We hear much from planners and those who have an interest in planning about the 40% of dwellings built last year which were one-off housing. That one-off housing is built, not because of any intention on the part of those concerned to do something that is regarded as bad planning, but because it is the only way a couple who buy a site, three or four miles from a village or town, will be able to afford a home of their own.
It is some achievement for the Government that those whom we describe as the lucky ones, those who have been lucky enough to buy their own homes, have to get up at 6 a.m., leave their children to a minder at 7 a.m. spend three hours a day in traffic getting to and from work, return home at 7 p.m. or 8 p.m. jaded and have little time to spend with their children or enjoy a normal relationship. They have no escape because of the cost of their mortgage. This is mortgage slavery. The Government, through its housing policies, has turned a generation into mortgage slaves. Those who have not been lucky enough to be mortgage slaves have no choice but to rent.
Let us look at the rental situation. Those who could buy their homes before the Government took office are now joining the queue for rental accommodation – students, temporary workers, single people and, in some cases, those waiting for local authority housing. Much attention has been paid to the lack of supply of private rented accommodation in respect of which I agree there is a problem. The reason such accommodation has become so expensive is that the demand side has also increased. The increase has been brought about by those who, before the Government took office, would have been able to buy a home of their own. The apartment or house which one could have rented for €500 per month, before mid-1997, now costs about €1,200.
On top of this the Government has failed to introduce any legislation to give protection to tenants. When the Minister of State, Deputy Molloy, took office he could not see the problem. He ended up being embarrassed into establishing a commission on the private rented sector which reported to him in July 2000. He made a public statement that he would do something about the matter in September 2000 and announced in January 2001 that he would bring forward legislation to provide protection for private tenants which we have not yet seen.
In its report the commission on the private rented sector estimated that there were 135,000 private rented tenancies, an estimate it based on the figures available for 1997. Given what has happened to the housing market since 1997, there are 200,000 private rented tenancies in which about 400,000 people live. Unlike other countries, they live in an insecure regime where they can be evicted at a month's notice, where rents can be increased as often as a landlord wishes and, in some cases, they are evicted.
Eviction has always been an emotive issue. Evictions are a daily occurrence in this prosperous country of ours. Old private rented accommodation is being upgraded or sold. In some cases landlords believe they can get a higher rent from the next batch of tenants. Thousands of families have been evicted legally under the Government while a large number of illegal evictions have been well documented by Threshold in particular. It is some achievement for the Government that more Irish families have lost their homes through eviction in the five years it has been in office than in any corresponding period of the land war in the 19th century under the British.
These evictions have created the new homeless, typically a single parent with one or two children, who are accommodated temporarily in bed and breakfast accommodation. In some cases they are in such accommodation for 18 months or two years. Under this regime they have to be out in the morning by 10 a.m. They take their children to school and find something to do during the day. Sometimes they have a younger child whom they push in a buggy. They collect the children from school and find a place to occupy their time, such as a public park, go in and out of shops, perhaps visit a friend, until it is time to go return to the bed and breakfast accommodation at 6 p.m.
All of us who are parents know that there are holidays for two or three weeks and people have to live a mobile life where they manage children in buggies. Young mothers visit my advice centres with children in buggies who, understandably, are restless. I really do not know how they manage. They push a child from Billy to Jack for the entire day with little or no prospect of housing being provided for them. This is the new Ireland that the Government has created through its housing policies. I admire the fortitude of the parents of those children, but what are the social, educational and health consequences down the line for both parents and children who have to live in such conditions? The Government's housing policy has been a disgrace, testified to by the fact there were 26,000 applicants on local authority lists when it took office, yet when I asked the Minister with responsibility for housing for the current figure last week, he could not provide an answer. Either he does not know how many applicants are on the waiting lists or he will not tell us – I do not know which is worse. I estimate there are about 60,000 families on local authority waiting lists. The Taoiseach has admitted that the official programme of building 25,000 local authority dwellings under the PPF will not be met. It is time the Minister of State, the Minister and the Government were swept from office and a Government elected which will deal with the housing crisis.