Dáil Éireann - Volume 287 - 27 January, 1976

Ceisteanna—Questions. Oral Answers. - Housing Grants.

10. Mr. Timmons asked the Minister for Local Government if he will make a statement on the decision to cut back housing grants; and if he proposes to provide any alternative to offset the higher deposits now facing potential house purchasers.

11. Mr. Ray Burke asked the Minister for Local Government if, in view of the recent increases granted by the Minister for Industry and Commerce for building materials, he will reconsider his decision concerning the payment of State grants for new houses; and if he will make a statement on the matter.

Minister for Local Government (Mr. Tully): With the permission of the Ceann Comhairle, I propose to answer Questions Nos. 10 and 11 together.

In my recent announcement of the Government decision on this matter, I explained that the amount of capital provided for housing purposes has increased greatly during the past three years. For example, £116 million was provided for housing last year under the public capital programme compared with £46 million in 1972-73.

In view of the present economic situation, however, the need to control the growth of Exchequer expenditure must apply to housing and other priority services. While I anticipate [340] that this year more money than ever before will be provided for housing, the Government have had to examine critically the need for, and the relative benefits of each component part of this expenditure.

In deciding to restrict new house grants to persons eligible for supplementary grants from local authorities, the Government were influenced by the need to channel available resources to sectors where they will be of most benefit nationally and individually. It must also be remembered that the maximum grant of £275, introduced in 1948, was intended to stimulate private housing output at a time when the annual output was less than 1,000. Last year the corresponding figure was approximately 15,750. The continued payment of new house grants on a free-for-all basis, irrespective of an applicant's income, could not be justified.

I have made clear that the substantial ancillary benefits of rates remission and exemption from stamp duty, hitherto enjoyed by grant-type houses, will continue to apply to such houses and proposals for legislation to give effect to this decision are being prepared.

Mr. Ray Burke: Would the Minister not agree that, with the SDA loan limit at the miserable limit of £4,500 for the past three years, and with the spiralling cost of houses, the decision to abolish the State grant is the final stab in the back for couples trying to buy houses and also for the private sector in the building industry?

Mr. Tully: Not at all.

Mr. Ray Burke: In his reply the Minister quoted various figures in relation to the money invested in the building industry by the Government over the past 12 months. Would he not agree that, because of inflation, the same amount of money will not buy what it was possible to buy some years ago?

Mr. Tully: I pointed out that the figure of £46 million three years ago compares pretty badly with the figure of £160 million last year.

[341] Mr. Ray Burke: With 120,000 unemployed and the fact that the building industry is capable of rapid expansion and taking on many of the unemployed instead of cutting the grant the Minister should have increased it and the SDA loan limit as we asked on many occasions.

Mr. Tully: My answer to that is that 25,750 houses were built last year and a lot of people were employed on that work.

Mr. Ray Burke: That was last year when the grants were available. Does the Minister not agree that the decision he has taken will seriously damage the housing output for the coming year?

Mr. Tully: It will not and the Deputy knows that.

Mr. Ray Burke: Of course it will. Does the Minister not accept the figures of the building confederation on this question?

Mr. Tully: No, I will not because they were so far out in figures they tried to give before on other matters. My figures are not open to doubt; they have been backed up by statistics which can be checked by anybody.

Mr. MacSharry: Scraping the bottom of the barrel.

Mr. Tully: I am sure the Deputy will agree that 25,750 is well up in the barrel.

Mr. Callanan: Would the Minister agree that his decision will mean that more people will look for houses from the local authorities thereby imposing more expense on local authorities?

Mr. Tully: No, because if local authorities have a housing list they will know who is entitled to be housed. Deputies opposite know that most of the money under that grant scheme went to people who would not worry whether they received the grant or not.

Mr. Ray Burke: That is not a fact. Apart from the odd exception, these grants were a great help to young couples buying houses and the fact that they will not receive such grants now will mean the price they will have to [342] pay for a house will be increased. At the same time the Minister has not increased the amount of the SDA loan.

Mr. Tully: It will still be payable to those eligible for a supplementary housing grant. Less than 3 per cent of the cost of expensive houses is represented by this grant and it is ridiculous to suggest that my decision will have a major effect on the building industry.

12. Mr. Walsh asked the Minister for Local Government the total number of applications for new house grants received for the year ended 31st December, 1975, for County Dublin; and the number approved.

13. Mr. Walsh asked the Minister for Local Government the total amount of money paid out for new house grants for the year ended 31st December, 1975.

14. Mr. Walsh asked the Minister for Local Government the total number of applications for new house grants received for the year ended 31st December, 1975; and the number approved for that year.

15. Mr. Walsh asked the Minister for Local Government the total amount of money paid out for new house grants for the year ended 31st December, 1975, in County Dublin.

Mr. Tully: With the permission of the Ceann Comhairle, I propose to answer Questions Nos. 12 to 15 together.

16,570 new house grants were allocated by my Department in 1975 and the expenditure on new house grants was £5,478,804. The respective figures for County Dublin were 4,034 and £1,278,205. Statistics are not available as to the number of applications for new house grants.

16. Mr. Lemass asked the Minister for Local Government if any agencies within the State cater for the letting of private flats to persons who do not qualify for local authority housing; and, if not, if he will consider setting up an agency to facilitate such persons who wish to enter into private housing contracts with individual landlords.

[343] Mr. Tully: While there are no State or local authority operated agencies which cater for the letting of flats to persons who do not qualify for local authority housing, there are a number of voluntary and commercial bodies which provide advice and information of this kind.

Mr. Lemass: Would the Minister let me have that information privately?

Mr. Tully: Yes, if the Deputy has not got all that information I will give him as much as possible.

17. Mr. Faulkner asked the Minister for Local Government the total savings in the current year arising from the withdrawal of private housing grants.

18. Mr. Faulkner asked the Minister for Local Government if he will confirm that the grants for private new houses will be paid where the foundations were laid prior to 1st January, 1976, whether or not formal application for the grant was made to his Department.

19. Mr. Callanan asked the Minister for Local Government if a person who has completed building a new house before 1st January, 1976, but has not applied for a local government grant and does not qualify for a local authority grant, will be paid his local government grant if he applies now.

Mr. Tully: I propose with the permission of the Ceann Comhairle to answer Questions Nos. 17, 18 and 19 together.

It is estimated that there will be a saving of about £750,000 this year arising from the Government's decision to restrict new house grants to applicants who are eligible for supplementary grants from local authorities. Grants will continue to be allocated and paid to such applicants, irrespective of when the work commenced or when the application for grant was made. As already announced, in any other case, the State grant will not be payable unless a formal application for a grant was received [344] on or before 31st December, 1975.

Mr. Moore: What was the figure saved?

Mr. Tully: £750,000.

Mr. Callanan: I was disappointed that the Minister did not increase the grant. Is the Minister aware that many people who had completed their houses did not apply for the grant because they were expecting that the grant would be increased on a certain date?

Mr. Tully: One of the conditions about grants is that the applicant must apply before he starts constructing the house. A system has been built up over the years whereby some people wait but I imagine that a person who can afford to wait for £325 until after he is living in his house is not very badly off or very much in need of the grant. I imagine that if he was short of cash he would apply earlier for the grant.

Mr. Callanan: Such people were waiting for the Minister to make an announcement and they expected that the Minister would increase the grants. I told people that they could expect the grants to be increased. During the last 18 months I have been asking questions about housing grants and I was very disappointed when the Minister dropped this bombshell.

Mr. Ray Burke: Would the Minister agree to reconsider this and to change the regulation to accommodate applicants who had laid foundations? Many foundations were laid during December and I am sure the Minister realises that prior to Christmas it was difficult for people to fill in forms.

Mr. Tully: Did the Deputy not say that no houses were being built?

Mr. Ray Burke: Many people left their applications over until after Christmas and for this reason would he not agree to change the regulation?

Mr. Tully: I am sorry, I cannot change it.

[345] Mr. Spring: Is the Minister aware that when former Minister Kevin Boland, was in charge of the Department of Local Government any house costing more than £6,000 did not qualify for a grant? Some of the houses which qualified for State grants were being sold for more than £20,000?

Mr. P. Belton: It was only pocket-money for the builders.

Mr. Callanan: Surely the Minister is aware that house prices have increased by more than 50 per cent?

20. Mr. Faulkner asked the Minister for Local Government the number of grant applications for private new houses; and the total amount expected to be paid in respect of these applications at present with his Department.

Mr. Tully: It is assumed that the question refers to the year 1975. Statistics of grant applications are not readily available in my Department, but grants were allocated for 16,570 houses in that year. All grants allocated will be paid if and when the houses concerned are completed satisfactorily.

It is expected that new house grant payments in 1976 will total approximately £4.75 million.