Dáil Éireann - Volume 310 - 29 November, 1978

Private Members' Business. - Housing Land Prices: Motion (Resumed).

The following motion was moved by Deputy Quinn on Tuesday, 28 November 1978:

That Dáil Éireann, noting with grave concern the cutback by the Government on its effective capital provision for Local Authority housing, its failure to control the recent excessive increases in the price of housing, and its lack of action to control the cost of housing land, calls upon the Government to take effective measures, including legislative action, to control the price of housing land.

Debate resumed on the following amendment:

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

“notes with approval the action taken by the Government to increase housing output, including the provision for this purpose of unprecedented amounts of public funds, and the measures which it had taken to curb the rate at which housing costs, including the cost of building land, have been increasing.”

—(Minister of State at the Department of the Environment).

Mr. Keating: As I tried to point out last night, despite whatever gloss the Minister tries to put on it, the factual situation is that on any available statistics an extremely serious situation prevails in the national housing picture. We are not building houses fast enough [371] to cope with the growing demand. In the context of their manifesto the Government's pledge to make it easier to buy a house and cheaper to keep it rings very hollow indeed. There will be another time and place for party politics, and leaving aside the manifesto, so far as it is possible to do so, and considering the facts, I would ask the Minister to face up fairly and squarely to the enormous implications of the problems.

On the question of house prices the facts are that, from the first quarter of 1977 to the first quarter of 1978, new house prices for which loans were approved by building societies increased by 44.1 per cent. New house prices for which loans were approved by assurance companies increased by 37.64 per cent. New house prices for which loans were approved by associated banks rose by 37.88 per cent. The general picture shows that house prices have gone out of control.

Take alongside this the fact that this year the allocation of finance for local authority house building has decreased as a percentage of the public capital programme to an all-time low of 10.55 per cent, and take also into account the fact that so far as there are available figures as, for example, in the major Dublin region, it is clear that we are going to build the lowest number of local authority houses since the beginning of the seventies. There has been a dramatic increase in the number of people seeking houses, from 6,100 to 8,400 families. Those are the facts and figures of the case.

Would the Minister consider the wider national implications? We must provide houses for people all over the country if we are to get rid of not just the growing number of people who need houses but the existing backlog. A number of studies have been carried out, for example, that by J. G. Eustace of the Department of Town Planning in UCD entitled “Housing Requirements in the Dublin Sub-Region”. These reports estimate that if the housing needs in Dublin city alone are to be met, 14,000 houses a [372] year until 1991 would need to be built. The NBA will build 1,500 houses. Their report is permeated by a tone of pessimism and concern about the future. This would not give anybody confidence in them, hamstrung as they may be by a number of problems facing them. There is a real problem here. No party could tell the people that the housing situation is anything but serious. This situation is very serious, because so much good or ill can spring from the basic policy and attitude of the Government towards housing. How can the Minister and the Government expect people who are inadequately housed, who are living in hovels, to live in any sense of the word a right life and to bring up their families in decent conditions? I suggest that the Minister pay attention to the facts and do something about this rather than trying to malign his predecessors who did their best during a difficult period.

From reading any of the statistical analyses or reports recently made available by the ESRI, the Central Bank or figures supplied by an independent source, one realises there is a serious housing shortage. There is serious inflation in house prices, there is a serious shortage of serviced sites and there is a growing number of applicants looking for them. The increases in cash payments by the Government in this area are irrelevant, unless they are taken in the context of the percentage ratios to previous years. If they are the criteria adopted it will be seen that the Government's efforts at this stage are far too little, too late.

There are one or two specific matters the Minister tried to draw out attention to last night. The certificate of reasonable value system is not working satisfactorily. The Minister has a number of reports on his desk to which I understand from his answers at Question Time yesterday he is addressing himself. I would ask him to consider the minority of unscrupulous builders who exploit this system and inflate prices. This can be and is simply done, and I will forward the details in my possession to the Minister in due course, and privately.

If we are to tackle the provision of [373] serviced sites it will need imaginative and courageous vision and action by this Government of a kind which has not been forthcoming so far, not just in the housing area but right across the board. We have derelict sites all over the city which are ripe for housing potential.

The question of planning permission might be looked at. It is most inflationary that people should be able to acquire planning permission and then sell sites. I suggest that planning permission be made applicable to the first applicant and not transferable.

There is a great deal more one could say, but perhaps other speakers will raise other relevant points. Any Government that seek to water down the motion before the House are negligent in their duty, and I call on them to set up an open public inquiry to reconstitute the National Building Agency, to give adequate funds to future housing needs, and to face this issue fairly and squarely. They will be doing everybody an outstanding service if they do so, but if they bury their heads in the sand they will be doing nothing but harm to the people on this island.

Dr. Woods: I am pleased to support this amendment.

Mr. Horgan: On a point of order, I offered when Deputy Keating sat down. What is the agreement about calling——

An Leas-Cheann Comhairle: The Deputy will be called next.

Mr. Horgan: I hope this will not be taken as creating a precedent.

An Leas-Cheann Comhairle: We are following the usual procedure in the House where we go from one side to the other. It is the Deputy's turn next. The motion has been moved by the Deputy's party. They will have another 30 minutes and a further 15 minutes to close.

Dr. Woods: I am not going to enter into a diatribe about the performance of the Coalition Government in relation to housing. I will, of course, refer to the performance of Fianna Fáil, in relation [374] to housing not only now but over many years. I remember a time when the former Coalition Government were in power and houses could be given away because people were emigrating to England. Then began an economic development period when houses became more valuable. This has something to do with what happened in recent times in this country. There has been a resurgence in growth and development at a pace which was faster than people expected, although it was set out in the targets of the economic Ministers at the beginning of this Government's term of office. This growth in itself creates and generates new interest and a capacity to purchase houses. Land is a problem in every country, not only in Ireland. This problem did not arise only tonight or last week. During the year we had various debates in which we discussed this problem. On the Estimate for the Department of the Environment we had detailed contributions from both sides of the House and various measures were taken by the Minister. Every country has a problem providing land at a reasonable cost for housing.

Fianna Fáil have a tradition of facing up to problems. We have not been afraid to face up to them in the past. One aspect of Fianna Fáil policy was to provide a land bank. They introduced the concept of a land bank and provided land by the capital purchase of land in advance of housing requirements. Many estates around our city were purchased in this way. The corporation estates in Kilbarrack, Donaghmede, around Raheny, Baldoyle and other areas provide excellent houses for people who want to own their own homes. These estates were provided because of the foresight of Fianna Fáil Governments in establishing not only the concept but the reality of a land bank.

The Coalition built houses during their term in office but they benefited from the land bank and the serviced land that had been established during the term of office of the last Fianna Fáil Government. If we consider the pattern of the completion of dwellings we find that the figure in this regard for 1971 [375] was 15,380, that in 1972 it was 21,573 while in 1973 it was 24,660. Surely the Coalition cannot claim that these increases were due to them. Obviously the increases were the result of a plan that had been prepared in advance and which was being executed by the then Fianna Fáil Government. In fairness to the Coalition they continued, on assuming office, to provide houses with the result that in 1974 there were completed 26,256 houses while in 1975 the figure was 26,892 but 1976 showed the beginning of a decline when there was a drop back to 24,000.

I am glad to note that in 1977 we completed 24,500 houses while the figure for 1978 will be more than 26,000, having regard to the current figures. Consequently, the indications are clearly that Fianna Fáil have a very responsible attitude to the question of the provision of houses. But I am concerned regarding the figures in respect of land acquired by agreement. Let us take Dublin Corporation as an example. In 1972 they acquired 245 acres. That was during the term of a Fianna Fáil administration. During 1973 the corporation acquired 617 acres but in the following years the figures show a falling off—to 197 in 1973 to 118 in the following year, to 83 in the year after that while the figure for 1977 was 120. This indicates a fall-off in the supply of serviced land provided by the local authority. Personally I had suspected that there was a tendency to build houses without providing sufficiently for the future. In this respect I would merely say that Fianna Fáil introduced the concept of the land bank and provided a supply of serviced land for future generations, and I am sure this party will do that again. In the meantime the land bank has been depleted. The supply of serviced land has been reduced, but Fianna Fáil's policy is one of commitment to home ownership. Therefore, every measure possible will be taken to facilitate the purchase of land for housing. Bearing this in mind a review and, if necessary, an updating of the Kenny Report is timely. In this regard we should consider the EEC dimension of [376] this question. The EEC could help with the development of land and with the necessary infrastructure to provide serviced land. I would assume that if the transfers which relate to the EMS are obtained, transfers involving as much as £650 million, they will go largely towards infrastructural development, and that in turn this will go in part towards the provision of roads and serviced land for industry and commerce.

In addition the EEC could be helpful by way of the application of regional aid to special problem areas in respect of development such as the inner city area, a question that has been harped on recently a good deal and which presents a great problem for us in Dublin. However, the matter is being tackled and the Minister is providing an additional budget in that regard as against the other parts of the country. But even this needs to be supplemented, and that is why I should like to see the EEC regional aid being applied to special problem areas. The problem, though, is not peculiar to Dublin. It is an extensive problem in the major population centres of all member states.

When I consider the facts in relation to the Small Dwellings Acquisition Act and the low-rise mortgage loans, I am surprised at the motion in the names of Deputy Quinn and others, because I realise the performance of this Government to date in this sphere. I note that in 1977 when the Coalition was still in office there was a budgetary provision in respect of low-rise mortgage schemes of £2.1 million whereas under the Fianna Fáil administration in 1978 the amount in this respect was £5.9 million. This scheme is very useful and can be used very beneficially by people on low incomes in that it gives a tremendous start to a young couple by subsidising the interest charges for the first ten years on a decreasing scale. I should like to see the scheme being extended and used more widely. Having regard to the facts, the situation would not support the points made by the Opposition in their motion.

Regarding the SDA loans, which, again are very important, I note that in the Coalition budget of 1977 there was provided for this purpose £17 million [377] whereas the figure in the Fianna Fáil budget of 1978 was £30 million, but more than £30 million will be used during the year. In the past SDA loans have been used widely by people even in the middle-income group.

There has been much discussion about the maximum loan position so far as the SDA scheme is concerned. Most Deputies will be familiar with the problems associated with house purchase, particularly in relation to income limits and the extent of the loans. However, when I refer to the record I find that the Minister increased the SDA loan in the first instance from £4,500 to £7,000 and that subsequently when that was found to be inadequate he increased the amount to £9,000. I do not think any reasonable person could have expected the Minister to do much more in that short time. Of course all of us would like to see more money being made available, but it is obvious that the Minister is concerned, that he has taken very positive measures, and that he has been prepared to take further measures when necessary. The low-rise mortgage scheme has been increased from £7,500 to £9,000. Here again it started off at a higher point initially and has been increased to the same level as the SDA loan of £9,000.

The income limits are a bone of considerable contention at the moment and a matter about which we must all be concerned. It is only fair to say that during the Coalition period these were not increased, but when the Minister came in he increased the income limits almost immediately from £2,450 to £3,500. Like many other Deputies I would like to see this limit increased further. One of the main problems in the short term is the fact that the basic £3,500 includes overtime. Around the country in different counties I find some variation in the methods of assessment of this basic income. The most satisfactory immediate step to take here would be to exclude overtime from basic income assessment; in other words if the basic income does not exceed £3,500 the purchaser should be eligible for the loan. The next step would be to increase further the actual limit as soon as is feasible. I ask the Minister to consider in [378] the very near future the question of removing overtime from the wages assessment for that purpose.

Another matter which has caused a great deal of debate and discussion recently is the interest rates on mortgages. Initially under Fianna Fáil and for quite a long time the interest rates came down as the economic situation improved and plans for economic development got under way. In the short term we had a fairly dramatic reduction in interest charges on mortgages. The Minister has reduced the SDA loan interest charge from 12½ per cent to 11½ per cent and at the same time the building society rates came down. Quite recently we have had a sudden rise in the interest rates on building society mortgages. It was not because of our Government's action that the interest rates rose; it was because of general problems with the British £ sterling and of Britain's decision to increase drastically the lending rates.

We can constructively analyse the possibilities here. One of the effects of our joining the EMS would be the breaking of the absolute dependence on British interest rates and on the British £. Hopefully, in that event we would have greater stability in interest rates for house purchasers. I am certain that the economic environment created by such a measure would foster the stabilising of interest rates, and this would be of considerable benefit to house purchasers. A long-term objective of joining the EMS is to achieve lower interest rates for borrowing for social, industrial and economic investment. I do not know if this aspect of the matter is realised; I have not heard it put forward as yet. If we could get away from the immediate effects of British policy on the interest rates and come to a situation of greater stability such as applies to Dutch and German interest rates, we could introduce fixed interest charges for building societies for, say, three years. If we can bring our currency to stability and with that bring down our interest charges, then we could introduce a scheme under which building society mortgage rates would be fixed for, say, three years. This would be possible [379] because the rates would not vary very much from year to year anyway, and at the end of three years there could be a review period for establishing a new level. This would be quite feasible and practicable. It would give the house owner with a building society mortgage far greater stability in meeting repayments and this is what he wants. He wants to be sure that he will be able to budget ahead for a period. In addition to that he would like to have smaller swings in interest charges.

If we enter the EMS I will ask the Minister to consider such an arrangement for greater stability in mortgage interest rates. I have had a fair deal of experience of people on mortgages and of the problems which they encountered. I would like to see a means whereby we could have this stability, and we should plan accordingly.

In relation to this motion I am very pleased with the performance of the Government to date. Numerous external factors have affected our environment. The Government, by speeding up the growth and development of progress in the economy, have created a wealthier economy where people have more money to enable them to seek to buy houses. A great deal has been said about the £1,000 grant. It has been of considerable benefit to those seeking loans and it was availed of quite extensively. It was not in any way a cosmetic touch, as has been suggested. The changes in the SDA limits have been an important step ahead.

I doubt if any Government in the past in such a short time have taken so many measures in relation to the provision and financing of houses. We have had a new and very generous scheme of grants for house improvements and the installation of piped water and sewerage services. The adaptation of houses for the physically handicapped and mentally ill has been introduced. The subsidisable limit on housing sites developed by local authorities for modestly priced housing was increased from £900 to £1,500 per site.

[380] We have had also reviews of the national rent and tenant purchase schemes. Various actions have been taken by this Government in relation to borrowing from building societies to do what they can and what is in their power to ensure that young people, particularly, and first time purchasers seeking their first houses, have the support of the financial institutions. I am, and I have said this previously, disappointed with the response from some particular sectors. If we look at the total cash expenditure on housing we find that in 1975 £115 million were spent on housing. In 1976 the sum was down to £105 million on the public capital programme and, in 1977, it was down to £93.13 million. There was, in fact, a decline in spending on the public capital programme under the Coalition whereas, in 1978, under the first full Fianna Fáil budget of the new Government we had a rise to £140.58 million under the public capital programme.

When I look at the figures and at the actions taken by the previous Government, and compare those with the present Government, I find it very hard to sustain the views presented by Opposition speakers. In fact, I find the evidence points to a Government which is very concerned, a Government which has taken very direct and very immediate action to remedy the situation they found themselves faced with. I have every confidence the Government will review the Kenny Report and consider what other measures are necessary to ensure reasonable prices for land for housing purposes. I am also confident that the rate of provision not only of finance but also of sites will be increased and improved under the present Government. One must appreciate that the rate of provision of serviced land will have some lag in it because, if it is not done consistently right through, there will be a lag in the provision of serviced land. I know that the Fianna Fáil Government are committed to this provision and I believe the figures achieved before Fianna Fáil last went out of office will again be reached. It certainly will not be a case of just building houses and not providing capital for the future provision of serviced land in addition.

[381] I have pleasure in supporting the amendment tabled by the Minister for the Environment expressing confidence in the Government, in the work already achieved and in what is currently being done in this area of providing land for housing.

Mr. Horgan: I have pleasure in supporting the motion introduced in the name of Deputy Quinn and the other Labour Party Deputies in relation to the serious problem that exists in housing in the country in general and in the capital city of the country in particular. I listened with interest to what was said by the Minister of State and to what has just been said by Deputy Woods, because there is a distinct difference in tone between them. Deputy Woods did not embark on a diatribe of any kind, as he said, but they were basically using the same arguments and basically the same approach.

Deputy Woods said one or two things of an original nature which deserve a comment. He suggested that overtime should be excluded from reckonable earnings for the purpose of SDA loans. With respect to Deputy Woods, this is a very crude solution to a very complex problem. It is certainly true to say that over the past decade or so the dividing line between basic wage and overtime has become blurred. But that is not to say that here in housing policy is the place to deal with that particular problem in all its complexity. The answer is basically to increase the upper eligibility limit for these loans. Deputy Woods and the Minister of State can make all the capital they like by raising the amount of the loans to £5,000 and then to £9,000, but that ignores the fact that the take-up of loans is related far more fundamentally not to the maximum amount of the loan but to the maximum reckonable earnings of the person who wants to claim it. You can raise loans to £10,000 or £15,000 without getting any noticeably greater take-up if you fail to make any substantial alteration in the upper limit of reckonable earnings. That is the way to tackle the problem, and not the overtime rate he suggested. Raise the limit and you do not thereby discriminate, as his [382] suggestion might do, between people who are earning a great deal of overtime and people who are earning very little overtime.

He also referred to the EMS as a kind of fairy godmother coming along with the magic wand to save us from all our problems, on this particular occasion from the problem of high interest rates on house purchase loans. He went to some lengths to argue that the advent of the EMS or, to be more precise, the accession of Ireland to the EMS—a reversal of the policy of St. Patrick because we are bringing the snake back into Ireland—would create this desired stability. But there is stability and stability. There is no point in having stability if it is stability of 14 per cent or more, and no point in having stability at a lower level if that stability is bought, or subsidised, or underwritten by long-term soft loans from the European Monetary System, loans which will eventually have to be repaid, and repaid with interest, however soft. Achieving low interest rates is only postponing the problem for another day, another Minister and another Government to solve. Indeed, there is some evidence that the number of problems which fall into this category under this Government is increasing by the day.

As part of his peroration Deputy Woods looked forward to the time when the housing programme would achieve the figures achieved by Fianna Fáil when they were last in Government. But that is not the target for Fianna Fáil. The target for Fianna Fáil is the target of 100,000 houses built in the four years under the last Government. If Fianna Fáil achieve that, or beat that, then they may have something to talk about, but not if they confine their expectations, modest and all as they are, to reaching a figure which was beaten by the last Government, and resoundingly beaten at that.

The speech of the Minister of State was a model of its kind. He used figures where figures suited his purpose and he used percentages where percentages suited his purpose. He skated very rapidly over the thin ice of his argument and it is logical to assume that, because he [383] used figures in certain instances rather than percentages, it was because percentages would not have suited him. If he used percentages in some instances rather than figures it was because figures would not have suited him. The ice on which he was skating was very thin indeed. A classical example of the thin ice department is contained in the Minister's speech where he stated:

Housing authorities estimated some weeks ago that they would complete about 6,500 houses this year. I would be glad to see their expectations realised but because of the factors outside my control, and which I have mentioned, completions will probably be no greater than in 1977.

In 1977 the number of completions was approximately 6,333. The Minister is being sanguine if he believes that completions this year will reach this figure. On the basis of information available to us to date it seems unlikely that they will even break 6,000 or, if they break it, it will not be by very much.

The Minister also said in the course of his speech that the public capital programme in 1979 will once again give evidence of the Government's firm intention of achieving their housing objective. If we look at the question of capital we must look in terms of percentages and not in terms of gross increases. In particular, we must look at percentages of the public capital budget accounted for by housing in general and by local authority housing in particular. That is at the core of our motion and the only kind of housing available to people who are unable through their own means to buy private houses. If we want to examine cutbacks or increases in capital expenditure on housing the only unbiased way we can measure this is by calculating the percentage of the public capital programme allotted to housing in each financial year. The public capital programme gives not just estimates but, in relation to past years, gives actual outturns and actual expenditure. For example, for the years 1976-77 and 1978, under the headings of local authority [384] housing and public capital expenditure on private housing there are some interesting percentages. These percentages, because they relate to the percentage of the public capital budget expended on housing, are a far more reliable guide to the sincerity of the Government when they talk about spending money on housing than any gross figures however much they may have increased in actual terms or in percentage terms on the actual allocation for the previous year. The public capital budget changes from year to year and it is the slice of that cake for housing, and public housing in particular, that we are concerned with.

In 1977 the public capital programme outturn for local authority housing, as a percentage of the total public capital programme, amounted to about 10.89 per cent and the estimate for 1978 is that the equivalent percentage will be 10.55 per cent. That means that a smaller proportion of the public capital budget will apparently be allocated for local authority housing this year than was last year. This 10.55 per cent includes the low rise mortgage increases of which the Minister and Government Deputies have been so proud. In the private sector in public capital expenditure on private housing there has been an increase over the two years from 3.85 to 7.54 per cent. It must be remembered that that includes the famous £1,000 grant which went, basically, into the pockets of the builders.

It is a fundamental part of our argument that the problems which the Government are now trying to solve are ones which they created by their inflationary policies and rash promises. They have thrown a whole series of spanners into a machine which is uniquely sensitive at the best of times but which has reacted in a predictable way to such uncouth and crude stimuli as have been applied by the Government. A classic example of this was the £1,000 grant on which the Government made such play coming up to the election. The recent report of the ESRI on housing stated this, and those who have bought a house know that the real obstacle for most people when it comes to buying a [385] house is not so much the weekly repayments on a mortgage, although these represent a substantial problem, as the initial deposit required. Once one gets one's foot on the ladder of domestic house ownership unless one is very unlucky or unwise one can never effectively be budged off that ladder. The problem is to get on it in the first place. The price of getting on it in the first place is the deposit one puts down on one's first house. The effect of the Fianna Fáil manifesto was to persuade tens of thousands of couples that the pennies and pounds they had scraped and saved together would, on the advent of Fianna Fáil, be miraculously augumented by the dazzling figure of £1,000.

We all know what happened to that £1,000. Where it existed at all—even this was questionable in some cases because so many existing grants were absorbed into the £1,000 that in some cases the net gain to an individual would be about £100—it went basically on to the price of houses. The speed after the general election with which the average price of houses rose by exactly the £1,000 mentioned in the manifesto was eloquent testimony of the ability of the market to take advantage of a carelessly thought out scheme to the detriment of the people whom the scheme was supposed to benefit. I do not know if the Government ever considered the possibility of what would happen, but I suspect that even if they had they would have let it stand in the belief that this confidence trick—that is what it was—would have a substantial positive effect in their favour in the general election campaign.

The second aspect of my contribution relates to the undeniable fact that a very high proportion of available mortgage finance has been going to people who are buying more expensive houses with larger mortgages. A couple of weeks ago in my constituency a large estate of houses, costing £45,000 each, was opened. They are within yards of Dundrum village and within sight of many people who are on one of the longest and most pathetic waiting lists of any housing area within the general responsibility of Dublin County Council. Those houses at £45,000, all no doubt [386] mortgaged to the hilt, are an affront to the officials and members of Dublin County Council who are trying to provide decent housing for the people who really need it. The tragedy was that the scheme was officially opened by a Deputy of the Minister's party. If the Government mean what they say about the need to provide low-cost housing for those who need it most, about the need to direct mortgages into the lower end of the mortgage market, it is time that Ministers and Deputies suited their actions to their words. They should avoid, politely or impolitely as they choose, public association with housing developments of the kind I have described which eat up mortgage finance that should be available for other sectors of the community. I can assure the Minister of State and whoever else lives in one of those houses in my constituency that I certainly would not because I cannot afford it on £6,700 per year and that amount is substantially ahead of the average industrial wage.

The Minister referred to this in his speech where he mentioned the Government's request to the building societies to make loan money available in certain ways; for example, that at least 60 per cent of the total funds available for mortgages should be allocated for house purchasers whose mortgage requirements do not exceed £13,000. Ironically the figure of £13,000 is the maximum that a building society will lend to a Member of this House on the basis of a salary of £6,700. As I have pointed out, this is not a small salary in comparison with the average industrial wage.

The Minister may make these approaches to the building societies but they are caught in a double vice which is in large part the creation of other fiscal and taxation policies of this Government. In the ESRI report to which I have referred, the authors point out that there are several reasons—I am identifying two in particular—why more mortgage finance should go to people who are buying larger houses. One is that the reduction of the higher marginal rates of taxation in 1977 would have enabled many on above average incomes to finance greatly increased mortgages. [387] Secondly, the shortage of land in the outer Dublin area and the land price escalation could have given impetus to builders to build expensive houses.

It is not by any means the fault of the building societies. They have to do this because, among other things, they have a responsibility to their investors and they have to ensure that their appropriate liquidity ratios are maintained. I should like to ask the Minister of State or the next speaker on the Government's side if the Government have considered the possibility of allowing the building societies in a phased way over a period of time to alter their liquidity ratios so as to release a significant amount of money for mortgages at the lower end of the market. Carefully managed, this could be part of the answer to the housing problem. I do not say that it would be the entire answer, but at least it is a possible solution and it is one that has been canvassed in public. It is distinguished by the fact that it is the only one that the Government, so far, do not appear to have considered seriously.

The final point to which I wish to refer is the question of the price of land. In his speech the Minister referred to “problems such as possible constitutional difficulties, the possible disruption of the long-established traditional marketing arrangements for land, and other legal difficulties.” I love the phrase, “the possible disruption of the long-established traditional marketing arrangements for land.” What are they? They are institutionalised and legalised greed and that is one of the things that has helped to put up the price of land, to increase the price of housing and to put it beyond the reach of many ordinary citizens.

I do not altogether blame the builders in this regard, because in many cases they pay the initially inflated prices demanded and got by the middlemen in a position of scarcity. The builders make their own profits. Some of them make too much profit, but it is the middlemen who are creaming off the profit on land and we have been slow to do anything about these people.

[388] The problem is that there is a finite supply of building land. We live on an island, and sooner or later we are going to run out of the stuff. Even if we did not live on an island the same would come true. I cannot remember the name of the American sage who said that he was putting his money into land “because they are not making any more of it.” If that was true in the United States with its endless frontiers in the 19th century, it is doubly and savagely true for us in Ireland today. They are not making any more land. What there is is getting scarcer and the price is going up.

There is an irony in this because since the establishment of the State on occasions we have made structural changes in relation to land ownership in rural areas and to the acquisition of land by bodies such as the Land Commission. They have not been revolutionary but they have been significant in creating different patterns of ownership of agricultural and rural land from the patterns that were traditionally there. We have always fought shy of touching the development land in and around our cities because that is where the big money is, that is where the influence pedlars are and where the middlemen are. Those are the people who can buy and sell their way through laws and taxes whenever they wish.

Mr. Quinn: And make contributions to political parties.

Mr. Horgan: There is a need for urgent action especially in the Dublin area where I suspect the problem will get worse before there is any hope of it getting better. The problem can be met in part by the supply of serviced sites, and it may be true to argue that the provision of such sites has not kept pace with demand or even with the possibility of demand. As Deputy Woods pointed out, in the area of serviced sites inevitably there is a lag between the adoption of a particular policy and the provision of so many thousand sites in any area. What we should be advocating, as well as the serviced site policy, is an aggressive and creative policy directed towards the control of the price of building land, and I hope to be more specific on this because [389] we owe it to the House and to the public to be specific.

The way this can be done, possibly without a constitutional amendment, is for each local authority to adopt a zoning policy in relation to all development land that will be required in the near future for housing purposes in their area. Having zoned land, there should then be legislation to control the resale price of that land. I am talking about the resale price, not the sale price.

If we adopted legislation such as exists in certain parts of Australia, not renowned for their socialism, which would allow the owner of land zoned by the public housing authority as development housing land to sell his land for whatever he can get for it—and the best of luck to him—but which would refuse permission to anybody who bought it from him to sell to anybody else for a price greater than that for which he bought it, grossed up by inflation, legal charges and so on, that would present us with at least the bones of a solution. Apropos our precious Constitution we would not be interfering with the right of the owner of that land to sell that land for whatever he could get for it. We would merely be restricting the right of any purchaser of that land to resell under certain circumstances. He would buy under notice of that restriction so that he could not claim subsequently that his constitutional rights were being infringed because his constitutional rights would be the rights that he had under the Constution and under the laws at the time he bought the land. Our Constitution says that the right to private property may be delimited from time to time in order that the Constitution should meet the requirements of the common good. If ever there was a case for delimiting the rights to private property it is in relation to the supply and control of the price of building land.

That is one of the most basic and serious problems. We will not solve it on a short-term basis because it will be even more acute in four or five years time. There will be less land; land will be more scarce; land will be more expensive. The corollary of that is that the people who [390] own that land will be ten times as hungry, ten times as anxious to hang on to that land, make the most they can out of it and therefore will be mobilising an opposition which will be ten times more effective to any fundamental and radical change of the type I am describing in the structure of land ownership and in the transmission of land from one owner to another.

I have pleasure in supporting this motion because it is not until the ideas in this motion and the arguments behind it are accepted by the Government of the day—hopefully a Labour Government —that we will have any radical change in the problem confronting us about housing today.

Mr. Smith: I rise to support the amendment put forward last evening by the Minister. With one or two exceptions this debate has been conducted in a very reasoned way.

This is a vital and national issue. We must avail of every opportunity afforded us in this House to assist in putting forward proposals which would help to accelerate the growth and development of the housing industry generally because it is in that way we help to rehouse adequately the many people who are in need.

However it was regrettable that Deputy Keating last evening should use this Labour Party motion to launch a typical barrage of irrelevant bombast about derelict sites, the abolition of rates on domestic dwellings, the rise and fall of shares on foreign markets, the association between social stability and education, and any random thought that came into his head on this matter—half truths poured out; misleading statements, one after another. He went to the bottom of the barrel to drag William Shakespeare. Indeed, in the quotation he gave he might have given Antonio's full account of Shylock. Perhaps when he has more time to browse through this debate and go over what he said he will appreciate my completing that quotation for him:

The devil can cite Scripture for his purpose. [391] An evil soul producing holy witness, Is like a villain with a smiling cheek; A goodly apple rotten at the heart. Oh, what a goodly outside falsehood hath.

Mr. Quinn: Is the manifesto now scripture?

Mr. Smith: Deputy Keating told the House that the numbers on local authority housing lists had increased by 35 per cent. He quoted from quite a number of reports—quite deliberate samples from a number of them—but I challenge him to produce a report to this House which can prove that the number of qualified applicants waiting on our housing lists have increased in the last year or two by 30 per cent or 35 per cent.

In support of what I am saying I should point out that Deputy Quinn, in a parliamentary question to the Minister for the Environment in October this year, sought that information and was told that there were 25,415 people on the waiting lists around the country and that that was roughly the figure for that precise date the preceding year. I do not want to say that that is not a problem. There are many people in that category who tonight and for this winter will live in dire housing circumstances. But it is wrong that a Deputy should endeavour to mislead the House in that way because that is not helping any family to get a house.

According to Deputy Keating, there is a negligible housing bank in the country. This House has been told that there are 78,000 sites, approximately equivalent to the annual out-turn for three years. While we should continue to increase and buy land in our cities, towns and villages and service that land as fast as we can, it must be obvious to anybody that a statement of that kind cannot be sustained and is in no way helpful.

On a broader housing front Deputy Keating asserted that the numbers of all housing completions this year will be lower than last year. Again, he has not done his homework. In the last complete [392] calendar year of the Coalition's period of office, 1976, 24,000 houses were built; last year, 24,548 and the number this year is likely to exceed 26,000 based on the fact that 22,222 houses were completed up to the end of October, 1978, as compared with 20,359 during the first ten months of 1977. No political party in this House have said that they would build any more than 25,000 houses per annum. The reason for that is basically that the building industry is a massive industry here which, as well as providing houses for people went through cycles in the fifties, at other times and again during the Coalition period and put 11,000 workers— carpenters, bricklayers, every labourer involved in the building of a house—on to the dole queues. In building more houses in this country each year we want to safeguard these men and their families as solidly as we did in the sixties by building gradually each year more houses but not having the peak and valley periods that run us into that kind of situation. The Deputy may talk about 14,000 houses in Dublin but his front bench spokesman would not come into this House and make that same sort of statement because he knows the answer: that for one or two years that can happen but then the numbers of people employed drop dramatically.

Whatever about the Deputy's assessment of the situation and the typical manner in which he completely disregarded the elimination of rates on houses, the reduction of electricity and other domestic costs, the facts are that in the first nine months of this year all the lending agencies approved almost 21,000 loans and these will require an expenditure of £219 million when they mature on payment. In the same period in 1977 the number of loans approved was 17,700 with a potential funding of £154 million. This confirms the success of the Government's policy on the promotion of home ownership. We have the highest rate of home ownership of any country in western Europe.

Mr. Quinn: Thanks to the Luftwaffe.

Mr. Smith: That number will have been increased by 20,000 this year.

[393] Deputy Keating claimed that our promise to increase SDA loans to realistic levels was not kept. The present income limit is £3,500 and that is a considerable increase on the limit of £2,350 when the Deputy's party was in power. That limit was unchanged from September 1973 until we came back into office and it takes some audacity to come into the House and make that claim. Nobody who was a Member of this House during that time spoke on this motion from the Opposition benches because such Members realise that there are aspects of their policy at that time which could not be sustained against the argument put forward on this side of the House.

We do not claim that we have solved any or all of these problems. Many problems still remain to be solved and we want suggestions that will help solve them. While Members on the other side may not remain there for ever, they will be there for very long periods unless they put forward propositions that will help.

An Leas-Cheann Comhairle: The Deputy should now conclude. He may speak for a further minute-and-a-half.

Mr. Smith: I have read Deputy Quinn's speech and I consider it a reasoned one in most parts. He claimed that people who benefit from Government policy are not in the lower income group. Only first-time buyers of new houses qualify for the £1,000 grant and 70 per cent of loans paid were to people who qualified for that grant, while 60 per cent of loans made by all financial institutions were to people whose annual income was under £5,000. The Government directed that 60 per cent of finance available for loans should be used for houses costing less than £13,000 and a further 20 per cent for houses under £16,000.

An Leas-Cheann Comhairle: I now call Deputy Quinn to conclude.

Mr. Quinn: I should be happy to let Deputy Smith have two or three minutes [394] in order to finish the point he was making, if that would be in order.

An Leas-Cheann Comhairle: Deputy Quinn is quite entitled to give away some of his time.

Mr. Smith: I understand his wish to remain silent.

Mr. Quinn: On the contrary, I welcome debate in this House which, unfortunately, we seldom get. I enjoyed very much Deputy Smith's contribution and I wish to give him the opportunity to conclude.

Mr. Smith: The lower income group are availing of SDA loans and payments which this year will be over £30 million, as against £17 million last year. There are 12,000 applications for SDA loans with the local authorities, compared to a little over 10,000 when the Coalition left office. This is ample evidence that many people are still availing of these loans and that they are relevant. That is not to say we should not still consider ways to increase them.

The argument put from the other side of the House may be summarised as follows: the removal of rates on domestic dwellings has caused all these problems, together with the £1,000 new house grant. Will a speaker from the Opposition say: “When we come back into office we will bring back rates on houses and eliminate the £1,000 grant”? If these are the problems then speakers opposite must tell us how they would remedy them.

Mr. Quinn: I should like to reply to the points made. Due to lack of time I may not be able to cover all of them. I have not had until tonight the pleasure of hearing Deputy Smith speak in this House and I listened with interest to the points he made. He made a good speech, the best he could make of a bad case. Instead of attacking me, though I moved this motion, he attacked a colleague in Fine Gael whose name is not on the Order Paper at all. Deputy Keating represents Dublin North-Central, an area which probably has a more acute housing problem than any other constituency. [395] He spoke as much from his heart as from his head. He, together with Deputies Michael O'Leary and Vincent Brady, realises the daily deprivation in this area. They confront the problems of housing despair in that constituency.

There are three points to our motion, the first of which is the impact of the Government's action in the area of local authority housing. I agree with the Shakespearean quotation; it is indeed possible to quote Scripture or statistics for one's own purposes and turn them upside down to prove a point. The final test is the effectiveness on the ground. In housing circular H37/78 the Minister states that the public capital programme allocation in 1978 is £80.77 million, but more than £100 million could have been required if local authorities had been allowed to go ahead with all the housing schemes they proposed to commence. Deputy Smith knows the reality of local authorities. Presumably they do not build houses in Tipperary for the fun of it and they do not, therefore, propose to the Department of the Environment housing schemes for which there is not a need. The Minister has said that he could satisfy only 80 per cent of the formal requests for funds from local authorities. In terms of the demand for housing, there has been a cutback to the extent that the demands have not been met.

In fairness to Deputy Smith, he said that was not acceptable to him, but regrettably he does not have responsibility for housing. The responsible Minister said that the Government have never varied their commitment to ensure that a family in genuine need of housing should not be debarred from getting it by reason only of their limited financial resources. He went on to express satisfaction with the performance of local authorities. In concluding his remarks on local authority housing the Minister of State said: “In short, I can assure the House that the local authority housing programme is at a satisfactory level.” I cannot understand such satisfaction. Time would allow me to flesh out that argument. Local authorities who responsibly represent people looking for housing requested [396] £100 million and were told they would get £80 million and the Minister of State says he is satisfied.

Minister of State at the Department of the Environment (Mr. J. O'Leary): They will get approximately 88 per cent.

Mr. Quinn: For the Minister to say he is satisfied simply underpins the argument that in times of crisis—and let me respect the traditions of the House——

An Leas-Cheann Comhairle: Deputy Quinn without interruption.

Mr. Quinn: It reinforces the argument we have made consistently that Fianna Fáil will give so much for local authority housing but, when the chips are down, they are not prepared to give it a priority. We believe people who have not got the financial resources to house themselves should get priority, all other things being equal. In the Minister's own words, they are 20 per cent short of that need.

Mr. Power: Would the Deputy give them 100 per cent of their demands?

Mr. Quinn: I would not have been so enthusiastic to applaud the abolition of wealth tax.

An Leas-Cheann Comhairle: Deputy Quinn is in possession. We will not talk about the wealth tax on this motion.

Mr. Power: When Deputy Tully was in possession he did not give them 100 per cent.

Mr. Quinn: I should like to read out for Deputy Power what the Minister for Economic Planning and Development wrote in this document. He actually stated that there had been satisfaction in many areas of local authority housing demand during recent years—a Fianna Fáil euphemism for the time when Deputy Tully was Minister for Local Government.

The Fianna Fáil Party pride themselves as being the party of realism, a party who know how to manage things, a party who get things done.

[397] They are not confused by idealism, or ideas, or a commitment to dogma, or anything like that. They do not question their commitment to private enterprise as being a commitment to dogma. They consider themselves hard-nosed good managers of the economy. They made a promise in the document published in May 1977, I think, about funds for the private sector. They said: “There will be a grant of £1,000 if you vote for us. Rates will be abolished instantly if you vote for us. There will be all sorts of other goodies, and money for the construction industry.” The private commitment to the private industry sector was a lot more, although it is not on any public record. Many builders at the builders' dinner tonight are celebrating the fact that, in part, that private commitment was honoured by the Government.

If Deputy Smith, who is a reasonable man, does not want to take my partisan word, would he accept the verdict of two eminent economists in the Economic and Social Research Institute? They assessed the combined effects of lumping the abolition of rates, lumping the £1,000 grant and lumping all the other goodies on the day Fianna Fáil assumed office. Their view was that the impact of the measures was such that it led to a bunching of demand for housing as people were not able to meet the deposit requirements, supply was not able to respond quickly enough due to the nature of house building, and hence the price rise occurred. We are not necessarily arguing about the £1,000 grant. We are not arguing about the abolition of rates. We are talking about the incompetent way in which the Minister, Deputy Barrett, who unfortunately cannot be with us tonight, and the Minister of State, Deputy O'Leary—and let us identify the absent rogue, the genius who thought up this package of election goodies who cannot be with us either——

An Leas-Cheann Comhairle: The use of the word “rogue” referring to any Member of the House is not in order.

Mr. Quinn: I withdraw that word. Let me refer to the roguish ideas of the [398] Minister for Economic Planning and Development who produced this package. Many builders who openly and unashamedly support the Fianna Fáil Party say that the biggest curse in the building industry—as an architect I am part of that industry—is its cyclical nature. The Government have aggravated the difficulties which confront that industry. They increased the capital allocation for local authority housing. They increased the capital allocation for the private sector and they introduced the £1,000 grant. In answer to a Parliamentary Question in October or November 1977 the Minister was able to say that, by the time the first £1,000 grant was paid his Department were producing statistics showing that the price of houses had increased by £1,004. Is that competent economic management? That is what this motion is about. Fianna Fáil were concerned about house prices.

Mr. Meaney: Check the planning applications. That is the test.

Mr. Quinn: The Minister realised things were not going well. His officials were coming in with the figures and they were horrified. He decided that something must be done and the building societies were approached. It is significant that the Minister referred to the agreement made with the building societies on the basis of legislation introduced by the Minister for Local Government which was so quickly denounced. They also went to the assurance companies. They went to the insurance companies and asked them to provide some money for the building industry. We have two major insurance companies which are Irish owned. Ninety seven per cent of Irish Life is owned by the Minister for Finance, Deputy Colley. What was the response? It was that there would be no money unless it was commercially favourable. There may be an argument for not messing with the State sector. The Minister also went to the New Ireland Assurance Company, the Chairperson of which happens to be the Leader of the Fianna Fáil Party in the other House.

[399] An Leas-Cheann Comhairle: Private business interests of members of the House should not be discussed.

Mr. Quinn: I will not discuss Senator Ryan's private interests. The New Ireland Assurance Company stated in public that insurance companies and assurance companies would not get into the business of providing loans unless it was made commercially viable for them to do so. Is that fair comment? If they could not persuade those two companies, one of which they own and the other with whom they have some kind of connections, how can we take them seriously as being professional managers?

An Leas-Cheann Comhairle: The Deputy should conclude now.

[400] Mr. Quinn: I can readily understand why I should conclude. My time is up.

An Leas-Cheann Comhairle: The Deputy's time is up. That is the only reason he is being asked to conclude.

Mr. Quinn: There is a temptation on both sides of the House to play politics with housing. In the debate on this motion we have tried to shy away from that and point to certain areas of incompetence and mismanagement. Unfortunately I cannot refer to the latter part of the Minister of State's speech on land prices. The Government have not dealt with our arguments in a satisfactory manner and therefore we are rejecting the amendment.

Amendment put.

The Dáil divided: Tá, 74; Níl, 43.

Tá.

Ahern, Kit.

Allen, Lorcan.

Andrews, David.

Andrews, Niall.

Brady, Gerard.

Brady, Vincent.

Briscoe, Ben.

Brosnan, Seán.

Browne, Seán.

Burke, Raphael P.

Callanan, John.

Calleary, Seán.

Cogan, Barry.

Conaghan, Hugh.

Connolly, Gerard.

Cowen, Bernard.

Cronin, Jerry.

Daly, Brendan.

Davern, Noel.

de Valera, Sile.

Doherty, Seán.

Fahey, Jackie.

Farrell, Joe.

Faulkner, Pádraig.

Filgate, Eddie.

Fitzgerald, Gene.

Fitzpatrick, Tom (Dublin South-Central).

Fitzsimons, James N.

Flynn, Pádraig.

Fox, Christopher J.

French, Seán.

Gallagher, Dennis.

Gallagher, James.

Geoghegan-Quinn, Máire.

Gibbons, Jim.

Haughey, Charles J.

Herbert, Michael.

Hussey, Thomas.

Keegan, Seán.

Kenneally, William.

Killeen, Tim.

Killilea, Mark.

Lalor, Patrick J.

Lawlor, Liam.

Lemass, Eileen.

Lenihan, Brian.

Leonard, Jimmy.

Leonard, Tom.

Leyden, Terry.

Loughnane, William.

McCreevy, Charlie.

McEllistrim, Thomas.

MacSharry, Ray.

Meaney, Tom.

Molloy, Robert.

Moore, Seán.

Morley, P. J.

Murphy, Ciarán P.

Noonan, Michael.

O'Connor, Timothy C.

O'Donoghue, Martin.

O'Hanlon, Rory.

O'Kennedy, Michael.

O'Leary, John.

O'Malley, Desmond.

Power, Paddy.

Reynolds, Albert.

Smith, Michael.

Tunney, Jim.

Walsh, Joe.

Walsh, Seán.

Wilson, John P.

Woods, Michael J.

Wyse, Pearse.

Níl.

[401]Barry, Peter.

Begley, Michael.

Belton, Luke.

Bermingham, Joseph.

Boland, John.

Bruton, John.

Burke, Joan.

Clinton, Mark.

Cluskey, Frank.

Collins, Edward.

Conlan, John F.

Cosgrave, Liam.

Cosgrave, Michael J.

Crotty, Kieran.

D'Arcy, Michael J.

Deasy, Martin A.

Desmond, Eileen.

Donegan, Patrick S.

Donnellan, John F.

Enright, Thomas W.

FitzGerald, Garret.

Fitzpatrick, Tom (Cavan-Monaghan).

[402]Flanagan, Oliver J.

Griffin, Brendan.

Harte, Patrick D.

Horgan, John.

Kavanagh, Liam.

Keating, Michael.

Kelly, John.

Kenny, Enda.

McMahon, Larry.

Mitchell, Jim.

O'Brien, William.

O'Connell, John.

O'Donnell, Tom.

O'Keeffe, Jim.

O'Leary, Michael.

O'Toole, Paddy.

Quinn, Ruairí.

Taylor, Frank.

Timmins, Godfrey.

Tully, James.

White, Jamesy.

Tellers: Tá, Deputies P. Lalor and Briscoe; Níl, Deputies McMahon and Horgan.

Amendment declared carried.

Motion, as amended, agreed to.