SEANAD IN COMMITTEE. - HOUSING (BUILDING FACILITIES) BILL, 1924.—REPORT STAGE.

SECTION 9.

I move the following amendment:—

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 enquiry 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."

I introduced this amendment with the idea of restricting the trading activities of the Government to areas where they found prices were wrong or where contracts were so expensive as to stop the work. If they institute such an inquiry they can use the powers they are taking under Section 9, if necessary. As far as the discussion on this subject went on the last occasion in the Seanad, it was evident from the vote that was taken that the majority of the Senators were in favour of the Government entering into trading operations on a Bill that is to last only for 12 months. The Government was to have power to establish factories and purchase quantities of material. As well as I could, I pointed out that these trading ventures could be entered into without getting the consent of the Oireachtas. The President stated that every expenditure would have to be sanctioned by the Oireachtas, but the wording of the Bill, as far as one can judge, provides for the expenditure first and for sanction afterwards. There is nothing to show that that is not the practice that is going to be followed.

I do not think I ever knew of a Bill, especially a temporary Bill, giving sanction beforehand for what might be a disastrous course of trading, and interfering perhaps with the perfectly legal profits of persons that this Bill wants to induce to come back to business—speculative builders. These restrictions are evidently aimed at speculative builders who may happen to build houses and sell them at a profit. I should think that it would have paid the State to have some body of men connected with housing to deal with the matter, so as to induce people to speculate in house building, and put their money and labour into it. Instead of that this Bill insinuates that everybody connected with the supply of material for builders and with contracts is trying to rob the State. The amendment seeks to restrict trading activities to areas where the cost of materials or appliances is proved to be excessive, so that the powers taken shall not be used all over the country.

I beg to second the amendment, Judging by the reports, this matter was dealt with very fully on a previous occasion in the Seanad. As one connected with the trade in the South of Ireland, I can assure the Seanad, whether the majority will agree with me or not, that in the trade connected with the supply of building material at the present time, there is a great deal of competition. In the City of Dublin, which has been criticised so much, I venture to say that no trade has experienced such keen competition as the timber trade and building materials generally. As far as I can see, no evidence was adduced on a former occasion of any profiteering in that branch of industry. As Senator Jameson has remarked, I do not think any member of the Seanad knows of a suggestion such as is contained in this section being made in this or any other country. I have also tabled an amendment to Section 8.

AN CATHAOIRLEACH

I should have called that first. I will come back to it. It is not an essential part of this amendment, and it was handed in after the printing of the Orders of the Day. If you wish to refer to it now in connection with this amendment, there is no objection to your doing so.

It would be singularly unfair to a builder or contractor who entered into a contract for supplying materials that, after the materials had been supplied, at what was mutually agreed was a fair price, a tribunal should step in subsequently and say, "We find you could have got the materials at a lower price."

We heard amendments of this sort discussed on the Committee Stage. The object of the Bill is to protect builders and not to allow any restrictions. Senaton Jameson states that we should allow the building to start. The Bill does not propose to interfere with builders. If a man comes along and builds a house and gets a subsidy of £100 from the State and £100 from the Local Authority, the only restriction is that he shall conform to the regulations laid down by the Local Government Department and its engineers, and that the house should be of a certain capacity. The object of this particular section is to see that the builder is not hampered and to prevent excessive prices being charged for materials. Senator Jameson's amendment is to the effect that the section should only apply to an area where it has been proved to the satisfaction of the Minister that there has been profiteering.

It is a notorious fact, notwithstanding the statement of Senator Haughton about there being tremendous competition amongst builders' providers, that if you ask for quotations for building materials you will invariably get the same figure from all firms. If there is such desperate competition in the trade as Senator Haughton would lead us to believe, how do you account for the fact that very seldom is there the slightest difference in quotations from these firms who are in such desperate competition with one another? That fact is sufficient argument why the Government should have some regulation to empower them to protect builders who propose to build houses under this Bill, from being fleeced by people who provide them with the necessary materials. I do not anticipate that the Government will build factories to provide these materials, but they provide a section in this Bill that will prevent people who want to profiteer and take advantage of the terrible necessity that exists for houses. These people will charge excessive prices to the builders who, we hope, will build houses, and it is to prevent excessive prices being charged that the section is included. I, therefore, oppose the amendment.

Senator Farren deals with facts, and I am only reasoning. He says that there are no quotations to be got at present except one from the providers of building materials.

I said that invariably you get the same quotations from all the builders' providers for standard articles.

I think that is your statement, and the remedy the Government is going to supply to that is to enable the builder to be certain that he will be able to get competitive quotations, and that the Government are going to deal in all these things and give them to the builders at a five per cent profit on what it cost them. I was looking through the Bill to find out how they are going to get rid of the materials which they purchase, and to complete the Bill they require a clause to compel the contractors to buy those things from the Government. Otherwise, there is no vestige of doubt that when the Government have materials ready to offer to builders, if their prices are not as good as the builder can get elsewhere, the Government will undoubtedly be left with material on hands so far as this Bill is concerned.

There is one thing we learned in the Great War and that was, that wherever the Government came along to meddle with trade or to get things made, or to take over business and produce the stuff themselves, it cost the nation an infinite amount of money more than if they left it to people who knew their business and who carried on the trade themselves. I had a great deal to say to that, as I was on the other side of the water watching contracts, and wherever the Government came in and took things out of private hands in any trade or business, the nation paid a huge sum for it. Probably the Senator is right; the Government may not use this power, but it is an awfully bad precedent to put in a Bill, that such powers should be given to the Government especially in a temporary measure. We ought not forget the lesson of the war so soon as this. This small Free State should not give power to the Government, whether they use it or not, to interfere with the ordinary channels of trade, for if they do, they will probably lose more than the £300,000 grant provided in the Bill.

May I say that Pepys in his diary says: "It is a singular fact that His Majesty can never get anything done as cheaply as can private citizens."

With all respect to Senator Jameson, I do not think that he understands the position. When we talk about builders' providers we speak of handlers and not manufacturers. Practically the only thing manufactured in this country which will be used in this type of house is the brick, so when we talk about builders' providers we are speaking not of manufacturers, but of people who only handle the material. These things are all imported, and are generally a standard article. In order to protect the people who will come forward under the provisions of this Bill to build houses it is essential that the builders' providers, who handle the materials, shall not be entitled to charge what they like. As I understand the clause, it is to protect these builders against the providers charging exorbitant prices.

Might we have an explanation from the Minister before we decide on this matter?

The Seanad have gone very fully into this amendment, and most of us will agree with Senator Farren that the object of the section is not to hinder but to help the builders. I hope it will not be necessary to put the section into operation, but if it has to be put into operation, I think we should take powers to utilise it on sound business lines. I think Senator Jameson will agree with that. I think it is obvious that if the Minister's power is restricted under this section to particular areas, it will be impossible to work the section economically, and it would practically mean deleting the section altogether. For that reason I cannot accept the amendment.

It is hard to make up one's mind on this amendment. What Senator Jameson said in relation to a Government going into business, I am in absolute agreement with. So far as we know anything about Government interference, it has always been disastrous. In these countries, at all events, it has always meant a charge on the taxpayer, but, on the other hand, it seems to me that this clause is more or less in the nature of a preventative to profiteering. It seems to me that this clause is directed against purveyors of building materials endeavouring to charge an improper price. For instance, it would deal with an individual trying to make a corner in slates or imported timber, or other requisite building materials. I am against profiteering in every shape, and, on the other hand, I am against Government interference in business of every shape, but, on the whole, I think Senator Farren has convinced me that this is a question of preventing profiteering, and in a Bill which is only going to last twelve months, the Government will probably not be tempted to enter on large commercial operations. I shall therefore vote against the amendment.

Amendment put and, on a show of hands, declared lost, 9 voting for and 17 against it.

I beg to move my amendment, which reads, "Provided that this section shall not apply to the price of any material which is the subject of a contract entered into before the date of the local inquiry." Contracts, I have ventured to submit, are solemn things to enter into. A contract is an agreement between two parties. If both parties agree to a sum, and subsequently the Minister comes along, maybe months afterwards, and suggests that the price is a little too high and breaks the agreement to the loss of the firm, I submit it would be a gross, a grievous and a moral wrong. There is one political illustration that comes to me as I speak, and that is the case of one of the States of the Australian Commonwealth, Queensland. Many years ago they entered into an arrangement with settlers. Leases were signed at a certain figure, and as years passed by, a Government came into power that altered these leases. The result was that the State of Queensland did not command that respect that it did in previous years.

AN CATHAOIRLEACH

This is based on the hypothesis that Section 8 is retrospective. I cannot find that in the section. You are assuming a contract made before the inquiry. As I read the section it seems to me only to provide that an inquiry is to be held as to the cost of any materials or appliances used in the building of houses. If the Minister is satisfied those charges are excessive, he may prescribe a new scale. It seems to me on reading that section that that would not entitle the Minister to make a scale of charges that would have a retrospective effect on contracts previously made. If that is the intention, it could be more clearly expressed.

That is the intention. There is no intention to make the Bill retrospective.

AN CATHAOIRLEACH

If that is so, I think it would be no harm to make it plain by the insertion of your amendment. That would take it out of the region of speculation. It is only my suggestion, looking at the clause in a cursory way, that it is not retrospective. It might afterwards be decided by the courts that it would be retrospective.

I would suggest that if the amendment be adopted, it should be altered so as to read: "Provided that this section... which is the subject of a contract entered into before the passing of this Act."

Entered into before the inquiry.

You can contract for anything then, and defeat the object of the Bill.

AN CATHAOIRLEACH

I think the point is that a building scheme is going to be started in a particular area, and contracts are entered into in connection with it. If a local inquiry is held before a contract is entered into, and prices are fixed, those prices will determine the prices in future contracts, but Senator Haughton means that there might be contracts existing before the building scheme is started in which definite prices might be agreed upon between the parties, and the amendment is aimed at preventing any interference with those.

I think in the building industry you can discover a loophole for defeating the object of this Bill.

AN CATHAOIRLEACH

I think, Senator Haughton, you may be satisfied with the suggestion "before the date of this Act."

I would accept that. The great danger would be of contracts that were notbona fide being entered into.

I do not think Senator Haughton is dealing with the date of the Act at all. He is dealing with contracts made before the inquiry is held.

AN CATHAOIRLEACH

Then, perhaps, it may be met in this way, "which is the subject of a contract,bona fide entered into before the date of the inquiry.”

And registered with the Ministry in anticipation of an inquiry being held.

What would be the position of a builder who has contracted with a brickfield to supply bricks for a whole year or an importer of cement? It is usual for a builder to have a contract for a year for a supply of bricks or cement at a fixed price. He may come in, three or four months after a contract is made, and tender for the erection of a house. What is his position in regard to this contract, which is binding on him, for the materials to be used under the contract?

AN CATHAOIRLEACH

He gets no relief unless this amendment is put in.

He would have to sell at the reduced terms and get no relief.

He would be a considerable loser.

I want a ruling as to whether or not this amendment is in order. An amendment similar to this, I think, with exactly the same wording as this, was moved on the Committee Stage by Senator Sir J. Keane on behalf of Senator Haughton, and was debated very fully. I want to know is it in order for that amendment to be moved again on the Report Stage.

AN CATHAOIRLEACH

Yes, it is. I can allow it to be moved.

That is all right, Sir. So long as you have ruled that it is in order to do that I am satisfied. The question might arise again on future occasions.

AN CATHAOIRLEACH

The same thing applies to the previous one.

In connection with this amendment, I think you are losing sight of the most important point. When you say that the section shall not apply to the prices of any material or appliance which is the subject of a contract entered into before the date of the local inquiry, I am perfectly satisfied to agree with that.

AN CATHAOIRLEACH

But, Senator, supposing you said "entered into three months before the date of the local inquiry."

I want to point out the difficulty. A builder who proposes to build under this Bill is compelled to do so within twelve months, or eighteen months at the outside, and in view of the time it takes him to get his plans sanctioned by the Ministry, get in his foundations and proceed with his work, he must place his contracts for the materials straight off. If, when he places his contract, he finds that he is being fleeced, he demands an inquiry.

AN CATHAOIRLEACH

You are overlooking the fact that in that case he would not have entered into a contract.

But I say he is compelled to enter into a contract.

AN CATHAOIRLEACH

As I understand it, in the case you are putting, he is to get this subsidy and he is going to build a house or houses. He then proceeds to ask for estimates for building materials and so forth, and he finds he is charged on figures which would not make it profitable for him to build houses. He will not enter into a contract; he will call for an inquiry.

I want to point out to you that the small man who will build under this scheme will not be waiting for the formality of an inquiry to order his materials. If a man wants to take advantage of the Bill, he must start building now. If he does not he will not build at all. This is the building season. He must, immediately after the passing of this Bill, order his materials, prepare his foundation, and obtain sanction to proceed with the work. If he has not bought the materials he may be left without them, and he must order and enter into a contract for them. It is only in the event of his finding that he has been fleeced that he demands from the Ministry an inquiry into the cost of materials in his area. If this amendment is passed, it defeats the whole object of the section, because it is only after a man has purchased his materials that he finds he is being charged too much. If the inquiry is held it may have an effect on the next Housing Bill, but I promise you if this amendment is passed the clause regarding the inquiry and the fixing of prices will be of no avail.

Does the Senator mean that the contractor is to bring in the Government to enable him to break his contract with people who are supplying him with the materials for building houses? Is that really and truly what the Government intend to do in this case—to enable the contractor to break his contract?

No, I do not suggest that at all. I suggest that this amendment, if passed, will debar a builder who is prepared to build, under the provisions of this Bill, from getting fair play from the builders' providers, because he must enter into a contract straight off to get materials, and just when he enters into a contract he finds he is being charged an excessive price. He demands an inquiry, and if the inquiry is not to apply to a contract made before the inquiry, then the inquiry is no use at all to him.

Of course, it is a matter of some difficulty. I think if this amendment is altered so as to embrace contracts freely entered into between two trading parties, we should be very careful lest we do anything that would break the sanctity of contracts. To safeguard a valid contract I have tried to alter this amendment, and I think the result should meet with the approval of anybody who wishes to maintain the right of contract, and at the same time not to allow collusion to evade the intentions of the Bill. What I would suggest is this: "Provided that this section shall not apply to the price of any material or appliance which was the subject of abona fide contract entered into at least one month before the date of the local inquiry. Provided that all such contracts are registered with the Ministry within seven days of the making of such contracts.”

AN CATHAOIRLEACH

The last part would defeat its own purpose, because there might be contracts existing to-day which are a month old, and you could not register them within seven days from the date on which they were made.

Well, this could be added—to register all contracts which are already in existence within seven or fourteen days, or some convenient time.

AN CATHAOIRLEACH

From the date of the passing of the Bill?

Yes. I think that is a very fair compromise.

I agree to that.

That protects the people who have a yearly contract for the supply of bricks or cement, or anything else?

AN CATHAOIRLEACH

Let us see how this will read. "Provided that this section shall not apply to any material or appliance which is the subject of a contract"—I suggest you putbona fide after contract—“entered into at least one month prior to the local inquiry, and which contract has been registered with the Minister for Finance.”

Within seven days after it had been made.

AN CATHAOIRLEACH

Within a fortnight of the date of the passing of this Bill or seven days after it is made, whichever shall first happen. You see you have to provide for existing contracts. If you say they are to be registered within seven days from the date on which they are made, you would rule out all contracts except those seven days old.

I quite see that.

AN CATHAOIRLEACH

What exactly do you mean by registered?

Notification that such contract has been made, setting forth the details, sending to the Minister a copy of the contract.

AN CATHAOIRLEACH

Would this meet the situation?—"Provided that this section shall not apply to the price of any material or appliance which is the subject of a contract,bona fide entered into at least one month before the date of the local inquiry, and of which a copy has been supplied to the Minister within a fortnight from the date of the passing of the Act, or within a fortnight from the date on which such contract has been made.”

I agree to that.

Amendment, as amended, put and agreed to.

Before we pass from this Bill, perhaps the House would permit me to mention a matter. When the Bill was in Committee there were two amendments in the name of Senator Sir John Keane, and their objects were to extend the benefit of this Act in particular to members of the Civil Service. Senator Sir J. Keane is not here. The first was an amendment to Section 3, increasing the number of square feet that the house may contain, and the Government permitted an increase in the case of houses built by Civil Servants to 1,500 square feet. The second was an amendment to insert after Section 10 a new section, the object of which was to enable a Civil Servant who probably would not be very rich in this world's goods to borrow money on the security of his salary or pension, and also to enable the Minister for Finance to make regulations under which moneys might be paid to the lender from the salary or pension of the Civil Servant by an arrangement. That amendment was withdrawn, by leave, on an undertaking by the President to look into the matter before the Report Stage, and he said that so long as the Minister for Finance was not called on to provide money, he had no objection in allowing it to go through. In the absence of Senator Sir J. Keane, might I ask the Minister whether that has been done?

We looked into this matter, and we find it is impossible to legislate on the assumption that a Civil Servant has a right to future salary, as his appointment may be terminated at any moment. We can arrange to have a portion of the Civil Servant's salary deducted monthly. Perhaps that would meet the case.

What is necessary, if you are willing to do that, is to remove the present legal bar on charging a salary of this kind. A Civil Servant, as the law stands at present, is not entitled to charge his salary or pension; so you would require an amendment giving him power to do that. That is what is meant by the first portions of the amendment:—

"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."

I think it would be necessary to pass that as an amendment, leaving it to the Department to work out the mode on which that would be carried out. If you would allow me, I would move that as a substantive amendment.

AN CATHAOIRLEACH

When Senator Sir John Keane brought this forward I mentioned that I thought there were statutes which prohibited the pledging or forestalling of the pension or salary, and that therefore the amendment would not work unless these sections were implied and repealed. But that is another matter. The Government certainly did not give any undertaking that they would consent to repeal these provisions. What the President pointed out was: "I am afraid there is a difficulty in our way, for I am told there are certain provisions which prevent the pledging of these salaries or pensions." He said that would be an obstacle in the way of accepting this amendment. I said I thought the President was right in that.

There is no doubt about the law. At present it is not legal to charge the salary or pension of a Civil Servant, but I suggest that for the purpose of getting the benefit of this Bill they should simply, for the purpose of this Bill, allow a Civil Servant to borrow on his salary or pension. I beg to move the amendment in the words in which it was originally moved by Senator Sir J. Keane, omitting part (ii).

I am afraid that the Minister for Finance has ruled that out of order. I think that by an arrangement similar to that which exists now in the case of a Civil Servant who is insured, the insurance premiums are deducted from the salary and paid direct to the insurance company, and I think an arrangement of that kind would meet this particular case without any legislation.

AN CATHAOIRLEACH

The Minister suggests, Senator Brown, that it might be possible to do this without legislation in the same way as arrangements are made with insurance companies, that the premium is paid direct by the State and deducted from the salary of the official.

So long as it is carried out—if it can be practically carried out —I am quite satisfied. I am speaking entirely in the interests of the Civil Servants.

AN CATHAOIRLEACH

Apparently the Government are in favour of the principle, but it is another matter whether they should introduce a particular Act, starting a precedent and reversing the policy of law which makes these salaries and pensions not liable to be pledged.

I do not much mind as to the procedure if it is quite certain they will be able to get the benefit of the Bill in this way.

The Minister for Finance has already agreed to this, so that I think there will be no doubt about it.

Very well, Sir.

AN CATHAOIRLEACH

I think you had better leave it at that.