In the motion before the House by the Taoiseach to which the Leader of the Opposition has put forward a counter-motion we are asked to affirm confidence in the Government. We are asked to do so at a time when chickens have been known to cost more than calves and where, yesterday, a cow was sold in Ballymote, County Sligo, for the price of a pint of Guinness's porter. It is ludicrous that the Taoiseach should put such a motion before the House seeking such support. We are being asked to give a vote of confidence to the Government at a time when the private house building industry is in danger of total collapse unless some special measures are taken by the Government.
We have called for assistance for the building industry during the last seven months and to date the efforts of the Government in dealing with this serious crisis which was foreseen 12 months ago have been miserable and halfhearted. These small steps came too late and had no significant effect in bringing about any improvement in the employment and output situation in this most important industry. Housing, and the building industry in general, are in a severely depressed state. The agricultural industry is in such a depressed state that calves are being sold for pence. For these reasons it is an effrontery to the House by the Taoiseach to ask for a vote of confidence.
Why has such a situation come about? As far as we are concerned it relates to the inactivity of the Minister for Agriculture and Fisheries to take steps at EEC and departmental level to deal with a crisis that was foreseen in the agricultural industry. We lay the blame squarely at the door of the Government. We also lay the blame for the crisis in the building industry at the door of the Government. Whatever the reasons for this situation, whether it is lack of experience or expertise in dealing with such matters, or the inability of the Government to understand and foresee difficulties at the right time, the facts are that the National Coalition form the Government and they have allowed these matters to slide.
To give some indication as to why the blame for the situation in the building industry can be laid at the door of the Government I should like to quote from a speech by the Minister for Local Government in Waterford on 13th October, 1973. In the course of that speech the Minister said that private housing work formed the major part of house building operations in recent years. He said he felt it necessary to query the validity of the emphasis given to private housing and expressed the view that some change of emphasis was needed.
At that Construction Federation Industry dinner nobody agreed with the Minister. Instead of listening to the views of members present at that function, and to the statements issuing through their spokesmen before and since, he turned a deaf ear to their pleas and to their elaboration on the difficulties facing them. In 18 months the Minister has succeeded in turning the building industry upside down. The Minister's speech in Waterford angered and shocked men who had devoted a lifetime putting together successful building teams. His lack of real understanding of problems facing the industry even then dismayed many people.
In his Estimate speech in November, 1973, the Minister for Local Government said that the State took action to control the rate of interest in building societies and that this action represented a first step in the positive use of the special taxation arrangements applicable to the societies as a means of promoting housing policy. The Minister's first action in May, 1973, to control the rate of interest of building society loans was the start of the rot that has blighted the industry since. Investors lost confidence in the societies and shares and deposit receipts which had reached £23 million in the second quarter of 1973-74 declined to £20½ million in the third quarter and further declined to £19 million in the fourth quarter. Withdrawals reached an unprecedented level increasing from £12 million in the second quarter, £13½ million withdrawn in the third quarter and £15½ million withdrawn in the fourth quarter of that year. The net increase in shares and deposits in building societies declined in 1973-74 from £11.2 million in the second quarter to £10.5 million in the third and to £5.4 million in the fourth quarter.
Further Government interference came with the decision to ban all building society loans on secondhand houses and to restrict the level of building society loans to £7,500. After a period, realising that a mistake had been made, the Government, in a halfhearted way, eased this restriction to allow one in every three building society loans to be paid for second-hand houses. Recently the Minister withdrew the restriction on loans for secondhand houses and increased the limit to £8,000. The Taoiseach offered this as a contribution from the Government towards the difficulties being experienced in the building industry and tried to create the impression that in withdrawing restrictions which the Government had brought in he was making some positive move to enable the industry to get back on the road to progress and expansion and to re-employ the men who have already lost their jobs.
I am pleased to see that the Minister for Labour is in the House because he must have some concern for the numbers unemployed in recent months in industries directly related to building. The Government's housing policy is idiotic. It is idiotic when one considers that it sets out deliberately to cut back on the number of private house completions. This can be easily displayed with the Government's own figures. They set a target in 1973-74 of 25,000 house completions. That 25,000, according to the Government's own statements, was to be broken down into: private, 17,400; local authority, 6,500. In 1974-75 they also set a target of 25,000 houses and also gave a breakdown of the components making up that 25,000. They showed that the Government intend that 16,650 privately built houses shall be constructed and that local authorities shall build 7,250. They are the Government targets. Government policy then can be seen to be deliberately aimed at reducing the number of private houses completed this year by 750. We are assured that again next year the same targets will apply, and therefore we are to expect a further reduction of 750 in the number of privately built houses completed.
The Government policy of putting a brake on the number of private houses to be built is succeeding. I can certainly concede them that. The Minister says he aims to increase local authority housing output to 8,000. If the overall target is 25,000, this means that the private building sector must suffer a further cut back to 15,900, that is a drop of 1,500 in a period of less than two years.
Is it any wonder that there is no confidence in Government policy? Is it any wonder that such a depressed policy for private housing is having disastrous effects within the private house building sector of the economy? Because of the Minister's claims repeated time and time again in this House that more houses are being built, that more money than ever is being provided, that more people than ever are employed in the building industry, and that 25,000 houses would be completed this year, there are, or until up to quite recently there have been, many people outside the building industry who are sceptical about the industry's claims and our claims here of the imminent disaster, which of course has now hit us.
It is difficult to reconcile the Minister's complacency with the position as it obtains within the industry. Each and every one of us in this House can list dozens and dozens of builders who have cut back on their output, who have ceased the production of houses altogether, of workers who have lost their jobs, of persons in builders' providers who have been let go, of builders' providers and contractors and other industries supplying the building industry who are in serious financial difficulties because of the sudden winding down in their cash flow. A number of builders have become bankrupt. A number of builders' providers are in receivership. I have not the exact figure for employment, but one would expect the Minister for Labour, in one of his many utterances at least to provide us with the exact figures for employment and unemployment. It is quite difficult, with the statistical analysis that has been carried out, to assess the exact number, and this is borne out in the Central Bank Quarterly Report for autumn, but we meet them from day to day, face to face, persons who are out of work because of the drop in housing output. We are asked to acclaim and give confidence to the Government which has brought this situation about.
The Government are either blind to the situation or are deliberately covering up the difficulties that exist in our economy. I certainly cannot give them the credit for being honest with the people up to now. If you examine the years as far back as 1969, or further if you wish, you will find that there has been a net increase in the number of loans until last year. Each year an increasing number of loans were given out. The net increase in 1969-70 was 1,200; the following year, 1,200; the following year, 3,600; the following year, 3,200. Then we come to the first year of the Coalition Government and we see the first bend in the graph. The net increase drops from 3,200 to 897, which is two-thirds of the figure that obtained as far back as 1969-70.
Therefore one can say that all the indicators, if one takes time to examine them, point to disaster and point to mass unemployment, and in the Taoiseach's address there was not one word of concern for those who have lost their jobs or for those who are threatened with loss in the coming months. This is an industry which has been geared for expansion. A decline in the number of loan approvals on second-hand houses to 1,874 was another indication of the bad effect of the Government's policy. The sad fact is that though these facts have been available to the Government for some months past and the warnings have been issuing since this time last year, no clear, positive programme and policy have been enunciated, and no positive action has been taken. Small measures, which came too late, have been taken but have had no effect, and the downward slide has continued.
The gap between the average loan and the average price for new houses has grown month by month and persons have been obliged to obtain bridging loans, if they can get them, at enormous interest rates. The building industry time and time again sought some assurance from the Government as to what their intentions were in relation to the application of the proposals in the Kenny Report. No clarification has been given up to now. Anybody who purchased after 26th January was at risk, and many did not go ahead with the purchase of land banks which was normal in the building industry to ensure continuity of work. Therefore the stop-go policy we have seen operate has had a detrimental effect on the industry in general.
I would ask the Government, even at this late stage, to spell out quite clearly in white paper form, or any other form they want to use as a vehicle, their policy in relation to the building industry. If they want to stop the construction of private houses, then let them say so. If they want, as they seemed to want at the conference held in Galway recently, to have houses under public ownership only, then let them say so. But remember that the persons who have been building up their teams, investing their money in expansion within the building industry, are in the dark as to what this Government's intentions are. The Government have lost their confidence and the position as it obtains at the moment seems to be a return to the 1956-57 situation where mass emigration was the solution. They went, and it seems that with the non-concern of the Government, they are to be driven to the emigrant boat again.
Builders want to know, if the only loans that are to be made available are SDA loans, and if the limits of SDA loans are to be kept at £4,500, is it the Government's intention that only low-cost housing should be constructed? If that is their intention then let them say it and the builders will switch into low-cost housing only. You can have small little box-houses being built at a minimum cost, with minimum facilities. If that is what the Government aim for, the industry would like to know, but there is great indecision and lack of understanding between Government policy and those employed in the industry—there are roughly 25,000 traditionally employed in private housebuilding. At the present time the figure is not known to me but from the latest unemployment figures, employment in housebuilding is declining rapidly.
In real terms, there is a drop in the forecasts for output in the building industry as a whole. That information has been made available to the Government through a committee specially established under the aegis of the Department of Local Government to which many sectors of the industry and Government Departments have contributed. They were set up to try to forecast trends in the building industry and to try to avoid peaks and valleys in the industry. That is their forecast for the future but not one mention of that forecast has been given in the economic policy statement we have heard from the Government.
This is the first time there has been a drop in growth in real terms in this industry since 1957. We are asked to vote confidence in a Government which have brought this about. Surely the members of the Government, especially those who claim to be socialists, must realise that builders have financial commitments, to the banks and to their shareholders, and that they must try to protect the interests of those who have shares with them and have a responsibility to ensure that whatever moneys they commit will not depreciate and get lost in the dizzy spell of depression this Government are bringing about.
Therefore, builders must retract in their forward planning. They must be careful. They must look for some guidance from the Government as to whether they want them to continue in existence or to wipe them off the face of the earth. We understand there is an ideological conflict within the Government. You have persons such as the Minister for Industry and Commerce who claims to be a Marxist-Socialist. At one time, Deputy O'Leary claimed to be some kind of a socialist but, of course, he cannot lay fair claim to that title now. However, he must present a facade of socialism and must try to manage to be seen by his followers in Galway to be trying to implement some form of socialist policy. Socialism would not look kindly on private enterprise, so you have the immediate conflict in the Government as to what their intentions are, with the socialists screaming for publicly-built houses and the Fine Gael conservatives sitting quietly, meekly, ineffectively, allowing unemployment to be brought about through the collapse of the industry. This is one of the great crimes of the Coalition Government. We have this playing with ideological socialism while persons are being thrown out of their jobs.
I could record evidence in regard to the industry. That might have been necessary last July but that is not now necessary. The Central Bank autumn report does not even go into detail. It states that it is now generally accepted the building industry is in trouble and does not feel any need to elaborate. There is the feeling that everyone now knows that what we have been saying and what the building industry has been saying has happened. We warned, we offered advice and constructive proposals as far back as the last Fianna Fáil Ard-Fheis. Earlier this year we set out quite clearly the steps the Government should take. It is so easy for Deputy Kelly to say: "We have world problems. You are losing sight of the fact that there are outside factors glaring down on us."
The building industry uses in the main indigenous materials. In this country it is one of the greatest users of Irish manufactured goods of all the industries. The difficulties we have had in the industry do not arise from lack of skill or manpower but from the wrongful manipulation by the Government of the sources of finance for private housebuilding, and the Government stand guilty.
There was a miserable attempt by the Minister for Local Government to restrict loans for secondhand houses as if this would make some major contribution. The delay in coming to the assistance of the industry has shaken confidence in the future not just in a mild way but to the very roots. The Government must know that plans must be laid well in advance, that decisions made now will affect output in 12 months' time and as far ahead as three years. The cost of houses has escalated. There has been an average increase of £2,000 per house for which loans have been issued by building societies, insurance companies and local authorities.
No provision has been made by the Government through the SDA loan system to allow for this increase in the cost of houses. Retention of the loan at £4,500 has been the cause of very great difficulty. The average gross price of new houses in the Dublin area for which loans were approved by all agencies in the first quarter of 1974 was £8,607, yet the maximum local authority loan is only £4,500. If your income is around £2,300 you will get the £4,500 loan but where will you get the £4,100? People are being forced to seek, if they can succeed in getting them, further loans from banks at 16 to 18 per cent.
The Minister knows that the solution to the building finance companies today will not come from the allocation of an imaginary sum for local authority loans. He came in here offering £9 million for local authority loans. When he knew well that the great need was — he heard this from his delegates at the Galway conference — to increase the size of the loans through the SDA.
During the debate on the Adjournment before the summer recess, great mystery surrounded the statement by the Taoiseach on 26th July when he stated £5 million would be made available to building societies. The statement did nothing to restore confidence in the industry which is so uncertain about its future. The mystery is that the Minister for Local Government contributing earlier to the debate was not able to give details of this loan. It was left to the Taoiseach in the very last minute of his speech to say that £5 million will be made available.
