Deputy Byrne gave notice that he would raise on the motion for the Adjournment the subject-matter of Question No. 98 on to-day's Order Paper.
Adjournment Debate. - Loan Charges Under Small Dwellings Acquisition Acts.
Mr. Byrne
To-day I gave notice that I would raise this matter of the increased rates of interest for loans under the Small Dwellings Acquisition Acts which affect a very large number of persons who are endeavouring to buy houses or to have their own houses built. The Minister told us yesterday that he would make a statement to-day on the matter but the statement he made to-day was not a satisfactory reply to any of the five questions on the Order Paper—one from me, one from Deputy Norton, one from Deputy McQuillan, one from Deputy Doyle and one from Deputy Collins. I want to point out the hardships that are being inflicted on people who entered into contracts and purchased sites in order to enable a builder to proceed with the work of erecting their houses. These people had in their possession, before entering on these commitments, a pamphlet issued in connection with the Small Dwellings (Acquisition) Acts stating that the rate of interest on loans under these Acts would be 3¾ per cent. Suddenly, without warning, at a time when some of these houses had been completed and when others were only half completed, the borrowers were told that the loans would be granted only at a rate of 5¾ per cent. and, in some cases, I believe, at a rate of 5½ per cent. All these people had entered into these commitments on the assumption that the rate of interest would be 3½ per cent. or at most 3¾ per cent. and had budgeted accordingly.
As a result of the increase in rates of interest, they now find themselves faced with an increased weekly charge of 10/- to 12/6 and in one or two cases of 15/. Deputies will realise the hardship which such an increase imposes on people whose wages average from £7 to £8 per week. There may be a few who earn £10 a week, but the majority of these people are in the £8 a week class—young men who are about to get married and those already married with one or two children who cannot qualify for houses built by the local authorities and who cannot get houses at a fair rent in any part of the city or county. These people, I suggest, showed great courage, initiative and a magnificent spirit of citizenship by entering into contracts to build their own houses. They were encouraged by the low rates of interest which they thought they would be charged under the Small Dwellings (Acquisition) Acts which they are now informed are to be increased.
In the question, which I put to the Minister to-day, I pointed out that if the borrowers, who have signed contracts with builders, find themselves unable to proceed with the contracts they may find themselves in the law courts for failure to fulfil their signed contracts and I asked the Minister if he would direct that loans be issued at the old rate of 3½ per cent. We had no reply, whatsoever, to that question. Deputy Norton, in his question, asked whether with a view to encouraging house purchase, as a desirable social policy, the Minister would arrange with local authorities that money would be made available under the Acts at the former rate of interest. Another question by Deputy McQuillan asked whether, in view of the unforeseen hardship that would be caused by the new rate of interest on loans to people who have already entered on contracts for the erection of houses on the assumption that they would obtain loans at approximately 3 per cent. interest, the Minister would arrange that the new rate of interest would not be applied to those people. These questions were not answered either.
Another question from Deputy Doyle asked if the Minister was aware of the grave injustice which the proposed increased interest imposes on persons who have applied for, and who have been notified of the intention to grant them, loans and who have signed definite contracts and agreements for the repayments of such loans. The question further asked the Minister if he is aware that, under the revised loan terms, many borrowers would be unable to meet their commitments and would be forced to forfeit their deposits or, alternatively, undertake to pay an exorbitant rent over a period of 35 years and if so if he would state what steps he proposes to take to relieve borrowers of this burden. That question was not answered either.
A further question from Deputy S. Collins asked the Minister if he had any proposition under consideration to alleviate the impact on the Small Dwellings (Acquisition) Loans of the increase in the rate of interest on advances from the Local Loans Fund. Again, that question was not answered.
The Minister, in the course of the reply which he did give, said that since the announcement of the variation of the interest rate, representations had been received by him regarding the position of local authorities and borrowers in respect to commitments of the nature referred to in some of the questions. He added: "In order to enable me to examine this position generally, I have requested the housing authorities to furnish specific information as to the amount represented by these commitments in each housing area." That is the statement which he promised yesterday, a statement that we all thought was going to relieve the minds of those young people, nearly a thousand of whom we have in Dublin alone. I am aware that there are at least 600 of them in Dublin because over 600 people met in O'Connell Hall during the week to make a protest against their treatment and against the proposed imposition of an extra 10/or 12/- a week. There are people in Dublin who, to-day, were sent for by their solicitors and were called upon to sign a mortgage to-morrow morning under the terms of which they would have to pay 5½ per cent. interest. If they sign that mortgage, they have no possible chance of getting any redress from the Minister.
I hold that the Minister should instruct the county councils, especially the Dublin County Council, that in the case of any applications for loans lodged with them before the issue of the recent National Loan, these loans should be granted on the terms which the applicants then understood would apply to such loans. Where it can be proved that some of these people purchased sites, and entered into contracts with the builder to build their houses within the last six months or the last two months, that, I suggest, showed a genuine intention on their part to purchase their homes under the terms of the pamphlet issued in connection with the Small Dwellings (Acquisition) Acts, by loans granted at 3½ per cent. I am asking the Minister to see that the pledge given to these people is honoured. I do not want to give offence to anybody, but I understand that applications made to the county council for loans some time ago were held up or delayed because of some scarcity of staff or because of the absence of some official through illness. A large number of young men and women are now going to be victimised because of that shortage of staff in the county councils and because of the failure to deal with the applications in the rapid manner in which everybody hoped they would be met. I was asked by one man who attended the meeting of protest to ask the Minister—and I hope he will not take offence at my putting the question to him—whether it was a fact that since the issue of the Report of the Central Bank he gave instructions to local authorities to go slow with these applications. I scarcely think it possible that the Minister would issue such instructions but I promised to ask him the question. I do not propose to occupy the time of the House much further as I should like to give one or two of my colleagues who have a special interest in this matter an opportunity of speaking.
A friend of mine two years ago decided to build. He looked for a site because he had a pamphlet on the Small Dwellings (Acquisition) Act setting forth 3¾ per cent. rate of interest. He went ahead from that date and started the house in January, 1952. The application went to the council in January, 1952, and he got approval in February, 1952. Now the house is ready and he has paid a deposit of £130. If he does not get the money immediately he loses that deposit. Let no one think that the unfortunate builder, who holds the deposit, will make anything because he is now pressed—the smaller builder particularly—for interest on the money he has borrowed to purchase the goods that built the house. Is it possible that once an applicant gets approval for a loan and asks for a grant the grant cannot be made ever again on that house; that if the person who applied does not go on he kills the opportunity of anyone else getting a grant on that same house?
The next case is in Dublin, too. In May, 1951, a friend of mine looked for a house immediately to rent. He had no hope and decided to buy a house under the Small Dwellings (Acquisition) Act. He approached a builder, paid a deposit of £200. He sought a loan on the 5th March, 1952, and got provisional approval on the 23rd April, 1952. The house was commenced in June, 1952, and notice of completion was given on the 18th September, 1952.
The final valuation was dated October, 4th, 1952. He must now pay interest at the rate of 5¾ per cent. The mortage is now to hand and he must sign immediately or pay the builder 6 per cent. on the full value of the house until the money is paid to him.
These cases show the hardship inflicted in Dublin City. Here is a letter from the very centre of the city from Deputy Cowan's and my own constituency. Maybe that is why this letter is written firmly and in a way that others will not like. Here is the letter:—
"Dear Mr. Byrne:
I appeal to you, on behalf of myself and thousands of others, to do all in your power to bring the grave injustice of the Government's new decision to increase the county council loan by 2 per cent. home to those responsible for it."
That is, will I bring home to the Government what is happening. The letter continues:—
"We applied for a loan from the county council last July and it was duly sanctioned on the 5th September. My future husband signed a contract with the builder and paid our deposit. It has taken us three to four years to save this deposit and by withdrawing now we lose all this. On the other hand we must now pay 54/- per week for our house. An increase of 10/6 weekly out of a wage of £6 15s. is quite a lot. We shall have £4 1s. left to live and bring up children on. We had budgeted to the last halfpenny when considering buying our house and now find it would be impossible to go ahead. We shall have to do either of three things:
(1) Break off our engagement and forget about marriage.
(2) Save for another 10 years to get a sufficiently high deposit to make the weekly repayments smaller.
(3) Emigrate.
Are Irishmen and women not supposed to get married? Must they go on saving for another ten years before they can get a home, and even then may not be able to afford to have children? Must we leave our own country to enable us to get married? Surely this order is wrong on moral grounds. God never meant any country to be governed like ours, and may He forgive those responsible for it.
I know your constituents can rely on you to show the drastic consequences of this measure to the Government."
Hear, hear!
Mr. Byrne
The letter concludes:—
"You have helped us before and will not fail us again; something must be done."
This letter is from an employed girl who is working over eight hours a day. She helped the young man to save the deposit and that is what they are faced with. I do implore the Minister to get ahead quickly and, thinking of those people who depend on him, on the Government and on the House, to put forward their case, to do so immediately. I understand that there are from 600 to 1,000 such people in the City of Dublin. I got a number of such cases and everybody in the House has got a number. The total number in all Ireland, I understand, does not exceed 2,500. I understand further that many are cases affecting Dublin County Council. These are nearly all City of Dublin boys and girls, workers living in the city in one or two rooms, who had to get away and go out to the county because the City of Dublin is being extended and there are no sites for private building in the centre. We in the corporation are going further. The City Manager and Dublin Corporation had some money in hand and as long as the money lasts he will with the approval and gratitude of the corporation deal sympathetically with these cases.
I give preference to Deputies who had similar questions down and call upon Deputy Collins.
I am grateful to Deputy Byrne for leaving me three minutes. I do not wish to appeal to the Minister on a sentimental basis; I want to make a forthright appeal for people who have already negotiated for a contract or entered into a contract to build their houses. I am more interested in the limited number of people in my own area who are affected by this. The Government profess to be anxious to keep the people in rural Ireland. Here is an opportunity for the Minister for Local Government who himself has sprung from rural Ireland and who himself understands very keenly the difficulty of the housing problem in rural Ireland. I want to make an appeal on behalf of the person who has bona fide entered into a contract and partly completed the contract for his house on the basis that his loan would be repayable at the rate of 3¾ per cent. The impact of the extra 10/- or 11/on the people for whom I am advocating is very serious because in the main they cannot compete with the type of wage or remuneration available to industrial workers or the people for whom my colleague Deputy Alderman Byrne has pleaded. There is a very limited number of cases in rural Ireland where the initial stage of the contract has been completed, where in many cases the building has been completed and where approval for a grant has been issued for a considerable time by the local authority. Their number is limited and this is not a recurrent responsibility. I would urge the Minister to examine them and to find some solution of the difficulty. I can appreciate that he may be in a position to say: “We have got the money at 5 per cent. and we cannot give it out at less.” I was wondering whether it would be possible for his Department to work out a scheme amending the Small Dwellings Act so as to extend the period for payment. That would minimise the impact now. They might find a compromise solution by extending the time. If they could find some measure to meet the people involved they could alleviate the full impact.
I am not making this appeal on any grounds other than the ground of justice to people who bona fide have committed themselves under the new repayment rates to payments a little in excess of their capacity to carry. I do that because I know that only a limited number of cases is involved, that it will not be a recurrent charge on the Minister's bounty and that it will give justice to very deserving people. Deputy Byrne has already pointed out that the people involved have shown an excellent spirit of citizenship because, not being able to obtain houses otherwise, they have undertaken the task of building their own homes.
On a point of order. As one who wants to support Deputy Byrne's appeal, may I say that surely an important discussion of this kind should not be confined to 30 minutes?
I am bound by the Standing Orders.
I want to protest against the limitation.
Might I say—
I am not going to allow any Deputy—
But suppose the Minister does not want ten minutes in which to reply, would it not then be possible to give other Deputies a minute or two?
The Minister may sacrifice the whole ten minutes, if he so desires.
I will take five minutes.
I just want to say that a limited number of my constituents are affected by this matter. I believe that the sudden decision on the Minister's part to increase the interest rate on loans issued under the Small Dwellings (Acquisition) Acts came as a complete bombshell to those people in my constituency who had already committed themselves in respect of the purchase of new houses. Many of the people involved studied the position very carefully from the point of view of financial expenses before they took the preliminary steps in the purchase of a new house. They made certain commitments on the understanding that they would be able to obtain a loan at the old rate of interest. Many of these people will not be able to bear the extra burden imposed upon them by the increase in the rate of interest. I feel there is a moral responsibility on the Minister to ensure that those people who have already committed themselves in this respect will not suffer as a result of the change in the rate of interest.
I want to add my voice to that of Deputy Byrne, Deputy S. Collins and Deputy McQuillan. I am concerned with those people who have applied to the Dublin County Council for loans under the Small Dwellings (Acquisition) Acts. There may be some doubt about it in the minds of some Deputies but I say that the number of people affected in Dublin City and County runs into well over 1,000. It is manifestly unjust that these people should be victimised—particularly those who had already made contractual agreements with builders and who, in many cases, had put down a deposit.
The Minister said to-day that he had written to local authorities asking them for an estimate of the expenditure that would be affected by those who had already made commitments. I submit that that is not enough. If the policy of increasing the loan charges to 5¾ per cent. is pursued by the Government it will have the effect of halting that particular end of the housing drive. The people affected are people who need houses and who want to build them for themselves. The Minister's proposal will deny them the opportunity of doing so with the result that they will be thrown back on the local authorities who, by force of circumstances, will have the task of providing houses for them. I suggest to the Minister that this step was very unwise and needs to be reconsidered immediately.
I want to make only two points. The first one is that we are in the middle of the financial year and that a programme of £35,000,000 capital development was announced on Budget day up to the 31st March next.
I feel that it should be financed from that programme which was announced at that time.
Secondly, I should like the Minister to finance the programme already under way in respect of those cases where applications have been made. If he could even finance the programme under way I think he would bring a certain measure of relief to those people who have already committed themselves.
In Dublin City we have decided that no person who applied prior to the 24th September will in any way be affected by the Order. I understand that the Dublin County Council have £200,000 which they can make available for people who had submitted applications. I think there is a moral responsibility on them to do so and that, in providing for the rest, they should have the full co-operation and support of the Minister.
Having listened to the speeches made in the past 25 minutes, I am forced to the conclusion that the Deputies were more interested in hearing themselves than in hearing my explanation: I should not like to accuse Deputy Byrne of such thoughts, but still I am sure he will not blame me if I am tempted to think so on this occasion.
The people of Dublin would not believe you, anyway.
I thought that I came away from Question Time having satisfied the reasonable requirements of those Deputies who addressed questions to me on this matter. I am just as alive to the whole position as any Deputy in the House and I should be just as anxious to observe any contract which I might enter into with an individual, as any of the Deputies who have spoken.
My first thought, as soon as the change was announced to local bodies, was for those people who had contractual obligations or who had entered into the type of arrangement to which Deputy Collins has referred. I was concerned as much as any Deputy to see to it that any such applications would be honoured to the fullest extent. I told the Deputies who addressed these questions to me that, in order to deal with the matter, I had sent a circular to local bodies asking them to certify the amounts which were involved in such contracts and such undertakings. I do not know what assurance Deputies desire me to give, in addition to that assurance which I have given them. One can, of course, in a matter of this kind, roam over the whole question of interest rates and so forth. One particular problem was raised in the questions which were addressed to me. I was concerned with that same problem following the announcement of the increase in the rate of interest. I have told the House the steps which I have taken in the matter. All that I can do, further to that, is to give to the Deputies, and to all those outside, the assurance that I will do my best to ensure that any contracts made or understandings arrived at between local bodies and outside individuals who have arranged to build or to purchase their own houses—where these contracts can be shown to have been made—will be honoured.
That is very reasonable.