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Seanad Éireann debate -
Wednesday, 15 Mar 1950

Vol. 37 No. 11

Local Government (Remission of Rates) Bill, 1950—Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

This Bill, as stated, in the Explanatory Memorandum circulated with it, proposes to extend for a further two years, that is to 31st March, 1951, the period within which the erection, enlargement or improvement of certain residences must be completed in order to qualify for remission of two-thirds of the rates for five years. No new principle is embodied in the Bill; the period over which rates remission will be given remains at five years, the same as it has been since the Local Government Act, 1927. The Bill applies only to those residences for which State assistance is not provided and, therefore, it is of very limited scope and application.

The amendment of the definition of the word "residence" being effected in sub-section (1) of Section I is merely a drafting amendment, its purpose being to bring up to date the reference to the collective title of the Housing (Financial and Miscellaneous Provisions) Acts, and thereby to exclude from the scope of the Rates Remission Acts residences in respect of which grants are paid under the Housing (Financial and Miscellaneous Provisions) Acts and the Housing (Amendment) Act, 1948, as amended.

Legislation on this matter has always been on a temporary, short-time basis and at no time was an assurance given that the principle of remission would be either made permanent or continued beyond the periods stated in the various continuing Bills. The period to which each renewing Bill applies is short, so that the Government may have an oportunity of reviewing the matter periodically and of deciding in the light of existing industrial and economic conditions whether retention of the concession is desirable. However, I think it would be considered a breach of faith on our part if these Acts were discontinued without due warning, as no doubt there are people who have commenced building on the assumption that there would be a continuing Bill as in former years, extending the period to which the Acts apply beyond the date mentioned in the last continuing Act. Such people would feel aggrieved if this Bill were not passed.

From time to time, Parliament is presented with a Bill of this nature. As the Minister has said, the Bill is of a temporary nature on each occasion, but the time has arrived when the Government should make up their minds as to whether or not it is a good policy to give a remission of rates to persons who erect houses for their own occupation, and, if the principle is accepted, should introduce a permanent measure rather than measures of this kind from time to time. The Minister is compelled, as it were, to bring this Bill before this and the other House because quite a number of people have begun the erection of houses, and, for one reason or another —reasons with which the Minister is very familiar—have not completed these houses within the specified time, and would not, therefore, be entitled to receive the State assistance, on the one hand, and the remission of rates, on the other, if this Bill were not passed That is not a position that should be allowed to continue.

Those engaged in providing homes for themselves should know what the State policy is over a longer period of time. The time has arrived when we should have a permanent measure. We should first agree as to whether the principle is a good one or not—the principle of giving a remission of rates to persons erecting or improving their homes—and whether it is one that should demand parliamentary assistance, the assistance here being the remission of rates over five years. That principle has been accepted since the State was formed. At one time, the remission was for 20 years, now in this case it is for five years. If we accept the principle, we should be prepared to go a step further and when persons improve their places of business they should also get a remission.

In recent times, there has been serious condemnation of the present system. It is held that where a person improves his house or place of business there is immediately a revaluation, resulting in an increase in rates. Remission is an inducement to people to engage in improvements and it should be encouraged in every way, but while we are encouraging people to improve and develop their surroundings we are at the same time discouraging them, by the fact that when an inspection is made the valuation is increased by 100 or even 300 per cent. The time has arrived when we should have a permanent measure, rather than have a Bill like this coming up from time to time. Those engaged in the building industry are uncertain now as to whether, if the house is not completed by a specified date, they will come within the regulations for remission.

When we examine this in the light of rural Ireland, Senators from rural Ireland will agree with me that the farmer who undertakes the erection of his dwelling-house does that work in between his ordinary farm duties. It may take two or three years to complete the building, particularly if there is any hold-up in supplies or skilled labour. Having begun the work on the understanding that he is entitled to a State grant or subsidy and also a remission of rates, he finds that owing to circumstances over which he has absolutely no control—weather conditions may mean that he has to give longer time to the harvesting of his crops— he is not able to complete the building by 31st March in a particular year and he stands to lose the concessions which the Act provides, unless a continuing Bill is introduced. That is a bad system. Provision should be made over a longer period. Concessions should also be given to people who carry out improvements to their business premises.

This is a simple Bill, in so far as it extends the time under the 1940 Act and it is probably unamendable by us and should be passed at once. I have a great deal of sympathy with what Senator Hawkins has said and it is quite wise that, when the time is being extended, we should also continue the general principles involved. There is no such thing as an absolutely permanent measure, as any Act could be repealed. I take it the Minister accepts the principle that, though this Bill is for a short period, there is an obligation to give ample notice later on if it is not intended to continue it. It is bad if citizens feel that, on a technical point, something they feel is bad faith is dealt out to them. In that I am in complete agreement with what Senator Hawkins has said.

I see a difficulty in devising permanent legislation immediately. For good or evil, there is considerable restriction on building and the conditions which might obtain under a more permanent measure—which should be considered as soon as possible—may be different. This is not the time when that could be considered in all its aspects.

I agree with the Senator in regard to business premises which are substantially improved. It is in the interest of the community and of local authorities, when materials and labour are available, to see that our towns and cities are gradually rebuilt substantially. The first five or ten years, as everyone knows, when loans for rebuilding have to be paid off, form a difficult period and it is extremely hard to have to meet double rates at that time. That may seem to be an overstatement, but I know cases, as Senator Hawkins does, which led to the rates being doubled. It is to the interest of the country that we should increase the amount of building as soon as labour and materials are available. The Senator mentioned the grievance people feel when they make an improvement and their premises, taken apart from the others, have a new valuation placed on them—a valuation not representing merely the improvements but representing a revaluation of the entire premises.

I would like to point out to him and the Minister that it does not stop there. I know a case where a lady thought it would be wise to add a room to her house. Whether she was justified or not is not the point. In order to do this, she had to submit plans, if she was to get a licence and the plans had to be sent to the local authority. When she got the estimate she decided she had not enough money to do it, but because the plans had gone in they came and revalued her house and added another £50. She feels a serious grievance, and rightly so, as none of the other houses on that road were revalued. She got no benefit, as she only considered doing the improvement and asked the price of it. I am informed that the technical position is that when plans are sent out, whether the work is done or not they are sent to the Valuation Office which has the right then to revalue the premises. I hope there are not many cases like that. This is not mere hearsay, as I know the lady and got the details and am satisfied that it is correct. She feels she has a grievance against the State and I must confess to a great deal of sympathy with her. Unless the improvements are substantial, there should not be a change in valuation, if it is not done for the whole district and is therefore fair all round. If the improvements are substantial, regard should be had not to the revaluation of the premises but to the valuation of the additions. However, that does not arise immediately here, but it shows the importance of keeping the principle. I think many of these matters would have to be dealt with in a permanent Bill. The simplest and wisest way is to extend this for a shorter period.

I support Senator Hawkins and Senator Douglas in this. This is an extension of the 1940 Act. The previous legislation which set out this remission which the two Senators have spoken about, stressed the fact that this remission was given only in areas where there was no complete revision of valuation of all the hereditaments in that area. It was a sort of shock, that someone living in the same hereditament as you had only half the amount to pay. It was very specifically stated that if there was complete revaluation his two-thirds remission was not given in the case of business premises.

Senator Hawkins does not make the point that it was the last Government which dropped the remission in the 1940 Act. The case he is making of people having 200 and 300 per cent. increased valuations would not have arisen if that had not been dropped in 1940. Maybe the Minister could see his way to bring in another small piece of legislation to relieve people who had their valuations substantially increased compared with other buildings in their own area, so as to give them the same concession as was there from 1925 to 1940. If so, he would be meeting the request made by Deputy Sweetman in the Dáil when he raised this question. The feeling in the country would be in favour of removing a definite anomaly which is taking place all over the country to-day.

The question of the revision of rates is one which it may be very difficult to approach at the moment. We all hope that money may enhance in value and when it does it will have a tendency to reduce the letting value of premises and we may be able to fix a better and more permanent basis of valuation then than we can at the moment. We are inclined to be rather static in considering the variation in the value of money.

A short new Bill would protect people against the anomaly of having in the case of similar premises in similar areas, one paying two to three times what another pays, where some structural defect obliged them to do some repairs which brought them under the observation of the rate collector and the scrutiny of the Valuation Office.

I intended speaking in the same strain as the previous speakers, especially regarding the shortness of the extension to 1951. This remission of rates is an inducement and incentive to people to build their own houses but those who have read the debates on the subject feel that this will be the end of it. It is extended only to 1951 and it is extended to that date in order that houses in course of completion at the present time would benefit. It may not extend to houses built in future. If that point could be elucidated, it would be helpful.

Urban authorities suffer most by the remission of rates. I am subject to correction on this point but, as I understand it, county councils, in computing the amount they are to demand from the urban councils, compute the full valuation of the houses and demand an appropriate rate whereas the urban authorities collect only one-third of the rates. I am not very clear on the point but, if that is so, something should be done to secure that the county council could demand from the urban authority only the one-third rate which the urban authority can collect.

I thoroughly agree with remission of rates for those who intend building new houses. It is an incentive and quite a good thing but I do not think that the small urban councils should be mulcted for the full amount when they are collecting only one-third.

I support this Bill. What I want to say has been said by other Senators. We all seem to be in agreement on this matter. I desire to put forward other points. In regard to this question of rates there is always a feeling, apparently, when a person rebuilds or improves business, that it is a sign of great prosperity. That may sometimes be the case but it is not always the case. It is very often a sign of great enterprise and willingness to take risks. It is rather depressing, when a person has taken these risks and has, perhaps, borrowed the money from the bank that, in addition, he is mulcted for extra rates. It is a very reasonable proposition that some period should be allowed to elapse during which there would not be any increase in rates which would give the person concerned a chance to deal with the extra commitments that he has undertaken.

It is pleasant to find, on a measure such as this, which is not contentious, that we can ramble a little outside the actual scope of the Bill and discuss, in this case, the general principle of rates remission and rates imposition. I would appeal to the Minister, with Senator Honan and other Senators, that when he is considering permanent legislation he would deal with the anomalies and injustices that at present exist. The value of this Bill is not the fact that it extends the remission of rates for another two years to a limited class of people building houses, but the fact that it gives us an opportunity of drawing the Minister's attention to certain things which perhaps he can be induced to include in legislation in future.

The difficulty I find with Bills is that you have to take them or leave them. Generally, you have to take them and it is resented if you make suggestions or criticise. Whatever is in the Bill, that and that only is all you can deal with. Very often what a Bill does not contain is the most important thing. One such thing has been mentioned here, that is, the revaluation of houses immediately they are improved. There is an injustice in that and there is a bad tradition behind it. It is the same idea as I think existed when the rack rent was imposed. The minute an Irish person does anything to improve his own conditions or amenities by his own effort somebody comes down on him and says: "You must not do it or you will be sorry for it."

I cannot understand it. Take the case which has been mentioned by Senator Douglas, where a woman wanted to extend her house. Probably it was a small house. She wanted an additional room. Plans were drawn. The first thing the council thought about was, not whether the plans were good or bad but for how much more they were going to rook this woman. Obviously, that was the intention of the local authority because they never bothered to see whether the room was built or not. They merely put the file and the plans on the record and said: "Let her build away but we will refer it to the rates department."

I want to call the Minister's attention to another matter. Before I do so I want to say that we frequently hear about what the poor, the wage-earners, the agricultural labourers and the labourers in towns and cities are getting from the rates; that they are getting houses subsidised by the rates. This Bill reminds us that anybody who builds is getting a subsidy from the rates. Let us be fair and say that. It is only the poor who get a subsidy from the rates when a corporation or a local authority build houses for them. In this case everybody covered by the Bill gets some form of subsidy from the rates. I do not begrudge it to these people but they are the very people who begrudge it to me if I happen to be living in a labourer's cottage.

This is the matter to which I want to direct the Minister's attention: I could bring the Minister outside the city boundary, to County Dublin, to a housing scheme which complied with the local authority's housing regulations. The housing regulations stipulate that houses must not be built to a greater density than seven to the acre. A building contractor takes a large tract of ground and builds the houses in blocks of four, the blocks being so close together that you could hardly elbow your way between. In order to make it seven to the acre, he leaves tracts of ground to the extent of three or four acres lying here and there in the middle, neither gardens, parks, nor anything else. They are breeding grounds for vermin and dumping grounds for rubbish. The contractor complies with the regulation that over the whole scheme his houses are only seven to the acre. He gets away with that. He has less footpaths, less railings and less sewers to construct. He has put the back gardens up against each other with only a strand of wire dividing one row of houses from another.

There is no back entrance to any of the houses. To-day I saw men wheeling barrows of manure and carrying buckets of manure through halls three feet wide, through the kitchens, to the little gardens at the back of these houses. That is because the county council was satisfied when the contractor complied with the letter of the law and not with the spirit. In front of these houses there are spaces of four and five acres lying derelict. When the Minister is bringing in future legislation these difficulties should be dealt with.

A great many people are certain that when the ground rent and the rates are fixed, the ground rent is fixed over the whole area. The people living in these houses are paying ground rent for vacant derelict sites in front of their houses. It would have been of more benefit to them if they had bigger gardens and back entrances although it was an advantage to get remission of rates.

Remission of rates.

I am dealing with remission of rates now. I am saying that the remission of rates was an advantage but it was not as big an advantage and would not continue over as long a period as the provision of proper back entrances would have been.

The Minister may have created some confusion when he said that it would be advisable that people building houses or those who would expect this remission should be given due notice of any intention to drop this system of remitting rates. Does the Minister visualise a decision in the near future to drop this scheme altogether? If not, he might take the House and the country into his confidence and say that for a reasonable time this Bill will come before the House. That would allay a good deal of the uneasiness.

Senator Hawkins made a point as to the advisability of permanent legislation. The whole matter hinges on what the Minister has in mind. Does he think that we ought to give up this system some time in the near future? Some of the difficulties arising out of this matter of remission of rates have been referred to. In Galway City the urban authority is particularly hard hit. I may not be quite correct in this but, to the best of my knowledge, the county council makes its demand on the gross valuation disregarding whether the property is occupied or unoccupied. In due course, the urban authority gets its bill and has to pay on a valuation on which, in effect, it does not receive income. That is a matter that the Minister should take cognisance of.

Again, there is the question as to whether the initial valuation of houses is the real valuation or not. It is felt that when houses are being valued initially, because of the remission of rates, they are valued unduly high in order to make up for some of the loss. I am not an expert. I cannot say that that is so but it has been mentioned more than once to me that it is so. If it is so, a good many people are being very heavily mulcted, because of certain changes that have occurred recently, if their houses were valued on the high side initially because of the advantage they would get by the remission of rates. As Senator Hawkins has mentioned, valuations have been very considerably increased within recent months. That could be very serious for people. Not alone must they pay off the loans but they must pay an increased rate and, in certain circumstances, there is an increase of income-tax and, probably, and increase in electricity rents. One can see how serious the whole problem is. Perhaps the Minister would take advantage of this occasion to clear up any doubts that may have arisen. We would all appreciate that.

Generally speaking, most people are in favour of some remission of rates, when improvements are carried out, in order to encourage people to do improvements, but, at the same time, the amount of the remission should be very carefully considered, because it is very desirable, when rates are being levied, that more, if possible, should be levied on people who are well off and less on people who are badly off.

It is quite true that the person who improves his house or business premises is not necessarily better off financially than the person who does not. There are some people who, no matter how wealthy they might be, would not improve their premises and would prefer to spend their money in other ways. When we give remissions of rates to certain people, it means that other people have to pay this amount, because the total amount needed by the local authority has to be raised in one way or another. Before permanent legislation is brought in I would suggest that very serious consideration be given to ways and means of collecting the money needed by local authorities from people in proportion to their income, rather than in proportion to the size of their premises. At least part of the money required by the local authority, if not all, should be collected on the basis of the income of the person concerned. Often two people may have the same sized premises but one is much wealthier than the other. A person with quite a small house and office or other premises may have a very large income, and yet pay a comparatively small amount in rates. I agree that it is difficult to collect money in exact proportion to a person's income, as has been found in the case of income-tax, but I think it is an ideal at which we should aim, and therefore I would suggest to the Minister, and all concerned, that very careful consideration should be given to seeing how far more money could be collected from people with large incomes, in order to relieve the burden on people with small incomes. Many people pay a good deal in rates, although their incomes are extremely small, and it is a great hardship on them. All these matters should be carefully considered as soon as possible.

I want to support the suggestion which has been made to the Minister that it is bad to have a Bill of this nature coming before the Seanad every year or every second year. Something of a permanent nature should be brought in because this leaves people uncertain as to the possibilities of their getting a remission of rates.

I should like to strike a new note and suggest to the Minister that he might consider the possibility of extending the period from five years with a view to helping some of the unfortunate boys and girls who are setting up homes after being married.

The position in many cases is that these people can get no accommodation unless they are prepared to build or buy a house. Nobody wants them. If they go to landladies, in many cases they have to assure them that there will be no children of the marriage. That has been known to happen. They have to go to a slum or tenement or buy a new house. That entails paying a deposit of anything from £150 to £300 or £400. Furniture has to be bought as well and a remission of rates would be a big help in their efforts to set up a home. Their rates are often fairly high and a remission of, say, seven or ten years would be a great help. Every Senator knows the position of people who come to him with problems about getting accommodation, particularly in urban areas. It is very difficult for young people to get accommodation unless they are prepared to agree to impossible conditions. They have to buy a house and borrow the deposit, which they have to pay back as well as the loan on the house. Remission of rates would be a help and in the permanent legislation a longer period should be considered.

I have only a word or two to say because this is being accepted by both sides. There is, however, a complaint from our friends on the left that it is bad that this system should continue, but if it is bad it has been bad for a very long time. If there is instability, there has been the same instability over a number of years and I do not know why we should suddenly discover instability and dissatisfaction now. I do not agree with Senator Ó Buachalla that people are perturbed or that there is a feeling of uneasiness about this. People have to accept the situation as it is. They know that a remission of rates has been the practice in the case of new buildings and they are satisfied. I do not think there should be a suggestion that this policy is going to be altered.

There is no necessity to call upon the Minister to make a declaration of faith in this policy because it has been continued and we have had no indication that it will be changed. I think the policy is very wise. The fundamental thing for us to do is to improve the country and its appearance, give the people new homes and give them a good appearance. A remission of rates is a help and I believe that it is an encouragement and a policy which should be continued. The question of tying ourselves up with permanent legislation is something that must presumably be carefully considered and I think we will all be satisfied as long as the policy which has been in operation over a period is continued from year to year.

I do not know that Senator Burke explains the whole story when he speaks of the difference there may be between two people living side by side in houses with the same valuation. The income of the owner of one house might be greater than the income of the owner of the other, but presumably he did not get away with all his wealth as the income-tax people found out how he stood. If they pay the same amount of rates I would like to compare their income-tax payments. At the same time, I agree that anybody who knows the system in operation cannot be perfectly satisfied that it is equitable. Those of us who are on local authorities see all sorts of inequities in its operation such as the kind of case which Senator Burke cites.

There is, I confess, a good deal of perturbation about the activities of the valuation office recently and the situation where you have a remission of rates on new buildings in one instance and, on the other hand, an increase of perhaps 200 or 300 per cent. in the valuation of another building where the rates are going up and where, as Senator Ó Buachalla said, the electricity charges are going up. There is something terribly inconsistent taking place. I have come to the conclusion from stories I have heard that the valuation office must be completely manned by Fianna Fáil because this is something like what happened in an election many years back when a flood of demands for increased income-tax came out a day or two before the election. Some of the things that are happening are really grotesque. One instance which was brought to my own notice was that of a man who has not increased his house by one inch but who has had his valuation increased by 300 per cent. because of improvements. When the responsible officer called—I presume he was such—the owner was not there, and when he came back again he still could not be found simply because he was living on a farm away from his business. The officer said he would be there the next time and the owner got a demand for an increase of 300 per cent. in the valuation. That does not make sense and is a discouragement to the policy which the Minister is pursuing. There must be consistency. The valuation side of the problem should compare with the policy of the Minister for Local Government and he should see whether one branch of the administration is not undoing what the other branch is trying to do.

There is no justification for saying that there is any uneasiness whatever among people who are building or who are going to build houses as to whether the policy will be continued or not. In this country when a policy is in operation for a period, although there is a change of Government, people do not expect a change in that policy if it is a good one. In this respect there has not been a change because this is a continuation of what was done. If the plan was bad in the past it is not any worse now, and I think we should be satisfied with what the Minister is doing without a declaration of policy for a long period.

The discussion has ranged over a very great number of subjects while the Bill itself is strictly limited and confined. Nevertheless I have received some fairly useful information. I was not ignorant of some of it but in some cases it has broadened my mind. We are dealing with the extension of the Act giving a remission of rates on new residences. Since 1940 it has been extended from year to year, and the reason that it is not put on a longer term basis or made permanent is that it is necessary for the Government to have the subject under review from time to time. The number of people availing of the remission of rates has declined and is a comparatively small number, but whether it is a small number or not, in equity and justice they are entitled to have notice if the remission of rates is going to be withdrawn. There is no notion of withdrawing the remission of rates but it is necessary to keep the matter under review. It has been so done since 1927. In 1940, this remission was restricted to residences, while before that it extended to business. premises and factories. It was felt, in the wisdom of the Legislature in 1940 and since, that the ratepayers should not be asked to contribute to anything except residences. It does not apply to labourers' cottages or any houses built under the Working Classes Acts. Private grant houses get seven years remission, while this is only five years. This is a remission of rates for houses which have not got grants and the number who do not avail of the grants is declining. Everybody seems to try to keep within the 1,250 feet in order to qualify for the grants under the various Acts. Those who are outside that get this remission of two-thirds for five years.

I should like to say a good deal about the alleged vagaries of the Valuation Acts because the complaints have been coming fast and furious in connection with their operation in recent times, but I could not hold out much hope that I could do anything about that. All we are doing here is remitting rates on the valuations as we found them. Valuation is not my pigeon. I know that there are certain anomalies and I think that Senator Douglas had the last word when he spoke of somebody who had his valuation increased because of a plan in an architect's office.

It went from the architect's office to the local authority.

But it was never in operation.

I would not like it to go out that it had not left the architect's office.

That is like the story of the two tailors. One said that he could measure a suit if he saw a man's shadow passing round a corner. The other said that he could measure a suit if he saw the corner he had passed. A plan is not necessary at all in an architect's office, not to mind the county engineer's office. The local authority's rate collector can apply for revaluation of anybody's premises without any alteration or the submission of any plan and it is happening every other day. John Blank wakes up to find that he has been revalued although he did not use a paint brush and he does not know who recommended him for this friendly visit from the Valuation Office. So a plan is not necessary. These things will probably find their own level, but they are matters in connection with which I cannot give any promise or hold out any hope about what can be done at this juncture.

Senator Burke spoke about valuations in Galway. Revaluations have been taking place in Galway City, Ballina-sloe and Tuam, but not in the whole county, as was suggested. There has not been a general revaluation in this case. Senator O'Farrell was anxious to discuss other matters and he regretted that this Bill was limited in scope, but I am hoping to introduce in the very near future another Bill which will provide a greater opportunity of discussing the various points he and other Senators have in mind. The Bill, a Housing Bill, is in draft, and the discussion of some anomalies which have been referred to here will be perfectly in order on it.

Question put and agreed to.
Agreed to take remaining stages to-day.
Bill passed through Committee, reported without amendment, received for final consideration and passed.
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