I should like to bring this matter back to the real point of relevancy. This legislation is entitled the Local Loans Fund (Amendment) Bill, 1950, and its object is to repeal the Local Loans Fund (Amendment) Act, of 1949, and, in lieu of what is contained in that Act to enact that the aggregate amount of the moneys issued from the Local Loans Fund in repect of local loans shall not exceed £35,000,000. The whole idea is to raise the ceiling, which is already fixed at £25,000,000, to £35,000,000. I am not changing the law in any other way and this has nothing to do with how grants are given in respect of houses or anything else.
Certain other matters have been discussed, however, and I suppose I shall be permitted to deal with some of them. I want to point out, in the first instance, that I did say to the Seanad that originally the limit put upon loans from the Local Loans Fund by the Act of 1935 was £5,000,000. That figure has been raised since by legislation. In 1937, it was raised to £11,000,000 and in 1940, to £17,000,000. It stayed at that figure of £17,000,000 until 1949, and this must be related, first, to the problem that exists with regard to housing, in so far as housing is facilitated by advances from the Local Loans Fund, and, secondly, to the effort being made to deal with that problem. In 1949, the limit being then £17,000,000, legislation was promoted before the Dáil and this House to raise it to £25,000,000. That was a considerable advance on the £17,000,000 which was then the ceiling. In other words, we allowed ourselves to go from £17,000,000 to £25,000,000. We now find that the sum of £25,000,000 is not enough and I want the limit raised to £35,000,000.
I have said to the Seanad quite frankly that I believe the £35,000,000 limit will carry me for another year. That is the beginning and end of it. Senator Hawkins seemed to complain because I have not asked for more, but I meet his colleagues in the other House who say that I am asking too much. I suppose it is possible to have it both ways. I do not think this amount is going to last more than a year, if housing goes on at the rate at which we propose it should go on, and if I can raise the money otherwise to feed into the Local Loans Fund, it will be speeded very considerably indeed.
Again I want to point out—and I want to stress it again in connection with housing—that I have said that the issues to 31st March, 1950, amount to roughly £23,750,000. I divide this sum into housing proper, £18.4 millions, and public health, £3,500,000. You can nearly add these together and relate them to housing, because although the public health advances have to do with sewerage and water, they are altogether related to housing and mainly related to new housing. There are occasions upon which a village or small town which has a water supply or sewerage system finds that it is not sufficient, or that it has to be repaired or renewed, and some money will be spent on that, but a good deal of the £3,500,000 relates to new houses being built in these areas. In addition, there was a sum of £750,000 which represents a redemption of a particular involvement of the Dublin Corporation which had to do almost entirely with housing. There are then two other items, £626,000 for vocational education services and £446,000 for other services. Added together, there is a sum of £1,000,000 in these. If I subtract that £1,000,000 from the £23,750,000 it means that £22,750,000 represents the issues in relation to the problem of housing in this country. We want to increase that by £10,000,000. That will be expended along lines consistent with the issues already made. It will be nearly all in respect of housing.
Two things have been said about housing. One is the complaint that comes from Senator Hawkins, who is wondering whether there is enough in the way of subvention made. The other is a particular query with regard to interest rates.
I, in the Dáil, offered for the future to provide for a number of years money interest free for housing on the guarantee to me that nothing else would be required from me except that. I believe I would save money to the taxpayer if that bargain were accepted because I think people are doing better than getting money interest free. When people begin to talk about the interest rates that are being charged, it really has very little to do with this question of the rents that are charged eventually or whatever part of the housing costs fall upon the local authority. The State is almost entirely providing housing as if the money was given to them interest free.
I do not think what is being provided by the State for local authority housing in the county boroughs and other urban areas is well enough realised. The whole matter is confused, and in the Dáil I did state, and I hope what I stated will be fully implemented this year, that there is going to be a new system with regard to local authority housing. I do not know whether it will make any improvement from the point of view of the taxpayer or of the man who has to pay the rent or of the local authority, but I think the public mind ought to be clarified and the public ought to realise what is being done in respect of housing.
At the moment, subventions towards houses come under three heads. First of all, there is a capital grant from the Transition Development Fund. That varies between £300 and £400. You can take the upper limit as being the ordinary one. Secondly, there is a subsidy paid. That subsidy varies, depending upon whether the housing is what is called slum clearance or whether it is other type of housing. There is also a differential as between the county boroughs and other urban areas. Under that second type of subvention, for slum clearance, the State provides two-thirds in the county boroughs of the first £400 and, in other urban areas, the State provides two-thirds of £350. Where it is not slum clearance but housing of another type, the State provides one-third in the county boroughs of the first £450 and, in other urban areas, provides one-third of the first £350. In addition to that, over the last couple of years, there is a special subsidy which I have provided myself, aimed at making 2½ per cent. the effective rate of interest on advances from the Local Loans Fund for housing. That is a special subvention. The effective rate, if I took the rate at which the State can borrow money at the moment and added on certain small administrative charges, ought to be 3¼ per cent., and 3¼ per cent. is the effective rate other than for advances from the Local Loans Fund for housing. I have said I would keep the 2½ per cent. rate steady and there is a special subsidy given to meet that promise of mine. I do not know that that promise can hold much longer, particularly if the State finds it has to pay a higher rate of interest in order to get money. Then, of course, the amount of money that is chargeable to people who borrow from the Local Loans Fund would correspondingly have to rise.
It is hardly fair to say that the Minister has raised the interest rates. I do not go out deliberately to raise interest rates. I give even below, at the moment, the effective rate at which the State itself can borrow.
Adding these three together, if I take a house that costs £1,200, in the county boroughs, the State assistance to the £1,200 house—I am speaking of the slum clearance type of property at the moment—is £738. There is no question of interest in that. That is a grant. £738 goes out, paid for by the taxpayer, towards the cost of the £1,200 house. That is 62 per cent. of the cost. I take the £1,200 house as a model throughout. In Dublin and Cork county boroughs, the State provides £667, 56 per cent. of the entire cost, and, in other urban areas, the State provides £709, 59 per cent. of the cost. That is all related to the slum clearance type of housing where, of course, the subventions are higher.
Take non-slum clearance housing. In the county boroughs, except Dublin and Cork, for the £1,200 house the total assistance provided by the State is £637, 53 per cent. In Dublin and Cork, the State provides £550, 46 per cent. of the cost and, in other urban areas, the State provides £609, 51 per cent. of the cost.
All over, on the £1,200 house, the State is providing more than half of the cost of the house. The provision which the State makes decreases as the cost of the house goes up and increases on the lower price house. On the £1,000 house, where it is a slum clearance matter, in the county boroughs, instead of merely meeting 62 per cent. of the entire cost of the house, the State meets 71 per cent. of the cost of the house and the percentages I have given previously rise as the cost of the house goes down and decrease as the cost goes up.
It must be admitted that the taxpayer is making a very handsome provision towards this attempt to solve the housing problem. The housing problem has accumulated here over the years. It started away back in 1914-18, through the Rent Restrictions Act. Probably there was a good intention behind these Acts. Certain people who owned houses realised the position in which there was a shortage of housing and raised the rents. The Rent Restrictions Act was a very good move on the part of the State, with the usual unforeseen consequences, that the speculative builder was to a great extent put out of operation and, as the Rent Restrictions Act has been extended over the years and the area of the limitation extended, the private speculative builders have been more and more put out of commission. It is surely coming to the point where very few houses will be provided by anybody except those who depend upon State assistance. What appeared to be a good State project at the start, to meet a vice developed by the circumstances of the time, has turned out to be somewhat vicious in its results.
Senator Honan comes to the other side—the building costs. That is a matter that ought to be more carefully examined and one of these days the Government will meet to determine some new scheme for the financing of local authority housing. In these circumstances I intend to bring before whatever group meets the very careful analysis that Senator George O'Brien gave in a recent debate in the Seanad with regard to housing costs. I feel that there is no doubt about it that there is a good deal of slack to be gathered in, altogether apart from what the State is providing by way of subvention towards houses. Again, it is just the defect that arises from the circumstances.
We are out on a programme, impelled by everybody, impelled by all the considerations of humanity and the highest social motives, the desire to make good conditions with regard to housing in the country. It is an attempt to do away with the rather desperate conditions that have grown up, certainly here in Dublin, and most of the cities and right through the country, and an attempt to get rid of the bad viewpoint that can be bred by bad housing conditions. There is an all-out effort now to try to get the housing problem solved. There is a danger when there is an all-out effort because those builders' providers, architects, builders of all types and the employees in the building industry all see their chance to cash in on what amounts to a national emergency. I am afraid it has been done to a great extent and I would like, with the assistance of Senators here, and a number of members of the Dáil with the same views—those who are experienced and have some definite association with the matter—to give their help in trying to get the costs of building down. In that way, we may be able to relieve the State and certainly in the end, the community, of some of the hardships we suffer from at the moment. I am afraid that I have drifted into some irrelevancies and raised some important issues. All I am asking now is to get a new ceiling set of £35,000,000. If that ceiling requires to be raised, I may appear here looking for more.