Dáil Éireann díospóireacht -
Wednesday, 3 Feb 1971

Vol. 251 No. 4

Private Members' Business. - Differential Rents: Motion (Resumed).

Debate resumed on the following motion:

That Dáil Éireann calls on the Government to undertake an immediate examination of the system of differential rents, particularly in relation to the hardship and injustices caused by the implementation of the B scale in Dublin.

—(Deputy O'Connell.)

Mr. Ryan

Last night I was endeavouring to explain that as well-intentioned as those who conceived the system of differential rents may have been much of the good intent has been defeated by the fact that the operation of the system is trimmed to suit bureaucratic convenience and accordingly it quite frequently creates as many family problems as it was intended to solve. It is often the cause of family rows. It sets off misunderstandings between husbands and wives. It causes grave disputes between parents and their children. It is possible, with a little good will on the part of the public authority, to devise a fairer system.

Nobody here is suggesting, certainly the tenants are not suggesting, that they should get housing accommodation without payment of a fair charge for it. I think it is possible to amend the schemes so that there is no loss of revenue to the local authorities concerned or to the State, but there is a more equitable distribution of the load. I suggest the Minister set up a committee, commission, council or some other body to inquire into the whole operation of the system of differential rents. Without speaking disrespectfully of other councils and commissions of inquiry, I believe many of them have sat on problems of far less importance than the issue of differential rents which affects over 100,000 families, many of them in a grievous way, to the great detriment of the family welfare.

On that inquiry I suggest there should be a representative of the tenants, a qualified social worker acquainted with the many problems created by the system of differential rents, a representative of the Minister for Local Government, a representative from at least one local authority—possibly Dublin Corporation as it is the largest local authority landlord—and, as the system of differential rents is, in effect, a tax, there should also be a representative of the Revenue Commissioners.

A great deal of the trouble arises because the differential rents system which is supposed to be a system of charging and collecting rents which would be a direct reflection on people's income, is not operated that way. The PAYE system of income tax was brought in because the Revenue Commissioners acknowledged that a system whereby income tax was levied twice a year caused many problems and created great difficulties in collection, not only for the individual, who had the burden imposed on him, but also for the public authority. Similarly, as I said last night much of the trouble arises here because people are required to pay a higher rent based upon a higher income which they were receiving at an earlier date. If a scheme could be devised whereby a person could be assessed at the time he is being paid a higher salary and be charged and have the money collected at that time, then the immense arrears which are so often imposed would not arise.

One of the great difficulties, and I am sure the Minister must be aware of this, is that people sometimes receive bills from local authorities running into two or even three figures without any explanation as to the manner in which the bill has been assessed. It is no answer to say that a tenant when he goes into the house will receive a detailed statement as to how the differential rent is to be calculated. I, with respect, suggest that every local authority should be under statutory obligation, when assessing the rent, to furnish a statement showing precisely the manner in which it has been assessed, what allowances have been given, and what proportion of the income is being made taxable. This is something the Revenue Commissioners must do when they are assessing income tax.

It must also be done by private landlords, who under the Rent Restrictions Act, cannot charge an increased rent to tenants without spelling out in a statutory form precisely what the basic rent is, the percentage increase for rates, the percentage increase for repairs, improvements and so forth. Any tenant who receives a notice from a private landlord without these detailed particulars is entitled to refuse to pay. It is extraordinary that legislators and their advisers are unable to devise an easy system for the calculation of rents. The rent restrictions code is supposed to operate so that tenants of private landlords cannot have exorbitant rents imposed on them. It is also supposed to operate in such a way that tenants may know what rent they have to pay. The truth is that the rent restrictions code is so intricate that neither tenant nor landlord know what the proper rent is without consulting a solicitor. Even solicitors have found it beyond them and have had to consult accountants.

The differential rents system is not much better. The only difference is that it is not calculated in percentages except for the assessment of one-sixth of certain figures. This is particularly difficult for people, who do not have an advanced educational standard, such as unskilled labourers, who left school at 14 years of age. I would urge the Minister to have a word with local authorities to ensure that there is a much better system of communication so that when rents are charged tenants are given a clear and detailed statement of how the rent has been charged.

We cannot leave this issue of differential rents without considering what is the main cause for the fantastically high rents which now operate on the higher scale of differential rents. The fact is that the ceiling of differential rents has jumped by leaps and bounds far beyond the cost of building the houses or the interest rates or the load of taxation. The principal jump of all costings has been in the ceiling of differential rents.

This has arisen because under the Fianna Fáil Government we are paying a much smaller contribution from the national Exchequer to local authorities to subsidise the cost and the interest charged on housing loans. In fact, at the present time we have the smallest contribution from the national Exchequer towards housing of any European country. That is a deplorable situation when one considers that this country has more decrepit old houses than any other comparable country in Europe. Our present system is so devised that it acts as a disincentive to local authorities to build houses because every new house that they build imposes an additional charge on the local revenue, a charge which the differential rents system itself acknowledges is beyond the capacity of the majority of tenants to pay. If the Minister is not disposed to amend the system in the reasonable way that many of us have suggested, if he is not disposed to have an inquiry or to set up some committee to look into the matter, I would urge upon him then at least to do what he is in duty bound to do and that is to ensure that his colleagues the Minister for Finance and the Government give a much larger contribution from national revenue towards the cost of housing so that our people, in our time, and without having to marry early and breed like rabbits and contract a contagious disease, may be housed in decent housing befitting their dignity and their rights as human beings.

Mr. M. O'Leary

Our motion simply requests the Minister to examine this whole question to see whether we are right in our claim that the differential rents system is causing immense dissatisfaction or whether, in fact. the Minister is right in his assertion that there is no dissatisfaction and that people, by and large, are quite happy and satisfied with the way things are.

We would be reminded in many quarters of the Government Party that Jim Larkin was the person who first lent his weight behind the idea of differential rents and its essential equity as a fair and simple means of ensuring that justice is done in the matter of paying rents, but like many things which may be perfect in theory in actual practice contention arises. Anybody who has any local authority tenants in his constituency is aware, if he is to believe his ears, of a great deal of hardship, worry and anxiety caused by the method of levying rent in the various local authorities. In the past year we have had enough inquiries into this and that. There is, in fact, one going ahead at the moment in the Dáil itself. Surely in regards to a problem of which there is so much evidence with so many people talking about the worry it causes them, a request for an inquiry is a request worthy of serious consideration.

I know the Department of Local Government is one which has registered defeat on several fronts over the last few years. The previous incumbent of the office of Minister for Local Government admitted his total failure to control the price of building land. He and his predecessor, Deputy Blaney, showed evidence that they were both under the impression that people in local authority houses were somehow not paying economic rents. They both expressed this view at various times and left no doubt in anybody's mind that they were exponents of a new rent policy for local authority housing. a rent policy which they described as making it more economic, a rent policy which in practice increased the amount of rent of local authority houses. This was the actual result of their belief in more economic rents. When one took away the wrapping of their various proposals in this area what was left was a move for increased rents based on their supposition that local authority tenants were not paying economic rents. This, of course, is the raison d'etre for the present differential rents system. It is an attempt to continue putting up these rents. The maximum is moving ever upwards, and it is the obscurity of the manner of assessing the rent and the manifest unfairness of its working out in practice, which is causing most concern.

Other speakers have mentioned the problem of overtime being included in the assessment of rent. This has the effect that one may be paying one's rent at what one thinks is the weekly rate but some months later one gets a note from the corporation saying that one is in arrears. One is in arrears because on calculation they find that one's bonus over a particular period means that one's rent has gone up. One may, at the end of a few months, find oneself saddled with a bill for £20 or £30 to be paid as soon as possible. These amounts may appear small and derisory perhaps to many professional people but how a bill for £20 or £30 coming out the clouds is to be paid is a real problem for many families.

I recall the NATO speaking especially about the large flat schemes in Ballymun and so on where people, in fact, as a result of the mysterious manner of working out the rent and unforeseen debts arising were being caused grave anxiety and that it was not any exaggeration to say that suicide attempts were made in several cases. This is not an exaggeration. There have been such attempts and NATO themselves if the Minister will meet them could give him actual case histories. Deputy Dowling is smiling but if he has authentic files on the rent problems of people he will know——

Mr. Dowling

A man tried to commit suicide down in Liberty Hall too.

Mr. M. O'Leary

——that the problem is serious enough and——

Mr. Dowling

That was a serious situation.

Mr. M. O'Leary

——that, in fact, it has brought about this attitude on the part of tenants, extreme anxiety leading in certain cases of severe financial trouble to suicide attempts. It certainly has led—and this may cause Deputy Dowling to smile again—to the breakup of many families. He probably is aware of that also from his files. It has caused husbands to depart to England or abroad without any notice, to go away because they no longer have the courage to face a mound of financial problems. Where human beings are involved in such grave hardship, where debts appear to come at intervals of every three months or so based on the bonus earnings of the husband, where such a scheme in its operation, while in theory it might appear to be just, causes such hardship, there is surely a strong case to be made for an inquiry into it.

Most industrial workers will admit their incomprehension of the manner in which their wages are made up each week. There are three or four different criteria used in the assessment of any man's wage packet in any one week. If he is baffled by the assessment of his weekly salary the bafflement is equally great in regard to the manner in which rent is assessed on his income.

The basic departmental feeling on the whole thing is that local authority tenants are getting away with murder. There is an illusion in the official mind that there are people who are being subsidised and should not be in that category of housing. This is obviously the root of the Department's approach to differential rents. This is the motivation which makes the Department unreceptive to the idea of having an inquiry into this area. The Department's mind is already closed on this, already made up that in fact the present rent system must be stiffened. Though this differential rent system will apply to all new tenancies there is a popular illusion that these rents do not amount to much. In fact they can at present amount to one-third of a man's average weekly earnings. Such amounts of rents are being paid in respect of flats which do not approximate to standards which we would all desire in housing in 1971. This applies to all new tenancies occurring in any part of the city area. It means that in many cases people are paying rents which compared with the amounts being paid for other forms of housing—and this for a standard of flat which is by no means up to that available in 1971— for other categories of persons are very high.

We ask that the Minister should consult with NATO, see from the tenants' organisation what would be the appropriate way of getting ahead with this inquiry, consult with the local authorities. Dublin Corporation itself is well aware, the Rents Section especially, of the kind of cases coming to them week in week out. We had an inquiry last year into the Seven Days programme on money lending. Evidence was given to that tribunal that much of the quest for loans arose out of the demand to meet rent commitments.

This is a social problem, where a piece of legislation may have to be reviewed. We did it in the case of the Constitution two years ago. I would say that there is a case for an examination of the differential rents method and that we should go ahead and set up this inquiry. If it merely serves to inform the Minister and his officials of the true state of affairs among local authority tenants it will have served its purpose. We do not suggest that the whole idea of the differential system of payment should be scrapped but we certainly question certain features of the present system of levying rent, the idea that the earnings of all members of the family be involved in the assessment of rent, how exactly this affects the family structure itself, the whole philosophy, in fact, of a means test. While in theory the ability to pay should perhaps be the criterion the fact is that ability to pay and the criterion of a means test appear to operate only at one end of the incomes scale. It appears that the bureaucracy flourishes chiefly at the expense of the lower income groups. It appears that those people with least money need the most examination to see what they do with the little they have; those with the most money are most free of surveillance by the society in which they operate. Those who have the cash to speculate in land and housing go without the attention of inspectors or any recognition by the Department of Local Government. The Department, in the last incumbent's words, declares itself powerless to do anything about it.

We have a study group now set up by the present Minister. Of course I do not subscribe to the view that the present Minister is an energetic go-getter. The present Minister, in my view, has shown his chief talent in geting his image on our national press, radio and television. This does not mean the same thing to me as actually getting down to the job. However, that may be an old-fashioned view of what Ministers should do. Perhaps the Minister understands the power of public relations to be a more important asset in holding on to his job than doing any work. He may be right in that. I do not know.

Minister for Local Government (Mr. Molloy)

It seems to bother the Deputy.

Mr. M. O'Leary

It does not bother me in the least. I do not know whether it bothers the Minister's colleagues in the Cabinet but it does not bother me. There is plenty of space for both of us.

I am making the point that here is an area where real work lies in store for a Minister who is serious about it. It is not an area where one can get one's PRO to put out a puff image for a few weeks and then, as in the case of cars being withdrawn from the centre of Dublin, the plan evaporates. Here is a real case of hardship. Here are people who are not interested in seeing the Minister's photograph. They are far more interested in seeing the Minister set up an inquiry. They are far more interested in meeting the Minister with his officials to tell him exactly what the facts of their problems are.

The Minister is in need of such information, coming as he does from a wide expansive rural constituency, and possibly not being so well aware of the intensity of feeling on this matter, and probably not being so well aware of the urban context of this problem and the way it presents itself in large blocks of flats. Here is ample scope for the Minister to reverse the dismal record of his predecessor by setting up an inquiry to see if there is a problem.

If one is young in a job one does not have to take the advice of veteran officials in one's Department that things are best left the way they are. If he is anxious about carving out a career which would seem to express his commitment to social justice, I would commend the Minister to this area right away. Here is an issue which calls for attention and which calls for an inquiry. It need not be a very expensive inquiry. We are making no demands for High Court judges or for any commitment as to the personnel needed. We merely say the matter should be investigated and then the result should lead either to action on the part of the Department or leaving things as they are at present.

We say that things are bad at present and here we disagree with the official viewpoint. Things are bad. This is not like a Minister for Agriculture talking about the feelings of the farmers and blowing away the problems as if they did not exist. From our own contact with tenants, we know there is real dissatisfaction about the way rents are levied in local authority housing at present. Tenants are not ideal material for agitation. They are not people who are ready to form picket lines at the drop of a hat. They are ordinary hard-working people. They have more problems on their minds than marching up and down the streets, or putting placards on buildings, or anything like that. That they were driven into some of the disputes we have seen over the past year is ample testimony of their feeling of frustration because of the way things are going under this differential rent scheme.

If we do nothing I cannot see the dissatisfaction disappearing; I cannot see the frustrations disappearing; I cannot see the hardships disappearing. None of us would like to see a whole category of people having to take steps which will break the law according to the legislation we are now being asked to pass. As I understand it, such is the temper amongst the tenants at present that, if nothing is done about it, and if there is not evidence of official concern this will happen. So far there has been no evidence of any official concern. The official side is adamant in its belief that nothing is wrong and certain in the belief that the system of levying rents is fair.

Unfortunately, the view of the people at the other end, the lower income groups, is different. Their view is that something is very gravely wrong. We do not deny that rents must bear a certain relationship to the cost of living. Whether this means that the method by which rent was paid 20 years ago is appropriate to how it should be paid in 1971 and that the method of levying it should be the same is an interesting question and one that merits examination. It has been said to me that we have a higher incidence of married women being forced to work as a result of the differential rent system. This may or may not be substantiated by this inquiry. I have been told that people have been forced to take two jobs. The chief feeling I have from the differential rent system is that of being watched. There is a caged-in feeling. There is a contradiction in our society where it is felt that the lower-income groups need supervisors, inspectors and means test operators. How much does this bureaucratic system cost us? How much does it cost administratively to collect the rent under the present system? If we are talking about making the rents economic, there seems to be some contradiction between the costs of the bureaucratic system needed for the work, the cost of servicing rent collecting, and the claim that the rent is not sufficiently high.

There are a number of issues which we believe could be examined by the inquiry we suggested. If this inquiry should hold the view, which the Minister has, that there is no dissatisfaction and that the local authority tenants in the country are satisfied, the Minister could then say that there is no problem or that the only problem is being caused by the agitators or people who are distressed for one reason or another. The Minister could then say that there is not anything inequitable in the system. We suggest there is a place for an inquiry when the discrepancy between the official verdict and our verdict after contact with the tenants is so great.

I would commend the Minister to the suggestion made in our motion that the inquiry be set up; the Minister should not be afraid to set up such an inquiry. The Minister will find thoughtful people of all parties agreeing with the wisdom of setting it up. If he is serious about social justice the Minister should find this a profitable area to engage in. The Minister has suggested that this is an area in which he is interested. This is more important than a ban on motor car traffic in Dublin. The setting up of this inquiry would do much to reconcile local authority tenants to the manner in which rent is levied at present. The difference between the local authority view and that of the tenants is great at present. We presumably will have a local authority in Dublin again some time. A local authority should be an example of local democracy in action. There cannot be proper local democracy where the levying of rents is ordained by the central authority and the method of such collection declared to be unchangeable.

The Minister may find that only small changes are needed. He may find a category of people in regard to whom a new method of levying rent would be more applicable. We have put down the motion asking the official side at least to subject the opinion that there are no grounds for dissatisfaction and no problem to an independent tribunal. We seek the facts and not opinions or pronouncements by the Minister about the situation as he sees it. I do not know the number of tenants in the bailiwick of Galway. Perhaps the people in Galway are of the same cheery disposition as the Minister. While speaking on television and radio some of them said bitter things about the Minister. They may have changed their minds by now.

Mr. Molloy

Would the Deputy care to say what I did that time? I heard adverse comments. Did the Deputy disagree with the action taken?

Mr. M. O'Leary

The dissatisfaction was about the change of policy on the part of the Minister. People were objecting to a Minister who said one thing one year and then did another thing.

Mr. Molloy

The Deputy is avoiding the issue.

Mr. M. O'Leary

People said that Deputy Molloy told them a certain thing a year ago and that he has changed his mind this year.

Mr. Molloy

That is a misquotation.

Mr. M. O'Leary

I am quoting from memory what I heard on television. The position is that there may be no problem in Galway. The Minister may be correct in thinking that. There may be no need for an inquiry there. From our experience in other parts of the country, and especially Dublin—and the Minister will note that the motion is down in the names of Dublin Deputies—we are aware of the intensity of feeling on this matter. This applies to the new flats at Ballymun. Dublin has one-third of its population in local authority housing, the highest proportion in such housing in any capital in Europe. We can at least look for an inquiry into the problem about which so many people have complained. We have asked the Minister and his officials to set up the inquiry; we should have consultation with the representative organisations such as NATO. We should see what they have to say. The Minister has had his differences in the past with the personnel of NATO. The setting up of an inquiry could be a significant bridge to better relations with that organisation. It would demonstrate that the official side are in no way against the idea of improving the system of levying rent. The official side could say that they have no intention of abolishing rents or that rents should relate to costs, but they should be mature enough to abandon any position which, in the view of the members of the inquiry, should be discarded. If these methods of payment which are seen to be unsatisfactory are discarded this would not, in my opinion, damage their interests ultimately. It would mean changing where change was necessary and would improve the situation immensely. This is why we ask for the inquiry.

Minister for Local Government (Mr. Molloy)

I was very interested when I saw the terms of this motion tabled in the name of the Labour Party. I am asked in this motion to undertake an immediate examination of the differential renting system, particularly in relation to the hardships and injustices caused by the implementation of the B scale in Dublin. I listened with great interest to the debate since I expected Deputies to highlight the alleged hardships and injustices occurring under the operation of the B scale, the hardships and injustices about which they were personally aware, but so far I have not heard them cite either hardships or injustices.

When one talks about the differential renting system one must keep in mind the fact that the system is devised in order to ensure that the tenant will pay a certain sum in relation to his income for his accommodation. There are 8,258 tenants on the B scale in Dublin. That is the latest figure I have got. There are 30,849 on differential renting system, including the B scale. If the rent paid is to relate to income then there must be an individual assessment in each case. The corporation are, therefore, involved in assessing 30,849 different incomes. If there are hardships and injustices they must affect tenants individually in the paying of their rents under the differential renting system. If it could be shown to me that there was genuine hardship, I would be very anxious to take steps——

Dr. Browne

The Minister used the word "tenant". Does he mean "family"?

Mr. Molloy

Yes, the family. The earnings of the family are taken into consideration when the tenant is being assessed, but there are certain concessions. I am concerned to seek out cases of genuine hardship under the differential rent system. I have made certain statements in public. I have had discussions with the National Association of Tenants' Organisations and I have written to them and I have mentioned my desire to be made aware of genuine cases of hardship. So far I have not been made aware of any such cases. I have not been told of any family suffering genuine hardship because of the B scale of rents, or because of any of the other scales that operate under the differential rent system.

When the system was originally introduced many of the tenants did not fully understand how it operated. One of the things the tenant must bear in mind is the fact that the corporation have to relate rent to income. That is stated very clearly on the form the tenant signs; he must inform the corporation whenever his income changes. A situation did exist in which tenants forgot to inform the corporation that their incomes had gone up and, when the six-monthly review took place, the increase came to light and the tenants were charged arrears of rent. They found themselves faced with rather large sums. I do not know whether it is unfair, unjust or whether it constitutes a hardship to oblige a tenant to inform the corporation of changes in income because I can see no way in which it can be done successfully. I think that obligation is now understood. It is up to the tenant to notify the corporation of any change in income without delay because the corporation are quite willing to adjust the rent if they are so notified. Lack of understanding initially was the cause of tenants receiving demands for large sums of rent in arrears, sums they could not meet. They were all circularised about this and I believe that the system is now fully understood and we do not have the same problems as we had some time ago.

I would ask Deputies opposite to consider the fact that I have an obligation and a responsibility to those occupying local authority houses. I have a somewhat greater responsibility and obligation to those who are not yet housed. Many of the claims made in relation to the differential rent system are, in fact, seeking further reductions in the rents that have to be paid. I have examined the whole position very thoroughly and I have satisfied myself that there is no great financial burden on any family as a result of the differential rent system provided the corporation are kept informed as to changes in income. The system is fair to the tenants at all times.

I do not want to go into the concessions. I dealt with them before on the Adjournment Debate. They are very generous. Under the 1970 scale a man with four children—the average sized family—would want an income of £47 10s per week to pay the maximum rent. One never hears this when people talk about the differential rent system. If I grant more and more concessions the only result will be to reduce the number of houses being constructed in any one year. Local authority houses are financed in three ways: (1) by State subsidy; (2) by the contribution from the rent the tenant pays and (3) by a contribution from the rates. The subsidy and the rate contribution totalled £9.7 million last year. Approximately £5 million of that was borne by the rates and £4.7 million by the State. It is our primary objective to provide houses for every family at a rent the family can afford. We can do this only if we manage the finances that are available to us in an equitable fashion. If the money used for subsidy is increased there will be a big reduction in the actual number of houses built.

For instance, that £9.7 million, applied to subsidies for local authority houses could have enabled us in any one year to build 3,000 houses, approximately, if used for house construction. To put that further, since 1960-61 a total of £59 million has been paid out in subsidies. That would have enabled 20,000 additional houses to be built. I do not say it should all have been spent on building houses but the subsidies are being spent to enable those who go to live in local authority houses to pay a rent they can afford. In all my studies of the differential renting system I am personally satisfied that tenants are only being asked to pay a rent they can afford. I was anxious that if I were wrong in that, it should be pointed out to me by some member of the Labour Party or of NATO because I invited NATO to point out individual cases of genuine hardship to me, This has not been the case. Information of that nature has not been made available to me. Therefore, I must assume that my own conclusions are correct in regard to this point.

If there were no subsidies and if everybody had to pay the full economic rent you would have an average rent of approximately £7 per week. That would cover only a fairly modest house. The average rent in Dublin is only £2 per week and the average for the whole country, including Dublin, is only £1 per week. By international standards that contribution is very low. One must ask oneself if those who have been lucky enough, if you like, to be in occupation of local authority houses already, are paying a fair amount for the accommodation they are getting. Are they making a fair contribution towards the cost of providing the house in which they live and towards financing housing generally? If one makes international comparisons one could not say the burden is bearing too heavily on the average tenant here.

I think I have shown that our rents are not generally excessive at an average of £1. We have often been criticised for not raising our rents to a much more realistic level. As there is not an overall burden on tenants and no individual cases of genuine hardship, I wonder why the motion, in relation to hardship and injustices being caused by the implementation in particular of these B scale rents in Dublin was put down. I had hoped for enlightenment from Labour Deputies. It would be great if the Minister and the Government could provide all the local authority houses free to everybody but I do not think anybody would support or expect that.

There is no financial hardship now but there was some difficulty in the operation of the system because many of the tenants did not understand their obligation to make changes in their income known to the corporation when the change came about instead of leaving it until the six months review has taken place and then be charged with arrears. Legally, the corporation had to collect the arrears. The tenant had in fact been in receipt of a greater income than that notified to the corporation and he had failed to inform them when his income had substantially changed.

Since I became Minister for Local Government I have spent a good deal of time examining the differential rent system. It was the first problem on which I put my finger. I received the NATO representation at a very early stage, about the beginning of July. There are many local authority tenants under the differential rent system in my own city of Galway. Many are personally known to me and I am available to all of them—only at weekends now because of my duties in Dublin—and I am not personally aware of any burning hardship.

I know there are fears among some of the tenants in Galway that their rents will be jacked up to some enormous figure but that is a false fear based on rumour. There is no genuine hardship with the differential rent system that operates in Galway. I am happy to assure members of the Labour Party who thought this situation serious enough to warrant this motion and the use of Private Members' Time to discuss it, of my own personal concern and desire to be made aware of where the snags exist.

To deal very quickly with some of the points made: Deputy O'Connell made a statement that houses and flats built since 1970 in Dublin have maximum rents of £7 and £8 a week and that under Cork Corporation rents go up to £8 per week. That is a rather misleading statement and Deputy O'Connell knows much more about the differential rent system than to claim that such a statement is correct. The maximum rent in the Dublin Corporation's 1970 scheme varies from £4 5s a week for a one-room dwelling to £7 5s per week for a 5-room-or-more dwelling. These rents are based on the cost of providing and maintaining the houses built in 1970 and the cost of flats, which is more than twice these amounts. A 5-room flat in Dublin now costs £8,000.

Dr. O'Connell

These people do not want to buy flats.

Mr. Molloy

The economic rent of the £8,000 flat would be £15 10s per week.

Dr. O'Connell

Would the Minister live in it?

Mr. Molloy

I am telling the Deputy the economic facts of the situation and what it costs to build these flats. The economic rent of this £8,000 flat would be £15 10s; but the maximum rent under the 1970 scheme is £7 5s, and that £7 5s must relate to the person's income. I have already given the example that to pay £7 5s in the case of an average family with four children, the householder would require to have an income of £47 10s a week.

Dr. O'Connell

That statement is completely illogical.

Mr. Molloy

It is pure fact.

Dr. O'Connell

Who wants to live at the top of Ballymun in a £15 10s. flat? Why do you not build houses and scrap the flats?

Mr. Molloy

I am surprised at Deputy O'Connell as a Dublin Deputy. When I mention the 1970 scheme he should know it does not apply to Ballymun at all. It applies to houses built since November, 1970.

(Interruptions.)

Mr. Molloy

There are no high rise flats under construction since November, 1970. Six-storey and eight-storey are about the highest and the people are quite pleased with that accommodation. I have been very impressed; I have visited these places and the families and they are quite happy and very contented and I should like to see many more of this type of flat built. I should like to see this type of flat erected in my own city of Galway as many tenants there would be very happy, I am sure, to get this type of accommodation.

I want to stress that it is individual tenants who are involved, over 30,000 of them, and a separate assessment must be made in each case. That throws quite a burden on the corporation. I do not deny that in dealing with this number of people every week of the year difficulties could arise and that mistakes could be made. We are all quite capable of making mistakes from time to time. I would excuse the corporation on that score, if there were certain mistakes or if certain difficulties arose for certain types of tenants, but I would be concerned if some special difficulty was being experienced by all tenants and I have no evidence that that exists.

Deputy Ryan said that some of the unrest to which he referred arises because people are required under the differential rent scheme to pay different rents for the same accommodation. That is rather a strange argument for Deputy Ryan to make. It is difficult to know what exactly he wants. The only alternative to the differential renting system is a fixed rent scheme. If Deputy Ryan was advocating fixed rents, and I doubt it, then with all the hardship that this could bring on a person of a very low income, such as an old age pensioner or a widow, I just wonder what kind of just society he is seeking. The injustices of a fixed rent system are so obvious that I did not think I would find anybody advocating it at this stage and there is, I think, general acceptance on the part of all parties to agree in principle with the differential rent scheme.

Dr. O'Connell

Is the Minister aware that a man with a total income of £6 14s 6d pays £2 17s 6d under the differential rent scheme?

Acting Chairman (Mr. Tully)

The Minister must be allowed to make his speech. He has only got eight minutes and Deputy O'Connell will get 15 minutes to reply.

Mr. Molloy

What did the Deputy say?

Acting Chairman

The Minister is inviting interruptions now.

Dr. O'Connell

A man with £6 14s 6d is paying £2 17s 6d rent under the differential rent scheme.

Mr. Molloy

Which scheme?

Dr. O'Connell

In St. Michael's estate. He is an invalid. I do not know which scheme.

Mr. Molloy

Why does the Deputy not advise——

Mr. O'Connell

I wrote to the Taoiseach. They laughed at me here and said it was impossible but a corporation official said it was possible.

Mr. Molloy

The Deputy can advise this gentleman on £6 14s to opt for the 1970 scheme in which a hardship clause applies and he can have his rent reduced to a few shillings.

Dr. O'Connell

I wrote to the Taoiseach about this and——

Acting Chairman

The Minister has five minutes left so I think he should be allowed continue.

Mr. Molloy

I want to deal with some of the points which were made as being causes of dissatisfaction, injustice and hardship. Deputy Ryan said that the differential rent scheme does not take account of normal family outgoings such as medical expenses. We must accept that medical expenses are normal household expenses. We cannot expect to go through life with a completely clean bill of health all the time and in practice medical expenses do arise from time to time especially in families where there are young children. Where a tenant becomes liable to meet these expenses himself, if his income is such that he is liable to pay medical expenses, well, then hardship should not normally apply as his income is of that size. However, if there are exceptional expenses involved and if he reported this to the local authority his case would be dealt with sympathetically and considered under the hardship clause which is generally incorporated in all differenial rent schemes. Deputy Dr. O'Connell made the point that tenants should not have to pay for central heating but——

Dr. O'Connell

I said for all the year round, for central heating over which they have no control.

Mr. Molloy

Again, this is a normal weekly expense in households that they have to heat the house and it is not really relevant to the house rent. The charge of 17/3 a week for central heating in a flat in Ballymun is about half the average weekly running cost of central heating in private dwellings of comparable size. If the flats were not centrally heated then the tenant would be obliged to provide some other form of heating.

Dr. O'Connell

Over which he would have some control.

Mr. Molloy

The charge is an element in the total payment and should not really be termed rent because it would arise if they had an ordinary house or flat without central heating.

Dr. O'Connell

But they could adjust it to their own economic resources.

Mr. Molloy

But they are getting hot water and so on from central heating. There are many benefits to be derived from central heating. However, I do not think it is a big point and——

Dr. O'Connell

No.

Mr. Molloy

——I do not think the Deputy was using it to justify the motion. I am very anxious to hear what the justification is. I think I dealt with the question of the 13 weekly intervals. Actually it is every six months that the corporation review the income of the tenant. They will do so quarterly if the tenant requests it.

Dr. O'Connell

Does the Minister think this is harsh?

Mr. Molloy

Is the Deputy arguing that they should review the rents more often or only once a year? I do not think the Deputy was here when I said that if there is a substantial change in the tenants income he is obliged under the terms of the agreement to inform the corporation and so ensure, by doing it immediately, that his rent continues to relate to his income. There is, anyway, a review of his income every six months and, if he requests it, a review every three months. In between those periods he can inform them of any substantial change in his income and have his rent adjusted. This is the whole trouble and this is where the dissatisfaction arose in the past, because tenants let it go and did not realise how important it was to inform the corporation of a change in income. Then they got a big bill and many of them found it difficult to pay it. I think it will be accepted that most tenants are now fully aware of this and they inform the corporation immediately.

I will agree that that was a real cause of dissatisfaction, frustration and heartache in many homes where they forgot to inform the corporation of the change. There has been a vast improvement and we do not have as many cases now as before. The Deputy mentioned about the tenant or his wife having to attend at Jervis Street to discuss differential rent. It is only in exceptional circumstances that the corporation insist that the tenant attend at Jervis Street.

Dr. O'Connell

Let me tell the Minister——

Mr. Molloy

Now, the Deputy will be able to make his reply. These exceptional cases will be, first of all, where the tenant claims he is unemployed, so therefore he would not be taken away from work and so there would be no problem. Secondly, if he is self-employed and his wife claims she does not know his earnings then it is reasonable that he should attend and explain the details of his income. That would require taking time off from his business but it would be in his own interests. Another case is where a husband has been giving his wife money to pay the rent but she has spent the money on something else. This can happen. In such cases there is a reasonable stand taken by the corporation. It is in the interests of the people in such cases to attend.

Dr. O'Connell

The Minister is very naïve.

Mr. Molloy

I am explaining how it should be operated. I have continually invited——

Dr. Cruise-O'Brien

Why not have an inquiry into how it does operate?

Mr. Molloy

No. Nobody——

Acting Chairman

I am sorry, the Minister's time is up.

Mr. Molloy

I will conclude on that. I have invited Deputies, associations and interested members of the public to submit complaints of hardship or injustice. I do not want to set myself up as a kind of bureau for receiving complaints about the differential renting system but I would know from the first half-dozen cases that I got whether there was a genuine cause for some kind of inquiry, of investigation or direction from the Minister to the local authorities. I have not received any cases and for that reason I must come to the conclusion that there is no genuine hardship and no great injustice being done to any tenant because of the operation of the differential renting system.

Dr. Cruise-O'Brien

On a point of clarification, I do not understand what the Minister's reply meant. May I ask if he is refusing the immediate examination asked for by the Labour Party; whether he is claiming that he has carried out that examination; or whether he would be prepared to have the examination set up in the event of further information being forthcoming? Can the Minister state which of those three interpretations should be put on what he has said?

Mr. Molloy

The differential renting system is under continuous examination by me and by the Department since I entered it last May.

Acting Chairman

Is the Minister accepting the motion?

Mr. Molloy

I do not accept the motion because if I accept that motion it implies that I and the Government agree that there is hardship and injustice. In all truth I could not accept that that position obtains today and therefore I cannot accept the motion. However, I would assure the Labour Deputies that I will continue to keep a very close eye on the operation of the differential renting system. I asked that any cases of hardship or injustice might be brought to our attention, and I said that I would look at them. I cannot accept the motion as it is.

Mr. Taylor

Do I understand the Minister to say that he has not received any submissions from any local authorities?

Mr. Molloy

No, I have not received cases of individual genuine hardship which I have invited.

Dr. Browne

This differential renting scheme is in operation for a long time. It is a scheme which has grown in complexity since it was introduced 25 or 30 years ago. It seems to us to be utterly reasonable to suggest that a scheme of this kind, with all its ramifications throughout the whole population of local authority housing schemes, should at least be examined by a committee especially established to find out its workings. The Minister need not accept it, but in our view there are genuine cases of hardship and injustice. He can ignore that part of the motion if he wants to, but he will have to accept that this scheme has been in operation for a long time and that he is sitting in a Government Department from which he may not be able to examine the problem in an objective way.

I have a basic objection to the differential renting system as a broad principle because it seems to me that the system is a clever device—effectively a device of benevolent capitalism. It is designed to impose a selective system of taxation on a small group in order to see that they are taxed in a special way so that subsidies made payable from the Central Fund or from the rates can be reduced or eased. If our taxation system were equitable, then the wealthier people in the community would be the people making the greatest contributions towards Central Fund taxation. It is these wealthy people who I believe should be paying the subsidies to the maximum, they should be paying the subsidy needed to provide working-class families with a reasonably priced rented house or flat:

One of the sources of injustice and hardship, which the Minister must know inevitably arises, is in the application of the means test idea implicit in the differential renting system. Many years ago the attitude of the Labour Party People—the Nye Bevan type— to means test medicine was twofold. They stated "We do not agree with the means test medicine on ideological grounds but much more important, we do not agree with it because it means the establishment of such a complex administrative superstructure to administer the test. We consider it is completely illogical, unnecessary, and undesirable."

Having listened to the Minister tonight explaining the many possible variations in payments made, the periodicity of the returns to be made, the six-monthly surveys, the necessity imposed on the average unfortunate householder of making returns as soon as there is a variation in family income, I completely appreciate the significance of this remark. This kind of means test inevitably leads to the creation of an enormous, bureaucratic morass which is inseparable from the operation of the differential renting system with all the elaborations that have become necessary because of the difficulty of trying to ensure that the person is paying the percentage required.

The Minister kept referring to the fact that the tenant must accept the responsibility of paying rent related to his income. On correction by me the Minister accepted that it is the family income that must be accepted. I am sure that Deputy Dowling, with his intimate knowledge of these matters in Dublin, could help the Minister in this matter. It is here the injustice and hardship arises, because of this necessity to give a global figure for the family income with all its variations. This leads to inter-family and personal stresses because of the demands which will arise from time to time.

I have always been fascinated here in this House listening to the Government and to the main Opposition party who believe in the idea of private enterprise capitalism consistently saying that the great dynamic for the success of private capitalism in any society is the right to make profit; that the greater the profit, the greater the dividend, the greater the return on invested income, the more likely is the private enterprise capitalist system to be successful, to expand and to create more wealth.

The curious thing is that this carrot of greater income which is going to mobilise our industrialists and make them create the millenium because of their own industry in factories, businesses and so on—which incidentally has never occurred at all—has been this right to create as much wealth as possible. You will get leaders in the three main newspapers telling you what a wonderful manager you are, what a wonderful industrialist or businessman you are because your profit this year is 17 per cent or 30 per cent more than it was last year and you hope it will be 60 per cent more next year.

The dynamic is permitted to apply to the wealthy industrial minority group within our society, but when it comes to the working class father of a family or to the boy or girl worker who belongs to a working class family, the reverse applies. If the working class family increases its income from £20 to £25, from £25 to £30 and so on, part of that money is inevitably and immediately taken away from it.

We are told we cannot afford to increase the level of direct taxation on company profits, or excess profits tax or corporation profits tax. If we take any more from these people we are told the business will fold up or these managers, executives or industrialists will not work as hard as they used to work. It is not, however, considered a disincentive to tax the average worker if he works overtime, if he gets some sort of bonus payment. If an industrious family increase their total income because they all work particularly hard, the Department of Local Government insists on getting its cut at once.

Mr. Dowling

Is Deputy Dr. Browne aware that this scheme was formulated by the Dublin Corporation at the time of a Labour Party motion and approved by the Minister for Local Government during the term of office of the second Coalition Government?

Dr. Browne

If Deputy Dowling was listening to me more carefully he would have heard me saying I do not agree with the general principle. The system is in operation but I disagree with it as a matter of principle. I was trying to make the point that the money should come from central funds and I was trying to turn back on the people who believe in private enterprise capitalism, this point they consistently make to me that the virtue of private enterprise capitalism is that if you let people make enough money everything will be all right. Of course, that has not proved to be true, but even if it were true I do not understand why the people who believe in private enterprise capitalism, who believe in the dynamic of the carrot for the donkey—in Connolly's famous adage: the biggest pig gets the most swill—do not believe it applies to the ordinary worker and his family. Why can they not be encouraged to work as much as possible on the factory floor, in industry, business or whatever it may be, so that the whole economy can be expanded?

Mr. Dowling

Can I take it the Labour Party do not agree with the principle of differential rents?

Dr. Browne

I am making a personal contribution.

Mr. Dowling

He is the spokesman for the Labour Party.

Dr. Browne

I am not the spokesman for the Labour Party.

Mr. Dowling

Do they agree with the principle of differential rents?

Dr. Browne

I accept the principle is in operation and I am not criticising it.

Mr. Dowling

Do they agree in principle with differential rents?

Dr. Browne

Yes, the Labour Party agree in principle with the differential rent system.

Mr. Dowling

Then there is a division of opinion.

Dr. Browne

This is quite a different party. We are allowed to have differences of opinion on these points. This is not a monolith. Deputy Dowling is continually witch hunting on the question of the monolith of the Moscow communist party, the inevitability in the one-party system, the one idea system. That is the one thing the Fianna Fáil Party stand for. There can be no divergence from the party line.

Mr. Dowling

I have a greater regard for the Deputy than I have for any other member of the Labour Party, but he is a party to this motion.

Dr. Browne

Deputy Dowling will have to get used to hearing people with different voices in this House——

Mr. Dowling

I have clarified the situation.

Dr. Browne

——rather than the one party speaking with one voice, the rigid party line which Deputy Dowling consistently criticises here as the great defect of the communist system, but he is practising it himself and asking me to practice it. I do not propose to. We feel that hardship occurs——

Mr. Dowling

We or I?

Dr. Browne

We feel that hardship occurs——

Mr. Dowling

He is confusing us now.

Dr. Browne

The Deputy is not that simple. We believe that hardship and injustice occur because there may be a family in which there are young people growing up, people of 18 to 21 years or whatever age they may be, who are trying to save up in order to get money for a deposit on a house, who are trying to save to get married.

Mr. M. O'Leary

Deputy Dowling does not see that class of people any more.

Dr. Browne

Anyway these unfortunate boys and girls find that if they work hard in order to save money to try to leave the house—they should not be there anyway because they are growing older and should be forming their own families—they are discouraged and penalised by the provisions of this differential rents system and by the present method of its operation. Hardship arises there because there is a conflict of interest. If I make more money it will go simply to pay the rent. Why make more money? Why not take it easy and lie in bed all day? Why not let the tenant, as the Minister first said, do all the work? Rather than go out to work in order to earn money to buy a house and furniture for themselves and in turn get married and create their own families they stay at home and become layabouts. This is the kind of hardship which is being imposed on the average working class family by the operation of this differential renting system. No one knows that better than Deputy Sherwin who represents an area where he must deal with this problem practically every night he holds a clinic in his constituency.

Under the differential renting system there is an incentive, which is very difficult to resist, when anyone gets an increase in salary, whether it be the husband, wife or one of the children, to conceal that fact because if they disclose the increase, it will be taken off them.

Mr. Dowling

Could I ask the Minister a question in relation to this matter?

An Leas-Cheann Comhairle

The Deputy appreciates that although the debate is over for this evening, it has not been concluded.

(Interruptions.)

Mr. Dowling

This is a deliberate attempt by the Labour Party to have the rents of the flat rate tenants and the rents of the A Scale tenants raised.

Mr. Molloy

I have some tenants from Ballymun waiting in my office to discuss various matters including differential rents.

Mr. P. Belton

I see them often enough and they are not too happy with things up there.

Debate adjourned.