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Dáil Éireann díospóireacht -
Tuesday, 2 May 1978

Vol. 306 No. 1

Private Members' Business: House Building Costs: Motion.

(Cavan-Monaghan): I move:

That Dáil Éireann expresses alarm at the unreasonable increase in the cost of house building and deplores the Government's failure to take remedial action.

I notice that the Minister for the Environment has tabled an amendment to this motion in rather peculiar terms. He proposes to delete all words after "Dáil Éireann" and to substitute "expresses confidence in the steps taken by the Government to regulate house building costs". I am sure there was a long and learned discussion about the word "regulate" and I am sure that other words were put in and struck out. Eventually the word "regulate" was agreed upon. It is noticeable that the Minister does not take credit for reducing, moderating, or controlling house prices. He picks on this peculiar word "regulate". I await with interest the Minister's explanation of what he means by "regulate".

The recent dramatic increase in the cost of houses and house building has far outpaced inflation, wages and salaries, and has already devoured the £1,000 new house grant introduced by the Government. It has made the increase in the small dwellings acquisition loan from £4,500 to £7,500, which many people thought would solve their difficulties, quite useless and ineffective.

In reply to questions which I put down recently to the Minister for the Environment, I got some very interesting information which I submit requires an explanation from the Minister.

In reply to those questions I learned that the price of the average grant house increased from £12,870 in the quarter ending March 1977 to £15,345 in the quarter ending March 1978. That represents an average increase of £2,475 or 19.2 per cent compared with the previous 12 months. It is certainly an increase of 13.7 per cent in the previous 12 months. It is certainly good-bye to the £1,000 new house grant, as it was called. Even at this stage the increase in the small dwellings loan from £4,500 to £7,500 has been eroded almost out of existence.

These increases are all the more alarming and certainly require an explanation when we take into consideration the fact that, during the same 12 months during which these increases took place, inflation was running at 9 per cent, and the Minister boasts about that. Over the very same period the average percentage increase in the house building index was 11.6 per cent. According to any reasonable yardstick, or any yardstick available to me, these prices are quite unreasonable and are far too high.

For example, the national wage agreement provides for an increase of 8 per cent approximately in wages and incomes. That is regarded as a reasonable increase in incomes. We understand the Minister for Agriculture has some sort of a similar increase in mind for the farmers. Furthermore, the Minister for the Environment, when dealing with the local authorities and estimating what their budget should be for the current year, decided that an increase in rates of 11 per cent would be reasonable. Apparently he satisfied himself that an increase of 11 per cent would be sufficient for the local authorities to carry on their services for the current 12 months.

Yet we find the price of houses in the past 12 months gone up by almost 20 per cent. The Minister was elected on a programme to control prices. There is an entire page on price control in the Fianna Fáil manifesto and, in the section of the manifesto dealing with local government, the Minister pledged he would make it easier to buy a house. He has done absolutely nothing about that. In fact, it is far more difficult to buy a house now than when the Minister assumed office because the cost of a house has far outpaced any increase in the house builders' wages or income.

Deputy O'Donnell raised this matter during the concluding stages of the debate on the Estimate for the Department of the Environment last week. In his reply the Minister referred to Deputy O'Donnell's contribution. I will read what the Minister said because I am not clear on exactly what he means. As reported at column 1639 of the Official Report of 27 April 1978 the Minister said:

This morning Deputy O'Donnell referred to the increase in the average price of houses in the first quarter of 1977 and the first quarter of 1978. The Deputy should refresh his memory on this matter. On 3 March 1978 my Department published a quarterly bulletin of housing statistics for the quarter ended 31 December 1977. The Press release that accompanied the bulletin indicated that the average gross price of new houses for which loans were approved by the main lending agencies increased by 20 per cent last year compared with 1976. The corresponding increase of 19 per cent in prices in the building and construction industry generally should also be mentioned. Since April 1973 house prices, house costs and earnings have fluctuated considerably but the stage has now been reached where increases in house prices, house costs and average earnings have been broadly in line with each other. There is nothing new in the written reply to Deputy Fitzpatrick to which Deputy O'Donnell referred this morning. The increase is slightly under 20 per cent. It was 20 per cent for the whole of 1977 and it has averaged 19 per cent since 1973. It is not suddenly an unusual occurrence.

I find it hard to know what point the Minister is making or what he is boasting about, if he is boasting. The only reasonable construction I can put on it is that the Minister is satisfied with an increase of 20 per cent in the price of house building for the quarter ending in March last as compared with the quarter ending in March 1977. If that is so, I am amazed. He goes on to say price increases have kept in line with the increase in salaries and wages. That is not so. There has been a 20 per cent increase in houses and an 8 per cent increase in wages. According to information in reply to a question on 26 April, the cost of building a house increased by 11.6 per cent. I fully appreciate that this does not include the cost of land but it includes everything else, although a footnote states that it does not take into account overheads, profits, and so on. Of course it does; they are built into the previous price and this percentage is put on.

That statement by the Minister seems to be an abdication of the task he undertook and a throwing in of the towel. We may talk about percentage points but the figures given by the Minister show clearly that the average price of a grant house increased by £2,475 between March 1977 and March 1978. That needs an explanation. The sum of £2,475 is, in round figures, two-and-a-half times the £1,000 grant and it very nearly closes the gap between the increase in local authority loans from £4,500 to £7,500.

I should like to draw the attention of the House to the percentage increase in house building costs since Fianna Fáil came into office. From 1 April 1977 to 1 July 1977 the housebuilding cost index increased by 1.44 per cent. From 1 July 1977 to 1 October 1977 the increase had jumped to 2.98 per cent and between 1 October 1977 and 1 January 1978 the increase had rocketed to 3.42 per cent—nearly three times what it was when Fianna Fáil came into office. They assumed office for the purpose of controlling prices and making it easier to buy a house. If the Minister is satisfied with these figures then he is easily pleased, and God help young people who want to make a home and buy a house.

When we find the average increase in the house building cost index during the 12 months ending March last running at 11.6 per cent and the average increase in the cost of a house during the same period running at 19.2 per cent, we must look for an explanation. I will give one explanation. The cost of the site is included in the price of the house, which has increased by 19.2 per cent, but the cost of the site is not included in the house building cost index, which has increased by only 11.6 per cent. It is obvious that there are land barons who are speculating in building land in a most disgraceful way and they are getting away with it. These site brokers particularly around Dublin, bought sites some years ago and have watched them appreciating in value. They found that if they wanted to build grant-type houses on these sites and applied for a certificate of reasonable value, the certificate would be based on the price that these gentlemen had paid for the land, plus holding charges. Therefore, they would not regard it as profitable enough to pass on the sites to the house purchasers at the price which they paid, plus reasonable interest charges. They are selling these sites to small builders at inflated prices and when the small builders apply for certificates of reasonable value the certificates are based on the price that the small builders have to pay.

I understand that these site barons are really ceasing to be building contractors or are building only luxury dwellings on part of the land acquired and selling the remainder to small builders at these inflated prices. I want to know why the Minister is not doing something about that. It is one explanation of why the index shows an increase of 11.6 per cent and the price of a house over the same period shows an increase of 19.2 per cent.

The certificate of reasonable value was introduced in an effort to control house prices. In fact it is being used to delay grant approval and to subject the purchasers of houses to stamp duty at 3 per cent. I am told that in some cases the delay in issuing these certificates is quite unreasonable. There has been an improvement since the new year. For the first six months of the Fianna Fáil administration there was quite a go slow in this. It has been said that the purchase of a house is by far the biggest single purchase that most people will ever make. Many people enter into a contract to buy a house on the understanding that the £1,000 is available and then find that because the house does not qualify for a certificate of reasonable value the grant is not payable, and the conveyance of the house becomes liable to stamp duty at 3 or 4 per cent often involving a payment of £400 or £500. The law should be changed and people should be relieved from such contracts even contracts which do not specifically guarantee the £1,000 grant but where people were led to believe that the grant was available. It is unreasonable to charge stamp duty on new houses because all new houses are adding to the national stock of houses and they should be free of stamp duty.

The Minister applied the system of the certificate of reasonable value to flats. I admit that prior to the change of Government no grants were payable in respect of flats but it was possible to get a certificate exempting flats from stamp duty. Since the Minister changed the system, certificates of reasonable value are required if flats are to be exempt from stamp duty. We find that since the Minister came to office certificates of reasonable value were issued in respect of only 55 flats. We know that flats are being built all over the city and that flats are becoming a way of life for many people. Only 55 flats have qualified for the certificate because the Minister refuses to recognise a sales policy in respect of flats. It is obvious that some flats in a scheme would sell for much more than others because of location and so on, but the Minister insists on averaging the entire scheme and dividing it by the number of flats in it and the result in most cases is that none of the flats qualifies for a certificate. The further result is that all new flats purchased there are subject to stamp duty of 3 or 4 per cent. I suggest that the Minister take each flat on its merits and value it according to its location and issue a certificate where flats qualify for a certificate.

As I said earlier, the £1,000 grant has disappeared, it has been gobbled up by the builders and the site barons but at best it is a restricted scheme. It should but does not apply to people who bought secondhand houses a few years ago and who want to improve their accommodation by building a new house. During the election campaign it was stated that this grant would provide a deposit, and great play was made about the fact that no longer would young married couples have to hunt for a deposit, that they would get it from Fianna Fáil in the shape of this grant. We find now that it does not provide a deposit because it is not payable until the person is living in the house. By that time people would have had to pay the full cost of the house.

Whether the Minister realises it or not, the most recent power of investigation which he is seeking in regard to the £1,000 grant will discourage people from applying for it altogether. In this year's Finance Bill which has just been circulated the Revenue Commissioners are being authorised to supply confidential information regarding applicants for the housing grant to the Minister for the Environment. Information given by the tax payer to the inspector of taxes is to be given by the Revenue Commissioners to the Minister for the Environment so that it may be checked and, no doubt, cross-checked. This is a completely new departure.

Surely the Deputy is getting away from the motion now.

(Cavan-Monaghan): I am dealing with the new house grant.

The Deputy may discuss this on the Finance Bill.

(Cavan-Monaghan): I will be coming back to it. This is a completely new and un-desirable departure. It is no defence to say that it is proposed to use the same section against farmers to increase their rates. I am convinced that this will frighten off people and that they will forego the grant rather than have this sort of inquisition into their affairs by the Department of the Environment and the Revenue Commissioners in consultation with each other. There is no better way of terrifying anybody than to threaten the Revenue Commissioners on them. People are more terrified of them than they would be of a mad dog.

The Deputy frightened the farmers.

We are not dealing with the Revenue Commissioners or the Finance Bill on this motion.

(Cavan-Monaghan): We will be dealing with them very soon.

We are only dealing with the cost of houses and the building of houses.

(Cavan-Monaghan): If people want to avail of this grant in future they will have to put their hand in the mouth of the Revenue Commissioners and get it severely bitten. They will see it as a procedure to extract more income tax from them. I am sure the Minister has had this pushed over on him without really thinking about it, but I would advise the Minister to drop it. It will be fought strenuously on the Finance Bill.

That is the place for it.

(Cavan-Monaghan): It looks like a device for cutting down on applications for housing grants. There is no doubt that the Government are cutting down drastically on local authority building and this will force people to buy houses at exorbitant prices. The record shows that whereas a sum of £28,601,000 was requested and £22,678,000 was granted in respect of work in progress on local authority houses at the beginning of this year only £13,914,000 was requested and only a paltry £4,665,000 was granted for new houses during the current year. The largest sum was requested and allocated for work in progress, work that was sanctioned by the last Government.

When we come to the second half of this year we find that the amount of finance requested by local authorities for houses is cut by nearly one-fifth. The Government are certainly living up to their White Paper which I have here, but which I have not time to read out. In that document—and it is on the records of the House—the Government promised to put local authority housing low down on the priority list and they have done just that. I am further told that the effect of this—I can see that the Chair is a bit uneasy——

I am anxious to get the Deputy back to the motion. Local authority housing is really not relevant.

(Cavan-Monaghan): If the Chair will wait a moment—I think I have shown beyond yea or nay that the price of houses has jumped dramatically by nearly £2,500 per house. The effect will be to put these houses out of reach of many people who would ordinarily be expected as a result to be accommodated by local authorities. On the other side, the supply of local authority houses will be contracted; the money will be withdrawn and the number of local authority houses will be reduced dramatically. That means that because of the failure of the Minister to control the price of houses and his failure to give local authorities sufficient money to build houses these unfortunate people will be left without houses. Nothing could be more relevant to a motion which is expressing alarm at the dramatic increase in the price of houses and which deplores the failure of the Government to take remedial action. The Government could take remedial action by building more local authority houses; they are doing the very opposite, closing down on them.

There is another serious matter in regard to the housing situation and the alarming increase in prices. Building societies are experiencing a substantial cutback in investment income. Last week the Minister denied that in this House but I want to put on record again that there is no doubt about it. The chief executive of one of the principal building societies went on the radio since and confirmed that they were experiencing a cutback in investment income. From inquiries I made since last week from another one of the big five I am satisfied that investment income is not only slowing down but drying up.

One building society which was lending money up to about a month ago to members who had £1,000 on deposit for six months has changed its policy and it will now only lend money to members who have money invested with them for 12 months or more. Is that not evidence that they have not the money to lend? Otherwise, they would not be taking steps to slow down applications first, by making it a condition that applicants have money invested with them for six months and now by stipulating that applications will not be entertained unless the applicants have money invested with the society for 12 months. How in the face of that can the Minister say that there is no change—in the wrong direction—in the building societies? Of course there is.

The position is that the price of grant houses has increased by 20 per cent in round figures or by £2,445. The Minister seems to be satisfied. The second point is that the Government are cutting back—savagely, I must say—in the building of local authority houses in accordance with their policy as outlined in the White Paper. Thirdly, finance for building societies is slowing up and applications are being put on the long finger by these societies. I await with interest to hear the steps the Government have taken to regulate house building costs. Flowing from all this I can see some very anti-social effects. As I see it, there is no way in which a young married man on his own income can afford to finance the building of a house that is increasing at a rate of £2,500 approximately. Apparently, the Minister is quite prepared to let it go on at that rate and accept it as a normal increase. The inevitable event is that his wife must go out to work whether she likes it or not. I believe married women have the right to work if they want to do so and the Government of which I was a member saw that, but I do not believe that young married women should be driven out against their will to work to provide a house or help their husbands provide it. That is anti-social and a move in the wrong direction. It also adds to our unemployment problem because many young women are quite prepared to stay at home when married and look after the house and babies when they arrive. In many cases the one thing that ensures wives will neglect the home or at least absent themselves from it and put themselves on the labour market is an unreasonable house mortgage. I call on the Minister here and now to tell us what steps he has taken to regulate and reduce building costs—that is what the manifesto says.

I was going to spend a few hours going through debates about housing that took place here last year and in previous years but I decided that it was no use; I knew what they were all about. There was a cry from Fianna Fáil when in Opposition that housing prices were ridiculous, that they would have to be reduced because people could not pay the cost of houses. Now Fianna Fáil are in office. We have heard the promises and have seen the performance and the performance to date is a pretty miserable one.

I move the following amendment.

To delete all words after "Dáil Éireann" and substitute the following:

"expresses confidence in the steps taken by the Government to regulate house building costs".

Nobody welcomes increases in costs particularly when they affect something of such basic importance to most people as housing and the provision of houses for young people in particular. I am no different. I share the concern with the trend in housing costs and if I were in Opposition I would consider it my duty to show my concern also and raise a matter such as this. But at least I should attempt to be constructive in what I would say and not just be critical as Deputy Fitzpatrick was.

The motion in Deputy Fitzpatrick's name describes as unreasonable the level of increase in house building costs over the past year. It lays the blame for this on the failure of the Government to take remedial action.

During the period from 30 June to 31 December 1977, the average gross prices of new houses for which loans were advanced by all the major mortgage finance agencies increased from £14,306 to £15,784, or by 10.4 per cent. This was a substantial increase but it becomes very insignificant when compared with the 113.5 per cent increase in the average costs during the four-year term of office of the Coalition. How effective were the Government controls being exercised at that time?

The National Coalition Government took office in March 1973. For the year ended 31 March 1974 the cost of house building increased by a staggering 36 per cent. Even in the 12-month period ended March 1977 when world inflationary trends generally had been curbed, costs of house building were increased by 22.2 per cent. Let is contrast this with the position in the corresponding period ended 31 March last when the house building cost index went up from 145.5 to 160.4—representing an increase of only 10.2 per cent. The rate of house building cost increases has, therefore, been halved a less than a year since our coming to office and I expect the rate to moderate further as this year progresses since the March index provides for the 8 per cent increase in labour costs under the first phase of the current national pay agreement.

Inflationary trends in prices will in future be associated with the last Coalition Government. Not alone house prices but the cost of practically every other commodity also increased at an unprecedented rate during their term of office.

House building costs cannot, of course, be considered in isolation. During the period since April 1973 these costs, new house prices and earnings fluctuated considerably. There were times when cost increases exceeded price increases because of the lack of mortgage finance and the dampening of demand during the recession. The stage has now been reached where percentage increases since April 1973 in house building costs, new house prices and earnings are broadly in line.

The average gross price of new houses for which loans were approved by the main lending agencies increased by 20 per cent last year, compared with 1976. There was a corresponding increase of 19.2 per cent in prices in the building and construction industry generally. In Northern Ireland, house prices increased last year by 20 per cent.

Increases in new house prices, house building costs, earnings and prices generally in the building and construction industry have outstripped increases in the consumer price index over the past few years. One of the main reasons is that the consumer price index reflected such factors as the introduction of food subsidies, the abolition of domestic rates, tax on most cars and the general decline in mortgage interest rates. For obvious reasons, the prices of all commodities do not increase at a uniform rate. Increases in house prices in recent months have received widespread publicity here. There has been less publicity about the declining trends in electricity charges and the price of petrol and, indeed, the drop in house mortgage interest rates during this period.

The plain facts of the matter are that any real effective controls introduced over the levels of house building costs have been introduced by Fianna Fáil administrations. The basic statutory control over the cost of grant-type houses is provided by section 35 of the Housing Act, 1966—a Fianna Fáil measure. The system of house price control using the certificate of reasonable value, was first introduced in 1973 by Deputy Molloy, now Minister for Defence, who was then Minister for Local Government. That system was extended by me last July to practically all new grant-type houses and flats as one of my first moves as incoming Minister.

That control provides an effective guarantee to a person buying a grant-type dwelling that the price he is being asked to pay is a fair one. My Department's intervention has resulted in quite a number of cases in builders conceding appreciable reductions in the prices they originally intended to charge. The resultant savings to purchasers of these houses is estimated to have totalled about £700,000 since the Government took office less than a year ago. There is no evidence whatever to suggest that the controls are either forcing builders out of business altogether or obliging them to switch to the building of so-called luxury houses or non-grant type dwellings. The continuing flow of applications to the Department for new house grants effectively counters the validity of that suggestion.

It has been suggested that the £1,000 grant contributed to the inflation of house prices. When I introduced the grant in July last, I extended the system of house price control to all State-aided private new houses and flats. Previously the system had been confined to houses of four or more which qualified for assistance from public funds. The £1,000 grant is paid directly to the person purchasing or building a house so that the builder does not pocket the grant. The grant is obviously very popular with house purchasers and builders. More than 11,500 applications for this grant were received in my Department between 6 July 1977 and the end of April 1978. As houses are completed and occupied the grant becomes payable and will be paid.

(Cavan-Monaghan): Will the Minister state how many grants have been approved subject to occupation and completion?

Approximately 50 per cent to date have reached that stage. It is obvious that at the beginning the payments were slow because according to the regulations governing the grant a house had to be started after 26 May 1977 and, therefore, one could not expect the grants to be paid last September or October. Only now are the houses coming in line for payment and the pace of payment is increasing. Deputy Fitzpatrick said that the grant was gobbled up by the increased prices and by the builders, but during the period of office of the Coalition the increase was of the order of 113.5 per cent. I wonder what happened to the grant of £325 which the Coalition did not see fit to increase during their four-and-a-half years in office? How effective was that with regard to the purchase of new houses or helping people to acquire their own houses?

The Deputy should not forget that in 1976 the then Minister introduced very strict controls over who would qualify for the £325 grant at that time by putting income limits on the people who would qualify. This resulted in the first six months of 1977 in only 2,500 grants being approved by the Department of Local Government whereas now between 6 July 1977 to 28 April of this year over 11,500 applications have been received of which 50 per cent have been approved. This is surely the most effective answer to those who criticise the availability of the £1,000 grant. It seems to me some of the Opposition are very perturbed that this £1,000 grant was made available at all. When we compare the trend in prices approved under the CRV system it should be borne in mind also that the system was extended last July to take in the grant type houses I have already mentioned. This is a very important feature of the CRV system which was introduced in 1973 which was not there before.

During the recent debate on my Department's Estimate the proposition was put forward that power should be given to the Prices Commission with regard to the control of house prices. I explained in my reply that this was not a feasible proposition. Hardly any two houses are identical in every respect, as is normally the case with the type of commodities over which the Prices Commission have control. Site values vary and conditions can vary from site to site. The cost of roads, water, sewerage, electricity services, extensions of the ESB supply vary from scheme to scheme. The quality and extent of the fittings to houses also differ widely from scheme to scheme. The present arrangement using the expertise of professional officers of my Department, which include a quantity surveyor, architects and engineers, all with their own particular experience of houses, has worked well. During the past three years it has secured savings exceeding £1.5 million for house purchases. The only way the Prices Commission could have a function such as this would be by duplicating all those services and staff.

When a Prices and Incomes Bill was being prepared in 1970 the Fianna Fáil Government at the time gave serious thought to the question of including house prices within the scope of control by the commission but, largely because of the reasons I have already mentioned, it was decided that this would not be appropriate or would not be workable. However, Deputies will be aware that the prices of building materials and the rates of professional costs affecting house building are subject to control by the commission. Whatever the merits might be of requiring the commission to control the price of new houses, it would be altogether out of the question to charge them with the responsibility of overseeing the level of prices for previously occupied houses. The commission have no function in relation to second-hand houses no more than they have in relation to second-hand cars. It is not a realistic proposition to engage the Prices Commission in.

Steps were taken early in the present year by the Department of the Environment in the United Kingdom to restrict the amount of money to be advanced by building societies in that country for new house mortgages, but it has not proved effective there. The scale of investment from time to time with our building societies and their intended level of advances is a highly important factor in the Government's national housing programme. The position is kept constantly under review by my Department and if action were required it would be taken without delay. However, as matters stand, there appears to be little call for following the action taken by the United Kingdom Government with regard to restricting these loans.

The approach of our major building societies, the big five, who are responsible for 98 per cent of all society loans, to the commitment of funds for new mortgages has always been responsible. I would be reluctant to intervene in their day to day operations unless the justification for this was clearly established. The results of the heavy-handed approach of the previous Government to the societies in 1973 and 1974, when limits were placed on the maximum amount of the mortgage which could be advanced in any case and the issue of loans for previously occupied houses was prohibited, provides a most effective warning against undue bureaucratic intervention in the workings of responsible commercial undertakings such as the building societies.

Loan approvals by the societies fell from 12,383 valued at over £67 million in 1972 to 7,350 valued at £39 million in 1973, largely as a result of the Government intervention at that time. Considerable hardship was caused to owners of existing houses who wished to sell their dwellings and particularly to persons who were liable to be transferred to different centres, such as gardaí, ESB officials and other such people. While we are talking about the availability of mortgage finance I would like to confirm the estimate of 26,500 new house completions this year is still a valid estimate. It takes into account the fact that the Government have increased the provision for SDA loans from £17 million in 1977 to £39 million this year. The associated banks expect to advance loans totalling £30 million.

Expenditure by the building societies on loans may reach £150 million this year compared with £120 million in 1977. While there has been a drop in the net inflow of funds to building societies in recent months the target of £150 million for this year is still achievable when we take into account the particularly high inflow at the end of 1977 and the liquidity position of the societies at that time. The position in this respect is being kept closely under review. Some people have very short memories. The net inflow of funds to the societies dropped to less than £18 million in 1974. The net inflow for the first three months of this year was £21.3 million. This is a vast improvement.

The view has also been expressed that the supply of mortgage finance should be increased. This step might cause trouble in the housing market, overheat the market and cause further increases in house prices.

Some Opposition Deputies conveniently forget that house prices this year will be about £2,000 up on last year and some £2,500 up on 1976. It has been suggested that half of the contribution to the increase in house prices lies in the control of land prices. As far back as January 1974, at a time when housing costs were escalating much more rapidly than they recently have been, the previous Government announced that the high cost of building land was caused by complex elements and that an effective solution to it involved far-reaching remedies. The then Government announced their acceptance in principle of the approach put forward by the majority of the members who sat on the Kenny Inquiry. That report was still gathering dust when they left office in July 1977. When I became Minister at that time my first priority was the implementation of job creation proposals and urgent measures promised in our election manifesto. It is now my intention to have the Kenny Report re-examined and to have a further look at its recommendations. I hope to present my considered recommendations on the subject to the Government in the not too distant future.

A few years ago land prices remained static for some time and even dropped in some instances. In recent months land prices have tended to increase, but this partly reflects the increasing costs of agricultural land associated with the growing prosperity of the farming community. Undoubtedly also the increasing costs of sites for new housing development are a consequence of the scarcity of serviced land. Since July last I have increased very substantially the capital available for sanitary services. This is the most effective way in which we can increase the supply of serviced land. The capital allocated for the purpose in this year's budget totalled £33.72 million, an increase of practically 30 per cent on the £26.23 million allocated in 1977.

Local authorities are primarily responsible for the provision of sanitary services in their areas and, with the more generous supply of finance provided by the present Government, they have been making comment about headway in dealing with the backlog of serviced sites. There is another way in which they can make a useful contribution towards combating excessively high prices for sites for the more modest type of private houses. They have power to develop and make available sites for such private houses and these are qualified for a subsidy from my Department.

At 31 January last local authorities had in their possession, building land including lands on which development had then commenced or was pending, sufficient to accommodate an estimated total of nearly 90,000 dwellings. Even on the basis of an annual building programme averaging 7,000 dwellings, this would represent a sufficient reserve for more than 12 years output. I would like to see local authorities developing some of this land, particularly in areas where serviced sites are scarce, with a view to making it available for private housing.

In recent months the increase in house prices has received considerable publicity in the Press and the effect has been to create a situation where potential house purchasers tended to suffer from a certain amount of panic. This does not help the situation in any way. There is no doubt that the number of new houses which will be built by the private sector in the coming year, some of which are now under construction, will be increased considerably. Deputy Fitzpatrick said it was set out in the White Paper that we would cut back drastically on local authority housing. That was not stated in the White Paper, which conveyed that a critical appraisal of the cost of local authority houses would be undertaken. This is happening.

The motion seems to give the impression that house prices did not increase in the past four-and-a-half years. During that period they increased 113.3 per cent and no steps whatsoever were taken by the Government to control or regulate these prices in any way. When we came into power we extended the CRV system to all grant-aided houses. Any person purchasing a house expecting to get £1,000 grant should first ask the builder to show the CRV or apply to the Department where they will be immediately informed that a CRV is necessary.

Deputy Fitzpatrick said people are rushing in, paying their deposits, solicitors and so forth, and that they are being led to believe the CRV is available. If any builder leads anyone to believe that a CRV is available if he has not got one or applied for one, he is conning the would-be purchasers, and if Deputy Fitzpatrick knows of any such case I would be delighted if he would bring it to my attention.

The Minister, while making a valiant effort to redeem his party's pledge in the manifesto, was unable to deny the incontrovertible evidence before the House that the overriding and most obvious fact, despite all the verbiage about the last four years, is that for the first time in the last year the price of new houses has soared at a rate which is unprecedented and which shows signs not of escalation but of a spiralling. As late as this week we had a spokesman for a major building society admitting that in a period of 18 months he anticipates that the price of new houses will increase by a total of 40 per cent. I am sure he is not in any way opposed to the interests of Fianna Fáil in promising right, left and centre to everybody who is there to listen that now the IOUs are being picked up and they are not delivered. The reason is simple when we come to the question of the price of new houses. This party would believe that a house or a home of one's own is not something that can be dealt with as another commercial commodity by people allowed to operate unchecked without some scrutiny in the free market which exists in our society. A home of one's own is a fundamental right which should be guaranteed by the State and which that State should enable people to acquire. The Fianna Fáil Party, because of their roots and their clear ideological bias—if I may glorify chasing after money as being an ideology—are by their nature unable to comprehend in a housing policy the basic ideal of this social justice of which I speak. That party have sold their souls to people who are oiling the party machine. Fianna Fáil have sold out, and the more one hears from them and the more one sees of their activities the stronger is the impression that in Fianna Fáil the people who are strongest triumph and there is no basic concern for the weaker section in our community.

It is difficult to take one sentence from the body of material published and the speeches we have heard on such things as the price of new houses and say "This is the evidence". Anybody who would systematically put together and integrate the variety of documents which have been published by Fianna Fáil will see the evidence. It is clear in the White Paper and in the policies—or lack of policies—which we have seen so far and in the alacrity with which certain proposals which have a mass gut popular reaction have been embraced while the party have at the same time refused to tackle those areas which are obviously socially necessary but which would involve treading on the toes of their party supporters.

The question of a home as a fundamental right is the basis of the great concern that we have in putting down this motion the purpose of which is to highlight the inadequacy of the Government's response on the question of soaring house prices. The truth, down in black and white, is that the party now in Government promised to make it easier and cheaper for people to buy a home. It is not easier, and anybody who has been trying to get either the £1,000 grant from the Minister or a certificate of reasonable value out of the Government will say that it is not easier. The Construction Industry Federation have already clearly said that it has become so difficult to deal with the new scheme of grants that builders are actively being encouraged into the £30,000 plus house, and I will quote chapter and verse for that later. In no way is it cheaper either and I defy anybody in the benches opposite to pretend that it is. The price of new houses has gone up in the order of 20 per cent in the last seven or eight months and all the indications are that they are going to go even higher. All the Government are willing to do is to ask their backbenchers, every one of whom knows the truth of what I am saying, to fall in behind them like sheep and bleat confidence in the Government who promised to make them cheaper and are failing in their objective.

The primary concern of the Fianna Fáil Party is not to ensure that the resources of the nation are distributed fairly and justly or that people get homes. Their primary concern and thrust is to ensure that those who support them are paid off. The Minister told this Dáil some months ago in reply to a question that the average length of time it takes to pay a £1,000 grant is seven weeks. The word "lie" is one we are not allowed to use here, but whatever acceptable substitute is appropriate I will use. It is not true; it is not in accordance with the facts. I am sorry that the Minister is not here to tell me that himself. At one time we were told that the £1,000 grant might be used as a deposit. Since that time I have met a number of anguished young couples who were misled completely by that promise, which was in the fullpage advertisement which the Fianna Fáil Party took prior to the elections; a £1,000 grant for first-time house purchasers. I defy the Minister of State at the Department of the Environment or anybody else to contradict that. If there was a code of advertising standards in this country the Government would be held in contempt of that. They promised a £1,000 grant to all first-time purchasers of houses; not new houses. Do not mind what was in the manifesto. I wonder how many copies of that were printed. It is the advertisements, the canvassing and statements made prior to an election which count.

Nobody will tell me that the average young couple about to embark on buying a house believed anything but that if they were involved in getting a house, new or secondhand, they would be entitled to that grant. That grant, by virtue of the way in which it was implemented, was one of the most inflationary elements in the house price boom since then. We have been awaiting some measure of concern of active interest on the part of the Government which has not been forthcoming. They are not concerned about the price of housing. Why should they be? The Estimate for the Department of the Environment in respect of the £1,000 grants is of the order of £11 million. Yet within three months of Fianna Fáil coming into Government the average cost of new houses had increased by a national average in excess of £1,000.

They got the prices moving, not the country.

They are charging 25 per cent extra for getting the country moving since last week also. The point is that about £11 million is going into somebody's pocket. I would like to make it clear that I do not suspect that it is the average genuine builder, the man with two or three people employed who is trying to eke out a living. There is a Fianna Fáil supporter of a certain calibre who is doing well out of this public money. The way in which the £1,000 grant has been implemented is a scandal. It has discriminated against the city of Dublin and it has had the effect of increasing the price of new houses. It has discriminated against the city centres of Cork, Limerick and Galway. Not one penny of public funds will be spent in these areas because no new housebuilding is going on there. If by some chance there is a new house on a corner in a city centre it is certainly not a first-time purchaser house. It is a very expensive house and will accordingly not benefit from this scheme. The effect of this is to slow down housing mobility and therefore to put up prices of new homes. One is now effectively inhibited from going into the second-hand house market. After all, if a young couple have an opportunity of buying a house how can we expect them to choose an innercity house with its problem environment already there, as opposed to a house in the so-called attractive suburbs where they will get the £1,000 grant? The Government and the Minister do not give one goddamn about these new suburbs.

I asked the Minister on more than one occasion in the Dáil whether he believed that it was desirable to have some idea of the impact of this grant scheme, not only in relation to the price of the house but in relation to the social implications which are at the root of our concern. He said no, there was not any such scheme and there would not be any such scheme. I am putting it to the Minister that the policy of the £1,000 grant has not been merely inflationary; it has been socially harmful. It is creating expectations in the suburban areas which are not going to be fulfilled. It is leaving behind a residue of perfectly valuable second-hand houses which are now no longer saleable at prices that are reasonable for couples. The result is that fewer people rather than more are owning their own homes.

The truth of what I am saying is borne out in the pitiful number of grants paid out under this scheme. Last week the Minister told us that 11,000 applications for the grant had been received. Indeed, each time he is asked a question about the scheme he talks about applications. Up to a couple of months ago the number of these grants that had been paid out for the six-month period was 400.

Taking the various strands of Government policy and the factors that contribute to the attitude that a house is essentially a commercial pawn and not a fundamental right with which the State should be very concerned, we can look at a number of documents. The Minister has referred to the White Paper on National Development. Despite his denial we find in that document not the bald assertion that there will be a cutback in the area of local authority housing—we do not take him for a complete fool—but a very clear bias against the tenant, against the weak and generally against those whose resources are limited: in other words against people who are not in a certain class in society. Apart from the provocative phrases such as "a lessening in the degree of relative urgency", which I as a member of Dublin Corporation find laughable, we find such phrases as that which says that "the local authorities will be requested to examine the circumstances of housing applicants in more detail to determine priority needs". Why is there not the same concern about the application of resources in the private sector? Why do we find that the local authorities are straining at the leash in trying to cope with distributing the paltry number of homes available in Dublin city in the fairest way possible? Why should these come under greater scrutiny? Is it the implication that these houses are not being allotted fairly? The answer is that it is fair game because if you discourage local authorities, the private building sector is encouraged. That latter sector should be encouraged but not at the expense of the local authority sector. On the other hand, if the private sector are encouraged there will be automatically bigger profits for Fianna Fáil supporters. That is what the question is all about. Since the change of Government £11 million worth of public money has gone into somebody's pocket but definitely not into the pockets of those people who have bought houses.

Various sets of figures were given in reply to questions put to the Minister by Deputy Fitzpatrick. These figures are worthy of some attention. Although I am a relatively newcomer to the House I find extraordinary the situation in which a Minister may ask the Dáil to vote confidence in a position in which house prices have soared by 20 per cent when he is one of a Cabinet who asked the people to accept a 5 per cent wage increase this year and in the full knowledge that house prices would escalate to the extent of another 20 per cent during the next 12 months. I have no confidence in the Minister's handling of the situation. Neither are the Construction Industry Federation satisfied with it. In the Evening Herald of 21 March there appeared an article headed “The £1,000 Grant Scheme is not Working” and the relative article went on to quote a CIF spokesman, Mr. Michael Greene, as saying that the builders who are involved in private house building are regularly being rejected for the certificate needed before a house qualifies for the £1,000 grant and are being given no reason for the rejection by the Department of the Environment. Would there be any possibility of the Department being engaged in a cutback in that area while benefiting from the rich political harvest of the promise they made? However, Mr. Greene is quoted as going on to say that the CIF find that there are major problems involved in the administration of the scheme and that they are unhappy with the way it has worked so far. That comment is not unduly strong but Mr. Greene is quoted as having gone on to say that this situation is having the effect of driving builders out of the medium-priced house and into the £30,000 class where they are not looking for the first-time buyer. Mr. Greene is quoted further as having said that, ironically, the system intended to help first-time buyers has turned around to act against them.

Fianna Fáil bowed regularly to the wisdom and collective knowledge of the CIF during the years of Coalition rule. Therefore, I see no reason for their taking too much issue with the same CIF now. Are the Government denying what the CIF have to say? They cannot deny it because they know it to be true. It is merely another piece of evidence to indicate that there is a boom, not in house building, not in Government concern for young couples, but in the profits of some builders. I stress the word "some" to distinguish them from the small builder, the man whom we should be encouraging. Rather, the boom in profits is going to the major builders, those who contribute substantially to Fianna Fáil funds. These are the chequebook cowboys who grease the wheels of that party machine.

Who greased the Deputy's wheels?

I got here by myself even if the task was similar to having to swim up the Niagara Falls.

Was it not the Deputy's party?

We have integrity and concern in regard to young people trying to find homes.

Perhaps the Deputy would speak to the motion.

I defy contradiction that I am doing otherwise but if I am a bit near the bone for some people, even for your good self——

The Deputy should not make charges against the Chair who is endeavouring to be very fair to everybody.

I was merely replying to a question put to me by the Minister.

I have given the Deputy a tremendous amount of latitude but he may not hope for that latitude to continue.

If I were to enjoy the sort of latitude afforded to me by your party, I would not be here at all. I am entitled to be here.

As an elected Member of the House the Deputy is entitled to be here. Nobody is questioning that but he must speak relevantly and not make charges against the Chair. He is only wasting his own time in being irrelevant.

Can the Chair indicate where I was irrelevant?

The Chair is not to be questioned by any Deputy. Would Deputy Keating continue his speech please?

I am not interrogating you.

That is what you are doing. I would ask the Deputy to move the adjournment of the debate so that we can move on to the next business.

As you wish, but I notice that it is not yet 8.30.

I suggest that the Deputy do as he is told lest he should be classified as a juvenile offender.

Deputy Quinn is wise enough to know that he should not enter into this argument.

Debate adjourned.

I am calling Deputy Desmond who has given notice of her intention to raise the question of Loughan House.

On a point of order, I would draw your attention to the fact that on both clock in the Chamber the time is not yet 8.30.

Maybe my sight is deteriorating but I read the time as being 8.30 and Deputy Desmond is in possession.

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