SEANAD IN COMMITTEE. - HOUSING (BUILDING FACILITIES) BILL, 1924.—(RESUMED).
(1) Any local authority having power to levy rates may, and when required by the Minister shall, in every of the first nineteen financial years after the valuation for rating purposes of a house in respect of which a grant shall have been made by the Minister under this Act, remit a portion of the rates leviable in respect of that house in that year by the local authority.
(2) The amount of rates leviable in any such year as aforesaid which may or shall be remitted by a local authority under the foregoing sub-section shall not exceed the proportion of such rates specified in the second column of Part II. of the Schedule to this Act opposite the number of such year in the first column of the said Part II.
I move:—
Section 7, Sub-section (1). To delete in line 53 the words "and when required by the Minister shall."
I am sorry I cannot accept the suggestion made by Deputy Gogarty, but I will be as brief as possible. The object of the amendment is clear. It is an effort to relieve the increasing burden on the local authority. They say that the last straw breaks the camel's back. I think the camel's back is very nearly broken. Here we have the power of forcing on the local authority the obligation to remit rates. These bodies are supposed to be autonomous. They are democratic and although I may be open to the charge of inconsistency in adopting this attitude, I feel that in this case there is no ground for interference by the Central Government.
This is also a case in which we have endeavoured to distribute the burden as equitably as possible. For two years we contributed towards the construction of houses by local authorities two-thirds of the cost. That proposal was entertained by us at a time when the State was not burdened with the enormous costs and liabilities of the last two years, and when there was not in contemplation such an enormous burden on the taxpayer. Here is a case in which the State does what never has been done in this country before. In the first place, it gives a subsidy; in the second case it enables a local authority to give a subsidy, and in the third place, the local authority, having had the money spent in each area, benefits by increasing the valuation of that area. We asked that the rates on houses—an almost uneconomic service just at the moment—be reduced by 95 per cent. the first year, by 90 per cent the second year, and so on until at the end of 20 years the local authority will have in its area a very valuable property, bringing in rates and benefiting the entire community.
In this case the State comes in with £100 towards the cost of a house, comes in also with machinery, with its help and assistance, and asks the Local Authority for a similar contribution. It provides the Local Authorities, one might say, with decent habitations and does not impose on them any extra liability. Take the case of a particular area in the City of Dublin where if you put up a couple of hundred houses upon what was virgin soil, what is the actual cost? What is the burden placed on the Corporation of Dublin by an addition of 200 houses? You have still got the Town Clerk and Medical Officer of Health and the various other officials' services, so that the actual additional cost by reason of these extra houses to the City of Dublin is scarcely a burden at all. The case is then that the State comes forward with a contribution of £100 and gives the local authority the entire benefit of any building activity that would result. I do not think it is an unfair burden. It is scarcely a burden at all to ask the Local Authority to give this remission in rates. For a great number of years, under at least one of the Local Authorities, persons in occupation of houses valued at £8 and under got a remission of valuation if the houses were kept in good order. That might not be the case throughout the country. This is a case in which this particular service, owing to the increased cost of production and the high cost of materials and other incidentals which have come about from the war, such as the increase in the cost of money, cannot be rendered now unless there is co-operation from every person engaged, employers, employees, the State, the Municipality and all interested in the provision of houses.
Co-operation by all means, but I suggest this is coercion. The only thing I would say is that I gather that an additional cost will very often be put on the Local Authority by reason of these new houses. You have to provide approaches to the houses, sewers and public drainage and other services. Surely these will mean an additional cost. I suppose if the Government are going to insist on it there is nothing more to be said.
Amendment put, and lost.
Section put, and agreed to.
SECTION 8.
(1) The Minister may at any time if he thinks fit order a local inquiry into the cost (including the wholesale and retail prices, the transport, handling and overhead charges, and the margin of profit) in Saorstát Eireann or any particular part or parts thereof of any materials or appliances used in the building of houses, and if he is satisfied, after the holding of such local inquiry, that the cost of such materials or appliances in that area is excessive and restrictive of output of building work, the Minister may by order prescribe the maximum amount of the wholesale price or of the retail price which may be charged for such materials or appliances in that area or the maximum amount of profit and of transport, handling and overhead charges which may be included in the wholesale or the retail price charged for such materials or appliances in that area, and may at any time and from time to time by order continue, vary, or revoke all or any prices or amounts prescribed by him or on appeal from him under this Section.
(2) Any person aggrieved by an order made by the Minister under this Section may appeal from such order in the manner provided by this Act.
(3) If any person charges in any area to which an order under this Section applies a price for any material or appliance to which the order applies in excess of the price which may lawfully be charged under the same order, he shall be guilty of an offence under this Act and shall be liable on summary conviction thereof to a fine not exceeding £50, and where the person guilty of such offence is a company, the chairman, managing director and every other director and manager of the company shall be guilty of the like offence unless he proves that the act constituting the offence took place without his consent or connivance.
(4) Article 32 of the Schedule to the Local Government (Application of Enactments) Order, 1898, shall apply to every local inquiry held under this Section.
(5) Neither this Section nor any order made thereunder shall continue in operation after the expiration of eighteen months from the passing of this Act.
I move: Section 8. To delete the Section.
This Section is an attempt to introduce the principle of diarchy, or dual control into business. We all know, after the recent experience in the European War, how fatal that is. I have reason to believe, or I surmise, that the Government do not intend to apply this, and that it is merely intended to act as a scarecrow. I can say that if that is the idea it will not only act as a scarecrow against profiteers and such pests, but against the fertilising qualities of capital and those who could contribute to the result we all require. The first thing we have to ask is what is the meaning of the word "local"? Does it mean an inquiry within the area of the local authority? I do not see anything in the definition to explain that. You may make a province or any large area the subject of a local inquiry. I wonder if the Government realises what an inquiry of this kind, if going to be effective, means? You would have to inquire into the cost of timber, and many people who have not a knowledge of timber think that is very simple. When you go into an inquiry in which you are going to fix prices you have a multiplicity of grades and qualities all of which would have to come under review. If there is to be any equity and effectiveness in it your inquiry must be very extensive and must go into considerable detail. I do not know if the Government appreciate that a merely general inquiry will serve no purpose at all. You could not fix prices in business without a knowledge of the various grades and qualities that have to be taken into account. What are the powers of this body? We have had experience of inquiries and of the Commission on Prices where it was generally agreed the whole thing was a farce, as there were no powers. I cannot see under this Section that there are any statutory powers to call upon parties to produce books and give evidence on oath. I may be wrong. Is the fixing of a price to come into operation from the date of the order or is it going to be retrospective and to affect undertakings and contracts made prior to the order? That is also dealt with in an amendment in the name of Senator Haughton which, with the permission of the Seanad, he has asked me to move on his behalf.
Then there is the power of varying and revoking. I am glad to see that the Government have kept that in because you could never fix prices unless you had power to vary and revoke. How that power would affect the head of a business firm who has to make a contract, I fail to see. Then, again, under this Section, and also under Section 10, within what period must an appeal be made? That fact will also affect the operation of Sub-section 2, Section 10, but mainly I think the Seanad ought to be somewhat concerned about this. Even though it is only intended as a sort of bogey, it puts a new and dangerous principle on the Statute Book. It may not do much harm in a Bill of limited operation, but once it is on the Statute Book it is almost a precedent for legislation of a most dangerous nature, and one that will deter a free flow of capital and enterprise which is the only way in the long run that houses will be built.
I am wholeheartedly in favour of this Section. It is a notorious fact that standard articles required for the erection of such houses as we contemplate are all quoted at the same price. I know from experience that if you go to all the builders' providers in Dublin, and ask tenders for these standard articles, you will invariably get an estimate which will be the same for every article. That proves conclusively that there are rings in the supply of building material. Somebody fixes the price and everybody must sell at that particular price. We all know that in some establishments the overhead charges are greater than in others, and in some the costings are greater than in others, and that the business of one concern may be run more cheaply than that of another, and that it can sell more cheaply than others. Most of the articles, such as flooring, boards, etc., which will be used in the constructing of these houses are standard articles, and they will all be obtained at the same price in Dublin. Therefore, I think there is a necessity to protect the public. There have been rumours that there are building rings and building profiteers who make exorbitant profits. If there are not such rings, they need not be afraid of this particular Section. I think the Government would be wise to include this Section in order to protect people who will be compelled to build a house according to specifications laid down by the Ministry, whose engineers will see that these specifications are carried out. I hope if the Government will get the power that they will exercise it fully.
I listened to Senator Farren on the Second Reading, and I think he said that such power would be ineffective as it would not be used.
I understand there are two Sections in the Bill which would make it work the way Senator Farren prophesies, namely, Sections 8 and 9. Section 8 says that "the Minister may at any time if he thinks fit." If a man makes a contract to build a house and he makes a sub-contract for material the Ministry may come in and start a local inquiry which will upset all his arrangements. That seems quite unworkable. Who is going to accept contracts under such conditions? Of course we trust the Government absolutely not to give grants for houses that will cost too much. It should not be done in the way provided here in the Bill. Before they pass a contract or give a grant the Government and their advisers know what the house should cost, for any of us who are building to-day know exactly what a house ought to cost. I may mention that we had a contract before us the other day which showed that a building was going to cost at least 30 per cent. over and above what it could be done for on the other side of the water and what we thought we would get it done for here. There is no question about big prices prevailing. There will be great difficulty in getting cheap houses in this country, and we will want the Government, who are putting public money into houses, to be careful about the prices at which these houses are to be built. This Section gives power for interference at the wrong time. If the Government are going to interfere, let them interfere when the contract is made. Let every contract be subject to Government approval as it is in the Bill, but do not let them pass a single thing unless the prices of the houses are what they ought to be. Once they agree as to the prices and the grant, let there be no further inquiry. Otherwise they will upset the contract, and they will get no one to build. I wonder has Senator Farren noticed that there is no interference with wages in the Bill?
I am not in the confidence of the Government.
There is no power to revise wages. I suppose they wish to avoid trouble. There is no power to say that there is to be interference with wages. I say that they are perfectly right, as they would get into trouble if they did interfere. If this Section is kept as it is, and if the Government keep a right to interfere and hold extremely expensive inquiries into such minute things as Senator Keane has referred to at any time they please after the contract is placed, they will undoubtedly damage the value of the Bill greatly, and prevent any decent contractor from taking contracts for these houses.
Senator Jameson is not very often wrong, but he seems now to have got the wrong end of the stick. The object of this Section is to protect the contractor who decides to build a number of houses. He has got to buy material for those houses. The very moment there is any sort of development in those houses up goes the price of material by speculators and manufacturers, simply because of the big demand for it. It is to protect contractors, who decide to build houses under the terms of this Bill, from any undue fluctuation of the price of materials. To prevent the people who sell to them from charging exorbitant prices is the object of the Bill. The only people it could embarrass in any way are those rapacious profiteers who are trading on the public requirements by seeking undue profit through the operation of the Bill. I do not see how he can argue that the contractor who is going to build is to be interfered with. It is to his interest to get things as cheaply as possible. Otherwise you are going to leave the contractor at the mercy of those rings and you frighten away men anxious to build houses, instead of encouraging them.
I do not at all suggest that the whole Section should be cut out, but that is the amendment. In speaking to the amendment I did point out that the Section as it stood was an interference with the contractor by the Government, and that that interference was put in at the wrong place. If this inquiry was made before the contract was let, it would be all right. A contractor cannot have his price run up against him. He must be sure of having his materials at certain prices before he makes his contract. It is said the Government is going to protect him. How will it protect him? He has got his material and everything of the kind, and he has then put in his contract price and that has been accepted. Once that has happened the Government should not come in and begin holding inquiries. I do not see, if they come in after the contract has been let, how they are going to protect the contractor, and I do not see how making him liable for a penalty of £50 is going to be of assistance to him. Perhaps the President will explain this further.
As one who has had a considerable amount of experience in this work, perhaps you will allow me to say a few words. I think there is a vast amount in what Senators O'Farrell and Jameson have said, but from my experience of contractors I do not see how the object which everybody has in view will be gained by Senator Jameson's proposal. I am aware that the suppliers guard themselves by a clause that they are to supply at a certain rate. Suppose what Senator Jameson said is correct, that the contractor has satisfied himself, and arranged the tender for certain goods. He will find when he comes to consider those prices he has got that the suppliers have guarded themselves by a condition that those prices are to vary under certain circumstances. If what Senator Farren fears happens, then the prices will go up and he will not be protected.
He will lose money by interference.
If the Government acts he will be protected.
As against the British producer.
I suppose that the British producer will have to land his stuff here some time or another, and then you can get at him. There are rings in existence. Within the last week I had a case brought under my notice. Senator Farren is quite correct in saying that rings are not confined to Dublin. They exist all over the country. In certain districts you find the same prices quoted to you for the same articles. If you go outside that ring you find that prices vary enormously.
In a certain district, which shall be nameless, timber was quoted at the same price. Everyone in that district quoted within a few pence of the same price. On going outside that ring the same timber was got at 30 per cent. less. I cannot imagine any Section which should be more advantageous or necessary than this one. I do not know how this will be amended. Whatever Section will be drafted the Government will have great difficulty in enforcing it.
I think a great deal of the difficulty will be met by giving the Minister credit for having a little commonsense. There is nothing in Section 8 to force him to interfere. If he does not think fit, he is not to set up this elaborate inquiry, and Senator Jameson's difficulty will be met as well as the difficulty supposed to overhang the contractor. I think a Section that gives the Minister power to think fit is essential to any Bill, inasmuch as the contractor always puts in a proviso that some imaginary posterior material will not become dearer for him. That is the method of making it difficult for a man to be disturbed in the middle of his work. With the Minister's discretion presiding over and controlling, it will be possible to some extent to avoid sudden profiteering and opportunism. I, for one—perhaps I am in a lonely position—always regard the Government as having a presiding intelligence over the country.
If the Government carry this, I hope they will not try and work it.
Amendment put and declared lost.
With the permission of the House, I beg to move Senator Haughton's amendment, to add at the end of Section 8 the following words:—"Provided that this Section shall not apply to the price of any material or appliance which is the subject of a contract entered into before the date of the local inquiry." This is an amendment to secure that a contract shall remain a contract. I am not satisfied that under this Section, if it is enforced, you will not have power to upset a contract. It is not necessary to elaborate the disastrous consequences that may ensure if you have that power.
If that amendment is carried it will vitiate the whole thing. If a man enters into a contract and is satisfied that he has been charged an excessive price, he applies to the Minister to have it investigated. If investigation shows that the man is charged more than he is entitled to be charged, and that his claim is justified, what is the use of the Section at all?
If a man enters into a contract for the supply of goods and he is satisfied that he is not getting the goods at the proper value, and he acquaints the Minister, or it comes to the knowledge of the Minister and the Minister decides to hold an inquiry into that allegation and finds that undue profits have been made, then there would be no use in holding such an inquiry if the findings of the inquiry would not deal with the specific complaints that were made regarding the price charged. I see Senator Jameson laughing. When I said the Section would be no use at all I should have said that the inquiry would be no use. I think the profits allowed should only be a fair margin.
I think you are wrong as to what I was laughing at. You proved up to the hilt that the contract will be no use under the Section as it stands. That gives power to discharge a contract, and a man who puts his name to a contract would be more or less a fool.
Amendment put and declared lost.
Question: "That Section 8 stand part of the Bill," put and agreed to.
SECTION 9.
(1) It shall be lawful for the Minister, whenever after consultation with the Minister for Industry and Commerce it appears to him expedient for the purpose of facilitating the building, reconstruction or repair of houses (including as well houses to which this Act does not apply as houses to which it does apply) in Saorstát Eireann or any part thereof, to purchase or manufacture, store, transport, and sell any materials or appliances ordinarily used in the building of houses.
(2) All materials and appliances purchased or manufactured by the Minister under this Section shall be sold by the Minister to persons in Saorstát Eireann at a price (in the case of purchased materials or appliances) equal to the total of the price paid by the Minister, all transport and storage charges actually incurred, and five per cent. of the price paid by the Minister, or (in case of manufactured materials or appliances) equal to the total of the net cost of the manufacture thereof by the Minister, all transport and storage charges actually incurred, and five per cent. of the net cost aforesaid.
(3) The expenses incurred in the purchase or manufacture, storage, transport, and sale of materials and appliances under this Section shall, to such extent as shall be sanctioned by the Minister for Finance, be paid out of moneys provided by the Oireachtas, and the proceeds of the sale of all such materials and appliances shall be paid into the Exchequer.
I move to delete Section 9. I am sorry to have to return to this. Really I do think that this Section is of great importance, much more than the last, because I do give the Government credit for not attempting to enforce the last one. But I think there is a great danger that they may be tempted to operate under this. The Government takes power to enter into the building trade, and with unemployment and these demobilised soldiers to be provided with work, there is a great temptation to start some factory or enterprise which would solve unemployment. What would be the effect of that? What has been all down the ages, as far as we know, the effect of Government competition on private enterprise? It simply drives private enterprise out, and Government operations, being proverbially extravagant by virtue of a lack of incentive, by the exclusion of all prospect of profit or gain, cut right at the root of these qualities which make for enterprise and develop initiative, resource and the running of risks. If the Government is really seriously going into trade, other people will get out of it, and the field will be left to Socialists. I am not now speaking against Socialism. I regard it almost as a sin against nature, in that it destroys those great qualities of virility which nature expects the human species to possess. I come now to the curious wording in Sub-section (2), that materials should be sold at a certain price. I wish the Attorney-General was in the House, or that we might have legal opinion as to what is going to happen in these cases. Supposing the Government sell, as every business man has to sell, at what they can get, surely it is common knowledge that you cannot make your price unless you also chose to force the purchasers to buy.
The Government find that they have got the stuff on their hands and the market has gone against them. They have then got to hold it indefinitely, saecula saeculorum, or until a new Bill is passed. Otherwise what are they going to do, because they have not power to set it? I do not know what are the rights of the citizen as against the Government, but I suppose that, by Petition of Right or by some other means, one could proceed against the Minister if one so minded. But I think if a body is going into trade it augurs very badly for their success if they go on the supposition that they can sell at their own price. If everyone could sell at their own price we would all be in a position of affluence. Then also, I am not at all satisfied that the Government possess the necessary accounting machinery, and I might also say that unless they recruit from the accountancy profession the necessary accounting skill to record in proper form these transactions and to ensure that the cost is the true cost, we could not know the real position. There is nothing more elusive than true cost. I have other amendments, if the Section is to remain, in which I hope to develop that point, but I think I have shown in the broadest grounds the reasons why I consider this Section dangerous and unacceptable.
It is quite evident that Senator Sir J. Keane has got a bad attack of Socialitis. I presume he is thanking his stars that he is not living in England, where there is a Socialist Government in power. He attacks this Section mainly on the lines that it is Socialistic, but for that matter the whole Bill is Socialistic, because it is providing State funds to subsidise a number of speculative builders to build houses in the public interest. We were told on the Second Reading that very much of the material that is required for building houses is not manufactured in Ireland at all, that we are very largely, to that extent at all events, at the mercy of combines and rings outside this country. If that is the case, the incentive would be for the Minister, if he decided at all to enter into the manufacture of building materials, to do so in connection with these commodities that are manufactured outside this country, and consequently there will be no question of driving private enterprise out of business. The Section provides for a profit of five per cent. Evidently Senator Sir John Keane thinks that it is a scandalously low amount.
I think that the ordinary manufacturer, if he is able to make five per cent. on his money, is not very badly treated, but he thinks that any manufacturer who is confined to that amount will inevitably go out of business altogether. That is an indication of the very high profits that are being sought, and the amount of profiteering that must inevitably ensue. As to the wording of the Section, I am not concerned with it; I had nothing to do with the drafting of it, but it is with the principle that I am concerned. What we want is to build houses, no matter who they are built by or by what means, to remedy this great social evil. There need be no anxiety as to the State entering into private enterprise, where private enterprise has absolutely failed. The State must not allow private people to speculate upon public requirements and to try to make a profit out of social evils. The arguments against this Section are of an utterly selfish character. They are unpatriotic in my opinion, and are only calculated to check or to obstruct the steps that are being taken to remedy one of the greatest social evils with which this country is faced.
Senator O'Farrell, in dealing with this, has brought in a matter which I really did not impute to the Government at all, as to what they meant to do—that this Section means the Government is to start manufacturing things not made in this country.
I did not say that. I gave it as an expression of opinion that that would be the direction in which they might operate. I did not dare to speak for the Government itself.
I quite take that for granted, but I should hope that that is not in the minds of the Government. It never dawned on me to impute that the Government were going to embark on the manufacture of things in this country which at present private enterprise is not able to manufacture; that the Government should think of using a Section in a Bill of this sort to start manufacturing. I take it that in all the Sections they are putting into this Bill they are simply keeping before them that value is to be got for the £300,000 they are putting up for housing. Therefore, I look at the Section quite differently, but honestly looking at it as it is drawn, I cannot see how it is going to act. I can see very considerable trouble for the Government itself. Take the one question of how they are going to get the money alone. Taking it for granted these factories are to be established because the makers of the articles which are to be used in the building of these houses are going to charge such a price that the houses cannot be economically built, the Government are going to manufacture so as to produce them more economically.
For instance, will they try to get timber cheaper than it could be sold at now? And they will probably manufacture bricks. As people know, those who are engaged in those trades are not making fortunes. I do not know if the Government think they will get such things any cheaper than at present. The people engaged in those trades at present are not making money. If the prices seem too high and the Government come in, make bricks and deal in timber, certainly we might lose a great deal more than the £300,000 unless they employ experts in the business. The Section says: "It shall be lawful for the Minister, whenever after consultation with the Minister for Industry and Commerce it appears to him expedient for the purpose of facilitating the building, reconstruction, or repair of houses (including as well houses to which this Act does not apply as houses to which it does apply) in Saorstát Eireann or any part thereof, to purchase or manufacture, store, transport, and sell any materials or appliances."
That, of course, will cost money. Then how is he going to pay for it? Look at sub-section 3—"The expenses incurred in the purchase or manufacture, storage, transport, and sale of materials and appliances under this Section shall, to such extent as shall be sanctioned by the Minister for Finance..."
The Minister for Finance is not called in at the beginning of the proceedings at all. The two other Ministers start. They go ahead and establish factories and everything else, and when it comes to pay their bills they come to the Minister for Finance. He may say, "I do not approve of your proceedings at all. I cannot face the Oireachtas and ask them to pay for this speculation." It seems quite plain that the Minister for Finance could come in and render it quite nugatory, and refuse to pay for the undertaking entered into by the two Ministers in the first paragraph. If it is meant that under this small Bill the Government are to manufacture on a large scale, it would seem as if it was the case the things are not to be sold only to the builders of these houses. They are to be sold to people in Saorstát Eireann, and it does raise the suspicion that the Government are intending in this Bill to bring in a clause enabling them to start factories. I do not believe it is so, but the Section implies it as it stands. It seems to me to give them full power to enter into it; it gives two Ministers full power to make bargains without the consent of the Minister for Finance, and it gives the whole three Ministers power to pledge the credit of the State with the consent of the Oireachtas to that expenditure. I think the Section is wrongly drawn, and I cannot see the necessity in a Bill of this kind to bring in all these enormous questions. I think that the Government could have quite enough control of the situation without bringing in such huge things as seem to be implied in the Section.
I do not think that the Government are going to build factories. There will be no necessity under this Section for the Government to build factories, for most of the supplies of building materials required in this country are not manufactured here. What the Government can do is, if the people who handle the goods on this side are not prepared to deal fairly and get reasonable profits for handling the goods, the Government can just as easily order a cargo of timber from Norway and a cargo of cement from Belgium. They can order them in grosses. We do not need this tremendous amount of accountancy work to do that. They simply order them the same as the providers do, and they have not wonderful counting houses. All the Government require is a store at the port, where the people who are building the houses under this Act can get their requirements, the same as the providers. The Senator told us all about what the Minister for Finance would have to pay out, but he did not read the last line of the particular sub-section, where it says, "The proceeds of the sale of all such materials and appliances shall be paid into the Exchequer." The Government, I think, can get as much credit as builders' providers. They do not pay on the spot for their cargo of timber, or for their cargo of Belgian cement. They get cargoes on three months', and sometimes six months' credit. The State, I think, has as good a credit as the private provider.
The people who buy the stuff pay, and the person who handles it makes a good thing out of it. It is not proposed in this Section to set up factories, though I wish the Government did set up a factory to make bricks. I hope they will consider the possibility of erecting a factory for making bricks, and that they will adopt a newer and more modern method of making bricks, and not have people engaged in the making of bricks go through the inhuman conditions of to-day. I would suggest to the President that he should consider the German system of making bricks. For an outlay of from £3,000 to £5,000 you can get machinery for making bricks under human conditions, and the bricks can be turned out at one-fourth of the present cost.
I do not think that the Government seriously intends to set up factories, but this Section gives them the power to make the people who are handling the goods required for the building of houses deal fairly with their customers. I take it that is the object of the Section. The Government do not propose to go into competition with anybody, but they wish to have power to protect the people who are prepared to deal with this vital necessity of houses so that they will not be fleeced and prevented from availing themselves of the advantages which the Government propose to give under the Bill to people who will build houses.
Amendment declared lost on a show of hands, 7 voting for and 9 against.
I beg to move—
Section 9. To add at the end of this Section the following words:—
"Provided that this Section shall only apply to the purchase or manufacture, storage, transport, and sale of materials or appliances to be used in an area in which the Minister, after a local inquiry under Section 8 of this Act, is satisfied that the cost of any materials or appliances in that area is excessive and restrictive of the output of building work."
This amendment is drawn on the supposition that Sections 8 and 9 were both really meant for the same purpose, which Senator Farren believes the Government are going to use them for, that is to say, to take care that the prices charged for materials are not excessive. If the Government use Section 9 without having an inquiry such as is prescribed in Section 8, and use the powers for dealing with any persons and manufacturing materials without selling them to contractors, undoubtedly Section 9 does go outside of the purposes of the Bill, as it has been explained to us. If we were certain that the Government would not use its manufacturing and selling powers until they had an inquiry into the costings, and had satisfied themselves that there was profiteering, then we would know where we were. The amendment simply means that Section 9 should only operate where there has been an inquiry and where the Government find that the need for such action exists.
I hope the Seanad will not accept the amendment, because it would unnecessarily restrict contractors in purchasing supplies from the Government which the Government had purchased at a low rate, and were prepared to sell at a reasonable profit. Section 8 is a very weak Section, as it only provides for a local inquiry. If there is a local inquiry into the cost of building materials and it can be proved that the prices in a particular area are the same as are charged all over the country, then I take it that the Minister cannot reasonably fix any lower price. In other words, if the "ring" is sufficiently large to cover the whole country, then this Section is inoperative. That being the case, as the Minister is unable because of the extent of the combine, to cut the prices in any particular area, then to carry this amendment would mean that the Government were ham-strung, and could not protect the contractor against the rapacities of the building profiteer. I hope, therefore, the amendment will not be accepted, because it neutralises Section 9 altogether.
I cannot read into the amendment the conditions which Senator O'Farrell applies to it. It seems to be a most reasonable amendment. Nobody, I think, desires to see this Government getting into the position that the British Government got into during the war, of manufacturing and providing materials at an enormous cost, without any regard to their real value, and which had to be afterwards sold by a special Commission at a frightful loss. As long as this Section 9 is only to apply to people who are charging too much, I see little objection to it, and I think that this amendment will meet that object. I do not see any reason why the Government should not accept it.
Whether this exact amendment is accepted or not, I think the Government ought to consider some restriction in the working of this Section, because it seems to me, unless it was held that the Act having lapsed the Section also lapses, that we are giving power to do trading of this kind, quite apart from the Bill, if at any time any Minister wishes to carry on trading in building materials. I think there should be some restrictive clause, restricting it either to the period of this Bill or the operation of it. Between this and the Report Stage, I think the Government ought to consider whether they would not approve of some such restriction. I also doubt if Section 9 will come into operation unless a supplementary financial provision is made. Otherwise you might quite conceivably, under Sub-section (3), have a loss through stock not being sold or through a change in the price. I venture to suggest to Senator Farren that these very profiteers whom he wishes to protect us against may be the people who will take advantage of the circumstances of the Government and force them to sell at a loss. Reference was made to Belgian cement. To purchase Belgian cement at the rate of exchange of the franc a month ago is a very different thing to purchasing at the present rate of exchange. Even with a perfect knowledge of the value of materials, you cannot possibly have a knowledge of the fluctuations of the exchange, and it is conceivable that private traders would purchase large quantities owing to a reduction in the value of the franc for the purpose of leaving material on the hands of the Government. Some sort of check, therefore, on the amount which could be charged to the State should be provided, and I suggest that the working of this Section should be limited to the operation of the Bill.
AN CATHAOIRLEACH
That is by inserting such words as "for the purpose of this Act"?
AN CATHAOIRLEACH
There is a curious provision there in brackets in Sub-section (1) of Section 9, where it says, "Including as well houses to which this Act does not apply as houses to which it does apply." That seems to contemplate that this power of entering into manufacturing enterprises would apply not merely to the purpose of this Bill, but for the purpose of building houses generally.
I do not want to be taken as objecting to that because I do want to recognise that if they did produce they might want to sell to anybody.
I would undertake to look into this before the Report Stage, but on the face of the objections I would like to say a few words. In the first place no money can be spent in respect of this Section, not a penny until the Oireachtas has passed a Vote, an appropriation. It is not within the power of any Minister, extern or intern, or of the President himself, to spend sixpence without the consent of the Minister for Finance. That is the use of a Minister for Finance. You would not entertain the luxury of such a Minister if he had not got some use. That is his use. However the Section may be worded or whatever infirmity there may appear to be in the terminology, the fact is you do not lessen in any way the grip of the Minister for Finance, nor do you impair the privileges of the Constitution or the rights of the Dáil or Seanad in any way. So far as this is concerned these two Ministers can enter into any conspiracy they wish, and all they can do amounts to nothing without the consent of the Minister for Finance. With regard to the particular part in brackets, that was inserted deliberately. We are undertaking a very considerable expense under the Damage to Property Act for the reconstruction of buildings, mansions and houses. It is not the intention of the Government to allow builders' providers to profiteer. It is costing the country a pile of money, and we are going to see that for any money the State or the country is committed to full value will be given for it. We are not going to allow even persons who talk about restrictions on capital "a free puck" any more than we are going to allow other people whom they criticise for having "a free puck."
If the particular Section in question was closely, seriously examined I think it would be found that we contemplated some little control over what I would call the opposite to capital, transport and so on. All these things come within the purview. They have not told us: "We will send all the labour out of the country if you do this; labour is a very ticklish things, very coy, and you are shaking confidence in the State, and then you people with capital will have to build houses for yourselves." Should it happen that there should be, let us say, a strike on the part of those supplying building materials in a certain area, we cannot allow the construction of houses to be held up, and will have to come in. In that case Section 9 would be required, irrespective altogether of the amendment. I will undertake to look into the amendment and see if I can meet the views put forward by Senator Jameson, while in no way detracting in this particular Section from any of the powers we have asked for in it. As I said, if these powers have to be exercised in the way of manufacture or purchase the matter will come before the Oireachtas, and a case must then be made by the Minister for Finance or by the Ministers concerned before the appropriation will be granted.
The President has offered to look further into the amendment. From what he has said, if he adheres to the purpose of applying the manufacturing powers under this Section to a different kind of trading than is mentioned in the Bill, we cannot meet him. You could not give an undertaking which would make Section 9 only applicable after inquiry, because it is stated earlier that it really applies to supplying materials to persons who are not building houses at present, and to the building of houses that are going to replace others, or be built under a totally different Bill to this one. It is as well to recognise the actual facts of the case. This Section is far bigger than I contemplated. It is undoubtedly taking power under this Bill to establish Government factories, Government trading, and Government purchasing of materials in a way that I did not contemplate. It is as well to know that. Whether it is a wise thing for the Government to take these powers in a small Housing Bill I do not know. I think if the Government want powers to manufacture they might have dealt with the matter in some other way.
It may be that they are right and will get their powers. If that is so, I would rather they took them under a Bill of another kind. This is undoubtedly a case where the Government, under a small Housing Bill, are taking powers for trading and for establishing factories that the average individual who read the Bill never thought were included in it. Certainly I did not think so. As to the President's statement that the two Ministers cannot spend a farthing without the consent of the Oireachtas, as it is worded the Bill states if it is passed it is lawful for the Ministers to do so-and-so. Mention of the Ministry of Industry and Commerce and the Ministry of Finance only comes in at the end. The three Ministers undoubtedly have power to purchase and to pledge the credit of the State before asking the leave of the Oireachtas. I may be wrong, but that is how the Section reads to me.
AN CATHAOIRLEACH
I was just asking, and I have not yet received a reply, whether there was any Message recommending this appropriation in this particular Section, because the Section is certainly peculiar in the respect to which you have called attention. It authorises the incurring of expense, and goes on practically to say that the Oireachtas should be compelled to provide the money.
What about Section 11 sub-section (2), which refers to the rules, conditions and so forth, which I take it would have to be made before any of this work could be done? Any orders made concerning them can be annulled by each House?
AN CATHAOIRLEACH
I do not think that Section 11 necessarily imposes any obligation upon Ministers to comply with any prescribed rules in carrying out Section 9, which Section does not seem to provide their doing it subject to rules. I do not think Section 11 has anything to do with Section 9. What do you propose to do? The President said that he would consider the matter before the Report Stage.
I know that the President will look into it, but I do not see how he can possibly meet it. I am satisfied, with the leave of the House, to withdraw the amendment.
Amendment, by leave, withdrawn.
I beg to propose in Section 9, Sub-section (2), to insert after the word "manufacture" in line 52 the words "(including overhead charges and depreciation)." After hearing this debate I have come to the conclusion that this is only a temporary Bill. If the Government will only try this Section, I do not think they will try many other of these experiments in future measures of a more far-reaching character. In the event of its being tried we want to be sure the trial is a fair one.
Senator O'Farrell hopes to induce people to go into trade on a 5 per cent. basis, but would any man go into business on such a basis, when he could buy 5 per cent. Loan and go round the world or else stay at home and smoke his pipe in peace? No doubt many people lose by looking for more than 5 per cent. As there is a danger of Socialism being put on trial we want to give it a fair trial, and you can only give it a fair trial by arriving at true costs. It is difficult to arrive at true costs unless you include overhead charges. If the Government wants to go into competition it must be fair. Private enterprises must support offices and all kinds of services, which it is quite possible the Government might provide, but not show in the account. It is to have these items included that this amendment is put down.
I think I will have to accept this amendment.
Amendment put, and agreed to.
I beg to move in Section 9, Sub-section (3), to insert after this sub-section a new sub-section (4) as follows:—
"(4) An account on the double entry method showing both trading account and balance sheet, shall be kept of all transactions under this Section; and in such account all services rendered by any Government Department shall be charged at cost."
I am encouraged to ask for a further concession, and that is that a commercial form of account be set up. I know that the Government do not use a commercial account. The ordinary form of Government account is a Cash Account, in which there is no difference between Capital and Revenue. You cannot make any comparison between expenses and costs as shown by the Government accounts. If the Government are going to trade they should be compelled to have a commercial account, that is a double entry account terminating in a profit and loss account and a balance sheet. I hope the President will be equally generous with this amendment as he was with the previous one.
I am very much impressed with this amendment also, and I will accept it.
Amendment put, and agreed to.
I beg to propose in Section 9, Sub-section (3) to insert after the previous Sub-section a new Sub-section (5) as follows:—
"(5) The account provided for in the foregoing Sub-section shall be audited by a firm of Chartered or Incorporated Accountants or by a public Auditor to be appointed by the Minister, and such account shall, after audit, be presented to the Oireachtas."
Here again I ask that the Auditor should be an independent party. I do not think that the Government could say that the Comptroller and Accountant General would be independent in a matter of this kind where competition with private enterprise is being entered into. Moreover, I do not think that I am casting any slur—I hope I am not— on the competence of the Government Auditors to suggest that this class of business is not one to which they are accustomed. It is highly specialised work and you should employ specialists on it.
I do not think that the Seanad could possibly accept this amendment. Senator Sir John Keane says that he does not intend to reflect on the competence of the Auditor-General and his staff. If we passed this amendment it would mean that we are not satisfied that we are getting a correct return from the Auditor-General and his staff. I am therefore opposed to this amendment.
Would the Government publish these accounts as a special business matter so that we could all look through them? If the Government will supply the necessary figures connected with the matter, we will all, I believe, be competent to do a little auditing ourselves. The whole thing will depend on the amount of information given to us in regard to the trading concern. If the Government supply the figures I do not think that we will need an outside auditor. When the Oireachtas come to pay the bill I think we ought to be careful to look into the matter and see whether the Government is making money or not and whether it is making 5 per cent. or not.
I could not accept this amendment, and I do not think there is any real necessity for going into the reasons. I had experience, as a member of a local authority for a number of years, of an accountant in that local authority, and I think he could give a good many points even to Senator Sir John Keane. One member of the local authority said that he had more points on him than a porcupine. Much of the same sort of thing seems to prevail in the Auditor-General's Department. There is no objection to submitting those accounts. We rather welcome it; but I think it would not reflect any credit on a Government Department that an amendment of this kind should be passed and placed on the Statute Book.
I am quite prepared to withdraw my amendment, as I am satisfied that the accounts must be published.
Amendment, by leave, withdrawn.
Question: "That Section 9, as amended, stand part of the Bill"—put and agreed to.
SECTION 10.
(1) Whenever a right of appeal from an order of the Minister is given by this Act, the appeal shall, subject to prescribed rules of procedure, be made to a standing tribunal of appeal consisting of three persons to be appointed by the President of the Executive Council, and such tribunal shall have power to confirm or to annul the order appealed against, or to make such other order in the matter as the Minister could have made under this Act, and the decision of the tribunal of appeal in the matter shall be final and not subject to appeal to or review by any court.
(2) Where any appeal to which this Section applies is not finally determined within fourteen days after the date on which notice of appeal was given, the operation of the order appealed against shall be suspended as from the expiration of the said fourteen days until the appeal has been finally determined.
I beg to move:— To delete sub-section (2) and to substitute the following new sub-section therefor:—"No order appealed against shall have effect until such appeal has been heard and determined." This is a question of appeal. An order made under Section 9 should not come into operation unless the appeal is determined within fourteen days.
AN CATHAOIRLEACH
It will have to be amended. As it stands now it practically amounts to this, that from the date of the lodging of the appeal and fourteen days after there is to be no stay of execution. That was never intended. It was intended that the lodging of the appeal should operate as a stay on the execution of the order, and should operate until the appeal is determined. This peculiar provision gives fourteen days after the appeal has been lodged, in which it is, apparently, open to go on with the execution of the order. That could never be intended. I would prefer some such words as "that every appeal under this Section shall operate as a stay of execution of the order appealed from pending the determination of the appeal." That is to say, from the date when the appeal is taken, all further operations are to be held up until a decision on the appeal is given.
That would satisfy me. I withdraw my amendment if that is provided.
Amendment, by leave, withdrawn.
The amendment which I suggest is that where any appeal has arisen the operation of the Bill shall be suspended.
AN CATHAOIRLEACH
That is exactly what I intended. The amendment proposed is—to delete sub-section (2), Section 10, and to substitute in lieu thereof the following:—"While any appeal to which this Section applies is pending the operation of the order appealed against shall be suspended."
Amendment put and agreed to.
I beg to move: Section 10. To insert after this Section a new Section 11 as follows:—
"11.—Where any moneys are borrowed by a person who is permanently employed in the Civil Service of Saorstát Eireann, in this Section called ‘the borrower,' for the purpose of erecting a house for his own use and occupation in which this Act applies:—
(i) Such moneys (in addition to any other security) be validly charged by the borrower on his future salary and emoluments in respect of such employment and upon the allowance of gratuity (if any) to which he may at any time become entitled in respect of superannuation or compensation for loss of office.
(ii) The Minister for Finance may make regulations under which such moneys may be repaid to the lender, if the borrower shall so agree, by instalments, which instalments shall from time to time be deducted from the borrower's salary or superannuation allowance and paid to the lender from the Exchequer of Saorstát Eireann."
This is put down in the interests of civil servants. It is a question of borrowing money. The civil servant has only got his pension, and he has not got any other security to offer. This gives the Government power to advance money necessary to build houses and to hold pensions as security for such advances in the event of his death. I am afraid I rather put this down as it was given to me. I have not studied it closely, but I think the principle is clear.
AN CATHAOIRLEACH
In other words, he should be allowed to borrow from the Government on the security of his salary or his pension.
As the amendment is drafted, the Government is not asked to provide any money, and it would appear that if passed it would mean that sums of money could be advanced on the security of his salary. I am advised that it is possible that some revenue regulation is against that. I will undertake to look into it before the Report Stage. As long as the Minister for Finance is not called upon to provide money we have no objection to allowing this through.
AN CATHAOIRLEACH
There are existing Acts of Parliament which prevent a man from pledging his pension in certain cases, and also in some cases which prevent him pledging his salary.
Amendment, by leave, withdrawn.
Question: "That Section 10, as amended, stand part of the Bill"—put and agreed to.
Remaining sections and schedules put and agreed to.
Bill ordered to be reported.
