Dáil Éireann díospóireacht -
Thursday, 11 Mar 1926

Vol. 14 No. 15

DAMAGE TO PROPERTY (COMPENSATION) (AMENDMENT) BILL, 1926—SECOND STAGE.

Mr. BLYTHE

I beg to move the Second Reading of this Bill. The purpose of it is to give legislative effect to Articles 3 and 4 of the Agreement of December last amending the Treaty. The Bill provides, in the first place, for the payment of the ten per cent. addition to the awards given under the Damage to Property (Compensation) Act of 1923. It was provided in the Agreement that those increases should be made by means of 5 per cent. stock. A considerable amount of thought has been given to the question of whether it was worth while issuing a new five per cent. stock, or whether payment should preferably be made by issues of the existing compensation stock. It was felt undesirable to issue new stock for small amounts. From the point of view of the position of our Government securities on the market it is desirable not to have a variety of securities, but only a few varieties of securities which will in consequence be easily marketable and easily disposed of and easy to buy for those who want to buy Government securities.

Having come to the decision that we should, so far as we were issuing stock, issue what would be the existing stock, we did not see that it would be possible to make any alteration in the amounts in which the stock would be issued. The present stock is issued in multiples of £50. Even if we had decided to issue new stock we would certainly not have issued any multiples less than £10, because the issue of quantities of stock in very small amounts involves a good deal of bookkeeping and a good deal of expense in management that is not worth while. We decided, therefore, to pay these increases by issuing compensation stock and paying broken amounts under £50 in cash.

The cost of this ten per cent. addition will really not be very much because the ten per cent. increase will not apply to the whole of the post-truce compensation payments. In the first place, compensation for railway damage was excluded from the scope of the Damage to Property (Compensation) Act, 1923. That was provided for by agreement with the Railway Companies and the provision for ten per cent. increase does not apply there. Compensation for personal injuries is not affected by the agreement. The ten per cent. increase does not apply to them. Then there are certain other cases which are excluded. For instance, where R.I.C. barracks were burned down the owner was entitled to compensation, but the Gárdaí authorities wanted new barracks as quickly as possible. Perhaps the owner might have been slow to build, so that what happened was that the Board of Works acquired the site from the owner with the right of compensation attached. In certain cases compensation was simply paid out of the Vote to the Board of Works for the erection of the new barracks. In such cases, naturally, ten per cent. additional will not be paid over to the Board of Works. The result of these deductions from the total amount of compensation payable is that not more than between £350,000 and £400,000 would have to be found. That will be the amount that will be required for the ten per cent. additional. Of that sum, roughly half will have to be provided in cash as we are issuing compensation stock in multiples of £50 and about half will be paid by the issue of stock. Of course the cash portion of this amount is a capital charge, which naturally the Government will borrow to meet. That is, we will not include this £200,000 or £175,000 in the moneys that have to be found in the coming year by taxation.

The Bill provides that in respect of report cases, just as in respect of decrees, the amount shall be increased by ten per cent. In the case of a decree ten per cent. of an increase must be paid but in the case of a report it does not follow that the ten per cent. will be paid. In certain cases people got reports but no payment was made and, of course, the ten per cent. will not be paid in these cases. In some cases a person got a report say for £200—£100 in respect of one particular item and £100 in respect of another particular item, but on examination in the Department of Finance one item may have been disallowed and the other item paid for, so that only £100 was paid. In that case the ten per cent. would only be paid in respect of the item allowed. Although the report was for £200 and this Bill will give us power to pay £20 extra, we will not pay the £20 extra. We will simply pay ten per cent. on the amount allowed by the Department of Finance.

It is not proposed to attach any reinstatement condition in the case of awards to the additional sum. If a man had built a house for, say, £1,500 and was entitled to get £150 extra, it would be, we feel, unfair to insist that he should do something else to the house costing £150. I think in the great majority of cases, it will be found that the person rebuilding has had to provide money in addition to the amount allowed by the court. I suppose in all cases such persons have had to raise money by loan in addition to the money they received from the court in order to carry out reconstruction. The terms of the Act made that necessary, because the difference in value between the new building and the old building is allowed for in assessing the amounts. Consequently, the general position is that people will have spent more on reinstatement than they actually receive in their awards, and the amounts payable under this Bill will, perhaps, only replace in part, the money which these people had to find. It would be, we believe, utterly impracticable to insist that further work should be done for the ten per cent. Then in the small cases, the cost of inspection and of seeing that the work was done, would be disproportionate.

Section V. provides that the judges shall continue to assess the compensation on the principles that have guided them hitherto, and that the addition shall simply be made afterwards.

Section VI. provides for the annuity to the British Government. This annuity represents a sum of, roughly, £4,900,000, the interest figure being 4¾ per cent. That 4¾ per cent. is appreciably lower than we could borrow for. We certainly could not borrow at less than the figure which we borrowed at when the National Loan was issued—5¼ per cent. plus a certain fraction—so that there is a gain of ½ per cent. I do not say that that advantage of ½ per cent. will continue over the whole period of 60 years, but I do think that it is a distinct advantage to pay an annuity rather than cash at present. It would be undesirable when we will have to raise other loans, that we should have to go to the market for this sum of nearly £5,000,000. It is a distinct advantage for us now to settle on an annuity basis, rather than a cash basis. Even if some time before the expiry of 60 years interest sinks to less than 4¾ per cent., at any rate, that is not going to happen for a considerable time, and, on the balance over the period, I do not think it will be found, even in the long run, that there is a disadvantage in paying an annuity for such a long period as 60 years at this rate of interest, and there is, as I said, a definite advantage at present.

Mr. WOLFE

Will the Minister say for what years this addition of 10 per cent. will be payable?

Mr. BLYTHE

For the period covered by the principal Act—the Damage to Property (Compensation) Act—from the date of the truce to, I think, 12th May, 1923.

Mr. JOHNSON

On the plea that Minister have made so frequently, and that they have been so eloquently backed up in both in the Press and in the Dáil, and perhaps also with the support of Deputy O'Mara and Deputy Heffernan, I propose to ask the Dáil not to agree to the Second Reading of this Bill, because of inability to pay those moneys which we are not obliged to pay. As to the £5,000,000 referred to, Article 3 of the Treaty (Confirmation Agreement) Act only obliged us to enter into agreements at such time and in such manner as may be agreed upon without any obligation to pay this money at present, and I think it is, in all the circumstances, unfortunate that we should be asked to raise £400,000 next year for the purpose of paying this money, if half that is stated to be true is well founded. Perhaps the Minister will tell us if we can afford to pay £400,000 that it is unnecessary to pay in this coming year? If that is so, then I think we ought to have had some assurances during the last few weeks which would have revived public faith and confidence. If it is not so, then we should not be called upon to pay at this time. The obligation which the Ministers entered into in December, and which was confirmed by the Dáil and Seanad, in respect to this, did not fix any date at which we should begin to pay. I, therefore, ask the Dáil to agree that this is not the time when we should begin to pay; that we should wait until prosperity comes, until we have fewer liabilities in respect to the Agreement of December, 1921, before the new Agreement, which was to amend that, begins to operate, in so far as this particular Section 3 of that Agreement applies. On the ground of inability to pay, on the ground of the necessity for economy and reduction of taxation rather than increase of taxation, I ask the Dáil not to agree to the Second Reading of this Bill which contains this particular provision.

In regard to the increase of 10 per cent. in compensation, I suppose we are bound by the provisions of our previous Act to pay such a sum, and being so bound, I am not very much concerned whether we should pay it in ten-shilling notes, pound notes or Bank of England £5 notes. It is not really of very much concern how it will be paid. That is a matter, I suppose, more for the convenience of the Minister for Finance than for anybody else. But I do propose to ask the Dáil to limit his power to pay in respect to these compensation awards in so far as the reinstatement provisions or conditions which have been imposed have not been carried out. I think we ought to take the opportunity of insisting, if we can by this means, that where reinstatement conditions were imposed in the awards they shall be obligatory and, if they are not carried out, that the 10 per cent. shall not be added to the total award. There have been a number of cases—some of considerable importance—where the recipients of awards have pocketed the whole sum and simply left the empty shells of the burned buildings.

Wherever it has been found desirable on the part of the courts to insert a reinstatement condition in respect of half the sum, as far as we can use this method of bringing pressure we should do so, because it will add a good deal to the circulation of money in the country, and I do not think there will be any grievance on the part of the people getting this added benefit which they did not expect, which was a voluntary grant issuing from the heart of the President. It was very kind and very gracious of him, and I am sure they will remember him in their prayers. But the Dáil thought it was an unpleasant duty, although they succumbed to the blandishments of the President, thought it was the lesser of two evils, and agreed to pay this sum of money—I was going to say as an act of grace but really as an act of profligacy—an entirely unnecessary obligation which we took upon ourselves, but which, I suppose, will have to be fulfilled. As to whether it is necessary to pay this at present I am not sure. I do not think it is. But the sum is smaller than the other and it will not necessarily be paid in cash, because it will not come upon the Budget for the coming year, as the Minister has explained. So that on that score I do not think we need raise any questions as to the burden that will be borne. But on the other question, the question of raising £400,000 additional taxation in the coming year, I will ask every Deputy who has ever spoken one word about economy, or who has ever thought for a moment of the desirability of reducing taxation or of cutting down expenditure, to vote for the rejection of a Bill which contains this clause.

Mr. CONNOR HOGAN

I desire to support Deputy Johnson's motion to reject the Bill. To me, and I hope Deputies will view it in that light. It is simply the first fruits of this great London victory that was boosted in the Press. I would like to ask a question of the Minister for Finance, especially with regard to the latter part of the Title—"and to authorise the issue out of the Central Fund of the sums necessary to meet the obligations undertaken by the Irish Free State by Article 3 of the Agreement made on the 3rd day of December, 1925, between the British Government and the Government of the Irish Free State." Why is the Minister putting these sums on the Central Fund? Is it the resolve of the Government to withdraw this altogether from the sphere of criticism which it would necessarily be subjected to by coming annually on the Estimates? That may be a good policy. It is certainly a good policy for the Ministry, but some of us will not support and endorse that policy. This Dáil will last only about a year and a half, and it is only fair and right to give a subsequent Dáil an opportunity of reviewing, or rejecting, if it so wishes, the commitments that this Dáil has entered into. I contend that the only means of doing that is, not to put this payment on the Central Fund, but to put it on the Estimates, so that it may be voted annually.

It is, no doubt, held that this 10 percent. is an act of grace, and by it that any injustices contained in the Act of 1923 are removed. I do not feel that such a thing has ensued. I feel that. if anything, the differentiation has been more marked, that the persons who did come under the scope of the Act of 1923 are, relatively, put in a better position than those who were excluded. Take, for instance, the seizures of land. Persons got reports with regard to these, I understand, but these reports were definitely turned down. Even an appeal to the Supreme Court failed to establish the right of parties whose lands were seized to secure justice, or the right to come within the terms of the Damage to Property Act of 1923. "The land for the people, the road for the bullock," is an old cry. I believe it is the darling sin of the Minister for Posts. However, the effect has been that a man whose lands were seized from 1918 to 1922 or 1923 never got a penny benefit, and he will receive nothing under this new Bill that we are called on to endorse. It is well to bear this in mind, that it was because of the direct pressure of the British Government, pressure put on our Executive, to assist persons who were friendly to the British Government. That, and that alone, it is that has caused the insertion of this 10 per cent. It is true there was the saving grace that it should apply all round, but we might as well face the kernel of the thing, that it was really these persons, who are supposed to be ex-Unionists, who were the immediate concern of the British Government.

My mind can go back a number of years. It can go back to 1917, and I can remember the time when—I will not say all ex-Unionists, but I do say this, and say it very definitely—in the case of some ex-Unionists, I have direct knowledge of the fact that they voted on an issue in a manner which is almost unbelievable. They voted for one who had been in arms against the King to whom they affected allegiance. Not that they sympathised with the rebel— not a bit of it; they did it because they thought that they could dish the constitutionally expressed demands of the Irish people for Home Rule—a Machiavelian policy undoubtedly. But what has happened? Their houses, in many instances, went down in the conflict that afterwards ensued, and the Irish taxpayers, the people who have to work and earn money, are called upon to pay to-day for a policy which these men contributed to. I hold that that is not quite a fair proposition. I would be glad if the thing were feasible—but, of course, I admit frankly that at this stage it is not feasible—that the people who voted with these instincts, who voted for what I call criminal and profligate politics, should be deprived, not only of the ten per cent. they are getting under this Bill, but of every penny they got under the Act of 1923. I take this viewpoint in justification of my attitude: I look upon these people, in supporting a certain policy and voting for a man that they held to be an anarch and a rebel, as having taken a deliberate step in the destruction of their own homes.

AN CEANN COMHAIRLE

What is the relevancy of this?

Mr. CONNOR HOGAN

May I say, sir, that in the Act of 1923, there is a precedent laid down, that those who engaged in activities against the State were precluded from getting compensation. This Bill is to make repayment to the British Government of moneys which the British Government had to accept liability for some years back, owing to the state of turmoil here.

AN CEANN COMHAIRLE

But there is no connection between the 1923 Act and the repayment to the British Government. The 1923 Act concerns damage done after the Truce.

Mr. JOHNSON

Article 3 deals with the British Government's liability.

AN CEANN COMHAIRLE

The 1923 Act and the ten per cent. increase are the same.

Mr. CONNOR HOGAN

But this is all included in this Bill.

AN CEANN COMHAIRLE

I am not able to follow the Deputy's argument. That is my difficulty. I do not see how the question of people voting at an election arises on the ten per cent. increase here.

Mr. CONNOR HOGAN

I refer to Section 6, which says: "For discharging the liability assumed by the Irish Free State by Article 3 of the Agreement made on 3rd day of December, 1925, between the British Government and the Government of the Irish Free State amending and supplementing the Treaty of 1921." The Act of 1923 dealt with the whole question of compensation for the period from January 21st, 1919, down to the 12th March, 1923. The citation of this Bill is: "The Damage to Property (Compensation) Acts, 1923 and 1924, and this Act may be cited together as the Damage to Property (Compensation) Act, 1923 to 1926." I contend that last section puts me in order before the House. I would be glad if it were feasible to exclude such people as I referred to. There is a precedent in the Act of 1923 which excluded those who took steps inimical to the public weal, people who acted on a policy which was contrary to all Governmental policies. I would be glad to apply that precedent to those people who, seven or eight years ago, voted for a policy that they did not believe in. I emphasise that they did not believe in that policy, but acted in that way because they believed that, by so doing, they could dish the hopes and the constitutionally and legitimately expressed desires of the Irish people.

The PRESIDENT

No one was excluded under the Act of 1923 for voting. They could vote any way they liked.

Mr. CONNOR HOGAN

"For doing any act." Voting is doing an act. The seizure of valuables, such as jewellery and money, was excluded from the Act of 1923. There is nothing in this Bill which attempts to repair the damage done to persons who, in several cases, suffered very grave injustice, indeed. In fact, the position is accentuated against them. They see other persons getting a 10 per cent. increase, while the terms of the original Act are maintained in all their stringency against them. I would be glad to get some explanation from the Government as to Section 6. Why was it that they agreed to accept liability, and yet failed to get satisfactory explanation as to the damage done by the British forces in the period from 1919 to 1921? Some sort of lame excuse was certainly put forward here. It was said that England was agreeing to wipe out her claim—the reputed obligation of Ireland in respect of the National Debt. It was held then that we should be generous and could afford to be generous. That is not my contention. I look upon the mere acceptance of this as a tacit recognition of a debt which has never been ascertained. The question of a national debt is a rather big one. I hold that no steps whatever have been taken to determine it. Our representatives must have held that we owed something to the British Government in respect of the Great War debt and the whole of the National Debt. That was done without any steps having been taken to determine what was excluded. I submit it is not a fair proposition that we should accept liability for the damage done without knowing what was excluded. I profoundly disagree with that.

Why is it that we are called upon to meet this debt of four or five millions by an annuity of a quarter of a million, extending over sixty years? The Government say they got the money at 4¾ per cent. The British Government compounded with many of its creditors within the past few years. Three years ago they made financial arrangements with the United States. I wonder if they got 4¾ per cent. in the case of the Italian debt. Did the Italians give them 4¾ per cent. interest on their money? No, nor anything like it. I have not the figures beside me at the moment, but I know that the Italians got large remissions on the principal sum as well as a low rate of interest, the effect of which will be to extinguish the debt in a comparatively short time, a period certainly much shorter than that during which we will be called upon to pay. They got all their commitments added together, so that the actual sum they are to pay does not amount to anything like the debt, that on paper, at least, they were liable to Great Britain for. In our case we are to pay annually a quarter of a million for sixty years. The present proposal is that we pay £400,000 in the ensuing 12 months. A payment of a quarter of a million for sixty years represents a total payment of £15,000,000 on a debt which only amounted to between four and five millions. The Italian and the French people owed very large debts, and were in a much better position financially to meet their obligations than we are, but how did they get off? Not by paying three times the amount which, in the first instance, they borrowed. We did not borrow this money. They got value, we got destruction. They are not paying three times over the same as we are doing. We are told that this represents a great victory, that it has conferred honour, glory, and greatness and the rest of it, on the country.

In the Treaty of the 3rd December, 1925, there is no arrangement whatever for the repayment. No Deputy, I am sure wants to turn down any obligations we have contracted—at least I am not prepared to do that—but I say that the method the Government asks us to endorse for this repayment is bad and inequitable. It is a method that is not just to the over-taxed people of Ireland. Was it not possible to get better terms? Surely if the Italian people, the French people and the English people themselves in the case of America, the Belgians, the Czecho-Slovakians and all the countries of Europe could get such good terms from the British, we, a constituent part of the Empire, should at least get as good. It is almost incredible to believe that we could not. But the Government, in their wisdom, or want of wisdom, tells us we have got to pay out a quarter of a million a year for sixty years. Now, in repudiating this Bill we are not repudiating that Agreement that was entered upon on the 3rd December. We are not breaking our bond. The bond was given under duress certainly, but we are not breaking our bond in turning down this, because the proposed method of repayment was not divulged to the House in December last. I emphasise that.

The actual terms of clause 3 of the Agreement are as follows:—

"The Irish Free State hereby assumes all liability undertaken by the British Government in respect of malicious damage done since the 21st day of January, 1919, to property in the area now under the jurisdiction of the Parliament and Government of the Irish Free State, and the Government of the Irish Free State shall repay to the British Government at such time or times and in such manner as may be agreed upon, moneys already paid by the British Government in respect of such damage or liable to be so paid under obligations already incurred."

Section 6 in the Bill does not contain one word as to the method of repayment. As a matter of fact, if the Government held out they could, perhaps, have got this money free of interest, or, at best, at a low rate of interest, and the debt would not fall so heavily upon the people. The Minister for Finance was good enough to say that they could not borrow at a lower rate. Evidently he is unaware of the financial arrangements which great countries and big empires have made in London within the last twelve months. Yet, he says that we could not borrow at a lower rate, and that no one has borrowed at a lower rate to his conscious knowledge, and further, that it has been a gain. Where is the gain? What is the worth of all the money which we will have paid out in the course of sixty years? What will £250,000 a year at 5 per cent. compound be worth sixty years hence? When you consider that you have fifty-nine such sums for a diminishing period in each case, it becomes merely a question of mathematics. The Government apparently do not believe in the earning power of money. They have got the money too soft, but they will not get any more soft money.

The PRESIDENT

May I correct a statement of the Deputy's when he said that the House was not led to believe that this was part of the bargain. I made the statement that it was £250,000 a year for 60 years.

Mr. CONNOR HOGAN

Did the President make that statement in his opening speech?

The PRESIDENT

The Deputy said that the House did not hear of it before.

Mr. CONNOR HOGAN

We did hear it, but at what stage did the President tell us? It is not in the Agreement, and we are bound to nothing except what is in the Agreement.

The PRESIDENT

It was stated here. The Deputy did hear it before in this House.

Mr. CONNOR HOGAN

I am admitting the error. I now move the adjournment of the debate.

Debate adjourned until Tuesday, 23rd March.

The Dáil adjourned at 8.30 p.m. until Tuesday, 23rd March.