I move:
That Dáil Éireann condemns the Government's mismanagement of all matters appertaining to housing.
For the past couple of years we have found it necessary to move a number of motions in Private Members' time in relation to the building and construction industry, especially in relation to the housing sector. During the course of these debates the speakers on this side of the House pointed to the inadequacies of the Government's programme in this field, and also proposed solutions which we were satisfied would go a long way towards overcoming the crisis which has affected the building industry, particularly the private sector, during that period. We were met with a stone-wall resistance from the Minister, his Parliamentary Secretary and the few speakers who intervened on the Government side. The case made by them was that they were spending more money than we had spent, that they were building X number of houses each year. That reply may have satisfied the Minister and his colleagues. It did not satisfy us and it no longer satisfies anybody else.
Today and for some time past the trade unions, the building industry and even the Minister's colleagues on local authorities, have been calling on the Minister and on the Government to take steps to aid this industry, which is capable of considerable expansion and which can quickly provide many new jobs, instead of which it is deteriorating as each week passes. The Minister, instead of assisting this industry, is by his own actions helping to wreck it. When I asked the Minister what was the percentage increase on the live register from this time last year the answer was 19 per cent but in the building and construction industry, which many people believe is capable of providing more jobs, the fall was 35 per cent. Whatever the Minister might say about the extra money being made available by him and relating it to the amount of money spent by Fianna Fáil while in office, the facts are that the money being provided in the coming year for the industry in general, and for housing in particular, is far less in real terms than was available in previous years. There has been a cutback in real terms in the money being made available in the public sector.
The lack of finance and the lack of confidence in the private sector is having a very serious and detrimental effect on the industry as a whole. This is understandable when one relates it to the lack of leadership by the Government and the Minister. It is no help to the industry that Ministers are making arrogant and irrational statements about the industry and the capacity of its workers, as was done by the Minister for Industry and Commerce recently. The steady growth in the number of houses built, the steady increase in the number of people employed in house building, the steady increase in the sales of cement and building materials with increasing employment in ancillary industries which was so evident under the Fianna Fáil Administration is no longer there. The confidence which was engendered in the industry under that Administration has now evaporated. We have this shocking situation in relation to an industry which should be expanding and employing more people. Instead the number in employment in the building industry has fallen by 13,000 in the past two years and in the same period the consumption of cement has fallen by 12 to 14 per cent. The unemployment figures in this industry on which so many people base their hopes for employment, at a time when our unemployment figures have reached frightening proportions generally, continue to increase. Even when there was a slight decrease in the general unemployment figures, the unemployment figures for the building industry continued to increase. The Minister's usual reply to this argument is to ask if we are aware that there is a recession, that the economic situation is bad and why are we demanding that more money be spent on house building while at the same time calling for a reduction in public spending. We are very well aware that in this country mainly because of the lack of leadership and mismanagement by the Coalition Government we are encompassed by an economic blizzard. Nobody feels this blizzard to the extent that an unemployed man and his family feel it.
If the Government were doing their duty, every Estimate, not simply the Estimate for Local Government, would be fine-combed to cut out all unnecessary spending, and the money so saved should be poured into the house building industry so as to supply jobs which are very badly needed. There has been an apparent change, which has been presaged by a speech made by Deputy John Kelly, Parliamentary Secretary to the Taoiseach, in the Minister's policies which is obvious from the Minister's circulars to local authorities in recent times. The Parliamentary Secretary to the Taoiseach said that he could see no reason why the State should build houses for people at all, that they should build their own houses with State assistance. That is the essence of irony, at a time when the Minister for Local Government and the Government themselves were reducing by 50 per cent the number of people eligible for State housing grants. This statement by the Parliamentary Secretary appears to be in accord with what the Minister for Local Government is doing through the circulars which he has been sending out to local authorities—not what the Minister for Local Government is saying, but what I gather he is doing, from a study of these circulars. I feel he is slowing down this vital industry.
I know the Minister can say that Deputy John Kelly was expressing a personal opinion. The day of collective responsibility is gone. A serious blow to the housing industry which was struck by the Minister for Local Government was when in June, 1975 he increased the interest rate of local authority loans by 1 per cent and followed this by a reduction in the subsidy to building societies on the grounds that it was unfair that building society borrowers should have better terms than those entitled to avail of local authority loans. I thought the reasoning at that time was rather strange because the Government had been responsible for the raising of the interest rates on the local authority loans.
Early in 1976 the interest rate on SDA loans was increased by a further 1 per cent while the remainder of the subsidies to the building societies was removed. This resulted in interest rates in both instances being about the level of 12½ per cent. Due to the reduction in the bank rate since then the building societies have reduced their interest rate and there is the extraordinary situation whereby those who borrow money from the SDA loan fund—the people who are least able to help themselves and for whom the SDA loans were intended originally—have to pay a higher rate of interest than have those who borrow from the building societies. We must keep in mind that some of those who qualify for SDA loans would not be considered by the building societies to be good risks but apart from that we find from official statistics that the average price of houses built by means of SDA loans is approximately £8,000 while the figure in respect of houses built by means of building society loans is approximately £11,500. Therefore, either we are pushing the people I am talking of into the area of the higher interest rate or we are telling them that they must wait for a local authority house.
Some time ago I queried the Minister for Finance on this matter and on the couple of occasions concerned I got the stock reply that the interest rate charged on SDA loans related to the cost of the money borrowed to provide the loan, that in any case the interest rate was subsidised. I do not accept that reply because if the interest rates are subsidised already there is no principle involved and there is no reason why they should not be reduced further to bring them within the scope of the small man who wishes to build or to buy his own home. I find it interesting that the same Minister who was so anxious to increase the rates in relation to the building society borrowers because, as he said, it would not be fair that they would be placed in better circumstances than the person who was borrowing from the SDA loan fund now, when it is possible for him to reduce the rate of the SDA loan, refuses to do so. Obviously, the reason why he was so anxious to do this was that he was saving money for the Exchequer.
The effect of those who are least able to defend themselves having to pay the higher interest rate is a dramatic fall-off in the demand for local authority new house loans. Combined with the high interest rate, there is the ridiculous situation of the maximum loan of £4,500 with a qualifying income limit of £2,350.
From the 1st January to the end of March this year the numbers of applications and approvals by Dublin County Council was 539 applicants and £2.148 million, respectively, compared with 1,464 applicants and £5.338 million, respectively, for the corresponding period last year. In Drogheda the position was that the applications during the same period last year for SDA loans numbered 29 compared with seven for the corresponding period this year. It is obvious that many of those who wish to build houses for themselves are no longer in a position to do so. Many of the applicants for SDA loans have no other source from which they might get a loan and, consequently, are forced to go on the already very long local authority housing list. This means that they must wait a long time for a house. It means, also, that families who have no hope of buying or building their own houses must wait longer for houses because of the extra numbers on the waiting lists.
The Minister may claim that the number of local authority houses being built this year is greater than ever before but that is no answer because he is forcing far more people to go on the local authority housing list by his refusing to make loans available at reasonable interest rates to those who would build their own houses. The increase in the number of applicants for local authority housing is much greater than the number of houses being built. The situation in Dundalk is an example of this where there are 431 applicants for local authority houses. This is a town which has a good reputation in terms of house building but if the situation there in regard to applicants is so bad I wonder what it is like in areas where the councils are not as progressive as they are in Dundalk. Many of the people on this application list would be only too glad to build their own houses. In that way, they would be helping those who are already on the waiting list but the situation is not such as to enable them to do that.
At the beginning of this year the Minister added a further disincentive to private house building when he removed from about half of those who qualified previously, the right to a State grant in respect of new housing. If it were not so serious, it would have been amusing for those who were being deprived of those grants to hear the Minister state that those who were really in need of the grants were being looked after and would continue to be looked after. State grants are available now only to those who qualify for supplementary grants. Thus a single person wishing to build or buy his own house will not qualify for a State grant if his income is more than £37 per week. In the case of a married couple the income limit is £39 a week. In these days of rampant inflation do the Government believe that a married couple with an income of £40 per week are sufficiently well off to proceed with the building of their own home? Had the Parliamentary Secretary to the Taoiseach such a couple in mind when he said that the State should not build houses for such people but that they should build them themselves with the assistance of the State? Does he believe that the decision of the Minister and the Government to remove the State housing grant was equitable?
I might refer here to statements made by Deputy Flanagan, Parliamentary Secretary to the Minister for Local Government, in defence of the Government's decision, statements in respect of which he got considerable publicity. He asked if I could justify the paying of a grant of £325 to a wealthy person for the erection of a superior type house. Later he asked if it was the opinion of Fianna Fáil Deputies that purchasers of houses costing £19,000 should get a State grant. This argument was totally dishonest. Nobody knows better than the Parliamentary Secretary that even prior to January 1976, when State grants were payable, no such grant was payable in respect of a house comprising more than a certain square footage of floor space. It is most unlikely that the houses he had in mind would come within that limit.
Again, I make the point that a young couple with an income of £40 per week should be entitled to the State grant for housing. Such people are not wealthy but those of them who have the courage and initiative to build houses for themselves should be given every facility to do so. The failure on the part of the Government to encourage and support such initiative is the basic and fundamental flaw in the Coalition's approach to all our problems and it is one of the prime reasons that we are floundering in the present economic mess.
Let us look at the harsh reality of the situation. In the quarterly inquiries on earnings and hours worked in the building construction industry, December, 1975, we find the average earnings of skilled operatives in the industry to be £55.93 a week and of unskilled operatives or semi-skilled operatives, £47.95. These workers would not qualify for a State grant if they wished to purchase one of the houses built by themselves. The same applies to other industrial workers.
The present average wage of industrial workers is well above the qualifying limit for a grant or a local authority loan. As I have said on many occasions, they are the very people for whom these grants and loans were made available. In 1972 they would have qualified for the grant and the loan. We made a plea to the Minister to increase the SDA loan limit and the qualifying income limit, without success. The ICTU, the Construction Federation, the General Council of County Councils, the Council of the Municipal Authorities Association, as well as many other bodies, have equally called for action on this matter, equally without success.
Despite the Minister's claims, conditions in the private sector continue to deteriorate, with fewer and fewer employed. The present levels of loans have remained static since 1973 while the cost of materials has escalated and the average price of houses is now more than £8,000. At the same time, the loan limit is still £4,500 and the interest rate is at the fantastic level of 12½ per cent. Let us take the maximum loan limit of £4,500. The potential house purchaser is expected to build his own home on a loan of £4,500 and he is expected to find the outstanding amount at an interest rate of 12½ per cent or more, as well as furnishing the house, making repayments and rearing his family. The Government, who are known as the greatest borrowers of all time, do not practise what they preach at national level in this respect.
The Minister's reply to the points we have made in regard to raising the loan and qualifying income limits is that fewer people would get loans out of the money available. My answer is to refer to my earlier suggestion that a complete and objective look has to be taken into the financing of every Department, and savings made on non-productive, though possibly desirable, schemes and that the money thus saved should be put into house building and other schemes such as water and sewerage because of the capacity of such work to produce employment quickly. It is also an insurance that when the recession is over we will be able to make use immediately of the upsurge in the economy.
It is important that the Minister and the Government should appreciate the seriousness of the situation facing the building industry and take immediate steps to revitalise this very important industry. The Government should know that the public capital programme for 1976 underlines that a further decline in employment is inevitable unless action is taken. The allocation for private industry has been 4.5 per cent more than in 1975 but when you consider this in relation to the enormous inflation prior to and during 1976 you can see how hopeless the outlook is. It was said prior to the January budget that the increase in inflation would be in the region of 16 per cent. That budget itself increased by 5 per cent, without taking into account the increases which will result from the wage negotiations. It is clear that the level of increased allocation for 1976 falls far short of what is necessary and the housing allocation is simply swallowed up. It will result in a further serious fall in employment in the industry at a time when we have the colossal total of 147,000 people unemployed and about 62,000 school leavers coming on the market.
Let me once again repeat that in real terms the allocation for the building industry this year is much below what it was last year, and we are all too well aware of the sad state of the industry last year. I would also repeat that a revitalised industry would have an immediate impact on the unemployment situation. I have no doubt the Minister will remind us of the large inflow of money to the building societies and endeavour to take credit for it, though I do not think he was equally willing to take responsibility for the very poor inflow to the societies in 1974. It is true that there has been a rapid inflow of money to the societies recently and from the point of view of its impact on housing it is to be welcomed. However, the rapid increase in savings generally, which would be welcome in times of stability, has quite a different meaning at present because it simply denotes the fear of most people of the future. This is reflected in the fact that in normal circumstances a considerable amount of this money would have been invested in industrial development to provide much needed employment in a sector which has taken a pasting in the past couple of years but on which we must rely to provide employment in the future.
The inflow to the building societies is welcome but circumstances can change that situation and the Minister has not got the right to throw over almost in its entirety the responsibility for financing private housing on the societies and on the banks and virtually pulling out all State involvement in that sector, as he is doing by removing State grants from many of those who are entitled to them and by keeping SDA loans at a ridiculously low level, and interest rates on such loans at very high levels. The State contribution to private housing was the most secure and certain element because the Minister for Local Government, whoever he might be, had control of it. He has not the same assurance that money will be available from the building societies and from the banks at the level at which it is now available.
The Minister showed a further lack of sensitivety to the unemployment situation and to many local authority tenants in respect of the maintenance of their houses when he issued a circular to the various local authorities stating that the payment of the housing subsidy this year would be subject to certain provisions. One was that expenditure on maintenance and mananagement in 1976, excluding improvement works and pre-sale structural repairs, should not be increased by more than 75 per cent on the actual expenditure for the same purpose in 1973-74. Additional expenditure cannot be financed from a rates subvention or by the use of overdraft. Some time ago I put down a question to the Minister asking him if in view of that circular and its effect on employment he would reconsider the situation. I pointed out to him that any decision which would have a detrimental effect on employment, in view of the present serious situation, should be reconsidered with a view to rescinding it. The Minister simply referred to some local authorities which, he said, had been over spending in this area because of the changes in relation to the rates. I believe the Minister should also have taken into account the fact that many members of maintenance staffs throughout the country would be disemployed because of his order and that the cost of paying unemployment benefit, pay-related benefit and redundancy money to them, as well as getting them re-employed, would be so high that it would be worth his while to withdraw the order and allow these people to remain in employment.
We all know that the present cost in relation to industrial employment is enormous. When I was discussing this matter in the Dáil at that time I did not think the Minister appreciated its seriousness. We see now that, in relation to Dublin Corporation, the instruction issued by the Minister will ensure that possibly 400 people will lose their employment. I do not know whether Dublin Corporation was one of the groups referred to by the Minister when he spoke of over-spending in this area. If it was, he should not be guided by the increase in the amount of money being spent by Dublin Corporation but rather by the number employed. It would be worth his while having a look, over the years, at the number employed in maintenance, when he will find, irrespective of the money, that number remain virtually static. We have been trying to impress on the Minister and the Government for quite a while that referring to the amount of money spent means absolutely nothing in circumstances where no consideration is given to the increase in inflation.
The Minister stated in the circular I mentioned a moment ago that the reason he made this order was that some authorities had started what he termed ambitious schemes of maintenance. He also referred to the fact that they were carrying out these because they had failed, on previous occasions, to properly maintain their houses. All I would say in relation to that aspect is this. If the Minister says it is a fact, then by the very issue of that order he is ensuring that the actual amount of money now being utilised on maintenance will be very much lower than that utilised in real terms in 1973-74. According to central statistics, the increase in building costs between May, 1973, and the end of September, 1975, was 71 per cent. We know what increases have taken place since. Therefore, the 75 per cent extra the Minister is allowing councils to add to the amount available to them in 1972-73 does not bring that amount up to the level it was in 1973-74. The point I am making here is this. If those councils were not carrying out maintenance properly at that time, then, because of the cuts now made by the Minister, they will be continuing to fail to carry out their duties because they will not have the money to do so. I am convinced that the tenants of houses in need of repair will not accept that their homes be allowed deteriorate further.
Perhaps the Minister would tell us what legal right he has to prevent a local authority from raising money for maintenance or for any other purpose from the rates. In the circumstances in which we find ourselves we, in the Fianna Fáil Party, demand that this order made by the Minister be withdrawn. If Government Deputies wish to prove their sincerity with regard to their oft-stated desire to improve the employment situation, they will assist us in convincing the Minister of the need for swift action and will support this motion.
The Minister has also issued a circular to local authorities curtailing severely the amount of land that can be purchased for housing purposes. This is a complete reversal of the policy pursued by the Fianna Fáil Administration when in office and is a complete reversal also of the policy pursued by the Minister in his early days in office when he urged on authorities the need to purchase land thereby making available a land bank ensuring there would be a steady flow of house building in future years. In answer to a supplementary question put by me to the Minister in relation to a question I had down on this matter, the Minister admitted that the land, still being used for house building was, in the main, land purchased under the Fianna Fáil Administration. If the Minister persists in his present policy in relation to this matter, the time will come in the not too distant future when there will be no land available and there will be no service land available for the erection of houses. It is no argument for the Minister to say that there are X acres available for house building. That is a global figure for the whole country. It does not reveal the fact that many towns have not got sufficient land for house building. It is not much use to tell people in one town—with insufficient land for building—that there is plenty of land for building in another town.
Another very serious aspect of the Minister's policy is the very severe cutback in money for sanitary services. This is, perhaps, one of the most insidious decisions taken by the Minister. Without the rapid development of sanitary services it is impossible to continue a housing programme. The cutback, not alone in real terms but in actual terms, is exceptional in this case. The total overall increase in the allocation this year, as compared with last year, is slight. Indeed, if one relates this to the spiralling inflation we continue to endure—when every other European country is getting it under control—one can see clearly how very serious is this cutback. To draw a true picture of the situation it is not sufficient to compare the amount of money made available by the Minister last year with that for this year. It is necessary to examine the situation in relation to each local authority, to look at its allocation and relate that allocation to its needs. Then one can see clearly the very serious deficiency which will have an adverse effect on the house building programme of that authority.
Not alone is there not sufficient money being made available for new schemes in relation to sanitary services but it is not sufficient to continue schemes already in operation. In my county the money made available is insufficient to keep the water augmentation scheme of Ardee and a sewerage scheme in Dromiskin, to which the Minister referred at a recent conference in County Louth, already in operation going. I wonder what will happen when the money runs out. Apart from that, I want to make it very clear that there is no money being made available for new schemes.
Perhaps I may briefly recapitulate on the overall picture. There are 13,000 fewer building workers employed today than there were two years ago. There has been a fall of between 12 per cent to 14 per cent in the sales of cement in the same period. There has been a fall in employment in ancillary industries. Interest rates on SDA loans have been increased to 12½ per cent in the past year. SDA loan levels and qualifying income limits have remained at £4,500 and £2,350 since May, 1973, despite a colossal rise in costs in the same period. Eligibility for State housing grants has been removed from approximately 50 per cent of those previously entitled to them. Land purchase for housing has been severely restricted. There has been a severe cutback in real terms in money for sanitary services and, I might add, in actual terms. Money for maintenance has been cut back. Subsidies for central heating have been abolished. Local authorities cannot engage in new housing schemes. I could continue but I do not think it necessary. It appears to me that the only hope for that industry and the workers—and I know the industry itself and workers know this also— depends on a change of Government. There must be an immediate increase in State capital for this industry. Loans and grants must be increased and be tailored to the varying needs of applicants. Building societies should increase their loans to 95 per cent. There is nothing sacrosanct about the 75 per cent. Some of them are granting the 95 per cent but they should all do so. We will always have large numbers of people unable to provide homes for themselves. Those people have to rely on local authority housing and, if we persist in refusing to make reasonable loans and interest rates available, then the number looking for local authority houses will be increased very considerably with the result that those who are unable in any circumstances to build homes of their own will be in the position in which they will have to wait longer than they should to be housed.
There is no doubt that there is a very deliberate effort being made by the Government to slow down all housing and this, as I have said, has a disastrous effect at a time when there is such an enormous unemployment problem because this is the one industry which, properly guided and financed, would provide many jobs for many of those people who are presently joining the ever-lengthening queues at the employment exchanges.
