Deputy Michael Barrett is in possession and he and the previous speaker were sharing 30 minutes so he has ten minutes left.
Private Members' Business. - Building and Construction Industry: Motion (Resumed).
The following motion was moved by Deputy Molloy on 19 June 1984:
"That Dáil Éireann calls on the Government to take immediate action, as a matter of urgency, to revive the building and construction industry."
Debate resumed on amendment No. 1:
To delete all the words after "Dáil Éireann" and substitute:
"while concerned about the decline in activity and employment in the building industry, recognises that this decline arises from factors outside the Government's control, including the reduction in private sector investment and the reckless economic and financial policies pursued by Fianna Fáil when in Government, and endorses the policies being pursued by the Minister and the Government which are designed, firstly to maintain public capital support for the industry at the highest practicable level and, secondly to create the economic and financial conditions in which the industry can develop and grow on a sound basis."
—(Minister of State at the Department of the Environment.)
(Dublin North-West): Sir, when you asked me to move the adjournment of the debate last night I was stressing the need to have a large amount of capital injected into the building industry. There is an urgent need now to get this industry out of its present wretched state. The Government in Britain recognise the importance of the building industry and have introduced home improvement grants which in that country have created an increase in employment in the building industry. A number of men who were employed in the building industry in this country have emigrated to Britain recently, and this might account for the Government's latest announcement that there has been a reduction in the number of persons on the unemployment list here. The Government here should consider reintroducing home improvement grants. At present 45,000 people in the building industry are unemployed and that is one-third of the workforce. Another important factor is that a survey carried out recently has revealed that 20 per cent of building contractors here have no work on their books, and this is very serious for the future of the building industry.
The Government now should as a matter of urgency take some action in this respect. The slump in the building industry has created great problems for the many industries serving that building industry. The question might be asked: have this Government a deliberate policy of holding back finance that would allow the State section of this industry to progress? There is widespread concern whether the Housing Finance Agency will have sufficient funds to service the number of applications for loans. People who have applied for loans are very worried about whether these loans will be approved because of the lack of finance.
Hear, hear.
(Dublin North-West): The Minister and the Government should take this into consideration and do something about it. The State section of this industry is overmanned completely and its day-to-day running surely must give rise to the biggest bill that the Government have to meet. This section operates mainly in maintenance rather than in building. I call on the Minister and the Government to have a hard look at the building industry which needs to have large amounts of finance put into it. The reintroduction of improvement grants would encourage people to carry out improvements to their homes and at the same time create employment in the industry.
I understand that Deputy Molloy in his contribution last night accused me of not being in attendance in the House and said that I in some way neglected my duty as Minister for the Environment to answer for that Department in the House. I hope that that is not what was said, but it has been put to me that this was one of the points made.
I asked where the Minister was. I felt it was his responsibility to be here and that he has been a failure so far in his ministry. I want to put the record right on that.
Let me say to Deputy Molloy that when we were here last week answering questions, many of them put down by himself, he was absent. His questions were postponed then and some of them were postponed again today. In his attention to his brief as Front Bench spokesman he would need to keep his own house in order before he looks over at this side of the House. Deputy Molloy as Minister for the Environment some years ago — I do not like to remind him of it——
Have a look at the results.
——because he does not like to be reminded of that period — was probably responsible for the greatest slum development that we have known since the British were here. I can bring him to my county and many other counties and show him the low-cost housing for which he was responsible in the early seventies which now has to be rebuilt at an extremely high cost to the Exchequer when perhaps more houses could be built with the money we have to divert to repairing those horrible houses he was responsible for in his day.
That is ridiculous. I did not build houses. The National Housing Agency——
This is Private Members' time. It is a limited debate and we should not have interruptions.
When Deputy Molloy takes me to task in my absence at least I will meet him face to face and make my comments. In any event, I have read with interest the Fianna Fáil contribution to this debate and, as usual, it is full of tired rhetoric and the usual promises of more money. We have heard that so often. Surely at this stage we are entitled to be told where they are going to get £200 million. Deputy Molloy comes in here and spends money when he is in Opposition. I know and he knows that one of the major problems facing us as a country is the accumulation of debt payments that we have to meet every year arising from expenditure excesses of previous years.
The Coalition Government brought that in.
The figures are there and anybody who wishes to read them may do so. The Taoiseach gave them the week before last. The expedient of using public moneys to try to spend their way out of recession has been tried and found wanting and it is absolutely futile at this stage for Deputy Molloy to counsel a return to that approach. He may not like me or Ministers on this side harping on this theme, but whether he likes it or not it happens to be true. As long as he keeps calling for additional expenditure of the order he now suggests we will have no option but to point out the fundamental folly of the course he is recommending.
Before going further I would like to refer to my own major programmes of housing, roads and sanitary services which comprise about 60 per cent of total output of the industry. Also I would like to answer some of the points made by Fianna Fáil last night and then I will talk about the Government's plans for the future of the industry.
The Minister of State spoke comprehensively on housing matters last night and I would like to add just a few words to what he said. This year we expect that total housing completion will equal or perhaps exceed last year's total of 26,138 houses. Given the present unemployment situation and difficult economic conditions and their effect on housing demand, this represents no mean achievement. With regard to private housing, an adequate supply of mortgage finance is available and the number of new loans approved by different agencies is holding up well. Housing completions on the local authority housing side are likely to show an increase this year, and average employment on this programme has improved by 5 per cent in the first four months of this year and by 13 per cent since this Government took office.
As part of their overall development policy the Government are pursuing a programme of road improvements aimed at eliminating major deficiencies in our own road network within a reasonable period. Despite the present difficult economic situation, the Exchequer will be paying out about £127 million in road grants in 1984. These funds will enable significant progress to be made on the programme of road works outlined in the road development plan. Of that provision about £102 million will be spent on road improvements and roughly £25 million on road maintenance. Priority is being given to the improvement of the national routes and selected major road works on other important routes. Major projects under way this year include the Athlone by-pass, the Redmond Bridge in Waterford, the Bandon line and Custom House Bridges in Cork, the improvement of the Cork to Mallow road, and in the Dublin region the construction of by-passes at Santry, Swords and Palmerstown-Ballydowd. Apart from the construction work involved, the benefits accruing from this programme will include easier access to our principal cities, improved travelling time on the major inner-urban routes and less traffic congestion in our larger towns and cities. The investment of previous decades must also be preserved and this year's road maintenance grant will permit a reasonable standard of maintenance on national and other major routes.
The present level of State investment in roads represents a significant increase in real terms relative to 1979.
A review of the road development plan has recently been completed by the Department drawing on four years' experience of the operation of the plan. The review examined the progress made since 1979 and identified the principal road schemes to be carried out in the medium term on a priority basis. The review will be considered by the Government in the next few months in the context of the preparation of the medium-term plan. In preparing the plan, the Government will take into account the view expressed in the recent report of the National Planning Board that greater priority should be given to investment in major road improvement projects.
On the sanitary services side the Government are very conscious of the vital importance that the provision of an infrastructural network of sanitary services facilities plays in the promotion of economic development. Despite the recession and its attendant financial difficulties, the Government made substantial capital available in 1983 for this programme and a similar high level of investment, of the order of £99 million, has been provided for the programme in 1984. The high level of investment includes about £7 million to be provided for the small schemes programme which is used to finance schemes costing £50,000 or less. These schemes play an important role in maintaining employment for local authority direct labour forces. In addition to the small schemes programme local authorities carry out some major schemes by direct labour and this also provides additional work for the workforce of local authorities.
The provision for 1984 also contains an amount of £6 million voted capital to ensure continued assistance to private group water and sewerage schemes which have a significant contribution to make in bringing piped water to rural houses and isolated farms. Increased levels of grants are available to groups who are in the "less favoured" areas, mainly western counties, through the European Guidance and Guarantee Fund. In 1984, subsidy on the sanitary services programme will amount to £36 million. This subsidy consists of contributions to local authorities towards loan charges incurred on the financing of sanitary services schemes.
Average direct employment created on the construction of sanitary services schemes in 1983 amounted to almost 2,000 and I hope that this level of employment will be maintained in 1984 and 1985. To this end I recently approved 47 public water and sewerage schemes with an estimated value of £37 million. These are all either new major schemes or new sections of existing major schemes and brings the total of schemes approved by me this year to 57 with an estimated value of more than £43 million. I have also allocated almost £7 million to local authorities for local water and sewerage schemes costing up to £50,000 each. This will bring the total value of the public water and sewerage schemes at construction and tender stages to an unprecedented £450 million and will maintain in respect of 1984 and 1985 the increase of about 7 per cent in average employment on the schemes achieved in 1983. This again shows the Government's commitment to providing a high level of investment in a programme which is vital to the building and construction industry.
It must be recognised that in addition to the beneficial effects on activity and employment arising directly from the construction of the schemes, the sanitary services programme facilitates other forms of physical development so important to the wellbeing of the construction industry at present. For that reason I have been encouraging local authorities to ensure that the newly-approved schemes are brought to construction stage as quickly as possible.
The idea of joint venture housing and shared ownership were mentioned in this debate last night and I would like to clarify the issue involved. The idea of joint venture housing where private developers build houses on local authority land for sale to persons approved by the local authority is in principle a good one and one that I am very keen to support. It has been actively encouraged by my Department since February, 1982 and a number of local authorities have initiated joint venture schemes. I would certainly like to see more local authorities getting involved in this kind of housing activity and I am considering how this might be achieved at the moment. However, among the factors I have to bear in mind are the already high level of assistance available to private house purchasers — the £1,000 grant, the £3,000 mortgage subsidy, stamp duty exemption and income tax relief — the need to ensure equity as between those buying joint venture houses and those buying houses on the ordinary speculative market, and the inevitable limitations on public expenditure. The matter would be very simple if we could be sure that every pound spent on private housing aids would be matched by a corresponding saving in subsidies for local authority housing, but unfortunately things do not work out that way in practice.
The idea behind shared ownership is a simple one: if people cannot afford to buy a basic house suitable to their needs perhaps they could afford to buy a share of the house to start with and pay rent for the remaining portion until such time as their income rose sufficiently to enable them to buy out in stages the rented share. It is basically a scheme to meet the needs of people whose incomes would not be sufficient to repay the usual kind of building society or local authority mortgage on the annuity basis. However, it must be emphasised that the Housing Finance Agency already meet the needs of this particular segment of the housing market by providing loans repayable on an income-related basis and that the shared-ownership concept has only been successful in the UK and Northern Ireland in the absence of an income-related mortgage repayment scheme and where the level of owner occupation and of financial support by the Government for house purchasers is considerably less than in this country. I am not convinced that there would be many people who would wish to buy only a share in their house and pay rent on the remaining portion, for which they would receive no income tax relief, when in fact they can already purchase the entire equity of their house with low repayments under the HFA scheme.
It is also important to stress that the shared ownership concept would not build any additional houses unless the Government provided the funds since the operation of the scheme requires the Government to fund in the first instance the purchase price of the house involved. However, I retain an open mind on the question and I am having the idea examined in my Department to see what advantages it may offer. It may, for example, be useful in relation to the sale of local authority houses to existing tenants where a newly appointed tenant with no tenancy discount might otherwise find it impossible to purchase his house under the existing arrangements.
All in all, while both joint venture and shared equity may have a contribution to make, it would be over-optimistic to think that they have the capacity to transform the housing scene here. However, as I have indicated, Deputies can be assured that I will give my support to any ideas that offer the prospect of improving our housing situation on a basis that can be shown to be cost-effective.
Deputy Nolan referred last night to the latest CIF/EEC survey of the construction industry for March 1984. While his information on the increase in the number of firms in the residential building sector that had ceased building was correct he neglected to refer to some very important quantitative information contained in the survey, namely, the average number of months required to finish work in progress and contracts in hand on the survey date. In the case of non-residential and civil engineering sectors of the industry the level of work which firms had in progress and for which contracts were in hand at the end of March this year was above that at the end of March 1983 while in all sectors the level in March 1984 was above the level in December 1983.
The National Planning Board's report was mentioned during this debate by Fianna Fáil speakers. Deputy Molloy in particular used it to point selectively to its recommendation on roads to the proposal for expenditure of £20 million on certain infrastructural projects. However, he did not mention the fact that the board said that the £20 million should be found by reducing other PCP allocations. Neither did he mention some of the other points the board made about investment in the building industry — for example, that no new subsidies or tax reliefs can be introduced to boost building activity, that the requirement for renewed growth in certain sectors of the industry is strong growth in the economy; and that special measures to boost building activity would make no contribution to recreating conditions for sustainable growth. I may not agree with their views — and indeed Deputy Molloy may not agree with them either — but if he is trying to use the board's report as a model of the way in which the Government should deal with the building industry, there is at minimum an obligation on him to give us a balanced picture of what the board had to say about policy in relation to the industry.
I would like to look briefly at the prospects for growth in building and construction output and the role of the State in encouraging and sustaining orderly growth and development. As of now, it appears that 1984 will see the worst of the recession weathered and a course set for a recovery in output in 1985 which will be strengthened in 1986 and, I hope, sustained in future years.
Generally, I would expect to see growth in the industry for the second half of the decade keeping more or less in line with the growth in the economy as a whole. We have had in the past periods of very rapid growth intermingled with periods of negative growth. It would, I feel, be in the industry's interests that in the future the aim should be to secure steady and sustained growth of a kind that will not put undue pressure on resources while at the same time allowing us to meet our essential requirements for infrastructure of all kinds. The industry will undoubtedly continue to depend heavily on public sector support and investment but it must also look to the private sector to generate demands for its services.
Inevitably, the pattern of demand from the private sector will depend on what is happening in the wider economy. In so far as the public sector demand is concerned, there is a recognised need to plan ahead and, in particular, to give the industry advance notice of the likely trend of public investment not just on a single-year basis but covering perhaps a period of three to five years. There is a Government commitment to produce a medium-term public capital programme and I have no doubt that this programme will provide the industry with a basis on which it can plan with some degree of assurance. But, having said that, I would emphasise that by its nature the industry will always be subject to some degree of volatility and it would be foolish to think that the Government can ever be in the position of being able to guarantee the industry an overall level of work or demand for its services.
A integrated public policy for the building and construction industry, if it were possible, would go beyond the preparation of multi-annual investment programmes for the main area of infrastructural investment and an assessment of the impact of existing specific policies which impinge on the industry or its output. It could, for example, give a better assurance of value for money, encourage innovation and ensure compatibility and consistency in the operation of public policies that have a direct or indirect effect on the industry. I should mention in this regard that the Sectoral Development Committee is at present finalising a detailed study and evaluation of the industry, which, I am confident, will provide valuable bench-mark material in relation to the industry and provide a context within which decisions as to future planning for the industry and the Government's role in relation to it can be taken. We need, too, to develop measures for assessing the returns we can obtain from public investment in different kinds of construction, the direct and indirect employment and output effect the fiscal impact and the financial return. Information on these matters would provide an improved basis for policy decisions and make the returns from construction investment more transparent. Better methods of forecasting construction output are also needed.
What I am trying to show is that the problems of the construction industry are to a significant degree rooted in the very nature and characteristics of the industry and that they are not therefore amenable to easy remedies. The industry has learnt the hard way through its experiences since the bonanza in the late seventies but at least it can be said with some degree of confidence that the major part of the decline is now over and that modest growth may begin in 1985. This is, therefore, a good time to plan ahead on a realistic basis taking account both of the problems and the opportunities that lie ahead.
Finally, I hope, that in what I have said tonight and what the Minister of State said last night we have indicated the Government's real concern for the building industry and for its workforce. We have maintained the sectors of the industry for which we have a direct responsibility at the highest practicable level of output and will continue to do so. Our actions in the housing, roads and sanitary services areas and in relation to the other items in the public capital programme for which there has been a genuine demand have prevented the decline in the industry from being much more acute. Deputies may be assured that this will continue to be our approach. But in the last analysis we can never have a soundly-based building industry without a soundly-based economy. It is in the interests of the building industry that we should persist with our plans to put the public finances on a proper footing and restore competitiveness to our economy. The steps required to achieve this necessarily impose constraints and restrictions on all sectors during the period of adjustment. There is, however, no other way and it is time that the Opposition realised it. Instead, they have come into this House again making the same rash statements and suggesting so-called "solutions" for an industry which deserves better.
I had hoped that by now they would have at least modified their approach in some respect. Obviously and unfortunately, I am wrong.
Not one line of hope for a declining industry.
The Minister has not been in the Department of the Environment for very long. The previous holder of the office was no less than the Tánaiste and leader of the Labour Party. This matter was discussed widely 12 months ago. Various proposals were put forward but the position has remained the same.
There is a major crisis in the building industry. We heard nothing from the Government about what efforts are being made to improve the position and alleviate the very serious unemployment situation in the building industry. There are approximately 45,000 to 50,000 people unemployed in this industry and we have heard very little about them. What is being done about this problem.
Over the years the building industry was one of our major employers. The building industry, particularly in Dublin, is almost at a standstill. I would like now to refer to the unemployment problem and the people on short time in the building supplier side of the industry. The building and construction industry employed many apprentices — carpenters, bricklayers, plumbers and painters. This is a well known fact, not Fianna Fáil gossip as it is often described: at present apprentices to the building industry who had served one, two or three years have been laid off and have been unable to find employment to complete their apprenticeship. I ask the Minister to look into this serious problem. It is a very sad situation when an apprentice is unable to complete his apprenticeship or to find any other kind of work.
It is well known that house builders have been unable to sell many houses. Probably one of the main reasons for that is the uncertainty of employment. People are unwilling to accept the responsibility of buying a house when they are unsure of their jobs. Until a few years ago people in certain types of industry were regarded as having safe jobs but unless one is employed in a very specialised industry one would be very hard pressed to find a secure job at present. Every day we hear of firms closing down and this is all adding to the problems of the construction industry because people are not buying houses. Down the years the small builder contributed to the success of the building industry. The small builder who built ten or 20 houses a year and employed five, six or 12 men has disappeared from the scene. What efforts are being made to help these people? It was accepted by all political parties that small industries played a very important part in the development of the country.
In his speech the Minister referred to the housing side of this industry, but let us look at other areas. I want to refer to the cutbacks in education because they are affecting the building industry. There has been a major cutback in school building. I appreciate that the Minister for the Environment is here tonight and not the Minister for Education but the cutbacks in school building have affected this industry.
The Minister referred to Housing Finance Agency loans. They have made a very good contribution to the building industry in the past few years. However, I have received representations from all over the country because people have experienced considerable difficulty getting these loans. There is a slowing down in this area and I ask the Minister to ensure that this situation does not continue. Many rural Deputies have had complaints from people who have been unable to get these loans.
Prior to the 1982 election the Coalition parties produced a policy programme which clearly stated that if they were elected to Government they would immediately provide an extra £100 million for the construction industry. When it came to the 1983 Budget not only was that £100 million forgotten, but many more millions of pounds were taken from the capital programme. So far we have heard nothing about this.
Last night the Minister of State said we were listening to the old style Fianna Fáil propaganda criticising the industry, and that it was Fianna Fáil who left the industry in this state. The time has come for the Government to accept their responsibilities. They have been in office since November 1982 and there is no point blaming Fianna Fáil at this stage. What have the Government done to help the building industry since they took office? This industry is facing a major crisis and recent surveys show that since this Government took office the unemployment situation is worsening. A solution must be found for this.
Over the years the building industry has played a very important role in the development of the country. It is not just the people employed in the industry or the builder making a profit who are involved, but many other industries benefit from this industry. I have been engaged in building supplies for many years and I know the situation.
February 1957 was one of the worst months for the building industry but the present situation is as bad. In 1957 we had a Coalition Government in power, and we have a Coalition Government in power today. The time has come for the Government to state their policies and to tell the people what they intend to do to improve this situation.
The Government must realise that developers and builders and all others associated with the construction industry have no confidence in the Coalition. That is what is causing the problems in the industry. It is about time, therefore, that the appropriate Ministers would arrange a get-together with the industry to discuss its problems and to give renewed confidence because without confidence there will be no investment. Many small builders have houses lying half completed but they simply cannot finish them because people, uncertain about their employment prospects, will not purchase.
There has been considerable slowing down in regard to group water schemes throughout the country. I understand grant payments have slowed down to practically nothing in the last 12 months — I learned this from a recent reply by the Minister to a parliamentary question. All these things are causing chaos throughout the construction industry. As well, there has been an enormous decrease in roadworks which is causing more unemployment daily.
The building industry has played a very important role in the development of the country and the creation and provision of employment, and it is the duty of the Government to do everything possible to restore confidence. I appreciate that the Minister took up office in this Department only recently but I earnestly ask him to try to remedy the delays in planning permissions and to do something about increased charges. There are considerable delays in Dublin and I have spoken about them on numerous occasions in the past few years. The provision of sanitary services has been slowed down and consequently many small builders with parcels of land throughout County Dublin are held up because services are not available. I suggest that the local authority should adopt a more lenient approach so that small builders might be able to begin to work again. I hope the Government will reconsider the funding of sanitary services.
All in all, there is a sad situation in the building industry because of Government policy. This has led to disemployment. I apportion most of the blame to the Minister for Finance, but the entire Government are responsible. They have been in office since November 1982 but the position is getting worse month after month and they cannot blame Fianna Fáil for it any longer. The Government's lack of incentive is tearing the industry apart.
According to information from the CSO, there has been only a 20 per cent completion of work on local authority housing. Graduates from Bolton Street last year had to go to AnCO to try to prepare themselves for future employment. The number of local authority houses being constructed in Dublin fell by 20 per cent in the first quarter of 1984 and it is questionable whether the target of 6,000 houses will be achieved.
Not true.
Twenty-four per cent down.
A few years ago architects and draftsmen had so much work that one had difficulty in getting plans drawn up. Today they are going around knocking on doors to see if there is any work for them. Many young people were employed in that side of the business but they now find it impossible to get work. When they took office, the Taoiseach and Deputy Spring promised that they would provide an additional £100 million for the construction industry but in the budget of 1983 not only was that money missing but many hundreds of millions of pounds disappeared as well. This has affected seriously an industry that has played an important role in the development of the country over the years.
I am glad to have a few minutes to express my views on the building industry. An idle nation is a nation in decay. It is well known that if given the opportunity the building industry could create jobs overnight. Recently we have been meeting many people with special skills, plasterers, plumbers, woodworkers, who cannot find work because of the disastrous effects of Government policy. Of course this Coalition Government are consistent in their treatment of this industry. Their predecessors did the same. When Fianna Fáil were in power building went ahead. I would remind the House that yesterday evening the Minister of State, Deputy Fergus O'Brien, said the Housing Finance Agency had sufficient funds to meet grant payments. The recent tender for funds to finance the Agency, as we all know, failed; yet the Minister of State has given an assurance that money will be provided by the State. I am anxious to know if this is true. I ask this question because in counties such as Limerick, Westmeath and particularly my own county there is a waiting period of anything up to eight months under the Housing Finance Agency. When that agency was set up it was introduced as the greatest thing that ever hit the land, something that would solve all the housing problems, something that would encourage people to build houses for themselves. That would have been an excellent policy but unfortunately that has not been the evolution. It was only yesterday a constituent asked me was it true that his application for a housing loan would be passed next week but he would have to wait until next January for payment. I would like the Minister now to assure me that this will not be so. It should not be so. If it is so it will be a complete contradiction. I should like that to be cleared up because that question is being asked nationwide. Is the money there and available?
A sum of £56 million was made available for the HFA loans and this year £83 million is available and will be spent on HFA loans. If, as the Deputy says, there is a waiting period all I can say is that the demand has grown out of all proportion as compared with last year. That can be the only reason for delay. The money has been increased by £17 million this year. This money will be provided and will be given to the local authorities.
Everybody knows there is no money.
I am telling the Deputy that £83 million will be spent this year, £17 million more than last year.
It was worthwhile to hear the Minister say he will ensure there will be no waiting period. That is what I understand him to say. If what the Minister says is not true and there is no money, then it is not surprising he does not succeed in the European Parliament.
The most alarming feature is that all indicators now point to a further decline in the construction industry unless, as my colleagues have said, there is a change of policy. Architects, engineers, quantity surveyors are all giving the same message. It is accepted that the industry must inevitably be affected by the worldwide depression but positive measures could be taken which are not being taken. The industry is of tremendous importance to the community. In various areas there is a need for physical improvements. Housing needs, school needs and so on must be met. This negative policy towards the industry must be changed. The potential in the construction industry is tremendous. The industry responds to community needs and Ireland is still a semi-developed country with a great deal of potential in that particular sphere. The philosophy of fax incentives or subsidies is quite fallacious and particularly damaging from the point of view of private funds being made available which, in addition to reviving construction work, would also generate subsidary employment.
Confidence is one of the most important assets in stimulating the economy and that applies particularly to the construction industry. We are all aware of the numbers who are losing their employment and the reason for that loss of employment is the construction industry. I heard an argument last night over cement sales in the beginning of this year. This side of the House was claiming that cement sales in the first four months this year had dropped. It is perfectly true that they have picked up now. We were told that last month cement sales had improved. For that one month that is so and the reason is that it was so low earlier on, that an upturn had to come at some stage. Also weather conditions had an important bearing on the situation. The weather recently was much better than it was this time last year and if one puts difficulty in finding the reason for cement sales being slightly up.
Do not forgot Fianna Fáil voted against.
I suppose you will blame Fianna Fáil for the weather last year as well. I would like to make a brief reference now to the serious issue confronting the industry, namely, the clawback which the Coalition Government have put in abeyance. But it is there hanging over the industry and I have been told by those involved in the industry that if this is not killed off immediately it will close down a great many firms which are on the brink at present. The Minister is well aware of this. I would ask the Minister to dissipate immediately the cloud that is hannging over the industry.
I understand about 35,000 families are waiting for houses to be provided by local authorities. We all know from our travels around the country in the last fortnight that there are people living in appalling conditions. In my own area in the last 20 years there has never been a time when a housing scheme was not in progress. Unfortunately for the past eight months there has been no scheme. That is a sign of what is happening.
I would appeal to the people across the floor to accept my word that what I say is true in relation to my area. I live in it and I am meeting people every other day who are looking for houses. I am asking the Minister now to put some money into the industry, an industry which will help him to solve some of the problems confronting the Government. The Minister has been landed with this difficult portfolio. The Labour Party have allowed themselves to take on the difficult portfolios and it is no wonder they find themselves in the sorry position they are in now.
In the time at my disposal I shall restrict myself to that aspect which relates to imports. Before I do so, however, it must be borne in mind I speak as one who dealt at first hand with the industry. I refer to the experience I had during the Alcan project which was the biggest project of its kind in Europe at the time. Sadly it is still the case in Ireland and many countries that this is an itinerant industry. Most people can look forward to security in their jobs, working from 8 a.m. to 4 or 4.30 p.m. in their factory or office and finishing at the end of the week, but the construction industry is still in the era of stop-go development. It has been crying out for a number of years for an overall policy to eliminate that aspect of its operation. I am sure people of all political persuasions would agree with that demand. I have spoken here on many occasions on different aspects of the industry and its employment content, which Milton Friedman has identified as the greatest reflator of down-pressed economies.
I want to speak about a very dangerous situation which is beginning to develop in the down-stream industry — the area of builders' supplies. There was a discussion here last night on the cement industry. We are all aware of what happened some years ago when one small group or individual started to import cement, causing havoc in the indigenous industry. Through whatever mechanism was employed that problem was resolved. We are now in a very difficult situation in that under the philosophy of the Common Market there must be free transport of goods, capital and labour. Badly depressed though our building industry is at the moment, it is in further danger if people decide to operate for themselves and introduce cheap construction industry imports.
Taking the gypsum industry as an example, I have been approached by workers in my city who are very concerned with what is happening at the moment. Gypsum Industries Limited have been working here as part of another foreign based company for the last 48 years and have given very worth-while employment to all types of workers down through the years. They employ at present 500 personnel. In recent times another company, a subsidiary of a Spanish multi-national company, have started to import gypsum into this country. That will have a very serious impact on the employment content of the gypsum industry which we have known up to now. It will create havoc if that situation is allowed to develop.
We are all aware of the fact that other countries in the Common Market are good and slick at evading the Common Market regulations. For as long as I have been in the Dáil I have referred to the fact that the Government here — and it is an honourable enough thing — tend to operate on a boy scout mentality. We forget all the hidden subsidies which other Governments supply to their native industries. It is outrageous that they are thereby circumventing the normal legislation and rules of trading within the Common Market. It might sound well to create a small industry employing eight, ten or 20 people by starting off this new import industry, mar ea, but in actual it could disemploy 100 people already working here in steady employment. A briefing given to me by workers in my own city employed in the gypsum industry stated that the company which always operated here was founded in 1936, employing 500 people. Foreign imports of plasterboard are a definite threat to this employment. If, for example, these imports gain 20 per cent of the Irish market, between 100 and 200 Irish jobs will be put at risk in the long term. The present threat comes mainly from Spain, with French and East German board currently in the background.
Ireland has the highest per capita consumption of plasterboard in Europe. Spain has among the lowest. This is a Spanish company which is operating an artifical agency here. The Spanish domestic market's annual demand is 2½ million square metres. The factory in Spain has a capacity of around 12 million square metres. It is owned by LeFarge of France, National Gypsum of the USA and Ultralitre, a Spanish company. The Spanish Government operate a subsidy system to encourage exports. This amounts to just under 10 per cent of full value, including agents' fees. Spain also maintains import duties of 24 per cent approximately to protect its home market from any counter-trading.
I appreciate that the Deputy has been considering the infrastructure of the Irish construction industry, but he is drifting into Europe and away from the motion which is before us now. This concerns the building industry in Ireland.
I accept the Chair's ruling, of course, as somebody who is very concerned that procedures should always be adhered to. With due respect, I do not think that I am straying away from the fundamental tenet of the motion, which is employment.
I thank the Deputy, but the subject matter relevant now is the Irish building industry.
I am speaking to one aspect of that. The Congress of Trade Unions have spelt out that 5,000 down-stream jobs can be maintained, in addition to the 15,000 in the building industry itself and I have spoken about this before, my views being very well known. We are talking about the building industry and similar industries. There is a danger at the moment that further jobs can be put under threat. We are talking about an import substitute programme here. I have heard figures quoted in this House in a general context, not just in connection with the building industry, indicating that if there were a swing away from imports to buying Irish products of 3 per cent over the present rate an extra 10,000 jobs would be created. Everyone here is lamenting the decline in employment, not alone in the building industry but in industry in general. I am seriously concerned that in a short-sighted attempt to get a foothold in a market, somebody starting up a small industry will do so at the expense of workers in the Irish construction industry. I am appealing to the industry to adhere to An Foras Forbartha's building project register here which is specifically available to help Irish companies to buy Irish made products within that industry. That should pre-empt the need for going outside the country and would protect Irish jobs.
Again, it cannot be said too often that every single one of us pays tribute to the concept of the Buy Irish programme. But some of us are like peacocks: we cannot look down at our feet because we do not know where our shoes have been made, whether they were made in this country. In every facet of every industry here we should look at what we are buying and keep Irish jobs safe.
In 1983 the building industry imported £300 million of construction products. There was a drop in that figure of £50 million between 1982 and 1983. If we could eliminate our present imports into the building industry, it is estimated that in a very short while another 8,000 to 10,000 jobs could be created here. That would give worthwhile employment within the industry on a regular ongoing basis. In spite of all the olagoning — a lot of it legitimate — which we get from the private sector of the industry, the construction companies themselves are contributing to that malaise by importing products.
The Deputy has five minutes.
There is a very legitimate temptation to buy cheapest, especially in an economy like our own which, as is common in western Europe, is going through a particularly bad time at present. However, could I appeal to the industry to look at its own conscience? It should see where it can buy Irish products and keep Irish people at work. That cannot be overstated. The Leas-Cheann Comhairle was present some time ago at a meeting with the construction industry in our own region and listened very sympathetically to their present difficulties. In spite of what has been said, the Government have invested very significant money over last year's expenditure, but there never would be satisfaction and I certainly am not satisfied with the level of investment in the construction industry. As much money as possible should be found to keep those people at work because it answers a dual need. I believe the Government are working towards that, however difficult the position is and given the kind of constraints we have at the moment. I would like to emphasise in this discussion on employment in the construction industry that the remedy lies in our own hands: we have the resources to control the level of employment, to stop any decline and to improve the employment content by cutting out altogether imported products in the down-stream supply industries of the construction industry.
May I correct a figure I gave, because I was not reading from a document when I gave it? The HFA figure for loans in 1983 was £55 million and for 1984 was £63 million. I inadvertently gave the SDA figure for 1984.
I agree with most of Deputy Prendergast's remarks. It is very important for us to be very careful about what he described as the downstream side of the industry. Architects and engineers have a duty, particularly at a time like this, to specify products which are of Irish origin and are up to Irish Standard specifications. That might might be a way of getting over the difficulty Deputy Prendergast spoke about.
For the record, I would like to state that the products produced in Ireland come from the highest developed technology in Europe and are among the finest of their kind in the whole world, but this is being undermined by cheap substitute grades.
I was going to suggest that the new regulations Bill might be of considerable help by ensuring that the products will have to be of specific standard and in that way overcome the difficulties about which Deputy Prendergast spoke. I welcome the opportunity to make a contribution, in the very short time available to me, in support of the Fianna Fáil motion, which was so ably proposed by Deputy Molloy. I would like to comment very briefly on the Minister's speech which has already been referred to by Deputy Hugh Byrne. It is something that I as a public representative and an engineer come across quite often. I refer to the difficulty in relation to mortgage finance. The Minister said there is adequate supply of mortgage finance available. It may be available in theory but on the ground and in practice a lot of people have considerable difficulty in obtaining adequate mortgage finance.
I would like to emphasise what has been referred to by a number of people on the Government side of the House as well as on this side in relation to the Housing Finance Agency. The hard practicality is that quite a number of people are being told they will have to wait seven months before they get payment and they will have to suffer on bridging finance for seven months. We will have to see if we can get over that. There is very little point in saying that money is available if people have to go and borrow the money and then have to spend seven months on bridging finance at 18 per cent to 20 per cent. We only mislead people if we tell them that adequate finance is available. Many purchasers have learned a hard bitter lesson over the long drawn out period they are on bridging finance.
Deputy Prendergast said that the building industry has often been descibed as the barometer of a nation's economy. If one takes this criterion and uses it in relation to Ireland the truth of this maxim is very evident. There has been a considerable fall in employment in the industry to what can only be described — I do not lightly use this term — as a catastrophic situation. Despite the Minister's best efforts tonight to state otherwise, never in my 25 years' experience in the industry have I seen it in such a deplorable state. The construction industry depends more than any other industry on confidence and trust. It is quite obvious that this industry has neither confidence in nor the trust of the Government, which unfortunately are so divided on ideological grounds that they have transferred to the industry their own uncertainty in regard to policy.
Government policies have stifled the industry and have effectively stopped what has been a developing facet of the industry. I refer to group water schemes, which could be reactivated. This came up at Question Time today and I know one of the problems the Minister has in relation to it. The system could be upgraded in order to safeguard the groups and the State without any very great cost to the Government. It is very significant that in the first three months of this year the total number of group water schemes paid was only 930 as against 1,745 last year. We got that today in reply to a question put down by Deputy Molloy. In the first three months of this year in comparison with the first three months of last year we are down by over 800 group water schemes. That alone would make a tremendous difference to the industry.
Many small contractors have a problem in relation to this. While the Minister has been very sympathetic to those which have been brought to his attention — I speak from experience and I would like to thank the Minister for his help in relation to a number of the group schemes I brought to his attention — there are many others where the contractors are in great financial difficulty. If something drastic is not done in the very near future many small contractors will go out of business. The Government could without any great cost very quickly end the black economy in the building industry. They could make it impossible for those doing "nixers" to conduct business. They could stop people from undermining the industry, from undercutting prices and from draining the confidence of medium and small contractors who are burdened by a tremendous variety of forms and taxes which a number of them are finding it impossible to keep up with.
There are many other things the Government could do to streamline the industry, to help the industry, and to restore confidence in it, which would cost very little but which would cut the red tape which is strangling many small builders. Unfortunately, over the last 18 months I have seen many small builders going out of business. They have thrown in the towel because they are unable to combat the bureaucracy which is overwhelming them. In 1984 some builders in Mayo are charging the same prices for local authority houses as they charged in 1982 and they are still being beaten on the price. I know one man who is a very strong supporter of the Government who priced a house recently at 10 per cent less than the price last year, and he was still beaten.
This is an impossible situation for the smaller contractors. The Government should help them. They could help them by making it impossible for people who have none of the bother and who have all the advantages, who have not got to complete tax forms or PAYE forms, and make the various deductions which small builders have to make, to compete for local authority houses. The Government should help the small builders.
The Minister should abolish the necessity for applicants for home improvement grants to wait for an inspector. I can understand why this was provided for in the changeover in the various grants. The time has now come for the Minister to abolish that necessity and give people the chance to start their work as and when a contractor is available to do the job. Many of these grants are for the installation of bathrooms and septic tanks. People have to wait three months for planning permission for septic tanks and, in many cases, another two to three months before an inspector calls. Then a contractor might not be available. These people have a certain amount of money to spend and they must spend it when the contractor is available. Many of them are not availing of the grants. The Minister would be doing a tremendous job if he abolished that necessity.
The local authorities are in the best position to survey these grants if we get the co-operation of the unions and so on. That would probably be the best way to do it.
It is a very good suggestion. They already do it quite successfully in the case of disabled persons' grants. The Minister told us tonight that, in the public area, employment has increased by 5 per cent. He also told us that in 1983 there was a 19 per cent fall in employment in the industry generally from the 1982 figure, and that for the first three months of 1984 there was a 15 per cent average drop in employment as compared with the first four months of last year. I ask the Minister to give the industry guidance, take it into his confidence, tell it his plans and show that he cares. I would ask others around the Minister to stop blaming Fianna Fáil. They have been in office for 18 months. A coalition of Fine Gael and Labour are in Government. Positive action would be much better than criticism of Fianna Fáil such as we heard in the speech made by the Minister of State last night.
The Minister spoke about the need for the industry to rely more on the private sector and not to place such a heavy reliance on local government and the public sector. The private sector will respond. It proved that it would respond some years ago when a Fianna Fáil Government advertised a programme with which I had the privilege to be associated for the construction of Government offices. We got many tenders and many offers from the private sector. If the Government have positive plans the private sector will respond.
Quite often the Opposition are accused of not making suggestions. In all his contributions Deputy Molloy put forward many positive suggestions. Have they just been pushed aside? The Minister should look seriously at the suggestions made by Deputy Molloy for positive improvements in the building industry. If his suggestions were put into operation the industry would receive a badly needed boost. When the Opposition make suggestions there is a feeling they are not acted upon or considered. Last night we got the old clap-trap about Fianna Fáil making a mess of the country from 1977 on.
The industry urgently needs guidelines. It needs them most of all to restore confidence. It needs positive, precisive, planning to enable it to plot its course. The Minister should give it that policy, that planning, that guidance and I am convinced it will respond. The Irish construction industry has the capacity, the skills, the skilled labour, the expertise and the management to produce badly needed employment. It probably has the most skilled workforce in Europe. That is generally agreed. It has the will and the capacity and all it needs from the Minister and the Government is a clear, concise, positive plan of action. If the Minister gives the industry that guidance and a clear, concisive policy, the industry will respond and we will have a much better construction industry which will be able to plot its course of action over the next couple of years and provide employment and spin-offs. I ask the Minister to consider seriously the motion put down by Deputy Molloy and Fianna Fáil.
A Cheann Comhaire, with your permission I want to ask the Minister to clarify his comment on house improvement grants in reply to Deputy Calleary earlier on and urge him to implement that as soon as possible.
The Deputy can not make a speech. He may ask a question.
Could I ask the Minister——
A brief question.
——if he will take on board what seems to be his own suggestion, prompted by Deputy Calleary, that he will introduce a new development whereby the local authorities approve house improvement grant applications thus expediting implementation of that work? This would be a major fillip to the industry.
This is going beyond a question.
I ask the Minister to issue a circular to the local authorities to that effect.
The Minister may give a brief answer if he wishes.
I am concerned at the confusion that exists where the local authorities seem to be prepared to give loans and grants but the people start work before the grant permission is given. Probably it would be better to combine both loan and grant at local authority level if that can be agreed.
What is the situation with regard to the Housing Finance Agency? Everyone wishes to know that.
Order. I am putting the question.
Amendment put.
The Dáil divided: Tá, 74; Níl, 61.
Tá
- Barnes, Monica.
- Barrett, Seán.
- Barry, Peter.
- Begley, Michael.
- Bell, Michael.
- Bermingham, Joe.
- Birmingham, George Martin.
- Boland, John.
- Bruton, John.
- Bruton, Richard.
- Burke, Liam.
- Carey, Donal.
- Collins, Edward.
- Conlon, John F.
- Connaughton, Paul.
- Coogan, Fintan.
- Cooney, Patrick Mark.
- Cosgrave, Liam T.
- Cosgrave, Michael Joe.
- Coveney, Hugh.
- Creed, Donal.
- Crotty, Kieran.
- Crowley, Frank.
- D'Arcy, Michael.
- Desmond, Barry.
- Desmond, Eileen.
- Donnellan, John.
- Dowling, Dick.
- Doyle, Joe.
- Dukes, Alan.
- Durkan, Bernard J.
- Enright, Thomas W.
- Farrelly, John V.
- Fennell, Nuala.
- FitzGerald, Garret.
- Flaherty, Mary.
- Flanagan, Oliver J.
- Glenn, Alice.
- Griffin, Brendan.
- Harte, Patrick D.
- Hegarty, Paddy.
- Kavanagh, Liam.
- Kelly, John.
- Kenny, Enda.
- L'Estrange, Gerry.
- McGahon, Brendan.
- McGinley, Dinny.
- McLoughlin, Frank.
- Manning, Maurice.
- Mitchell, Gay.
- Mitchell, Jim.
- Molony, David.
- Moynihan, Michael.
- Naughten, Liam.
- Nealon, Ted.
- Noonan, Michael.
- (Limerick East)
- O'Brien, Willie.
- O'Keeffe, Jim.
- O'Leary, Michael.
- O'Sullivan, Toddy.
- O'Toole, Paddy.
- Owen, Nora.
- Pattison, Séamus.
- Prendergast, Frank.
- Ryan, John.
- Shatter, Alan.
- Sheehan, Patrick Joseph.
- Skelly, Liam.
- Spring, Dick.
- Taylor, Mervyn.
- Taylor-Quinn, Madeline.
- Timmins, Godfrey.
- Treacy, Seán.
- Yates, Ivan.
Níl
- Ahern, Bertie.
- Aylward, Liam.
- Barrett, Michael.
- Brady, Gerard.
- Brennan, Paudge.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John.
- Burke, Raphael P.
- Byrne, Hugh.
- Byrne, Seán.
- Calleary, Seán.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Ger.
- Coughlan, Cathal Seán.
- Cowen, Brian.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leonard, Tom.
- Leyden, Terry.
- Lyons, Denis.
- McCarthy, Seán.
- McCreevy, Charlie.
- McEllistrim, Tom.
- Mac Giolla, Tomás.
- Molloy, Robert.
- Morley, P. J.
- Moynihan, Donal.
- Noonan, Michael J.
- (Limerick West)
- Daly, Brendan.
- De Rossa, Proinsias.
- Fahey, Jackie.
- Faulkner, Pádraig.
- Fitzgerald, Gene.
- Fitzgerald, Liam Joseph.
- Flynn, Pádraig.
- Floey, Denis.
- Gallagher, Denis.
- Gallagher, Pat Cope.
- Geoghegan-Quinn, Máire.
- Gregory-Independent, Tony.
- Haughey, Charles J.
- Hilliard, Colm.
- Hyland, Liam.
- Kirk, Sémus.
- Kitt, Michael.
- Lemass, Eileen.
- O'Hanlon, Rory.
- O'Leary, John.
- Ormonde, Donal.
- O'Rourke, Mary.
- Power, Paddy.
- Reynolds, Albert.
- Treacy, Noel.
- Tunney, Jim.
- Wallace, Dan.
- Walsh, Seán.
- Wilson, John P.
- Woods, Michael.
- Wyse, Pearse.
Tellers: Tá, Deputies Barrett(Dún Laoghaire) and Taylor; Níl, Deputies B. Ahern and Briscoe.
Amendment declared carried.
Motion, as amended, agreed to.