asked the Minister for Local Government if he will state the number of applications for loans under the Small Dwellings (Acquisition) Acts, in respect of each housing authority, which were awaiting sanction at the date on which the increase in interest charges was announced.
Ceisteanna—Questions. Oral Answers. - Loans Under Small Dwellings (Acquisition) Acts.
The information requested is not available as applications for advances under the Small Dwellings Acquisition Acts are dealt with by housing authorities without reference to my Department.
Mr. Byrne
asked the Minister for Local Government if he is aware that a large number of applications were forwarded to county councils for loans under the Small Dwellings Acquisition Acts long before the recent National Loan was issued, that these applicants expected to secure loans at 3½ per cent. interest but have now been informed by the Dublin county council that the loans can only be granted at the higher rate of interest, thus increasing the liability of the borrowers by ten shillings per week, and that if the borrowers who have signed contracts with builders find themselves unable to proceed with the contract they may find themselves in the law courts for failure to fulfil their signed contract; and, if so, if he will instruct that loans be issued at the old rate of 3½ per cent.
asked the Minister for Local Government whether he is aware of the serious hardship caused to potential borrowers of money under the Small Dwellings Acquisition Acts by reason of the increased interest charges and whether with a view to encouraging house purchase as a desirable social policy, he will arrange with local authorities that money will be made available under the Small Dwellings Acquisition Acts at the former rate of interest.
asked the Minister for Local Government whether, in view of the unforeseen hardship that will 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, he will arrange that the new rate of interest will not be applied to those people.
asked the Minister for Local Government if he is aware of the grave injustice which the proposed increase of interest on loans under the Small Dwellings Acts imposes on persons who have applied for, and have been notified of the intention to grant them loans and signed definite contracts and agreements for the repayments of such loans; and that under the revised loan terms many borrowers will be unable to meet their commitments and will 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 will state what steps he proposes to take to relieve borrowers of this burden.
asked the Minister for Local Government if he has 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.
With your permission, A Cheann Comhairle, I propose to take Questions Nos. 98, 99, 100, 101 and 102 together. The making of advances under the Small Dwellings Acquisition Acts and the rate of interest to be charged on such advances to individual borrowers are matters for the local authorities, subject to Section 40 of the Housing (Amendment) Act, 1948, which provides that the rate of interest shall not exceed a ½ per cent. per annum in excess of the rate at which the local authority borrows for the purpose of making the advances. Where local authorities borrow from the local loans fund, the rate to be charged by them must be related to the rate for issues from the fund. Since the announcement of the variation of the interest rate, representations have been received by me regarding the position of local authorities and borrowers in respect of commitments of the nature referred to in some of the questions under reply. 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.
Would the Minister say whether, as a matter of principle, he will permit local authorities to grant the loans at the former rate of interest where application was made for the loan prior to the date of the announcement of the higher rate of interest? If he could do that it would relieve the considerable anxiety which is now being felt by persons who may have to borrow money at a rate of interest outside their capacity to pay.
I have issued a circular to all local authorities as follows:—
"I am directed by the Minister for Local Government to state that, following the issue of this Department's circular letter of the 3rd instant, notifying the giving by the Minister for Finance of a direction under the Local Loans Fund Act, 1935, increasing the rate of interest on issues from the fund made on or after 6th October, 1952, for the purpose of financing advances under the Small Dwellings Acquisition Acts, representations have been received from a number of housing authorities, and from persons directly concerned, regarding the position of housing authorities and the borrowers where advances under the Acts have been granted or promised at the old rate of interest.
In order to enable the matter to be examined generally, I am to request you to furnish a certificate of the amount, not met by issues made before the 6th instant from the Local Loans Fund, which is represented by any such undertakings given before the 6th instant, where binding commitments had been entered into before that date for the erection or purchasing of houses.
In notifying allocations of advances financed from the Local Loans Fund, some local authorities already make it clear to the borrowers that the rate of interest will be governed by that at which the amount of each advance was issued from the Fund. It is desirable that this practice should be adopted generally."
All I can say is that when these local authorities have submitted whatever information they have, all the facts and particulars, then, in consultation with my colleague who has agreed to treat sympathetically all applications where there is evidence that a commitment was entered into prior to the announcement of the higher rate, I will decide the matter.
Would the Minister regard as a commitment a provisional sanction for a loan? Would he say also when he hopes to be able to give a firm decision on the matter?
So many different types of case are sure to arise because of the different practices followed by local bodies that it would not be safe or wise at all to give an assurance in advance as to what would be regarded as a commitment. The assurance which I have given to the local bodies and to the House is that when these bodies have given the information which they think should be furnished as a result of this circular the facts and circumstances will be examined on the basis I have stated.
I take it that the Minister would agree that in a case where a deposit had been paid to a builder and an assurance given by the local authority to the applicant that a certain amount of money would be forthcoming by way of loan, that at least would constitute a commitment?
The Deputy will agree that if I said that this would be taken or that would be taken, I would be induced to cover all the factors which would weigh with me and my Department in determining the issue. I can only repeat here that a case where there was evidence of a fairly binding contractual obligation between the individual borrower and the council would be sympathetically treated.
Mr. Byrne
The Minister says a contract between the council and the borrower, but where a genuine case comes up of a man who has purchased a site and paid a deposit to a builder would that not be accepted?
Deputy Byrne is merely asking to give an assurance in the case raised by Deputy Dunne—it is somewhat different.
Would the Minister say when he hopes an assurance will be given?
To those who think they have a grievance in this matter all I can say is that if local bodies supply me with the information I requested from them my Department and I will try to make decisions and convey them as quickly as we can.
Mr. Byrne
I am not satisfied with the way the Minister is putting it. The Minister is talking about a case where the person and the local council had a contract, but he is not taking into consideration a case where a person received a pamphlet on the Small Dwellings Act and entered into a contract to buy a site from a builder; he had not applied to the council for a loan but had prepared his plans. Surely that unfortunate individual is not to lose his deposit of anything from £100 to £300?
Will Deputy Byrne tell the House whether he has deserted Fine Gael to join Fianna Fáil?
Mr. Byrne
Has that anything to do with this matter?
It has, very definitely.
Mr. Byrne
Has it anything to do with the 600 people in Dublin who are going to get married? You cannot cover up that you are trying to deceive those poor people, those 600 people.
Can the Minister for Finance not sink beneath the waves again? He would look better
Is that to be taken as final? Will no further consideration be given to the matter as far as its effect on future building is concerned, and its effect on persons of middle income who would make a contribution towards their own house?
I would have no hesitation in giving a reply to that question if it were relevant.
I will put down the question on the Order Paper.
Mr. Byrne
With your permission, a Leas-Cheann Comhairle, I propose to raise this matter on the Adjournment, in view of the unsatisfactory reply of the Minister.
Whenever the Minister for Finance puts in an oar he starts a row.
The answers to Questions Nos. 103 to 108 in the name of Deputy S. Collins will be included in the Official Report.
In view of the fact that the Minister for Finance has no further questions to answer, could he be spared from the House?
Would he go away? That is a simple petition. He would go away among universal rejoicing.
Does Deputy Dillon talk in that manner at meetings of the Ancient Order of Hibernians?
Is the Minister's remark relevant to the question?
It is a calf jobber's reply—not a bad one.