I rise to speak in favour of this Bill although I think that, perhaps, I should require certain modifications. The question of valuation is not as simple as a number of Deputies seem to think. There is undoubtedly the fact that, on the one hand, if you increase the valuation immediately an improvement is carried out you penalise the man who improves his property whether it be commercial, private or agricultural. On the other hand, you have the Valuation Office—who are carrying out the wishes of the Government and, indeed, presumably, of successive Governments—saying that people who erect new premises must not expect to get away with the same old valuation. I think that that sums up the two schools of thought in connection with valuation and the dice has been loaded entirely against the individual who improves his property. I have seen that from a private point of view.
We all have met people who told us that they put up, in the suburbs, perhaps, a very small garage or some sort of a shed to hold a motor car. The majority of motor cars at the present day are necessary to people. They are not all by any means luxuries. Many people have to have motor cars for their business and, anyway, even if they have them as a luxury there is a very great industry there which it is the policy of the Government to encourage. We all have had experience of hearing people who put up garages in the suburbs complain bitterly of the increase in their valuation. That is the type of action we have had on the part of the Valuation Office which, in my opinion, has not been in the public interest. When I say "Valuation Office" I do not say so in any personal sense so far as the officials or the men who are carrying out their work are concerned. I use the term to describe that part of the Government which carries out governmental policy in relation to valuation. That is what the Valuation Office are doing and it is their duty to do it but, as a result of successive legislation in this matter, we have now arrived at a situation where initiative is stifled.
On the industrial and commercial side, every business person has to think very carefully what type of building he will put up and what improvements he will carry out. In many cases, business people have to consider the matter so carefully from the point of view of increase in valuation that they hinder business in what they eventually do—and that is something which is not to the benefit, in the main, of the people of this country nor does it help industrial or commercial policy.
The Minister for Lands referred to the poundage. He seems to think that the poundage would increase if legislation somewhat on the lines of this Bill were passed. I do not quite follow him on that because, actually, this Bill does not propose a reduction in the valuations: it proposes a freezing of increases in valuations for seven years. Personally, I am inclined to think that that might be too long a period unless you had a much more subtle definition of what really constitutes "increase".
I think the seven years might be too long but, at any rate, it is a step in the right direction because it enshrines in legislation the principle that you are going to give the individual who has carried out improvements, at some cost to himself, time to get over the cost of the improvements before you make him pay an increased rate and an increased income-tax on his improvements. The difficulty is that the individual who carries out these improvements, by virtue of the increase in valuation, is immediately hit. I can think straightaway of three different ways in which he is hit. His rates go up. He pays income-tax on five-fourths of his valuation immediately. That means that, for income-tax purposes, for every £1 increase in valuation, income-tax is levied on 25/-. The third immediate increase is in regard to his basic rate payable to the E.S.B.—that is, if he is a private individual. Therefore, there are three different things which hit him straightaway in addition to the cost of putting up the buildings themselves.
I think the House will agree that one of the ills which we suffer from in this country is that we have not got enough forms of employment. This House tries to encourage building and industry generally in every way it can and yet the results flowing from our valuation laws are completely at variance with the policy which is enshrined from time to time in the various Bills which come before this House. That is the most serious aspect of our valuation policy. It is not at all in keeping with our general industrial policy in these respects.
The Minister for Lands referred to income-tax on improvements being allowed. I think he is looking at the problem through rose-coloured spectacles, because that is not at all the experience of commercial people, or of the ordinary individual. You are not allowed to set off your expenses on improvements in matters like that. The question of capital expenditure on repairs and improvements is a very difficult and complicated one andit has to be gone into by skilled persons. Again, as a result of the governmental policy in that respect, I am afraid you do not find what the Minister for Land says, so the individual is hit when he carries out the improvements.
There is another matter in connection with valuations and I am sorry to see that it is not mentioned in this Bill, but perhaps it will be done in the Bill which apparently the Government contemplates bringing in. The valuations of premises all over the City of Dublin and the suburbs in many cases do not bear any real relation to the present value of the house. I know buildings which were valued 70 or 80 years ago when there was an idea that people had to pay a very big price for, I suppose, what they thought was the "snob" appeal of a district. If a district was what was then considered a high-class district, owing to the low rates which were then paid it did not much matter if the valuation of the house was set very high. You had these small little local councils which abounded in South County Dublin at that time. Every time a new building was put up in the area, they practically hung out a flag in the local town hall and said: "Here, boys, is another chance to get in £70 or £80 valuation." If the house was put up in a good district, a very high valuation went on it.
We now live in a period when rates, in the main, are round about 30/- in the £, or very nearly that in most cases, and there is this income-tax on five-fourths; so that a high valuation on a house hits the occupant of that house very heavily indeed now, whereas 70 or 80 years ago the rates did not matter so much.
There is the further point that in the intervening period what was a high-class district has now become, perhaps, a very different type of district. As a result of the high valuations in many cases the decay of certain districts is accelerated. You find big houses which have become nowadays difficult to maintain, difficult, in fact almost impossible, to staff. People have not the money for them and they are houses that were generally somewhat difficult to sell and expensive tolive in. Instead of a reduction of valuation taking place, there is the same high level of valuation levied on those houses. That again accelerates the decay of a neighbourhood. The more difficult houses are to sell, the more quickly the neighbourhood decays.
In that respect our policy on valuation is not used as an instrument of our general policy in respect of houses. I am sure there is no Party or individual in this House who feels that the building up of slums is something that is in the public interest. I do not think any of us wants to see the decay of property down to the level which some properties reached in the City of Dublin. If we can do anything to maintain the life of a number of our houses, I think we ought to do it. One of the ways of helping to maintain these larger and more awkward and expensive houses to run is to see that the valuation is not kept at the level it was when those houses were occupied by people of wealth. It only means that you are accelerating the decay of those houses and ensuring that they will be turned into tenements.
There are numbers of other matters in connection with valuations and general policy that I would like to touch on, but they are very complicated and it is difficult to see how a clear policy can be formulated on them. One of the matters arising from what I said at the beginning of my speech refers to the allowing of improvements. What we would like to see is improvements encouraged and at the same time radical changes also encouraged but paid for in increased valuations where such increased valuation is a fair and equitable thing. I am not asking that all improvements on buildings should be let off scot-free. I think that that would be something that we could not stand over because a firm might put up something that really would be a genuine extension to its property. That would be an addition on which firms would expect to pay a certain, though not a harsh, increase.
However, there are those highly debatable and, in fact, unjust increases of the type to which Deputy Flanagan has referred. I did not quite follow Deputy Flanagan in all he said butthere are these internal improvements in various business premises in regard to which an increase in valuation is not always merited. If a publican is charged on an increased valuation for a new counter, that to my mind is something that is very foolish and wrong especially where such improvements have been carried out in compliance with the Health Act or by virtue of other Acts which were passed here insisting on improvements in shops. I think that an increased valuation in respect of such improvements is something that seems to cut across our general industrial policy.
This is a very complicated problem, and up to the present I do not think our legislation has at all mirrored the complexity of it. I do not think our legislation has given any line to the Valuation Office in respect of such improvements. I should like if it were more generally known amongst the public and commercial people just what they could do without incurring increased valuations because very often they do something which they consider is in the same category as putting in a new pane of glass—I do not say it happens in the case of putting in a new pane of glass, but it may happen in the case of improvements that they regard as being akin to that —and then to their horror they find that their valuations are increased. The Valuation Office in these matters are doing their duty, I think, but a clearer policy should be laid down for them. The archaic principles underlying Valuation Acts of the past have been carried on to this day with very chaotic results.
I welcome this Bill, and I think it can be said for it that it has gingered up the Government to the extent that, apparently, it is going to bring in a Valuation Bill of its own. I am not very clear as to what the Minister for Lands said in regard to firms being allowed some reduction—I think he said a reduction in rates, but I did not catch it very clearly—for cleaning up premises in the City of Dublin. I should certainly be glad of that concession, and I think it is one that, if it were applied all over the country, would go a long way towards assisting employment and, secondly, would conduce towards the brightening up of our cities and towns. I am glad that this Bill has been introduced inasmuch as it has ventilated a very real problem which exists in relation to valuation. In conclusion I would say that we must have a valuation policy in keeping with modern conditions and which does not cut across other types of legislation enacted in this House.