I want to thank you, the House and the Minister for giving me the opportunity to speak on this very important matter. I believe it is one of the most serious motions I ever had the opportunity of speaking on before this House.
The first question I want to ask is what is the exact position with regard to these reconstruction grants. I am not completely sure. I know that a registered builder should be employed. There is space on the application form to give the income tax number of the builder and the VAT number. I know of one registered builder who was not allowed to build an extension to his own house. He gave his registration number and his VAT number. I also heard of a director of a building company who gave the registration number and the tax number and was not accepted as suitable to carry out the works. I understand this stipulation will be extended to new houses shortly.
This is an area I know very well, having been involved in it for a long time. The impression I and most people get is that the do-it-yourself house builder, so far as reconstruction grants are concerned, is finished. This is a complete departure from the tradition we had in this country. The history we have in this country is of people doing their own works, extending their own houses, in some cases building their own houses and, in the old days, thatching their own houses. Suddenly it seems that this comes to an end. This is wrong. If that is the situation I would ask the Minister to seriously reconsider it. As I have said many times in this House, in this country we have class distinction. In my own experience the possibility that people had to build a house or to extend a house of their own gave them an opportunity to improve their position. People could buy a site and they could build a new house on it with their own hands. They were able to improve themselves in this way. They built their own house, they were proud of it and they were entitled to be proud of it. I lived in a labourer's cottage and back in the 1950s we got a small grant to provide a bathroom and a kitchen. Some of the materials we used were from an old house. I must say that the grant inspector was a kindly man who overlooked a few details. Had he not done so it would have been impossible to do it. We were not different from other people. There were very many other families in the same position.
I recall about eight years ago a middle aged woman calling to my office. Her concern was that she wanted to build a house with her own hands and the blocks were too heavy to handle. I spent an afternoon helping that lady and advised her to use bricks. She thought that was a great idea. She told me she would build with bricks. Unfortunately, I never heard from her again. It would have been nice to have got a postcard to say that she did so. The point I am trying to make is that people were able to use their own hands to improve themselves.
I want to say with regard to this matter I am not anti-builder. I realise the value of builders, particularly the small builder. I know what they have done. They were committed people. They worked hard and in many cases without the small builder extensions and new houses would not have been possible because people had to wait a long time for grants and in many cases the builder himself was the financial institution. These people could not and did not get bridging loans. The builder had to wait. Nobody is more aware of the value of the small builder than I am.
I realise the problems of the black economy. I must make that clear. I understand the anxiety to eradicate this problem and I am totally behind that. But in trying to get rid of the problem in this way the Minister is throwing out the baby with the bath water. There is no question whatever about it. In filling up the application form it is necessary to give the builder's income tax number and his VAT number. For most builders it is very difficult to refuse people when they look for his VAT number and his income tax number. In many cases the builder is working in a small community and most of the people would be his friends. I have no doubt that no builder would be able to cope with all the work he would get if he was successful in all his tenders. I know one builder who has given his numbers to over 20 people and there is no way that he could cope with that number if he were asked to do so. It would be a sheer impossibility. I want the Minister to realise that it is very difficult for a builder in a small community, if somebody approaches him and asks for his numbers, to refuse. Under the old system the contractor's name and address was asked for and in most cases people put down "not yet selected". Even in this system where a builder's name is given that builder would not have quoted for the works and if the person were tied to that builder he could ask for any figure he liked.
There will be very long delays in payment with this new grant system. Bridging finance is very expensive and it is the poor who will suffer. It is those most deserving and those least able to afford to do the works and perhaps those with large families who will be affected mostly.
With regard to direct labour, the Fourth Report of the Joint Committee on Small Businesses had this to say on page 44 paragraph 7.4:
Claims forms for housing grants and mortgage subsidies in the case of work undertaken by direct labour should include the names and PRSI numbers of those employed in the construction work. In the event of this information not being supplied properly a deduction of 50 per cent should be made from the grants and subsidies until this information is forthcoming. A receipt of payment to the builder should be produced.
That seems simple enough. That is reasonable and that is fair. I would ask the Minister to reconsider that.
I understand the position with regard to registration for VAT to be that if a builder has a turnover under a certain figure — I think it is £18,000 — he does not have to register. I know of one case where a small builder whose turnover was under the stipulated figure — he had paid his income tax — had not registered. In order to do these works he had to register. There are many elderly people, people who do not want to get involved in filling up VAT forms, and they must register to qualify to do contract works for these grants. I think that is unfair.
I do not condone the black economy but with regard to the unregistered builder the State does not lose out. The registered builder pays 23 per cent VAT on the materials which he buys. He recoups that 23 per cent VAT and in some cases he qualifies to get back more at the end of each month. Therefore he does not charge the customer the 23 per cent VAT. He bases his price on the materials, less the VAT. He charges 10 per cent VAT on the job. If we take it that labour and materials work out about fifty-fifty, an unregistered builder pays 23 per cent VAT on the materials. He cannot recoup the VAT. Therefore, he charges the VAT to the customer and it goes to the State. In my estimation the State does better from the unregistered builder because he cannot claim back the VAT. That is a very important point which the Minister will have to consider.
I do not believe this system will make unregistered contractors register. These jobs simply do not pay. The contractor has to keep his price too keen, he has to wait too long. Therefore he does not want to do the works. There is no chance of forcing people to register in this way. They will not. The situation in other countries is that people can do the work themselves and qualify for grants. From any of the literature I have read it appears to be possible to do that. We are in a unique situation now in this country. With our history and the special problems we have, I think it is wrong to prevent people from doing their own work.
There have been criticisms of the buildings in this country, the houses, extensions and so on. In general the form of a building is determined by three things — the requirements of the builder, the skills of those involved on the buildings, and skills would include knowledge and tradition, and materials used. I believe that our requirements change. We need bigger houses. Our skills are improving and, particularly because of the teaching in vocational schools, people have become very proficient and skilful.
Over the years young people have called to my office who had just left school and were planning to marry and to buy a site and build and furnish a house; and old people who have retired have come to me. They are ambitious. All such people will be frustrated now if that is the situation. I hope the Minister will tell us here tonight that this is not the situation. I hope there will be allowances made for situations where there may be a large family, where people in that family want to work and where they can do a certain amount of the work. I hope the Minister will tell us that that is to be permitted.
With regard to the PRSI contributions, in one sense it is unfortunate that we do not have the old system whereby people stamped a card, because it was very handy. If that were the situation now when hiring a worker to do this kind of job it would be very simple to put on a stamp. Perhaps a special stamp could be organised for that situation. There will be big delays with the grants. At present there is a waiting period of maybe up to six months before people are notified of what grant they are entitled to. The inspector has to call on them and there is a certain amount of clerical work; I know of one instance where there was a delay of over four months with that. The Department can, if they want to, prolong payment. If the inspector is told that money is scarce he can ask for a few screws to be put in a downpipe, he can look for something insignificant to be done. Building was a hobby for many people. Large families shared the workload. They were proud of their achievements. People had something to live for. They were proud of their own work. Now all that is changed. There are problems with houses all over the country. Deal windows are rotting and have to be replaced. It is not a difficult job for somebody who is handy. Overall in changing the system we are going backwards. We are hitting those who are most vulnerable. We are preventing them from working and I would ask the Minister to look again at that situation.
The grants are generous to a certain extent but it must be remembered that in getting the services of a contractor it will be essential to pay at least one-third of the cost of the works because the grants only amount in most cases to two-thirds. With regard to the pre-1940 house I understand the position is as follows. I got this information from The Irish Press of last Friday, 7 February. If your house was built before 1940 you could in theory qualify for the grand total of £8,600 in grants but to claim this maximum figure you would have to do work costing a total of £12,900 on repairs and improvements as no single payment can amount to more than two-thirds of the total cost. To qualify for £8,600 you would be claiming £400 to install a water supply, £400 for sewerage facilities, £800 to install a bathroom, £2,000 for a livingroom, kitchen or bedroom extension plus the new £5,000 grant for repairs and reconstruction of older houses. As the owner of a house built since 1940 you could receive a maximum of £6,400, £400 for a water supply, £400 for sewerage, £800 to build a chimney if the house has no existing chimney, £800 for a bathroom, £2,000 for an extension, £2,000 maximum for necessary works to the fabric of the house including the £800 maximum for the replacement of windows.
