Local Government (Temporary Reduction of Valuation) Bill, 1960—Second Stage.

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

Minister for Local Government (Mr. Blaney)

The provisions of this Bill relate to the law on rating. It is proposed to continue for the three years ending on 31st March, 1963, the period in which buildings erected, enlarged or reconstructed during that period may qualify for a seven-year remission of rates under the Local Government (Temporary Reduction of Valuation) Act, 1954. It is also proposed that farm buildings constructed or improved in that three-year period will qualify for a remission of rates for 20 years instead of the seven-year exemption provided for by existing legislation. A new method is proposed for calculating the county demand on Buncrana urban district council, providing for the abatement of that demand on a sliding scale over a period of 30 years from 1st April last. Finally, the Bill makes provision for a reduction by one-half during the next ten years of the rates levied by county councils on half-rents.

Under the 1954 Act, a remission of two-thirds of the rates was granted for seven years on the valuations of new buildings and on any increase in the valuations of existing buildings that were enlarged or improved, where the constructional work was begun and completed in the three years ended 26th July, 1956. This three year period was extended up to 31st March last by the Local Government (Temporary Reduction of Valuation) Act, 1956. The remission applies to all buildings such as hotels, shops, factories, offices, houses and so on, which do not qualify for a remission of rates under any other Statute. It is estimated that an average of approximately 1,500 buildings newly built or reconstructed, receive this rate remission in each year. The extension of this remission is intended to encourage building and construction work to which the rate remission provisions of other Statutes do not apply and the execution of which might otherwise be delayed.

Section 2 proposes to amend Section 14 of the Valuation (Ireland) Act, 1852, which provides that the valuation of a hereditament or tenement shall not by reason of the erection of any farm outhouse or office buildings, be increased for rating purposes for a seven-year period. This exemption extends to the enlargement or improvement of such farm buildings. Many improvements in farm buildings, particularly in connection with the Bovine Tuberculosis Eradication Scheme, are found to be urgently required at present and the extension of the rating concession from seven to 20 years is introduced in order to encourage farmers to provide the new or improved buildings that are necessary in present circumstances. The new terms will apply to farm buildings erected, enlarged or improved between the 1st April, 1960, and the 31st March, 1963.

When the Bill was before the Dáil, it was suggested by some Deputies that this longer rates remission might be extended to appropriate works carried out prior to the 1st April last. The effect of any rates remission under legislation such as this is to transfer a certain burden of rates on to other ratepayers. As I have pointed out, the purpose of the present measure is to encourage the carrying out of constructional work which might not otherwise be undertaken. This motive is considered to justify the extended remission on farm buildings. There would, however, be no corresponding justification for awarding in this Bill a gratuitous and retrospective concession in respect of work which was undertaken prior to the current rating period.

A general re-valuation of all property was carried out in Buncrana urban district in 1950, at the request of the urban council. As a result, the total valuation of the urban district increased from £7,563 at 1st March, 1950, to £11,445 at 1st March, 1951. This resulted in a corresponding increase in the demand levied on the urban council by Donegal county council. A provision in the Local Government (Temporary Reduction of Valuation) Act, 1954, was intended to bring the valuation of the urban district for county demand purposes back, in effect, to what it was estimated it would have been if no general revision had occurred and only normal increases had taken place. That Act provided for an increase of £330 in the valuation in each year from 1954/55 until, in 1963/64, the county demand would be based on a valuation of £11,520, after which the ordinary basis of valuation would apply. This provision did not secure the intended degree of relief. The average annual increase in the valuation over the past nine years was only £93 instead of the estimated normal increase of £330 annually. The result has been that the county demand on Buncrana has been much greater than if the general revision had not taken place.

The position of Buncrana relative to other districts was further worsened by Section 50 of the Local Government Act, 1955, which provided that the county demand on urban districts should be calculated on the basis of net valuation and not, as hitherto, on gross valuation. This provision was to the advantage of urban districts generally but the section stipulated that, in the case of Buncrana, the county demand should continue to be assessed on the gross notional valuation as set out in the Schedule to the 1954 Act, thus preventing that urban district from gaining the benefit conferred on other urban districts by the 1955 Act.

Buncrana urban council have been pressing for amending legislation to relieve the disproportionately heavy county demand on their district and Donegal county council have supported their request. Section 3 of the Bill accordingly provides that the county demand on Buncrana for the current financial year will be calculated on the basis of .70 of the net produce of a rate of one penny in the £ in that urban area. It is estimated that this should have the effect of placing Buncrana in the position in regard to the county demand in which it would be if the town had not been completely re-valued in 1950 and only normal increases in valuation resulting from new building and other development had taken place. The fraction will increase by the one-hundreth of a penny in each subsequent year until, in 30 years' time it will be .99 of a penny. This arrangement will spread over a period of 30 years the effect on the county demand of the abnormal increase which resulted from the 1950 revision. The immediate effect will be to reduce by approximately £3,700 the county demand on Buncrana for the present year.

Section 4 provides for the granting of a rate relief on half-rent valuations in county health districts. Under existing legislation, a person receiving a rent in respect of a hereditament exempt from rating under Section 63 of the Poor Relief (Ireland) Act, 1838, used for charitable or public purposes, is liable to be rated in respect of half the rent or the "half-rent" as it is called. In county boroughs, and urban districts, rates are assessed on a fraction only of such "half-rents". Where an owner is liable to pay full rates on the half-rent in a county health district he would, in fact, suffer a loss in cases where the county rate exceeds 40/- in the £. In a large proportion of cases the tenant, by arrangement, pays the rates but I feel that there is a strong case for granting rate relief on these half-rent valuations. Section 4 of the Bill accordingly provides that for a period of 10 years from 1st April, 1960, half-rents in county health districts shall be assessed on only half their valuation. This will bring the position into line with that which applies in urban districts and boroughs. As this Bill is a temporary measure, it would not be appropriate to include in it general provisions to deal in a permanent way with the rating of half-rents. It is hoped, however, that before the 10 year period ends, the general question of the rating of half-rents will have been fully examined.

Remissions of rates have been given by Local Government Acts in one circumstance or another over the past 40 years and they have always been on a temporary basis. The Bill proposes to continue the temporary nature of the legislation so that the policy in regard to such remissions can be reviewed from time to time. I feel that in present circumstances, these rate remissions are giving a desirable impetus to building projects which compensates for the transfer of part of the rates burden on to other ratepayers and I recommend this Bill to the House.

Mr. Burke

Every member of the Seanad will surely welcome this measure. I am afraid I cannot be overenthusiastic. The Minister is meeting many of the problems of the day in a piecemeal manner. He is not getting down to the kernel of the problem which has caused much anxiety for many a long day and will continue to do so until a new measure is introduced which will deal with valuations in a comprehensive manner.

I am glad the Minister's law officers are present. They must be aware of the jungle of anomalies that will be created by this type of piecemeal legislation. I welcome the introduction of this legislation which shows what has happened. There was a complete revision of valuations in Buncrana, county Donegal, which distorted the exactions imposed on the people of that progressive township in relation to the rest of the county.

No effort is made to apply the Bill to the rest of the country. With as much sincerity as I can command, I ask the Minister to have this question examined. Every day in some town or village the valuation officer inflicts the same type of anomaly, hardship and injustice on some person, as happened the whole township of Buncrana.

When the law-makers in 1852 conceived these valuation statutes they cannot have foreseen an enormous devaluation in money. They made the valuation of land static and allowed the valuation of hereditaments to be dynamic. Many progressive people who have suffered visitations by valuation officers know that the matter has been dynamic. I do not lay any blame whatsoever on the officers of the Valuation Commissioners. They are doing their duty. However, they must be aware of the problem and of the injustices that ensue for anyone who is progressive.

This Minister has devoted a considerable amount of time to seeing how in some small way he might relieve farmers from the burden of the Valuation Acts. They are concerned at present with the eradication of bovine tuberculosis and the better housing of their cattle and other animals. As he sees the justification for putting these provisions into this Bill, he might consider the thousands of other people who, year after year up and down the country, have to face the same problems.

The Minister should have included all hereditaments in the 20-year period as well as farm buildings. During that period he should have the law in this matter reviewed. Nothing brings the law into such ill-repute as the feeling that it is not fair or equitable. If any code has brought about that feeling of disrespect for the law, the Valuation Acts have done so.

Some years ago, the then Minister for Finance was asked about this matter in this House. He told us that someone cut a number of pages out of Thom's Directory which referred to properties in North Dublin and sent them in to have all the properties on the pages revalued. Whether it was done as a sort of appalling practical joke or because of spleen, I do not know. The only factor that saved the worthy citizens of that part of Dublin was that the job of revaluing the whole of that area would be so colossal that I do not think the money was provided by the Minister for Finance for carrying it out.

I want to reiterate some of the points I have made. I approve wholeheartedly of what the Minister is doing for the farming community by allowing them a 20 years' remission of the increase in valuation on all buildings in respect of the next three years. He has also extended the provisions of the 1954 Act for another seven years. He is not out of season in giving a rebate to the people of Buncrana who suffered an increase of valuation amounting in round figures to between £7,500 and £11,500. I believe that if he examines the points, he will admit that, to be fair to all the other sections of the community, this 20 years' remission should be extended to any person who builds a house or factory or improves a shop or any other hereditament.

If this is not done, it will increase the sense of grievance we hear given expression to at our urban councils and discussed every year by the Municipal Authorities Association. It is even discussed at our trade councils, where they say that shopkeepers are afraid to do up their shops because if they put in a new front which might be worth 10 per cent. of the value of the building, they might get a 200 per cent. increase in their valuation.

I ask the Minister to consider seriously these points. I should like him to charge the law officers of his Department with the responsibility of drawing up a new code of valuation procedure on the existing valuation of the whole country, to take some arbitary standard and fix it at that so that the valuations for all time will be based on that. You cannot base valuations on changing values of money. The letting value which was the criterion for years changes from day to day, from week to week and from district to district. It is very often grossly unfair to the citizen who has his premises valued in that archaic manner. It is not to the credit of the intelligence of our people that we should have this body of laws which, in my view, impeded the progress we would like to see in our country towns and rural areas.

Mr. Brady

I should like to make a small contribution to what Senator Burke has said on this question of valuations. He is quite right. I know a shopkeeper who, on his own initiative, put a new roof on his house in a small village. He applied for no grant, but had a few pounds to spare and did it with his own money. The poor law valuation of that house was £8 and the reviser came along and fixed the valuation at £20. That man came to me and of course I advised him to appeal. He had to go to Ennis, to pay a solicitor and get a barrister to appear for him in the circuit court, and there the valuation was fixed at £18. That man is paying the full rate of £2 in the £. He is paying £36 rates on that house. He is also paying rent to a landlord in Limerick. I cannot understand how these revisers arrive at their decisions.

At one time, Ennis urban council was abolished and its affairs administered by a commissioner. The people were very pleased with him, with the result that they nominated no candidates at the next triennial election. Then the commissioner was appointed for a further period. What did he do? He carried out a general revaluation of the town. He sent up the gross poor law valuation, something like Buncrana, and of course, reduced the rates on paper. He is now a county manager.

We know that in the town of Ennis, there are houses unoccupied where the urban council sued. One man who had a pretty big shop and owed £120 rates defeated them in the circuit court. He said that he had made every reasonable effort by advertisement, by negotiation and in every way to find a tenant for the house but could not, with the rates and charges that were on it.

I have a thorough knowledge over 36 years of this problem and I have great sympathy for the borough of Ennis and for Kilrush and for the people who have been instanced in Buncrana, because I understand their position.

The man I mention whose valuation was increased from £8 to £20 was enterprising enough to put a roof on his own house and to plaster the front of it. There was no increase in the measurements, and the structure was not touched in any way. I think it is terrible the way the valuers are carrying on.

Mr. Burke

There is more than one Buncrana.

Mr. Brady

We talk about progress. Is that progress? This man said that he would not borrow or apply for a loan. We have land in our county from Ennis to Limerick valued at about 50/- an acre. I know a farm of about 180 acres of land and the valuation is something like £465 15 0. I see all the books and I know everything about it. I cannot understand how some of these revisers work. I would like to see some of those fellows put on a 24-acre holding, given a wife and a few children, and told to try to make a living on it. That would give them some conception of their duty to the rural population of this country. These excessive valuations have come before the county council and no words of mine could condemn them sufficiently.

Mr. L'Estrange

This Bill is designed to amend the Valuations (Ireland) Act, 1952. Under that Act, a farmer who erected a farm building had a remission for seven years. Under this Bill, it is proposed that if a farmer erects a building between April, 1960 and March, 1963, he will get a remission for 20 years. Senator Burke spoke about the sense of grievance; but there will be a sense of grievance and very unhappy feelings between neighbours if this Bill is passed, because there is no denying that the enterprising farmer is the man who will suffer under it.

Take any enterprising farmer who answered the call to increase production, to build new farm buildings, to help eradicate the scourge of T.B. and to adopt modern byres, during the past seven, eight or ten years. Such a farmer has now passed the remission period and is paying the full rate. For others, the seven years will be up shortly and they will be paying full rates. The man who has been hanging back, who did not answer the call as a duty, is to be rewarded under the Bill by getting a rates remission up to 20 years.

The farmers are supposed to be conservative and lacking in initiative. Here we have a Minister of State bringing in a Bill which is definitely rewarding the farmers who proved themselves both conservative and lacking in initiative, while the people who built over the past 10 years are being victimised. Anybody who did any building since the war or who does it within the next few years should have this rates remission up to 20 years because he is a man who must dig into his capital, get loans or grants, go to the bank to borrow money. It is very unfair that immediately he does that work, his valuation and his rates are increased.

Senator Brady has given an illustration of what has happened in Ennis. What happened there is happening all over the country but it is unfair to blame those in the Valuation Office. Those people are only doing their duty. The time has come when the Government should say that people who have built since the war should get 20 years' remission and anybody who puts up any building or improves his shop, factory or any other building in the next six, eight or 10 years should also get 20 years' remission of rates. Is what is going on at the present time progressive? Senator Brady is unfair to blame the valuation officer. Let him blame his Government and his Taoiseach who suggested that they are the progressive Party. If they want to be progressive, let them agree with the suggestion some of us are making or with those made in the Dáil when the Bill was before the Dáil.

Mr. O'Reilly

I take the view that this is intended to be an incentive to the entire people to do things that should be done anyway and I welcome the Bill in so far as it does create an incentive to farmers, particularly dairy farmers who must have more extensive housing than any other type of farmer. It is an incentive to farmers to improve their premises and in so far as the Bill goes in that direction, I welcome it.

It may be argued that it should be retrospective, that the people who built prior to its coming into operation should be indemnified because they were a bit too soon. If this case could be made, then grants under the Housing Acts, say, the Housing (Financial and Miscellaneous Provisions) Act of 1932, should be increased when grants are increased under the 1952 or 1954 Acts.

Mr. L'Estrange

You could build a house for £350 in 1932, and it takes more than £1,000 now.

Mr. O'Reilly

You cannot go back all the time. We must legislate for the future, not for the past. That is why we always have to bring amending Bills of one type or another into Parliament—so that legislation can be changed with changing times and changing circumstances. While it might be possible to make a case along Senator L'Estrange's lines, to create this position of equity between man and man in everything, I think, is impossible, because if you want equity between man and man in everything, you have to take one individual by another and relate one individual to another. It would not be possible under any legislative system in any country. It never was possible and it was not practicable.

I should mention the contribution of Senator Burke. Mind you, I am inclined to say that he is a very brave man and very sincere in the views he expressed. It could be argued by some people that there would be no reasonable equity between valuations until there was a readjustment between all the valuations of the country. But who is brave enough, apart from Senator Burke, to implement that? If we on this side of the House were to take direction and advice from Senator Burke, many of his colleagues would repudiate him in a very short time. We would be sitting ducks for attack by any of the people who might feel like making political capital out of such a situation.

These matters are not easy to solve. This solution, if reasonable agreements could be got, might be a good thing or it might have very bad effects, too. I am not prepared to go all the way with Senator Burke in this matter but there should be some method of levelling up.

I take Senator Brady's word for his facts in the example he gave but I might suggest to him that some other person who built a new house, not a business premises but a residential premises, might have as high a valuation on that residence adjacent to a business premises.

Mr. Brady

The man did not object to £3 or £4—put it up to £12. He knew there would be some little increase and the man was quite reasonable.

Mr. O'Reilly

I am not disputing the case. The Senator has not heard me out. An abnormally high valuation could be set on a new premises— though the owner would be indemnified on a sliding scale. The Valuation Office has no regard for adjacent valuations and the State has to step in to indemnify such people against the full impact of the increase in valuation. Take a reconstruction of premises such as that mentioned by Senator Brady. When these premises are re-valued in the light of and in proportion to adjacent premises, then the valuation could go up. I often wished that something could be done to ensure that in valuing any premises, reconstructed or new, the Valuation Office should have regard to the all-over position in that townland, village or parish.

Mr. Burke

That is right.

Mr. O'Reilly

Senator L'Estrange says that the Valuation Office have done the job very well. I am not prepared to agree with him. I agree with Senator Burke and Senator Brady. They have not succeeded in keeping equity and justice between existing valuations and people unfortunate enough to be re-valued have been very unjustly treated. Those who built better premises and escaped re-valuation are getting away with it and not paying a due share of the local rates. As far as the Bill goes, I welcome it.

Professor Quinlan

I should like briefly to add my voice to the comments made about the injustice in valuations and the necessity to improve on the system. The only improvement I can see on this system that would be just is to abolish it altogether. The first task in raising the moneys involved is that they should be raised with some relation to income. A commission in the past few days showed how income tax could be lowered and that lowering could be very well used to abolish this iniquitous system of rates based on valuation altogether. The most iniquitous of all is concerned with agricultural land and claims made down through the years have treated of that.

If the Minister is reconsidering valuation, the time has come to reconsider the whole basis of the raising of this money from agricultural land. If he wants the same amount—I am not saying that he will have it or that he should not have it— it should be raised by some progressive method, by a progressive land tax that would encourage the good farmer and not by rates as they are arranged at the moment that hit the good farmer and the bad farmer alike.

Mr. Blaney

One thing emerged in varying degrees from the five speakers who contributed and that was somewhat a condemnation of the present system of valuation and the manner in which the revisions are carried out and, in general, a call for a change of method—a change of system, or as the last speaker said, the abolishing of the system altogether and the putting in its place of some form of tax that would raise the same amount of money, some form of a land tax or something such as that.

What I want to put to the House is this: While I have views—they could be as valuable as the next—quite strong views on the valuation system, as we know it, the fact is that it is not my Department at all and I do not propose to impose those views on Senators here tonight. I shall merely deal, not with the general arguments made by practically every speaker but with those others which are immediately concerned with the Bill before us.

In that regard, I think Senator L'Estrange took the view that we should have retrospective remission of rates under this Bill and that, in fact, by giving the remission we now propose of 20 years on new, improved or reconstructed farm buildings, we are not giving encouragement to those who deserve it but rather that we are penalising those who were enterprising enough in the past to have built new farm buildings or improved or reconstructed their existing buildings.

I want, as I did in the Dáil, to reiterate that circumstances today are such, due in particular to the bovine tuberculosis eradication scheme, that in many cases, particularly in the dairying areas, that will arise in the very near future, certain farm buildings must, of necessity, be improved, reconstructed or renewed. It is to encourage and to help those who must in such circumstances do this renewal or reconstruction; it is to try in some way to alleviate the burden they may have to carry in regard to this building that we bring in this remission. It is to help and encourage them to do something which, without this remission, they might not do, which in itself would be not only a loss to the farmer in question but could also be detrimental to the whole bovine tuberculosis eradication scheme.

May I also say that this idea of making it retrospective to those who built in the past five, six, seven or 12 years does not really meet the point intended to be covered by the remission for the future, in that those people, obviously enterprising though they may have been, must have been in possession of sufficient material goods or gains to enable them to build. It may also be that a number of those described as unenterprising were unenterprising for the very simple reason that many of them in those years were unable to provide the wherewithal for these repairs or renewals. Surely, those people were in need of encouragement? This encouragement, we hope, will be of some value to them in present day circumstances.

Again, one other point in regard to this whole matter of rates remissions —they are and have been over the years intended to encourage building. There is no encouragement surely in giving a remission of rates to somebody who has the building up and enjoying its worth over the past five or ten years? We ought to encourage building for the future. That is the intention, in addition to the other reasons I have already given.

The question of penalising, I think, does not arise. The question of encouraging those who have not yet built or who must build in the future is not, I think, payment for not doing their business in the past. Rather is it a further encouragement to help them to do it in the future, if they were not in a position to do it in the past. Having commented on the items which were mentioned specifically in relation to the measure before the House, were I to say any more I would have to start discussing the general arguments on the valuation system as a whole, which is not the responsibility of my Department. It is a matter which is not relevant to the discussion here tonight.

Question put and agreed to.

The Seanad adjourned at 6.50 p.m. until 3 p.m. on Wednesday, 16th November, 1960.

Seanad Éireann debate -
Wednesday, 9 Nov 1960