Dáil Éireann debate -
Wednesday, 1 Nov 1978

Vol. 308 No. 9

Local Government (Financial Provisions) Bill, 1977: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Treacy

On Wednesday evening last I had been deliberating on this important measure when it fell to my lot to move the adjournment of the debate. I had been seeking to convey to the House and to the country the serious implications of this Bill for the future of our local authorities. The Bill is obviously designed to give legal effect to the Fianna Fáil promise to abolish rates on domestic dwellings and other types of buildings. On that basis alone it must surely be a popular measure.

The promised abolition was certainly a good political gimmick in the general election. This is a sugar-coated Bill containing a deadly poison, a poison which connotes the ultimate destruction of the local authority system and the democratic basis on which it exists. Central to the Bill is the provision enabling the Minister for the Environment to direct local authorities with regard to the rate to be struck by them in each area. It is significant that that direction will be taken by the Minister for the Environment in consultation with the Minister for Finance. It is reasonable to assume, therefore, that in future the determination of the level of local public expenditure will be a matter for officials in the Department of the Environment and the Department of Finance.

Have the real implications of this measure sunk in? On the face of it, the Bill takes away the right of local authorities to determine the amount to be levied to meet local needs plus the right to determine priorities. If the Minister for the Environment is not hell-bent on the destruction of our local authorities and the withering of the democracy and autonomy which they have always enjoyed, he should quickly tell this House that this is but a temporary measure and that it is not his intention to unsurp the authority of all these bodies.

Section 2 empowers the Minister for the Environment to make an Order fixing reduced valuations permanently at their reduced level. The existing arrangement is that new buildings are rated on only a fraction of their total valuation over a number of years. This is well known. In the case of a dwelling house this arrangement is phased over ten years but eventually rates are payable on the local valuation. The intention in this Bill is to fix the existing reduced effective valuations at their present level and, as a quid pro quo, to rate all new domestic properties which would otherwise have been subject to a temporary reduction over ten years. For example, a house appearing on the valuation list for the first time in 1978 eligible for nine-tenths remission and valued at £20 will permanently remain in the effective valuation list at £2, while its neighbour appearing for the first time on the valuation list in 1979 will effectively be valued at £20 for the purpose of determining the State's contribution to local authorities in lieu of rates. There must be serious doubts about the long term benefits of this alleged quid pro quo in urban areas such as Clonmel and Cashel, where building land for houses is scarce and becoming scarcer all the time. There is very little scope for the building of new houses, on which the State would pay a full grant in lieu of rates in the future based on the gross valuation, whereas the urban authority now stands to lose out permanently in respect of all existing buildings which have been built in recent years and on which the effective valuation is at present at a low level.

Secondly, the local authorities' income from the State in respect of any new buildings that might be erected depends on prompt action by the commissioner of valuations in placing valuations on these structures. This applies in all local authority areas. Any delay in the placing of such valuations will redound to the benefit of the Minister and his Department, because it seems that the State now has a vested interest in delay in that it will not have to pay anything to the local authorities.

Thirdly, a loss arises to local authorities in the case of council dwellings. The practice heretofore was that tenants paid their rate contribution as soon as they took up occupation of a local authority house. Where the house had not been valued, the assessment was based on a notional valuation. The recoupment made by the Department of the Environment in respect of contributions in lieu of rates in 1977 included such cases. As far as 1978 and subsequent years are concerned, it seems that no notional value will be placed on these dwellings and, therefore, they will not be recoupable and only dwellings listed in the valuation book will be recouped.

Under section 1, having regard to the definitions of "domestic hereditament" and "lodgings" and the provisions of subection (3) (a), the new Bill will mean that registered tourist accommodation will not enjoy rates relief, whereas non-registered accommodation, which would include the vast bulk of dwelling houses catering for bed and breakfast, will get full relief. I contend that this will be detrimental to the tourist industry and will discourage proprietors from registering and, therefore, from being listed in the tourist guides of Bord Fáilte. The provision caused many existing registered proprietors to de-register, and this is surely a retrograde step and will cause a loss of control exercised by Bord Fáilte over standards. These standards will surely be undermined in the process.

Perhaps the most far-reaching provisions in the Bill as far as local authorities are concerned are contained in section 10 and section 11. Section 10 empowers the Minister to issue directions to local authorities limiting the amounts to be provided in their estimate of expenses. Additionally, in the case of rating authorities the Minister may issue directions limiting the rates in the £ to be adopted by the authorities and it will be the duty of the local authorities to comply with any of these directions under this section. If they purport to provide an amount in the estimate of expenses or in the rates in the £ in excess of the limit notified, the estimate of rates will not be invalidated but will be deemed to be reduced to the minimum amount permissible having regard to the limit. It will be the duty of the county or city manager to prepare a statement for the local authority indicating the effect of the direction in relation to the estimate of expenses. If the direction is not complied with, it shall be the duty of the manager to notify the Minister in writing of the extent to which the limit is exceeded, and to amend the relevant estimate of expenses adopted by the local authority to make it consistent with the Ministers direction.

We are also perturbed and concerned because the Bill gives legal effect to the overall limitation to the rate in the £ as exercised by the Minister in 1978, that is to say, an increase of not more than 11 per cent on the rate that applied in 1977. The Minister is also given authority to limit individual items in the estimate, and I emphasise this point. Looking carefully at subsection (1), it would appear that the Minister will have the power to fix both the upper and lower limits of the amount to be provided if he chooses to operate these new controls. The exercise of these new powers in any degree would mean a limitation in the exercise of discretion by local communities, acting through their local public representatives on the local authorities.

It will now be within the Minister's power to decide the works and services on which the revenue of local authorities is to be spent, whether that money is raised locally, provided by grant or from other sources. Every one of us, especially those who have been or are members of local authorities must have serious doubts about the desirability of a remote and elusive Department of State such as the Department of the Environment or the Department of Finance, and the ability of those Departments to make proper assessment of local requirements. This is a very improper procedure.

We should ask ourselves if the decision by the Government to relieve the rated occupiers of private houses and other premises of their liability to contribute towards the cost of local works and services, and a further decision to delimit the powers and controls of local councils over all their activities, is justified. I do not think it is. We know that after the local authorities had adopted an estimate of expenses for a given year they could authorise by resolution the expenditure of money or the incurring of a liability in excess of the expenditure provided for in that particular year. It is very pertinent to point out that under this Bill the sanction of the Minister for the Environment will be required for any excess in expenditure. It is also intended that the recession will take effect from 1 January 1978 but it is not too clear what will happen if the local authorities overspend in any year. Must the local authority provide for the debit so created in the following year? If this is not the case will the Minister use his powers under section 10 of the Bill?

We all know that over-expenditure arises in attempting to forecast for a period of 14 months ahead the financial provisions that must be made to enable local authorities to carry out a full programme of works and services. I contend that assumptions must be made with regard to variations in the cost of wages and salaries, materials, machinery and overheads, including certain items which central Government might vary or determine during the year to which the estimate relates and of which no account was taken at the time the estimate was prepared and adopted. An example of that is the estimates struck by local authorities for 1978. These estimates were prepared at a time when the guideline set down by the Government in respect of wage and salary increase was fixed at 5 per cent. The Government said that no more than this would be permitted. We now know that the actual wage increase worked out at 8 per cent with a further 2 per cent negotiable at local level and in respect of which claims have been made in a number of local authorities. It is too early to say if the local authorities can live within the various programme estimates as a result of such increase in labour costs and other costs which have accrued during this year. Local authorities are being placed in an intolerable position by handing them a lump sum like this, not to mention emergency situations which can arise from time to time. This time last year we had very heavy snowfalls which had a very bad effect on our roads. Our local authorities had to take immediate action to repair them. This was an expenditure which could not have been envisaged when the rates were struck. No account is taken of situations of this kind.

Sections 10 and 11 strike a death blow at the foundation of our local authorities and our future. I hate to think what will be the future of local government if this Bill is not amended. Perhaps it is significant that when Fianna Fáil got back into power they changed the name of the Department of Local Government to the Department of the Environment. They never had much respect for local government as we know from the abolition of the city council in this city. Local government at the moment is a misnomer. If this Bill is passed unamended local democracy will be dead in the country in a very short time. The decision to abolish rates on domestic dwellings and certain other property and to control individual elements of the estimate of expenses and the rate of income of all other property has left our local authorities in a very bad way as they have completely lost control over their purse strings.

A number of ways can be explored to meet that situation. The most obvious one is to try to generate extra or new non-rate revenue. This would take the form of new local taxes such as local entertainment taxes or local income taxes. More likely it would be possible to allow local authorities to make direct charges for services rendered or for goods supplied, but whatever device is conjured up by the Minister he must find a way of giving back revenue to the local authorities. It is the life's blood of the local authorities. When the Government remove such a large amount of money from them and subvent it by way of a grant, it is no substitute. Strings, conditions and sanctions are attached to grants. Local authorities must be given back moneys for their own purposes; they must be given back self-respect, new hope and autonomy. It is for the Government to find the ways and the means. We could make many suggestions.

Another point that comes to mind in respect of the pressure for derating domestic dwellings and other properties, is the lack of consistency in the valuation and the rating system. Studies have been done on the situation and many sources favoured total revaluation such as the basis of the revaluation in respect of the Copeland and Walsh Report, but the basic principle of site valuing is that the land is valued according to remunerative potential use as defined by the planning authorities. The main benefit of site valuing is the penalty it imposes on the failure of a property owner to put his property to its most efficient use not only where the site is vacant but also where the site is not used to its full potential. In relation to the exemptions from the remission of rates many experts have pointed out that there is no case for subsidising electricity consumers by exempting the ESB generating and transmission facilities from local rates. The same applies to many other State enterprises which could and should be rated as a means of providing much needed revenue for our local authorities.

When speaking on Wednesday evening, I mentioned the powers already vested in members of local authorities. These powers have been reduced over the years especially by reason of the implementation of the County Management Acts which gave vast powers to county managers as distinct from the members but the members had the power to strike the rate and to convene estimates meetings and this was taken very seriously resulting in not merely one but many meetings prior to the striking of the rate. Members of all parties conscientiously faced up to their responsibilities and provided manfully and courageously what they felt was the proper amount of money for the maintenance of the essential services of local communities in the knowledge that they would have to face the public at the next local or general election. Under this Bill the need to convene estimates meetings has been ruled out. The members of our local authorities be they Fianna Fáil, Fine Gael, Labour or anything else, are puppets of the Department of the Environment when it comes to the time for the next estimates meeting. It simply will not take place. The manager will draw up the estimates and the Minister will sanction them and will have power to vary any item in their estimates. Surely this is an affront to members of local authorities. Surely this is a colossal insult to those who have served their local communities devotedly and sincerely down the years, that they are now stripped of all power and influence in respect of the affairs of their community.

Section 4 contained a very important power for members of local authorities. They could invoke section 4 to instruct the manager to do a certain thing and to provide the necessary money for that purpose, whether it was the erection of a cottage for a homeless family, the repair of a roadway or the provision of a water supply or any other essential service. I know that section 4 was abused and I may have abused it, but the first time I invoked section 4 as a member of a county council was an occasion I am always proud of. The situation was where a single man was being appointed to a council cottage and another applicant with a wife and six children living in a hovel was also an applicant but was ignored. In such a situation where there was such an obvious flagrant injustice I was prepared to invoke section 4 and win the support of my colleagues so that that family could be rehoused. I wonder is this power also gone from the members of local authorities? What now is the position in respect of the implementation of a section 4 motion directing the manager to do a specific thing and asking that the necessary money be provided in the estimate? I would assume that this too would not require the sanction of the Minister. May we take it that this would be regarded as being in excess of the estimate and that it would not be sanctioned? Has section 4 become ineffective?

This Bill is the fulfilment of an election promise to abolish rates on domestic buildings and other properties, but it is to the eternal disgrace of Fianna Fáil that they have used the Bill to attack the very foundation on which our local authorities have been built up and sustained. There is the pretence that rates are being abolished as if this were some kind of gift from Fianna Fáil, but the valuation officers seem to be extremely busy revising valuations and, in all cases, revising them upwards. Those revised valuations that I have seen in recent months are almost double the previous figures, although the people concerned have not been given an explanation for such increases. These people are entitled to be informed fully in relation to the increases. They are told that they have a right to appeal against a decision, but in the notices I have seen the recipients are informed also that in the event of their appealing, their valuations may be increased rather than reduced. There is also the right of appeal to the courts, but most people are reluctant to avail of this procedure because it is a daunting experience. In the cases of the increased valuations to which I have referred, internal inspections of the premises were not undertaken. Those of my constituents who are concerned with this matter tell me that although they have received notices of increased valuations, there was no visit from anybody for the purpose of inspecting the premises. What kind of yardstick is applied in deciding to increase valuations? Is it the position that an arbitrary figure is arrived at by some faceless official who does not even see the property in question? The system is archaic. It needs to be democratised and opened up to public scrutiny. It is a system that has been responsible largely for the present chaotic situation. If the necessary changes had been made down through the years it might not have been necessary to abolish rates on domestic dwellings and, consequently, the local authorities would have been spared the disastrous consequences that the abolition of rates mean to them.

When I refer to local authorities I refer to our local communities, whether they be corporations, county councils, urban councils or town commissioners. I refer to our county managers and their staffs and to the dedicated and long-serving members of local authorities who are stunned by what is happening. We thought we had won freedom when we rid ourselves of foreign domination, but we have now a big element of domestic tyranny manifested in this Bill, a Bill which is designed to destroy democracy in every one of our villages, towns and cities and which is designed to give to central government the dictatorial powers whereby every local community can be told what is considered good for them. This legislation is a bad day's work.

The appeal procedure in respect of increased valuations should be designed to give the right of appeal to a neutral tribunal. It is absurd that an appeal be heard by the people who made the decision in the first place. There is long overdue a fair and just means of redress for people in this regard.

I am appealing to the Minister to uphold and protect the rights of members of local authorities and to assist them quickly to find their self respect. A previous Minister, Deputy Molloy, set out desperately to abolish local authorities. He was gaining good ground to that end but was interrupted by a general election which resulted in a change of government. However, the present Minister seems to have achieved by stealth all that Deputy Molloy had set out to do. Almost surreptitiously the abolition of local authorities is being effected without any form of protest in the streets. I am appealing for the stranglehold to be removed from local authorities and for continuance of the grant system until such time as the means of raising revenue is given back to local authorities. I trust that we will have an intimation from the Minister that this Bill is a temporary device and will be operated only until there are devised ways and means of financing local authorities. The Bill is the worst blight ever to befall local authorities. In the future when the estimates are exhausted, local authorities will be helpless so far as remedying the situation is concerned. In such circumstances cutbacks in such essential services as water, sewerage, housing and so on are bound to follow. There will be also the consequential loss of employment, because the local authorities will not be able to go to the rescue of their workers.

No longer will county councils be able to maintain continuity of employment which has been built up over a number of years. Workers' pension rights will also be affected. After all this wreckage one would imagine that the people were getting away with the payment of rates as such. Some £80 to £100 million is involved which we are told by the Minister in his brief, is being provided by the Minister for Finance. I am entitled to pose this question: where will the Minister for Finance get this money? He will get it from the people, the taxpayers. This extra money will be provided by direct and indirect taxation.

We know from the facts before us that the increased revenue required by the abolition of rates will be borne most heavily by all those caught in the PAYE net, people who already subscribe over 85 per cent of the tax gathered. The working class people will pay this bill. They are the people who are mulcted while the professional classes, farmers, business people, shopkeepers and so on pay merely a pittance by way of direct income tax. The fact is that the people caught in the PAYE net pay over 85 per cent of the tax collected.

That is where the Minister for Finance will find the money to pay the local authorities for the abolition of rates. This gimmickry has been bought at a terrible price and the other gimmicks involved will be paid for dearly also by massive borrowing, and we are now told that it may even result in food subsidies being withdrawn, children's allowances being slashed and in a cut back of moneys to local authority house building and even social welfare recipients. All this is being done while the wealth tax is abolished——

An Leas-Cheann Comhairle

The Deputy is getting away from the Bill. He has been very good for the last hour or so but he is getting away from the Bill when he speaks about wealth tax and taxation generally, and nobody knows that better than Deputy Treacy.

Mr. Treacy

I am sorry the Leas-Cheann Comhairle thinks I am veering from the subject matter of the Bill. I have no intention of deviating from it. I could speak on it for days on end without deviating. This is essentially a Bill which raises revenue and I am commenting in passing on how this revenue is going to be raised—on the back of the people. I said that the wealth tax has been abolished and a hand-out has been given back to the millionaire classes. If this is not Tory government, what? This legislation out-Tories the Tories. The loss of revenue to the local authorities is serious.

The second deadly blow which was struck against the local authorities, which knocked them to their knees and from which they may never rise was the destruction of the road fund by the abolition of car tax on vehicles up to 16 hp. This vital source of revenue is also a loss to local authorities. This money was expended essentially on our main arteries of traffic, the main primary and country roads. As members of local authorities we all know how valuable these moneys were. The road fund was abolished for shabby political purposes and that void of millions of pounds must be filled. Again it can only be filled by way of direct taxation.

Already this is having an effect. One reads daily of the problems arising in county councils in respect of the maintenance of roads and the making of new roads. We all see evidence of deterioration in the condition of our roads and footpaths. The future looks bleak for the roads programme—the five year plan that most of our county councils and corporations have. How do they pay for the maintenance of roads and the making of new roads? The road fund is gone; that went with the car tax. That was a good gimmick, but were the repercussions considered? We all know now what those repercussions are. In my home town of Clonmel the roads are deteriorating and the footpaths are in an extremely bad state, and these are early days yet. What are these roads and footpaths going to be like in the years to come unless this Bill and all that goes with it is redressed?

In his reply the Minister should state clearly what he intends to do to provide moneys for local authorities. In the meantime I appeal to him to ease the controls and restraints in respect of expenditure and give the widest degree of autonomy to our local authorities. In essence local authorities must be empowered to raise revenue by some means, even if it is only by a lottery. They must have control over their affairs, and ways must be devised to enable them to do this, otherwise local authorities as we know them will wither away and be no more. They are fast becoming sterile organisations of no consequence.

In his book on Irish government Professor Basil Chubb remarked that the powers of a Minister with regard to local government add up to a formidable array. The Minister for the Environment may remove members, dissolve councils, substitute commissions for a refusal on the part of members to carry out duties or failure to perform them effectually, or for neglecting to comply with judgments or to submit accounts. This Government have shown no hesitation in using these powers in recent years. This was demonstrated vividly by the suspension of Dublin Corporation. The Government can veto any major expenditure on town and county plans if they see fit. It would be hard to envisage much greater control at departmental level unless the entire local authority system were to be abolished.

In a booklet on the problems of Irish local finances by Donal de Buitléar, it is pointed out that local authorities should be allowed to finance local services wholly from local taxation and to administer them in accordance with their own priorities. While the local authorities carry out the administration of many national services such as housing, sanitary services, roads and so on, he proposed that they should remain as agents, with discretionary powers, for the central Government.

I am seeking to have such autonomy restored as quickly as possible. Otherwise it would be easy to talk of the interest that will be shown in the next local elections. I cannot conceive of patriotic-minded men and women who want to serve their local community going into public life in the realisation that they will be entering assemblies which are mere talking shops with no power. I cannot conceive of these patriotic-minded young people being puppets of the Minister for the Environment or the Minister for Finance. Unless we restore democracy to our local authorities, they are doomed and the quality of life to which we have been accustomed will suffer.

The Minister may well be busy abolishing councils, corporations, urban councils and town commissioners in the future. Most probably they will abolish themselves as useless appendages of the Minister's Department. The financial structures of local government in Ireland are becoming more and more dependent on State grants. Fair enough. Almost all of these grants are specific, with the agricultural grant perhaps the main exception. Even though there is a generally accepted principle that national minimum standards should be applied to housing, roads, and so on, because grants are not based on a general formula, differences cannot be calculated very easily.

The abolition of rates on domestic dwellings was a necessary move because the burden of the rates was becoming intolerable and was proportionately heavier on the backs of those least able to bear it. The Minister has gone too far in this Bill. There is a sinister move in the Bill to attack local authorities and destroy their power. I am surprised that the Minister is allowing himself to be used in this fashion. He will be made to change his mind very soon. I am satisfied that members of the Fianna Fáil party who are members of local authorities are as concerned as we are in the Labour Party and as our colleagues in Fine Gael are about this atrocious measure. The revolt will start soon if it has not started already. We will not allow democracy to be destroyed in rural Ireland by a device of this kind. It is bad enough that the coffers of the local authorities should be emptied by the abolition of rates and the destruction of the road fund, without having government from the Custom House solely by direction with not even a rates estimate meeting allowed.

One of the directives issued by the Minister is what I would term an infamous circular. It is essentially anti-social and devoid of any principle and it contains within it a very large element of political skulduggery. I refer to circular II. 37/78 of 31 Lunasa of this year. That circular convinces us, if any convincing is required, that the squeeze is on with a vengeance on the local authorities. Among the more obnoxious proposals in that circular is the stipulation that henceforth all applicants for re-housing must provide PAYE certificates.

An Leas-Cheann Comhairle

I was waiting for the Deputy to get down to the circular. We cannot discuss housing on this Bill. I have ruled that several times already, and Deputy Treacy knows it quite well. The Deputy will have other opportunities.

Mr. Treacy

This circular is an integral part of the Minister's policy in relation to the finances of local authorities.

An Leas-Cheann Comhairle

A full discussion on housing has nothing to do with this Bill. I have allowed the Deputy to mention numerous matters in passing and to do so quite relevantly. He cannot discuss the circular. I have refused to allow two or three other Deputies to do so. Deputy Treacy knows quite well that he is not in order in doing so.

Mr. Mitchell

A Leas-Cheann Comhairle, did you read the circular? It is very relevant.

An Leas-Cheann Comhairle

The Chair has to rule in accordance with the rules of the House. We are not discussing housing on this Bill.

Mr. Mitchell

We are talking about local authority finances.

An Leas-Cheann Comhairle

Deputy Mitchell should not challenge the ruling of the Chair. Deputy Treacy should not do so either. He knows he will have other opportunities to deal with that matter.

Mr. Treacy

There will be another opportunity to deal with this infamous circular which intimates that housing is no longer a social need.

An Leas-Cheann Comhairle

I told the Deputy he could not discuss the circular or housing on this Bill.

Mr. Treacy

Very good.

Mr. Mitchell

I cannot understand that ruling. On a point of order, the circular to which the Deputy referred flows directly from the consequences of this Bill. It deals with financial provisions.

An Leas-Cheann Comhairle

It is in order for the Deputy to mention financial provision for housing or the lack of it, but it is not in order to discuss the circular or to discuss housing.

Mr. Treacy

I have been relevant and close to the Bill all along.

An Leas-Cheann Comhairle

I accept that.

Mr. Treacy

This circular is closely related to the subject matter before the House this evening. It states that, in order to effect economies within local authorities, a means test is to be applied to all those applying for re-housing and that the vast reservoir of land which local authorities have bought and garnered in in so many years should be sold out to private building speculators.

An Leas-Cheann Comhairle

We are not going to debate housing, and the Deputy knows that.

Mr. Treacy

This is disgraceful, it is anti-social and has a direct bearing on the finances of local authorities.

An Leas-Cheann Comhairle

The Chair has already said that we are not debating housing in this Bill, and the Chair is not going to allow it to be debated in this Bill.

Mr. Treacy

I am not doing so.

An Leas-Cheann Comhairle

You are, Deputy.

Mr. Treacy

I mentioned it in passing.

An Leas-Cheann Comhairle

Mentioning it in passing and staying on it for three or four minutes is a bit too much in passing.

Mr. Treacy

The Chair may rule.

An Leas-Cheann Comhairle

Surely nobody knows the rules better than Deputy Treacy and nobody applied them more often in cases such as this. On to the Bill, Deputy, please.

Mr. Treacy

I do not wish to refer to my position as Ceann Comhairle of this House, but when I was in that position I granted a goodly amount of liberality in the matter of debate, especially where matters could be related, and very closely related. However, I am not going to clash with the Chair on that issue.

I ask, therefore, that this Bill be treated with the utmost seriousness by all persons who value our democratic way of life. They will see what is contained in this Bill as an attack on the pillars on which our society has been based. Whose crazy notion was it that local authorities should be attacked in this fashion? Admittedly no thought was given when rates were abolished as to how that void would be filled. It is part of a manifesto which conferred goodies on all kinds of sections of our people with no thought for the aftermath. The chickens are coming home to roost. I hope that the Minister will realise what is happening, that he will tell us that this is but a temporary measure, that he will withdraw his restraints and that he will see to it that circulars such as I have referred to are not issued in his name.

I wonder why we are having local elections next June. It seems an utter waste of time and energy for people through all of the parties to expend themselves in seeking election after what is being done in this Bill.

I feel that I have made my point. In all sincerity I assure the House and the country that we will oppose this measure line by line and fight it inch by inch, and we will change it at the first possible opportunity. We will restore heart, hope, life, liberty and autonomy to our local authorities. We will make local government what it was meant to be until the Government abolished it, or tried to. I believe that the people will assist us in our endeavours towards that end.

Mr. Smith

I have sat here for the last hour-and-a-half and I have been amazed at some of the statements and assumptions of Deputy Treacy. Before making a few general observations on this Bill, which of course I welcome——

Mr. Treacy

The Deputy welcomes it?

Mr. Smith

——there are a few points on which I would like to take issue with Deputy Treacy. Coming as we do from the same county, there might be good reasons why I could not allow him to get away with some of the statements he made.

Mr. Treacy

I cannot hear the Deputy too well.

Mr. Smith

He has attacked the Government on the abolition of car tax on cars up to 16 h.p. on the basis that this has removed the road funds from local authorities. In other words they have removed from the councils funds which were used for the repair, maintenance and upkeep of the roads. If he checks back the records in his own county and constituency and for the country at large he will know that for many years the total money collected in car tax did not go into the road fund. The percentage of it that went into that fund varied from county to county.

Mr. Treacy

Tell us how much.

Mr. Smith

In south Tipperary, the constituency Deputy Treacy represents, the percentage of car tax which went into the road fund was about 60 per cent.

Mr. Treacy

Thank you very much.

Mr. Smith

The rest was sucked into the Exchequer in the four years of National Coalition Government and was not used on our roads. The Deputy complained about the state of our roads as he found them and is finding them today and he says they are deteriorating. I agree that many of our roads are poor, but they have been getting poor for many years, and our Minister for the Environment this year practically doubled in all cases the amount of money available for the improvement, upkeep and maintenance of our roads. In my constituency the amount was increased by almost £400,000. The Minister when he took office as Minister for the Environment recognised the need to increase these road grants. It would be remiss of me if I did not remind Deputy Treacy that in his period of office in the Coalition Government the local authorities—for whom he cried crocodile tears for the last hour-and-ahalf—were unable to recruit men for the road staff to fill the vacancies created by men who retired. He must be aware that that was the position.

Mr. Treacy

No, I am not so aware.

Mr. Smith

I am now making him fully aware of it.

Mr. Treacy

Let the Deputy give us the facts.

Mr. Smith

If he checks the position in Tipperary he will find that that was the case.

Mr. Treacy

It most certainly was not.

Mr. Smith

The question of car tax embraces a lot more than merely the road fund. The reason it was abolished was that the average car user had to spend much more of his income on his car in the past five or six years.

An Leas-Cheann Comhairle

We can deal with the Road Fund but we cannot go into other matters concerning car tax. I allowed Deputy Treacy to raise the question of expenditure on the Road Fund.

Mr. Smith

I understand. The Chair is most lenient in these matters and was very lenient with the previous speaker.

An Leas-Cheann Comhairle

I agree, and I have allowed the Deputy to reply to the points.

Mr. Smith

In relation to valuations, I am surprised at Deputies Treacy and Keating claiming that there was a rampage of increases on properties. He must be aware that the Valuation Office are not involved in initiating the review of valuations, that they can only revalue properties that are listed by the local authorities. The hidden implications that the Minister for the Environment or the Government are directing the Valuation Office to increase valuations cannot be sustained. As many Deputies are members of local authorities, they are in a position to discover why more properties are listed for valuation than is usually the case.

During his speech Deputy Treacy shed crocodile tears for local authorities. He conveniently forgot that water and sewerage schemes were delayed for long periods before being sanctioned by the Coalition Government. There were no amenity grants then. This newly-found love for local communities and voluntary organisations was absent when the Coalition Government were in power. Local organisations that had developed recreational facilities for youth in conjunction with local authorities were stopped in their tracks. He conveniently forgot that house improvement grants were abolished and that improvement grants for roads in rural areas were decreased. One of the amazing things about this debate so far has been the number of times Opposition Deputies have agreed with the abolition of rates on domestic dwellings and other properties. On 25 October Deputy Treacy said:

The abolition of rates on domestic dwellings and certain other types of property was something on which all political parties in this House were agreed for a number of years past. In 1977 the Coalition Government displayed their sincerity and earnestness in regard to abolishing rates when, in that year, the Government arranged that the rate demand was reduced by one quarter, and it was intended to continue that process of phasing out rates until in a year or two rates were phased out entirely.

You will find similar statements from Opposition deputies who have contributed to this debate. Having welcomed the decision to abolish rates, they began to call it an election gimmick and said it would in some way destroy local democracy. The idea was first put into Fianna Fáil policy in 1973.

Mr. Mitchell

It was first mentioned by the Coalition in 1973.

Mr. Smith

We will allow that. We put it into our policy statement in 1973. Opposition deputies were still saying it was a gimmick in 1977 after their policies were rejected by the electorate. They were slow to recognise what had to be done. The only claim they can make is that they were about to introduce it. In some extraordinary way it became a gimmick because they did not introduce it when they were in power.

For years we talked about the inequities that were deep in the heart of the rating system. The system operated for more than a century and bore no relationship to real household incomes. Many people said that the system was unfair. I believe that the people welcomed our decision to abolish rates on domestic dwellings. We have abolished rates on secondary schools and on community halls. The voluntary organisations referred to earlier have welcomed this move.

To put this provision into effect can still produce problems. The Minister has introduced a Bill which, in the opinion of his officials and in his opinion, is the best possible one. I know there will be another opportunity on Committee Stage to go into detail, but there are a few points which I should like to make in connection with sections 10 and 11. The more money being given by the Exchequer to local authorities, the more the demand by the Department for a greater say in how that money is spent.

Though I accept that this should be the position in the overall finance policy of local authorities, I suggest that because of the local knowledge and expertise that have been built up locally in the administrative, technical and representative spheres, the fullest possible consultation should take place with local authorities. Once the overall amount of grant has been decided, whether it is an increase of 11 per cent or more, on local estimates, the detailed decisions of how the money will be spent should reside entirely in the local authority in regard to housing, water and sewerage, recreation facilities and amenities and so on. The Minister should ensure that there will be no interference by the Department in these matters.

This year there was an increase of 11 per cent in the grant, and this has met with a fair degree of satisfaction all round, but it seems to me that in the future there should be a different, more sophisticated basis in regard to deciding the amount of the increase. This should apply not to local authorities as a whole but to each local authority vis-à-vis the others. I suggest this because some local authorities have developed their areas more quickly than others; some local authorities have had consistently tight budgets whereas others have not been so tight. In the fifties and sixties some local authorities went ahead with regional water schemes, for instance, and others did not. The latter now have to spend much more in order to open up possibilities for industrial and housing developments. Local authorities who went ahead earlier with their developments are now faced with only small loan charges whereas councils who were late in these developments are now at the peak period of loan repayments. Therefore, I suggest there should be a new type of formula in relation to percentage grant increases to local authorities. The Minister should keep these matters in mind so as to ensure that problems peculiar to some local authorities would be treated differently, and that there would not be a blanket increase in future years.

In regard to section 11 cases, the council of which I am a member through the years have come up against problems which could not have been foreseen when the annual estimates were being made. Such estimates could not always take into account emergency situations that might crop up in the 12 to 14 month financial period. These might include such things as wages. I am suggesting that where it is merited, allowance should be made to local authorities who are faced with making provision for schemes that could not possibly have been foreseen when the estimates were being passed. In regard to section 11, local authorities have had emergency situations, and I therefore submit that there should be some tightening up in the existing situation to cater for expenditure incurred which could not have been foreseen by local authority members, managers and staff when the estimates were being prepared and passed.

On the question of the relationship between local authorities and the public, many people do not appreciate the complications of local government and quite often the public take a poor view of the work councils do. Therefore, I suggest that in civic classes in schools children should be taught more about institutions, services and the functions fulfilled by local representatives in an effort to get the public more involved in local government services.

I was glad to read in the Minister's brief that he intends to re-organise local government and to ensure that the Department will be more in line with day to day local problems, and that the Department will have more contact with the people at local level. The more power we transfer to central Government and the more we become involved in Brussels decision making, the more danger there will be that people will lose contact with decisions and problems. Therefore, it is necessary that the local government structure should be closer to the people so that the people will have more participation in local democracy. People's misunderstandings of these problems can be very frustrating.

Mistakes are sometimes made at local level—mistakes are inevitable—but it is better to promote ten projects locally and to fail in one than to go ahead with only three or four because of too much caution. All wisdom and reason does not reside alone with the department, with higher civil servants, and although the Department must have control it is essential that the peculiarities and the way of life in the different counties and regions should be taken into account. This can be achieved by full partnership between the Department and the local authorities.

We should examine how best we might achieve a more widespread distribution of power for the benefit of all our people. We should try to stop the excessive growth of bureaucracy particularly in Dublin and in city areas and the imbalances that arise from that kind of growth. We should take account of the way it can denude rural areas. Social and environmental problems can arise in cities like Dublin, with traffic and other problems. We should use this opportunity to start a public debate throughout the country on how democracy should develop in the local centres. It would be far better to debate that rather than having one side of the House saying that the abolition of rates on domestic property will destroy local democracy while the other side takes the opposite point of view. Debate on a matter like that should continue during the next few years.

I should like to thank the Minister for the Environment for the way he has granted extra finance to local authorities. He has been conscious of the various schemes that can involve local communities and the voluntary organisations, for instance, amenity grants and particularly the grants relating to the environment. He has tried to involve the young people in helping to create a better environment for people in their own areas. I hope he will be able to continue the good work. The provision in this Bill regarding the abolition of rates on domestic dwellings will mark a milestone in our history because the average person has been given a relief. From that can grow a new determination on the part of all to build up the local authority system to be much better and more suited to the challenges that lie ahead.

Mr. Mitchell

This important Bill has not got from the media the attention it deserves. It is basic to the whole system of democracy, or as Deputy Smith said to the distribution of democracy in our society. That really is what the Bill is about. It is not about the abolition of rates on domestic property. In 1977 the National Coalition Government reduced the domestic rates by 25 per cent and the present Government removed them entirely. This Bill validates those decisions.

I accept that the provision in the Bill regarding the abolition of rates on domestic property got the most attention but there are less obvious provisions that are more basic, far-reaching and important. I wish to deal with the more obvious provision, the validating of the decision of the National Coalition Government in 1977 to remove 25 per cent from the domestic rate and the decision of the present Government in 1978 to remove the remainder of the rate on domestic property. I welcome the move wholeheartedly only in so far as those two decisions refer to ordinary dwellings. I should like to define what I mean by "ordinary dwelling".

I consider any family dwelling, even a five-bedroomed house, to be an ordinary dwelling, but anything larger that that would suggest it is not an ordinary dwelling, except of course in the unusual situation where a very large family extends the house. A house with more than five bedrooms—with the proviso I made—is a luxury that only the very wealthy can afford. In the past these people did not have any problem in paying their rates and they neither deserved nor required any financial help from this or from the previous Government. That is a major criticism of this Bill, of this Government and of the previous Government.

We sought to abolish domestic rates across-the-board. It was a completely unrefined and unsophisticated thoughtless stroke-of-the-pen act. We have given relief to people who live in castles and in mansions, to millionaires, multi-millionaires and to extremely well-off people who did not need relief. We confused them with a mass of ordinary people who live in ordinary houses, who work for a week's wages or a month's salary trying to keep a roof over their families. Undoubtedly these people needed relief from the penal imposition that domestic rates had become and so we abolished domestic rates. Thus, we gave much more relief to the owners of mansions and castles. It is not too late for the Minister to reverse that. He could decide that relief would not apply to a dwelling with more than five bedrooms, unless there are very exceptional circumstances. If he did this he would give back to the local authorities some additional source of local revenue that would help to balance against the obvious diminution of democracy at local level that the withdrawing of financial power has entailed. I urge the Minister to do that.

We must remember that very few, if any, people in the PAYE net live in such large houses. That means that the owners of those houses are not paying proper income tax. Now they are not paying rates. Some of them have been granted as much as £6,000 relief because of the abolition of rates. Let us compare that with the relief given to the vast majority of my constituents, almost all of whom are local authority tenants. The relief granted to them was something in the region of £50 per year—£1 per week—and then one month later 50p was added to their rent. The average benefit to householders in my constituency has been 50p per week without taking account of tax. People in the large houses I have mentioned are not paying income tax, rates or wealth tax. Most likely they are multi-car families and they are benefiting to a much greater extent than my constituents by the abolition of car tax. These people have had a bonanza since this Government came to office.

Meanwhile out in Ballyfermot and similar areas, where the houses are in the main small two or three bedroomed local authority houses, the benefit of the abolition of rates is something like 50p a week because of the increase in rents. These people do not benefit from the abolition of car tax because very few have cars, but they are affected by the increase in bus fares, an increase which followed almost immediately on the abolition of car tax.

This may be slightly off the subject but there is a connection.

An Leas-Cheann Comhairle

It is slightly off and the Deputy realises when he is slightly off.

Mr. Mitchell

I realised that I might provoke the Leas-Cheann Comhairle.

An Leas-Cheann Comhairle

It is very difficult to do that. On the Bill now, Deputy.

Mr. Mitchell

On the Bill, this is a very serious matter. Does the Minister think it justifiable that owners of mansions and castles should enjoy a relief that ordinary householders undoubtedly need? From the point of view of social justice I do not believe it is justifiable. I do not see why the State should subsidise grandiose residences, which is what the Government are doing in this Bill. I would ask the Minister to amend the Bill to provide relief on houses with up to five bedrooms, and that is being generous, and thereafter reimpose rates. Houses with over five bedrooms should be rated on the surplus, whatever it may be. That would earn some revenue for local authorities.

The second area in which I am critical of this Bill and of the last Minister for Local Government also, because he gave rates relief to the tune of 25 per cent right across the board on domestic dwellings, is in the area of what I describe as multi-dwelling private houses in which the landlord does not reside. This city and other major areas of population are being ghetto-ised by illegal multi-occupation of private houses. Property speculators are earning vast sums on these multi-occupied dwellings. These are exempt from domestic rates. The Minister spoke at considerable length about the benefits being passed on to the tenants. The Minister and the House know that the tenants get no benefit whatsoever except in one or two per cent of cases where you have conscientious landlords. There is no way of ensuring that the landlord passes on the benefit of the abolition.

The tenants of these multi-dwellings are a most needy section. I will give the Minister an example. When I was a child, and up to ten years ago, there was a house with four bedrooms and four other rooms occupied by a single family. That house is now occupied by eight families, one family to a room, with one unusable bathroom and two unusable toilets. The tenants are paying a rent of £15 a week each. The landlord has a weekly income of £120 or something over £6,000 a year. He is getting the benefit of the abolition of rates. The valuation of that house was something in the region of £14. Multiply that by the going rate before there was any abolition and the result is that, at something like £10 in the £, the landlord is getting relief to the tune of £140 a year. You can bet your bottom dollar he is not paying the proper income tax or making proper provision for his tenants. That landlord owns 20 houses on the same road and the story is the same in each.

An Leas-Cheann Comhairle

I hope we are not talking about someone who is identifiable.

Mr. Mitchell

There are so many of them.

An Leas-Cheann Comhairle

Of course there are.

Mr. Mitchell

This landlord is one of many. He is getting a gift of something like £3,000 a year on these 20 houses because of the abolition of rates. Is the Minister crazy, or am I missing something, in making provision like this for people like that? I appeal to the Minister in the name of common sense and in the name of the common good to reimpose rates on multi-dwellings in which the landlord is non-resident.

The position is different where the landlord is resident. The property is not allowed to degenerate and the tenants are properly looked after. They are usually retired couples or widows. If the Minister does as I suggest and reimposes rates on houses with over five bedrooms and on multi-dwellings that would benefit the Exchequer and also provide some revenue for local authorities. I am glad to see the former Minister for Local Government present. His was a distinguished ministry, except for the 25 per cent abolition of rates across the board. Rates had become a penal imposition on ordinary people, but they should not have been abolished in this unsophisticated fashion.

On the question of the abolition of domestic rates, which is the obvious provision of this Bill but not the most important, the history is that in 1973 when Fine Gael and Labour came together as the National Coalition and presented a 14-point programme in the election campaign of that year, one of the points was the phasing out of domestic rates. During the course of that campaign it was said repeatedly by Fianna Fáil speakers, and stated in newspaper advertisements on behalf of that party, that the abolition of domestic rates was impossible. Given the problem that domestic rates constituted a penal imposition on ordinary people, Fianna Fáil recognised in the middle of the campaign that this was a vote winner. Exactly one week before election day the leader of the party, the then Taoiseach who now holds that office again, announced that they would abolish domestic rates altogether. It certainly retrieved some votes for them and saved them from an absolute hiding in the 1973 election. They lost the election and the National Coalition Government, under Deputy Tully, the then Minister for Local Government, proceeded to honour their promise by removing health and housing charges from the rates and subsequently removing 25 per cent of domestic rates. Then in the election campaign of 1977 both the National Coalition and Fianna Fáil promised to abolish domestic rates. That is a fairly factual history of the abolition of domestic rates. There have been assertions and counter-assertions on both sides of the House during this debate which were equally inaccurate. According to every politician in the land, domestic rates should have been abolished. Now they have been abolished, hopefully never to come back. It is a pity that a little more thought was not given to the whole question of the abolition of rates before a decision was made. It is not too late to reverse the mistakes which have been made and to introduce the two refinements I have suggested, both of which are justified.

I gave the House and the Minister an example regarding one house in my constituency. If the Minister wants the address, I will give it to him, together with a few more. The houses in my constituency are mainly local authority dwellings, and there are not too many such examples there, but there are constituencies in this city where there are literally thousands of such houses. Those houses have been developed into ghettos and vandalised by property speculators, who are now enjoying relief under the Minister's Bill, without any planning permission, without bye-law approval and without reference, in most cases, to proper facilities. Yet the local authorities—certainly Dublin City Council, which I had the honour to head as Lord Mayor two years ago and of which I now have the honour to be a member—refuse to pursue these property speculators who are ghettoising the city because if they did there would be such a housing crisis in this city as to cause a revolution.

This leads me to my next point, which deals directly with local government finance. The circular of 31 August from the Department of the Environment to all local authorities, which has been referred to several times in this debate, will go down in history as the most ridiculous and paradoxical document ever to issue from a Department of State. I understand fully that if the Minister for Finance is paying the piper, then he will call the tune. That is inevitable no matter what Government are in power. That circular asks two things. Firstly, it asks local authorities to get people off the housing list and it suggests for the first time the possibility of a means test. It goes on to suggest that from now on people who apply for SDA loans should be asked not for a certificate from their employers but for a balancing statement from the PAYE authorities. That is a terrible mistake. The Minister knows that most couples have to work overtime in order to raise the deposit for a house, especially since house prices have really taken off. By working overtime, these people are now placing themselves above the income limit, which is being rigidly applied, and, therefore, they cannot get SDA loans. This week in my constituency clinic I have about eight such cases. These people need between £4,000 and £5,000 for their deposits because the cheapest house is now about £13,000. The difference between £9,000 and £13,000 is £4,000. Many houses cost in the region of £15,000 and the difference between that and £9,000 is £6,500. If a grant is given, the price is £1,000 less. In relation to deposits, we are talking of sums between £3,500 and £5,500. How could young couples possibly save such amounts of money without working overtime?

An Ceann Comhairle

The Bill does not permit of a wide ranging debate on the whole ambit of local government.

Mr. Mitchell

I appreciate that. I am dealing with the question of local government finance. It is inevitable that when the Minister for Finance is paying the piper he will also call the tune. He has to deal with all the demands and he will hold tight anywhere he can. This has happened in the case of local government finance since the abolition of domestic rates. In order to reduce, I presume, the amount of money being borrowed from the SDA fund, the Department's circular has suggested that balancing statements should now be sought. That effectively rules out the vast majority of the couples who want those loans, because they must work overtime to get money together. By working overtime, they are disqualified. I have a case on hand at the moment, about which I was in touch yesterday with Dublin County Council. A fellow worked like hell in order to earn £1,000 in overtime and his efforts are rewarded by his ineligibility for an SDA loan. He is now on the corporation housing list, and he will remain on it because of the unforgivable naïvety of that circular.

I have a suggestion which will save the Exchequer and local government finance. I raised this point at the Dublin Corporation housing committee at which the matter was discussed and got agreement from senior housing officers of the Dublin Corporation, who are by far the leading housing authority in the country. We should, instead of restricting grants or loans, say to every person on the housing list: "We do not care how much you are earning, you can have a loan for a house provided we are satisfied that you are able to pay it back and provided the house you are buying has a certificate of reasonable value". We would also have to put in some provision about a deposit of £500 or something which is not outside the reach of ordinary couples and would make the scheme attractive to them. This would take people off the housing waiting list and diminish the need for fully subsidised local authority houses. It would also save the Exchequer money and would have the social benefit which comes from people owning their own homes.

The alternative to this is that the Government will have to continue building more local authority houses, although I know the White Paper says they will not but eventually they will have to catch up. People will become tenants of those houses and will then qualify for those houses at subsidised rates. If those people in the meantime are tenants of corporation flats every year of that occupation will qualify them for further reductions in the price. This will cost the Exchequer more money. The Minister should carry out a cost benefit analysis of what I am suggesting. He should tell the people that they can have a 99 per cent loan and they should buy their houses provided they can raise the loan and provided the Government are satisfied that they can meet the repayments. That would save money, but the circular, which is a direct result of the Local Government (Financial Provisions) Bill, is a contradiction. It has forced people who want to buy their own houses back on to the housing waiting list. The Minister should carefully read that circular and make sure nothing like it comes from his Department again.

I became a member of Dublin Corporation in 1964 and I have since then, with a handful of other councillors, taken a particular interest in the rates. It is not a very attractive subject, there are no votes in it, but I felt I had a certain responsibility to do it and I am also interested in financial matters although I am not a member of the Corporation Finance Committee. At every meeting of the corporation estimates committee, including last year when Fianna Fáil were in power, I and a few other members proposed a reduction in the rates. If we saw under a particular heading a proposed increase of 25 per cent, 30 per cent or even in one case 64 per cent, when the prevailing increase in the CPI was only 17 per cent, we argued for a reduction. We were not allowed proceed with this because the manager argued against it. That is the history of this matter in Dublin Corporation, and the Minister can check it. Councillors have not been running wild increasing estimates. This Bill, however, is based on the premise that the Minister for Finance and the Minister for the Environment cannot afford to trust councillors with spending their money. They are setting not only an overall limit but individual limits. They are abolishing local democracy.

In the major authority in the country, Dublin Corporation, in the last four years, regardless of what Government were in power, the proposals always were to reduce the estimates, one penny here, twopence there and a few per cent some other place, because some councillors felt that increases over and above the CPI should have to be justified very strongly. Some councillors will only do what the city manager or the county manager wants them to do. Those people and their staff are full time and councillors are only part time. Many councillors feel that the managers know best and they will take their advice. It has not been councillors who increased estimates. There has not been any irresponsibility by councillors, but this Bill is based on that premise. If I were Minister for Finance or Minister for the Environment and I was proposing the abolition of domestic rates I would want that authority because one wants to know that one is not giving a blank cheque. It is important to control the situation. There was a blank cheque in the past and it was not abused by councillors as a general rule. The major provision of this Bill is to abolish local democracy. I believe it is based on a false premise.

Supplementary estimates are now out. I am very familiar with Dublin Corporation although I am familiar with other authorities as I am a member of the Association of Civic Authorities of Ireland. I cannot remember a supplementary estimate being proposed by a member in the last four and a half years. Supplementary estimates were always proposed by the city manager or his officials. They were the only people who sought approval for expenditure which was not provided for in the estimates. I believe the Minister misled me, although it was probably not intentional. This year, as is usual for Dublin Corporation and a number of other authorities, we did not provide in advance for the national pay agreement because before there were national pay agreements it was thought prudent not to compromise future pay negotiations by providing anything in the estimates. If the members decided that they would provide in the estimates for a 5 per cent or 10 per cent pay increase it was very likely that the other side would start off with a 5 per cent or 10 per cent. No provision was made in the past but when agreement was reached between the manager and the trade unions it was submitted to the elected council for approval and to be provided out of the following year's estimate.

Last year in anticipation of the 1978 estimates the same practice was followed. About eight weeks ago I heard that a problem existed in Dublin County Council in relation to the national pay agreement, and I saw a letter from the Department of the Environment to the county council directing them to provide a sum which amounted to £0.65 million for the national pay agreement out of the current year's estimates even though that was not provided for. On talking to the deputy city and county manager I discovered that as far as the city was concerned the cost of the national pay agreement was £1.89 million and that no provision had been made in the estimates. I asked what he would do or whether there were any directions from the Department of the Environment and he said no, that they would cross that bridge when they came to it. In a report requested by me the manager was able to tell the committee that he had found £1.89 million to pay the national pay agreement in breach of all practice in the past and in spite of the fact that only three weeks previously the cultural committee of Dublin Corporation were denied £30,000 for cultural purposes because it could not be found.

An Ceann Comhairle

I would ask the Deputy to relate this to the Bill. It is totally out of order. The working of Dublin Corporation over the past year is difficult to relate to the Bill before us, which is to provide certain reliefs in relation to the payment of rates and for a number of consequential miscellaneous amendments in the law relating to rates and local government. It is not a narrow subject and it permits of references to certain things but it does not permit detailed discussion on them. The Deputy will co-operate with me in this.

Mr. Mitchell

I have no wish to fall out with the Chair.

An Ceann Comhairle

I have no wish to curtail the Deputy but I would like the Deputy to relate what he is discussing to the Bill, in some way.

Mr. Mitchell

The example I am quoting derives directly from the consequences of the Local Government (Financial Provisions) Bill before us. A major local authority is being directed by the Minister under the vast powers granted to him in this Bill, which he is already exercising in anticipation, to extract £1.89 million from their expenditure, because of tight fiscal control by the Department of Finance and the Department of the Environment. That is just an example of what will happen. Only a month before that £30,000 could not be found for the cultural committee. Confusion obviously reigns in the Department of the Environment in relation to this. A few months ago the Minister gave the corporation about £800,000 to create jobs in the environmental improvement scheme, but according to the Minister's statement when I raised this question a few weeks ago the extraction of £1.89 million from the funds would not retard the creation of jobs. How can the Minister reconcile these two things? Is the Minister telling us that the environmental improvement scheme is only a nonsense and that the £800,000 which he reputedly gave to Dublin Corporation will not create jobs, the allocation to the other local authorities will not create jobs and that the extraction of £1.89 million from Dublin Corporation and £0.65 million from Dublin County Council will not affect job creation? Of course it will affect jobs.

This is just typical of the confusion and lack of thought in the Custom House in relation to the whole question of the abolition of rates. This Bill is ill conceived and is nonsense. It appears that there is a lack of understanding of financial management in the Custom House. The officials in the Department of the Environment have to implement the policies of their political masters and it is not their fault if the Government's commitments do not fall into line with intelligent financial management. Will the Minister, in the name of God, sort things out? The Minister has certainly made a mess of things in Dublin Corporation and in Dublin County Council. Out of the 11 per cent increase that we got last year in line with the CPI £1.89 million must be extracted. That means that in effect we only got something like a 6 or 7 per cent increases despite a much bigger increase in the CPI. That means a sharp reduction in services and consequently a loss of jobs—perhaps not in the local authority, because they employ a permanent staff, but probably in contractors, house builders and road builders employed by the corporation. This situation has made the Minister's environmental improvement scheme appear ridiculous. The Minister has given £800,000 with one hand and has taken nearly £2 million with the other. Where is the job creation in that? All this stems directly from the provisions in the Local Government (Financial Provisions) Bill, 1977.

I am extremely critical of the thoughtlessness that has been manifest in this whole subject over the past five years, from the rash promises made a week before the general election in 1973 that if Fianna Fáil came into power rates would be abolished. At least the National Coalition Government said that they would phase out rates, giving themselves time to think out the consequences. Now we are facing those consequences which are creating chaos. Sometimes chaos is created in order to make other gains, but there are no obvious benefits in the way this is being handled.

In relation to the abolition of domestic rates and the question of restoring them on multi-dwelling houses not resided in by the landlord, the interest on mortgage repayments can be claimed against income tax. It would bring money into the Exchequer if the needy people living in these multi-dwelling houses were allowed to claim their rents against income tax. It would allow them a certain concession and give them a subsidy which they deserve. This would benefit the Exchequer also because the incomes of these property speculators would be known to the Revenue Commissioners so that a proper tax could be extracted from them. In other words, what I am suggesting would be a simple way of effecting a dual purpose benefit. I trust that the Minister will bear that in mind, not only in reflecting on this debate but even after the Bill has been passed, so that he may form a policy regarding the whole question of the future of local government and its financing. The Bill is coarse and indicates lack of thought, but that should not obliterate the justification of abolishing rates on ordinary homes. In that context I emphasise the word "ordinary".

I think it is accepted by all sides of the House, regardless of what Members may say publicly, that local democracy is being reduced greatly by this Bill. Apart from the abolition of domestic rates the other aspect of the rates is now controlled for the first time by the Custom House. In addition, individual headings within the rate are controlled by the Custom House. This is regrettable. However, perhaps the Minister will have a change of heart in this regard and allow local authorities to strike whatever rates they consider appropriate to raise necessary finances. If local authorities were known to be irresponsible and to hike up rates enormously one could understand this provision, but that is not the case. The provision is another of the false premises on which the legislation is based, and it indicates a lack of trust in elected members of local authorities. There is no evidence in history to suggest widespread irresponsibility among those bodies. I appeal to the Minister to change the relevant provision of the Bill in order to allow local authorities to strike the local rate as has been the case and if, in the light of the experience of four or five years, there was an appeal to the Minister to curtail their power, he could reconsider the matter then, but if he adopts my suggestion he will be restoring a certain amount of local democracy.

Small shopkeepers are a group of people who are not being provided for in this Bill. In this age of the supermarket, some small shopkeepers are in a very poor situation. I know some of these people in the Inchicore area of my constituency and I am aware of how hard pressed they are. Indeed, some of them have had to go out of business in the past few years. It is most unfair that the small shopkeeper is asked to pay domestic rates while the speculator who is creating ghetto-type situations and making a fortune from his speculations can avail of rates relief. Would it not be much more fair to grant rates relief in respect of all shopkeepers but to provide for payment of rates by all property speculators?

I am merely highlighting how irrational is the legislation. There is no justifiction for providing for rates relief in respect of multi-dwellings, especially since the relief is not of any benefit to the tenants. If tenants were allowed to claim income tax remission in respect of their rents, the incomes of the speculators would be exposed and the tenants would have the benefit of the rates remission directly from the Exchequer. The Exchequer is not in receipt of a fraction of what should be going to it by way of tax from these speculators.

As Deputy Smith said very well, local democracy is a distribution of democracy. That is what this debate is all about not only for now but for the future. One of the questions that must be answered is whether local democracy is of any value. If the answer is in the negative there is not any point in decision making locally. Would it not be much more honest for the Minister to say that local councils are something of the past, that in future each county administration will be a subsection of the Department of the Environment in Dublin? In effect that is what is proposed in the Bill. Deputy Treacy in his thoughtful submission both last week and today posed this question. Let us consider section 4, the provisions of which should be the most powerful weapon at the disposal of any local authority. However, if there is no control over financing, and that is the matter with which the section deals mainly, it has little if any effect so far as local authorities are concerned.

Inherent in this Bill is the tendency on the part of the major political parties, certainly on the part of Fianna Fail and Fine Gael, to centralise everything, to adopt the attitude that big daddy knows best, that everybody must obey and that if they fail to obey, they must remain quiet. I had the privilege, as Lord Mayor of this city, to head the major local authority in the country. I have been on that authority for four-and-a-half years. I have seen Fine Gael and Fianna Fail Whips being imposed to decide issues of local concern. I mention this as an example of the tendency to control everything centrally, which this Bill enlarges upon and gives vent to. Everything will be decided centrally to the extent that the Minister is making provision to be able to dictate the limit of the increase on any one item in the estimate. That is an unsustainable provision. It is absolutely wrong and unnecessary.

The Minister has said repeatedly that there is no diminution of local democracy and that local councils will still be able to order priorities. That is not so. Even if the provisions about which I have spoken were not in the Bill —where the Minister can say he will give them an 11 per cent increase overall but that they can only increase this by 2 per cent because more money will be needed for something else; effectively that is the power he is giving himself—in practice, when estimates are presented to the elected councillors for their consideration, those estimates have been fought out between different senior officers of the local authorities concerned. Before the city or county manager comes to the council with the estimate proposals, those proposals have been negotiated, bargained and fought for between the different sections under his control. The estimate comes to the council as a fait accompli and hardly ever will a manager agree to any reduction or change in those rates. The priorities are always the manager's priorities, never those of the elected councillors. It is rubbish to say otherwise. That has been the case before this Bill was introduced and it will always be the case. Local councils will have no say, good, bad or indifferent, in priorities. That is copper-fastened and even telescoped by this Bill. Therefore for the Minister to come here and say that local councils will still be able to order priorities is wrong.

The Minister is no fool. He knows what I am saying is true. The manager decides the estimates. The only thing I have ever seen councils do with estimates is to increase them by 1p, 2p or 3p to do something worth while. In Dublin Corporation that has happened in the past few years. The council sought to reduce the rate under several headings without success but they have been allowed to increase the rate by 2p or 3p and there was no objection from the manager. Dublin City Council did that twice in the past four years. The year before last the council decided to strike a penny on the rates for cultural grants and 3p on the rates for community grants. They are two fine outstanding moves by the corporation.

Do not let the Minister come here and say that councils will order priorities because they do no such thing. They have no say in ordering priorities. This Bill makes matters worse because it takes the ordering of priorities out of the hands of the manager. The Minister will be deciding priorities. If he is saying that local decisions should not be taken locally, why is he not more honest? Why does he not say he is abolishing local authorities altogether? In my view the only remaining value local authorities have is as an electoral college for Seanad Éireann, and that only applies to county and county borough councils. The lesser councils are of no consequence. I would prefer to propose in the interests of honesty and clarify that local authorities be abolished.

Deputy Treacy asked if there was any sense in having local elections next year. I happen to be of the opinion that if local elections are to be held that they should be held on the same day as the European elections because they would help both elections by getting a proper turn-out and would be a good exercise in democracy. On reflection, an exercise in democracy? This is not an exercise in democracy; it is a charade. The electors are being asked to vote people on to vacuous bodies. I urge the Minister to postpone local elections until he, the Government and this House have had time to think more deeply on the implications of the new financial provisions, to think about local government reorganisation and about decentralising decision-making. We heard about decentralising Departments of State to Castlebar, Athlone, Galway and so on, but such decentralisation as there has been is just a joke. The degree of decentralisation that has already taken place is tiny. Now we are taking away what remains of local democracy.

This is not the first step. This is the final step because local councils have been deprived of their powers over a number of years. In the not too distant past their authority in relation to health matters was transferred to health authorities and subsequently to health boards. They were robbed of any serious role in health matters. Their direct responsibility for vocational education has gone. There is a Dublin city VEC, a Dublin county VEC, an Offaly county VEC and a Clare county VEC, but they are not under the control of the county councils. They are under the control of the Department of Education.

I think it was in the 1930s that the worst step of all was taken—prior to this Bill—the City and County Managers Act in which the central Government removed from the local councillors their right to run their local areas. This was based on the false premise which has run right through local authority legislation, and which runs through this Bill, that councillors cannot be trusted to run things well, and that they would be irresponsible, for which there is not a shred of evidence.

If on reflection the Minister were to decide that the local elections next year are irrelevant, that they are a nonsense, and that the present local authorities should be retained for another two or three years while local government reorganisation is being planned, I would be satisfied. I would hope the proposed local government reorganisation would include a return to pre-city and county manager days. If people know you have to run for election in three or four years time, and if they know you are responsible for the bin service, or the road service, or the lighting service, you will be more responsive to their needs.

Look at this capital city of ours. It is a run down ramshackle capital city, matched only in the poverty stricken areas in India. As my colleague Deputy Kelly said recently, it is the most run down city in Europe. One of the reasons is that the administrators of this city do not have to worry about getting elected at the next elections because they are permanent officials like the permanent officials in the Custom House, in Government Buildings, in Parkgate Street and wherever they are running the country instead of the elected Government. They do not have to worry about the problems of Kilrush or Ennis. They do not have to respond as politicians have to respond.

An Ceann Comhairle

I cannot see how this is relevant.

Mr. Mitchell

Power springs directly from finance. The Local Government (Financial Provisions) Bill deals with power in local authorities and who holds that power. Effectively this Bill takes away any remaining power elected representatives have. To an extent it diminishes the power of the county managers. It places those powers in the hands of the Minister for the Environment. It makes each county borough administration a subsection of the Department of the Environment. The opposite is what is needed. If you want maximum value for money, if you want fiscal responsibility and results, power should be placed in the hands of those who have to respond or else they are gone next time around.

Look at our capital city as an example. It is ramshackle. It is falling down. I said this when I was Lord Mayor of Dublin. I said it since and I will say it again here today. Not one decent building was put up since the bad old British days. Not one building of note has been erected in this city since the foundation of the State. One of the few buildings of any merit in the city is the Custom House where the Minister has the good fortune to sit. It is hidden by a hideous bridge. There are derelict sites all over the city. There are broken tar barrels despite pressure from local councillors to get rid of them. There is no logo in road signs. They are all shapes and sizes. They are hideous looking. This stems directly from the lack of political control. It is not that these things have not been asked for by local councillors. Councillors, even members of the Minister's party, have been most conscientious, most intelligent, most idealistic and most imaginative in their suggestions, but we got nowhere worth talking about. This Bill takes away from local councillors 99.9 per cent of what remains of their powers. If we were really interested in results at local level, the reverse should be the case.

Local government is not local government in Dublin. My council area is bigger than my Dáil area. How can that be local? Not only do I represent more people as a councillor than I do as a TD but, were it not for the fact that I am a TD, I would be completely powerless, as are most of the councillors in Dublin city. How are they supposed to exercise any control when they represent 80,000 to 100,000 people without even one shilling for a stamp? When the Minister is considering the problems of reorganisation in Dublin, I hope he will remember this level of representation, which he knows about. I hope he will also give consideration to the nonsensical boundaries which have lost all meaning. That is urgent yet, disappointingly, the Minister says that there will be no local government reorganisation before the next elections. He should postpone those elections and get the reorganisation done. Then we will see results for the money spent.

I have been speaking about ways and means, even within the ambit of this Bill, of restoring certain finance-raising powers to the local authorities. I mentioned three items. Abolish the control on the non-domestic rate. Abolish the relief on luxurious houses and on income earning multi-dwelling houses. That is probably not enough if we are to have meaningful local democracy. Local decision-making is very important. It is not valued by the people at large, but those of us in the political process and in administration in the Public Service should recognise its great value. It is closely connected with the power to raise finance, and the three items I have suggested would not restore enough finance-raising power to qualify for the description of local democracy. Other local sources of finance will have to be considered.

Deputy Treacy mentioned local income tax. I am totally opposed to that. We have already too much income tax, but I would not be opposed to some other form of local taxation which would be easier to implement if the local authorities were politically controlled. Politicians will not increase local taxes very much if they know, as they do, that they will have to face the electorate in a few years' time. In the present situation the manager effectively controls everything and recommends this or that tax. He does not have to face any electorate. I would like to see some form of political control with certain committees having paid chairmen, and allowances paid to councillors. The Minister will know that in England it has been decided to pay an allowance of £1,000 to each councillor. That is not a very good idea because the responsibilities of councillors in different areas vary. The travelling expenses paid here at the moment seem to be in inverse proportion to the responsibility involved. Dublin city councillors get next to nothing and yet they have the highest rate of representation and the biggest budget. This is an outrage. If we want real improvement and real value for money our councillors must have the needs of the community at heart. Some of them should be occupied full-time examining the proposals of officials and should be recommending priority. Such an arrangement would leave the situation open to alternative sources of local finance.

What sort of local finance? As I have said, the idea of local income tax appals me as does also the idea of a local sales tax. Deputy Treacy mentioned a sort of "pay for your service" system. I am not sure whether this can be achieved. You cannot put up a gate at each park and stipulate that people may use the park but must pay 20p admission, but there may be some scope for payment for service. Often the greater number of users of public services are big firms and wealthy people, and why should they not pay for the services they are using? This is another aspect which could be introduced more easily if we had more political control.

With regard to regulation of their own affairs, at the moment local authorities can decide very little for themselves. They have the power to suggest local electoral boundaries, but for the past three months Fianna Fail councillors in Dublin city have been saying that the Minister is going to change that provision to suit them. The Minister will not do that because it will not be to his party's advantage. He should not do it in any case. It can be said that his party might win, but we have all learned a lesson on the possible effects of such action. The Government must cease interfering unnecessarily with local affairs and allow some matters to be decided at local level. Even elementary matters are being taken away from local authorities. Everything must be centralised and controlled. This should not be the case and nobody benefits by it. One of the terrible ills of society is this desire to control everything. People get into the rut of thinking that such and such must be done without reflecting on the harm that may ensue or what benefit might accrue if matters were otherwise. I hope the Minister will deny the suggestion that he intends to gerrymander the Dublin city local electoral areas. I ask him to comment on that.

An Leas-Cheann Comhairle

He is not going to do so on this Bill. There is nothing in this Bill about the reorganisation of local areas.

Mr. Mitchell

I make the point because it is related to matters in this Bill such as local power, local democracy and local decision-making: it is another way of subverting the little bit of decision making authority that is left to local authorities. I ask the Minister to forget about it.

There is one other worrying and annoying matter I must mention, conscious that the present Government will not always be in power and that Deputies on this side of the House will swop benches yet again with those over there sometime in the future. In any event, the argument will hold good. Under the provisions of this Bill the Minister would have the power to vary even between local authorities the increases granted. He can tell Mayo County Council that they will get only 5 per cent, whereas Cork, because a by-election is pending in south-west Cork, have a great case and will get 40 per cent.

Before by-elections take place, roads are fixed, hedges are trimmed and water pressure problems are miraculously solved. As there is a provision to manipulate increases, the Government can announce, as other Governments can, the provision of new factories in West Cork and so on. This Bill gives the Minister power to vary the amount of money given to local authorities. That is dangerous, unfair and wrong and has nothing whatever to do with the abolition of domestic rates. There is no need for that provision and it should not be in the Bill. I do not believe that the Minister would remove that provision if I asked him to do so. We should allocate our resources according to need. The Minister should explain why the provision is in the Bill, a provision which allows him to vary local authority increases without any guidelines. If the Minister decides that 11 per cent is the general increase, as he did last year, it will not suit all local authorities. As Deputy Smith said, they are all at different levels of development. For instance, let us consider counties Galway and Mayo. The roads in Galway are much better than the roads in Mayo. The Galway County Council must have given priority to tarring roads whereas Mayo has 1,000 miles of untarred road. Both counties will be given an 11 per cent increase on last year. The Dublin County Council area is a rapidly expanding one but it does not get anything like its development requirements. A formula should be devised to cover upward and downward variations.

Another important aspect in regard to finance and value for finance at local authority level is the calibre and motivation of staff. This has a direct bearing on finance, especially in relation to technical staff. Local authorities have difficulty in attracting technical staff because of their fixed salary scales. It is also very difficult for them to recruit solicitors and engineers. To get the best staff available we must give attractive terms. There should be a two-way flow of staff. I believe that civil servants should be seconded to industry every five years.

An Leas-Cheann Comhairle

The Deputy may mention the financing of staff but he may not discuss the recruitment of staff and so on.

Mr. Mitchell

I accept that. It is relevant in relation to getting value for money. Another problem is that technical staff do not become principal officers or assistant county managers. That is wrong——

An Leas-Cheann Comhairle

It may be wrong but it does not come under this Bill. The Deputy will have an opportunity to raise these matters on another occasion. This Bill is reasonably limited in its scope and we have allowed a fair amount of latitude.

Mr. Mitchell

I understand the Chair's ruling. I think it is a serious problem and it relates to getting value for money. Technical staff often work under principal officers who are less skilled and experienced.

In his speech the Minister said that councillors would have no say in ordering priorities. If the Minister knows that, why does he imply the opposite? Local authorities have next to no influence in the matter of ordering priorities. In his introductory speech the Minister said:

It will be noted that these proposed powers of ministerial control are framed so as to ensure that, with the responsible co-operation of all concerned, little if any interference will be caused to the free ordering of priorities by local authorities.

That is plainly the reverse of the truth because the major effect of the Bill is to take away from local authorities the ability to order priorities, or anything else for that matter. This Bill is not about the abolition of domestic rates but about the consequences thereof. The possibility of abolishing rates was an electoral issue not only for Fianna Fail but for this side. The Bill is about the results of the abolition of domestic rates and the provisions are so coarse and unrefined that they will have the most serious consequences for local democracy and for the people, who will find that at local level they will have no say even in such a matter as the filling of a pothole in a road. A situation will arise like the present one in Belfast where the British Ministry control all the services and local councillors have no say. That is how it will be in the Republic as a result of the Bill. It is a bad Bill and I ask the Minister to reconsider it. If we had been a little more refined in the manner of abolishing domestic rates it would not have meant the expenditure of extra money. The Minister also said:

There is a need, then, to ensure the continued harmony of local and other programmes of expenditure.

What does "continued harmony" mean? In this context it means rigid control, which heretofore did not exist. Up to last year local authorities had the right to fix their own rates by reference to estimates submitted to them by managers. Different managers submitted different levels of expenditure and different councils decided the levels of increases necessary in their respective areas, and no major disasters or fiascos resulted. There have been mistakes in policy made by my party as well as by the Government. We all go to our ard fheiseanna——

An Leas-Cheann Comhairle

This is all very interesting but it has nothing to do with the Bill.

Mr. Mitchell

I differ from you, and that is healthy——

An Leas-Cheann Comhairle

That may be so, but there is no prescription for it in the Bill.

Mr. Mitchell

A little levity is no harm. The Minister said:

There is a need, then, to ensure the continued harmony of local and other programmes of expenditure.

The harmony that existed in the past came about freely. Individual councils and corporations faced their estimates every year and there was no overall control on the levels of local government expenditure. This Bill will have serious consequences for local democracy. Some managers and councils up to now have been much more restrained than others. I mentioned the comparison between Galway and Mayo in the matter of roadmaking and I said that Galway councillors made adequate provision. The Bill takes away the ability of local councils to decide levels of expenditure and that, as I have said, means the abolition of local democracy. In another part of his speech the Minister said:

The present Bill makes no provision in relation to the future valuation of new and unproved domestic property. The Tánaiste and Minister for Finance has already adverted to the possibility, in the wake of domestic rates abolition, of a global rather than individual valuation of domestic property being carried out for each rating area in future. The Tánaiste has indicated, however, that the matter is still being examined. Depending on the outcome of this examination and on the timing and the content of any proposals which may emerge, either the present Bill may be amended on Committee Stage or a separate Bill may be presented to amend the Valuation Acts.

If rates on domestic property are gone forever, why is there any further need for valuation? Why not forget about valuation of domestic property? Is it not obvious that the Minister for Finance and the Government are making provision for the reimposition of domestic rates if events so dictate in the future? At the outset of my speech I said that domestic rates on ordinary dwellings are gone, and we hope gone forever, but the comment about valuation stinks to high heaven. It suggests that the Minister for Finance, as a matter of budgetary strategy, either next year or in a few years' time, can decide to restore domestic rates. That is not what Fianna Fáil promised.

There has been much talk recently about revaluation of property. It has been said that the Minister has no role in valuations but I do not believe that. I believe that, by a nod or a wink, the Valuation Office got the message to revalue property. In my constituency a woman who extended her house seven years ago recently got a notice from the Valuation Office stating that the gross valuation of the house, including the extension which was very small, had increased from £12 to £24. Why was a stamp wasted giving this information to that person if there will be no rates in the future? It means that the Government have reserved the right to reimpose domestic rates by the stroke of a pen.

Mr. Killilea

There is no danger of that.

Mr. Mitchell

Is the Deputy the Minister for Finance? I did not know he had been promoted.

Mr. Killilea

Twelve years ago exactly the same thing was said about land valuations.

An Leas-Cheann Comhairle

Deputy Killilea should not come in at this stage. Deputy Mitchell is retracing most of his speech.

Mr. Mitchell

I did not speak about valuations before now. Deputy Killilea has said that domestic rates will not be reimposed but how does he know? Why is the provision in the Bill? Why does the Deputy not put down some amendments to delete that provision? Why does he not tell the Minister for Finance to forget it, that the electorate will not tolerate the reimposition of domestic rates? It is like the Tuam factory.

Mr. Killilea

That factory is open.

An Leas-Cheann Comhairle

Surely the Tuam factory has nothing to do with this Bill. Neither has land valuation.

Mr. Killilea

Twelve years ago Fine Gael made the same kind of speech about land valuations but the Fianna Fáil Minister for Finance did not act that way.

An Leas-Cheann Comhairle

Deputy Mitchell is in possession and he does not need help from the Deputy.

Mr. Mitchell

I hope the Minister will accept that there is no need for valuations and that there is no need to return to rates on ordinary domestic property. In his statement the Minister said:

I can instance, in support of this statement, the manner in which rating authorities have been able to operate as freely as before within the 11 per cent limit on rate poundages which I notified for the current year.

That is not so. Last year when the Estimates were being considered —weeks later than they would be in the normal way—the City Manager in Dublin had to cut to the 11 per cent limit. Not one penny could be added and he could not make provision for cultural matters or anything else. The Minister knows that the last time when the Dublin City Council decided not to accept the City Manager's submissions, Mr. Kevin Boland, then Fianna Fáil Minister for Local Government, promptly dismissed the council. So much for priorities, so much for making real decisions. We had the freedom to add one or two pence if we did not cut the manager's estimate but there is no freedom to add anything now, however worthy the cause. In some respects the speech by the Minister at the beginning of this debate was as faulty as the notorious circular of 31 August.

The importance of this debate has been underestimated. I have made a number of suggestions which I should like the Minister to consider. I will summarise them for him. He should forget about controlling the limit on non-domestic rates. He should forget about relief of domestic rates on luxurious homes—homes with more than five bedrooms, as a crude definition. He should forget about relief on private multi-dwelling houses in which the landlord does not reside. He should consider some other form of local financing and he should consider also restoring some real political control to local authorities. When I say that I do not mean just to go back to where we were before the commencement of the phasing-out of rates but to go back to where we were before the readjustment on the health scene and before the readjustment of the original Act dealing with city and county managers.

I firmly believe that in abolishing domestic rates we have created and are creating unnecessary havoc in local democracy. Effectively we are bringing local democracy to an end. I do not believe that is inevitable. With a little bit of thought and a more sophisticated approach I believe that could be avoided and I believe this disaster for our people, the implications of which they will only realise as the years go by, would also be avoided.

Mr. Tully

In late 1972 around December a circular was issued by the Department of Local Government with regard to the reorganisation of local authorities. One of the main proposals in that was the removal of 42 local authorities. There was such an uproar from both sides, from supporters of the Government and from the Opposition, that it was quite clear that this suggestion was not an acceptable one. Local authority representatives understood they were elected to do a job and they wanted to continue to be allowed to do that job. When I took over in 1973 I made it quite clear I had no intention of removing small local authorities and no change would be made. A system of reorganisation was commenced and local democracy was restored in a big way to local authority public representatives.

This Bill is effectively aimed at reintroducing in a far more crafty way the proposal adumbrated in the earlier infamous circular of December 1972. Although a great many people at local authority level and the general public do not appear to understand it, this proposal is intended to take away completely the powers of local authority elected representatives. I greatly regret this. I know there is a school of thought, a fairly big one, which says that civil servants rule and run the country. They make the decisions and the Minister carries them out. I refute that. In my time in the Department of Local Government I found the civil servants quite excellent people who knew their job and were competent to advise but the decisions had always to be taken by the politicians—in other words, by the political head—and so we must not blame civil servants for the mess created at the moment. The Minister and his Government must take responsibility for that.

I do not know whether the decision was taken in the full knowledge of what actually was being done. Was it a sudden decision following on the removal of domestic rates to put a ceiling on local authority expenditure lest wily men throughout the country would rush in to reimpose rates on some other section in order to collect a great deal of money to do the things they thought should be done. I do not know whether that was the idea but it seems to me very likely that was the reasoning behind the decision to curb local authorities in this way.

It should be pointed out that the commencement of the removal of the rates began very early. In 1973, 1974, 1975, 1976 and 1977 housing and health charges, as the Minister pointed out, were removed by the previous Government. Had that not been done it would not have been possible to remove rates in the way in which they have been removed now. It should be borne in mind when discussing this Bill that this removal represents approximately £10 in the £ of Irish valuation. The farmer with a valuation of £75 got a present of approximately £1,000 a year, because of the fact that his rates did not go up to that extent. This is something which is not properly understood by many people. Indeed, it amuses me to hear someone complaining about having to pay £150 or £200 income tax when, in fact, he had got a present of £1,000, and over. This was followed, of course, by the decision of the previous Government to remove rates. I hand it to the Minister and his party that they first thought of this idea of removing rates and they first thought of it not in this circular which issued on 23 December 1972, and not in their election manifesto, but just before the 1973 election. It was then they said they would remove all domestic rates.

Now I do not know how much thought went into that idea, I do not know whether as was suggested by the previous speaker, this was simply a gimmick designed to retrieve, as it did, an earlier electoral loss. But it was at that point it was said this could be done. I will not say that the preceding Government started immediately to look into this whole matter. For a period they went after the removal of housing and health charges and that resulted in the rates not going up by £10 to £10.15 in the £ valuation, but sometime after the matter was considered, and very fully, over a couple of years. Subsequently a decision was reached that rates on dwellings should be removed, but should not be removed immediately because of the impact that would have on local finance. The decision was to reduce the rates in 1977 by 25 per cent, in 1978 by 75 per cent of the balance and the balance in 1979. The idea was to ensure there would not be a sudden loss of local authority finance. Apparently the present Government did not take that aspect into consideration. They said they would take rates off immediately they got back and with effect from 1978 they removed all domestic rates.

What was the result? There is no way in which the Government can hide the effects of the removal of rates and the removal of car tax. The effect has been disastrous on local authority finance. The Minister, prior to the reasoning governing this Bill, decided he would limit last year to 11 per cent. It did not matter what local authorities felt was needed to finance their particular counties for the year, the Government said "You can have 11 per cent and you take it or leave it". Good public representatives, the county managers and the local authority officials together did their best to operate within that amount. They knew—they pointed this out to the Minister—that there was no provision for wage and salary increases or various other increases bound to occur during the year. They assumed that they would get his sanction in the normal way to carry such increases forward to the next year. No one told them they would not be allowed to do that. When salary and wage increases came along there was no extra money allowed. What happened? We now have local authorities glad of a strike by engineers which has resulted in the laying off of a very big amount of machinery and because the machinery has been laid off, the amount being saved may now pay road workers and local authority officials' wages until the end of 1978.

Is this the sort of administration at local level to which we must look forward in the years to come? Are we to live with the idea that we do not know what is going to happen and whether staff, who are doing a job that should and must be done, will be able to carry on until the middle or the end of the year because the money may or may not be available? If a wage increase is granted which is in any way substantial, then it is too bad; these people cannot continue in their employment and must be laid off. Deputy Mitchell said that some of them would not be laid off because they are permanent staff, but people are being laid off now who have been pensionable servants of a local authority for many years. A pensionable servant has not the same guaranteed continuity of employment as a pensionable officer and such people must be laid off if there is not enough money to pay them. It is proposed in this Bill that this should be continued ad infinitum. I do not know if the Government went to the trouble of checking what the repercussions would be. These are the ones we have come across and I am sure they will get worse as time goes on.

I wish to mention something which happened last year and should not have recurred this year. Perhaps the Minister would explain why local authorities have not been told what percentage they will get this year. How does he expect local authorities on 1 November 1978 to be able to make an estimate of what money they will have or how they will spend it in 1979 if the Government do not know themselves how much money they will give them? It has been decided that the meeting to strike the rate should not take place and Deputy Mitchell mentioned that there may be a variable limit as between one local authority and another. Is this the sort of thing which is to govern local authority administration in the future?

I have been critical because, having been a member of a local authority for 17 or 18 years and having had the honour to be in the position in which the present Minister finds himself, I know both sides of the story. People elected to local authorities must render an account of their stewardship when they stand for re-election and people at local authority level are much more critical than they are at national level. In many instances, they know their local representatives personally and know whether they are doing a good job or not. I have stated on numerous occasions my belief that the elected representatives to local authorities are the salt of the earth. They do a good job without being paid for it. Sometimes one hears jokes about the amount of money they are paid for expenses, but if one checks up one will almost certainly find that the amount is very much less than the actual cost of being a member of a local authority. They get a lot more kicks than ha'pence. Many of the people who criticise them would not themselves be prepared to stand before the electorate seeking their support. It is entirely wrong that at national level the Minister is being empowered to tell these elected representatives that they may be elected next June if the elections take place and they may make decisions, but when it comes to the spending of a shilling the decision will be made by the Government's representative, not by the elected representatives. I do not think anybody imagined we would come to this situation so quickly.

It all goes back to the shortage of money. We have not the money and we will not seek it anywhere else. We all know that one cannot create money, no matter how badly it is needed. Anyone who has run a house knows that if the money is not there, then there is no point in borrowing it because it must be paid back and may be more than the householder can afford. The Government, having borrowed £850 million, cannot give the local authorities the money they require. They have given a guarantee that the borrowing of so much money was a once only affair and that there will be a reduction of 3 per cent in borrowing next year. Now they want this Bill passed without any opposition so that they can give the local authorities an increase of 5 per cent or 6 per cent, knowing that the local authorities cannot run their affairs with that amount. This will affect the whole range of local authority jobs.

Deputy Mitchell spoke about the rundown condition of Dublin. I do not agree with him on that. I was associated with Dublin Corporation during the time when Deputy Mitchell was Lord Mayor and also during the terms of office of those before and after him. I found that they were doing their best in trying to make Dublin the respected capital city that it should be and they did quite well. Dublin is not the slum city of Europe, as some claim. It annoys me that during the past 12 months they have not been able to do so much, not because they did not want to but because the money was not there.

I know this debate is so confined that it is very difficult to make a point without going a little over the line, but I am sure you will agree, a Leas-Cheann Comhairle, that this whole question is tied up with finance. If the finance is not available for local authority houses, it must be obtained elsewhere. If Dublin Corporation or any other local authority have developed a site for the purpose of having houses built, the water and sewerage scheme must also be developed. A local authority can only do that if the necessary money is made available. Some local authorities have surmounted this difficulty in the past and have helped out villages and small towns which had no sewerage or water scheme, or only a very poor one, by a small levy on the rates, giving an allocation to one scheme in each area. That can no longer be done. It is not in the original provision and there is no way in which it can be done. Local authorities should not be asked to run their business in this way. We should attempt to give them as much power as they can carry. Local representatives are what that term applies. There is talk, on the one hand, of giving more power to community councils and, on the other hand, there is a cutting away of the power of local authorities to raise funds to do what they consider necessary. I agree with Deputy Mitchell in that down through the years when they had authority to raise money local authorities were very reasonable.

There was a reference to Mayo and Galway. It is only fair to say that in Mayo nearly 83 per cent of farms are derated and that might have something to do with the level of road repairs there. I do not know.

Local authorities will be asked to carry on with much less money than they require. This can only result in paring back. Instead of this, we should be attempting to provide the necessities which people need so badly. I was very proud of the fact that during my time in office local authority housing figures went up and up and the present Minister was proud of last year's figures, though I am prepared to say that quite a lot of it was a follow-on from what happened before he took office. It was during this period that the final figures were produced. He now suggests that the man who goes to look for a local authority house should be asked to build a house of his own and he will get a grant of £1,000 and a loan of up to £9,000 but his income must be less than £67 a week. That man can then get a loan of £9,000 repayable at £22 a week for 30 years.

That is how the Government are going to finance local authority houses or the substitute for it. If this is what the Government think is the right way in the late 1970s to deal with local authorities they should have done the decent thing and said: "There will be no local elections next year, we do not think local authorities are necessary. Let us have the community councils meeting, saying nice things about what is being done and criticising what has not been done. It could then all be passed over to big brother in the Custom House who will decide whether or not the money will be made available." It is absolutely ludicrous that we should reach a stage in the country's development that this type of Bill should be brought before the House.

There are many holes in the system as it is. I suppose portion of it can be put on to my shoulders because I was responsible for the start of the derating and the people, without any query at all, who had a small business attached to their dwellinghouses, got one-third rates remission. That was a rule of thumb which was handy at the time. Perhaps it was not the correct way but the local authorities have the right to appeal to the Circuit Court if they are dissatisfied. This year the Minister has introduced another refinement which has caused utter chaos, that is where he said that people who have not got registered guesthouses but who use their houses as guesthouses are entitled to rates remission but if they are foolish enough to register as guesthouses then they are not entitled to a rate remission. A lady came to me recently who lives in a country town and when I asked her if her café was still running she told me it was not. When I asked her why it was not she said she was being treated as a business house. She said she cannot continue because she can only get custom during the few months in the summer when the tourist trade is on and as soon as the tourists go she closes. She told me that her neighbour down the road, who has never had an official café has her house full every day in the week but she does not have to pay any rates. Surely there is something wrong with that. The Minister needs to be a bit more careful before he makes off the cuff statements about who should or who should not be exempted from rates. If he is going to exempt a café which is not registered he will have to think very strongly about the cafés that register. The under-cover ones should not be allowed get away with something which those who register and carry out the full legal requirement are not allowed to get away with.

I do not know if the Minister intends to proceed with this, if this is just the first stage in a reorganisation or if this Bill would not be much better if there were some other things included in it. As it stands now it looks as if the future is very gloomy. The Minister may have ideas about how things should be done in the future, but I can see no future for those going forward for election next June, if the election takes place then. If they go on the local authorities they will be allowed a monthly gripe, monthly meetings at which they can complain about things they consider have not been done and can relate to the local GAA team, the soccer team, the Tidy Town winners or something like that but with no authority to do anything else. I feel this is lowering the dignity of elected representatives.

My colleague Deputy Seán Treacy said earlier that most of the people in the House came in through local authorities. I did not. I was here first but I deliberately stood for the local authority afterwards because I felt it was a place where a lot of good work could be done. We all know that if we go on the basis that the man who pays the piper is entitled to call the tune then as far as local authorities are concerned they might as well go out of existence.

I am sorry to be so critical about this Bill and about something which the Minister has introduced, because it is not my form to criticise something because it has been introduced by people with whose policies I do not agree. In this case the effort to take short cuts and to get away with something is so blatant that it needs to be criticised very strongly. There has also been criticism of the Minister's speech and the famous circular of 31 August and what he advised the people to do. I was amused when I read the circular because you were in this House as well as I was——

An Leas-Cheann Comhairle

Sorry, Deputy, we did not allow discussion on that circular. It was mentioned a couple of times and I had some job stopping discussion on it. It was leading to a full debate on housing which would be completely out of order.

Mr. Tully

I have no intention of introducing a full debate on housing. The Ceann Comhairle was very generous with regard to the circular when he was here. Perhaps you will allow me to make the reference I was going to make, which will be a very brief one. I was amused at the circular which was issued because among other things it states that the number of local authority sites available throughout the country is 68,000, as far as I remember. When I sat on the benches over there the members of this Government day after day criticised the then Government and me for not giving vast sums of money to purchase land for sites for local authorities. I suppose a move across the House can do extraordinary things, and now it seems to be all right. The Minister says that we do not need a lot of those sites and the local authorities can sell them. The only reason for selling them is because it makes more money available. I believe that is at the back of this thing.

No matter where we go with regard to this Bill, around in a circle, we come back to the fact that the Government have not got the money to carry out the job they were elected to do and in an effort to try to cover that up they are introducing proposals which have the result of making local authority elected representatives puppets, people who will go in to meetings and can be pulled this way and that way because they will not be able to say that they should or should not do something. I am quite sure that the Minister, who has excellent public servants in the Department to advise him, must have been told that there are numerous things—I referred to one, making a small additional amount on the rates available for water or sewerage schemes—which local authorities can do by putting a very small extra amount on the rates. The local authorities have been doing this, but if we once agree to a system where the Government—it is unfair to blame the Minister because this is a Government decision—decide that local authorities will not be allowed to raise the money they consider necessary to spend we are in fact saying that the local authorities should cease to exist.

There has been a practice with many local authorities over the years of borrowing money, raising an overdraft for the purpose of doing something they felt needed to be done urgently. Sometimes something must be done urgently, and if there is no other way the local authority should be able to raise the money for it by way of overdraft and recover it in the following year's rates. Down through the years since the striking of rates by local authorities started there was never a local authority which deliberately put extra money on the rates because they had to go before the people for election and if they did that sort of thing they would not be re-elected. The Minister always had the right, if the local authority did not strike a rate which he considered to be sufficient to administer the council affairs for the year, to abolish the local authority. That happened on a number of occasions, the most recent case was when the Fianna Fáil Minister, Deputy Boland, abolished Dublin Corporation. The corporation were suspended not because they put on too much money but because they would not vote enough money. There is no evidence of a local authority wanting to spend vast sums of money, yet the Minister says that he will not allow the local authorities to strike the rates. In effect the Minister is saying that they do not need an ordinary rates meeting because while he says in his brief that they can strike the rate, he has not given them the necessary information about the amount of money they will be allowed to use next year and it is impossible to strike a rate without knowing what money is available.

In reply, I hope the Minister will be able to tell the House what he has in mind. Am I being unfair to the Minister if I say that he is deliberately not giving the information to the local authorities because if he does they will kick up such a row that the Government will be forced to change their minds, or is there some other very good reason which the Government will let us know of in good time? If the local authorities are not notified of the amount of money they will get from the State how is it expected that a rate which will operate from 1 January 1979 will be struck or will come into operation? Surely the Government must know what the allocation will be, because the budget should have been framed about a month or six weeks ago and the local authorities should be given this information.

One thing that amused me about the debate on this Bill was the lanes and bohereens that were travelled by the various Deputies either trying to get away from the main point or trying to get on to the main point, which is that the local authorities were, up to now, the people who decided what money they should spend in their areas and as from the passing of this Bill they will have no authority to do that. There may be very good reasons as to why the Minister did not give the information which the local authorities need. He may be in a generous mood and as Deputy Mitchell said even if there is no by-election he might decide to give a generous allocation to the local authorities. I have been looking at what is happening in various local authority areas and when travelling around the country by car one of the things that comes to mind is the deterioration of the roads. Is this because, as Deputy O'Donoghue said some time ago, men must be kept in employment even if only digging a hole here and filling it there? Is that what it is proposed to do with the local authority employees? Will no money be made available for serious work? In the last week or so local authorities have had to lay off quite a lot of their hired staff, including refuse collectors, the excuse being that there is an engineers' dispute. If the engineers went back to work tomorrow would they be re-employed or would there still be the excuse that the money is not available?

From questions which I asked the Minister I know that there is a tremendous shortfall in available money this year even with the 11 per cent CPI increase which was allowed. What argument did the Minister use to encourage local authority managers to reduce their estimates for SDA loans, for instance, one of them by £1 million? Is it that because of the system adopted by the present Government the SDA loans are not even being taken up? If it can be proved that this year local authorities were unable to spend the money they got, the reason being that nobody in the £67 a week or under wage bracket can spend £22 per week on a house, will that be used as a yardstick by which the expenditure of local authorities will be considered in future? Is that an excuse for not giving the necessary money? Is there any truth in the rumour that the percentage may be as low as a 6 per cent increase? If there is I would advise the Minister to think again. Many people are absolutely fed up with the promise made less than 18 months ago, which has very little to show for it now and the Minister for the Environment should not add to the weight of dissatisfaction by doing what he proposes in this Bill.

Even at this late stage the Minister and his excellent officials should have a look at it to see if there is some other way to deal with this matter, because this is not the way to run local democracy. If this operates as it is suggested it will operate it is the end of local democracy. Perhaps the Minister wants that. The Minister was not a member of a local authority and perhaps the hurler on the ditch can see things that we cannot see, but the Minister being an intelligent man must realise that the suggestions as to how this is to be carried out will not work. The fact that the Minister got away with his 11 per cent in 1978 is no guarantee that he will get away with the limit in 1979.

I would ask the Minister to look at this Bill, consider the suggestions that have been made and realise that there is no way in which people who have given years of dedicated service to local authorities are prepared to accept the type of slur which is being offered to them by this Government, where they are not even allowed to make provision for the purchase of a shovel in the local authority.

Local authorities are being put in the position of having to seek the Minister's permission even if it is only a shovel they wish to purchase. The evidence for this year suggests that the permission to borrow the necessary moneys by way of overdrafts will not be forthcoming. This means that instead of having democracy we are having for the first time a dictatorship. I am not accusing the Minister of being a dictator. The dictatorship will come from elsewhere, namely, from the Department of Finance in the main.

Minister for the Environment (Mr. Barrett)

I thank the Deputies for their contributions and I shall try to deal with most of the points raised. However, a number of the points made could hardly be regarded as being relevant to the Bill so it is hardly necessary for me to deal with those. I am grateful for the manner in which my predecessor, Deputy Tully, paid tribute to the officials of my Department and described them as excellent people because no later than last week one of the Deputy's colleagues described these officials as faceless individuals.

People opposite must be aware, as the 850,000 people who are being relieved of rates are aware, of the impact of this Bill and of the necessity for bringing it in. This Bill is to give legislative effect to a motion I brought before the House on the day after my appointment to office. Not only are we derating domestic dwellings but we are derating also community halls, secondary schools, farm out-offices and, of course, farm dwellings. The Bill is the fulfilment of our commitment in this regard in the manifesto.

Opposition speakers are inclined to ignore the main purpose of the Bill and to become involved in discussing the less important aspects of it. They should know that the various adjustments and changes in local finances for which the Bill provides, flow directly from its main purpose, that is, the abolition of domestic rates. Deputy Treacy went so far as to say that it is the committed aim of his party to undo what has been done in this Bill and to restore democracy to our local authorities. At first I wondered whether I had misunderstood the Deputy but he went on to seek an assurance from me that I would devise ways and means of enabling local authorities to raise their own revenue as was the case in the past. The reason the Deputy gave for making this request was that grants are no substitute for local revenue and never can be. Deputy Treacy knows well that, despite the many studies carried out into this matter both here and in England, there has been failure to find a satisfactory source of local revenue to replace rates. We must take it from what Deputy Treacy has said that Labour are seeking the re-introduction of the rates we have abolished. That is what is meant by a commitment on their part to undo what is being done in this Bill. Deputy Treacy told us that his party intend fighting this legislation line by line. I do not know whether I am to assume from that that they intend voting against the Second Reading, consequently, against rates relief for more than 850,000 householders.

Several Deputies referred to local democracy. I am surprised at the lack of faith on the part of Deputies Fitzpatrick and Quinn in relation to the good sense and intelligence of local councillors. I am confident that councillors everywhere will adapt themselves quickly and easily to the changes we are making. Already, in 1978, local authorities have had direct and practical experience of operating under the changed conditions. They know that there has not been any real interference with their freedom and powers. On the contrary, a new dimension has been added to their functions. What happens now is that an upper limit is put on the level of their rate increases. This is needed because of the dangers that Deputy Callanan mentioned in his clear and common sense way. That common-sense attitude is shared by local councillors generally, who can approach their planning and their estimates decisions with a clear guideline from the Government as to what is needed to tie in their overall programme with broad national policies and programmes. This is responsible local government which fits fully into the wider national picture. The effect of this will be to hold a fair balance between national programmes that are undertaken from central funds directly and local programmes which must be financed also by the taxpayer. There is no question of interference with local discretion or with the powers and freedom of local authorities beyond that desirable and sensible level.

To get down to simple facts and figures. Local authorities this year have £530 million to spend on current and capital programmes. This is nearly £100 million more than last year. On current expenditure alone they have £373 million to spend. These figures prove there is no reduction of local democratic rights. Within the total fixed, each local authority is absolutely free to decide its own programmes and priorities. This is an undeniable fact.

There is no interference from me or my colleague in the Department of Finance with the establishment of the programmes and priorities drawn up each year by individual local authorities. The proof of that is that there was no interference last year with any local authority in this respect. They worked within the limits set and in some cases where there was more buoyancy and development the increase they enjoyed because of the grant went as high as 20 per cent.

For Deputies to say that the local authorities are limited to a fixed percentage is not justified, for another very good reason. Despite the fact that the limit was 11 per cent, last year 16 local authorities did not even avail of that increase because they did not need it. This should be remembered very clearly as proof that the local authorities were treated properly by this Government during the first year of derating.

Deputy Tully criticised interference with local democracy, and the limit on the striking of a rate. I am sorry he is not here because I would like to point out to him that in his own constituency there were three local authorities which did not avail of the 11 per cent increase—— Navan Urban Council went as far as 9.29 per cent, Kells Urban Council went as far as 7.448 per cent and Trim Urban Council went as far as 8.45 per cent. Therefore, I do not know why the Deputy was criticising the 11 per cent increase for that county. I fail to see why other Deputies are criticising the 11 per cent increase when members of local authorities have not been criticising that figure because they found they could work within it. There is no interference whatsoever with the rights of these local authorities to establish their programmes and priorities.

Deputy Fitzpatrick and Deputy Quinn expressed concern that section 13 was taking away from elected members their fundamental power to strike a rate. This is simply not so. Subsection (2) of section 13 makes it absolutely clear that nothing in the section will affect the exercise by elected members of their power to adopt an estimate of expenses for their services and to strike or determine a rate in the pound.

I will be prepared to devote all necessary time on Committee Stage to clarifying for Deputies the wholly technical nature of this provision. That will be a more appropriate time to go into such detail.

Deputy Fitzpatrick, Deputy Quinn, Deputy Keating and others spoke about what they saw as the shortcomings of section 5. For a start, I would like to make it clear that section 5 is only one of the provisions of the Bill designed to ensure that domestic rates relief will benefit tenants of rented accommodation.

Section 6 deals with the position both of local authority tenants and of private tenants of small dwellings. Between them, these probably account for a majority of all tenants in the country. They are fully and effectively relieved of rates.

Section 5 does not deal with tenants who have been paying rates directly to their local authority. These are entitled to full relief under section 3. Section 5 deals only with those tenants who have not been paying rates directly but whose rent may be assumed to have included an element in respect of rates. This rates element, in turn, may be a separate identifiable sum or it may not.

In the case of lettings controlled under the Rent Restrictions Acts, the rates element is always identifiable. What is more, a machinery already exists under those Acts for securing an appropriate reduction in controlled rents now that rates are no longer a lawful addition to them.

Deputy Fitzpatrick knows this, but I think he under-estimates the importance of these provisions. His estimate was that controlled dwellings accounted for only 4 or 5 per cent of all rented accommodation. In fact, the 1971 census figures suggest that about 50 per cent of private rented accommodation was then controlled. In the absence of a further census we can only roughly estimate the position at present.

Mr. Keating

Does the Minister have the exact figures for 1971?

Mr. Barrett

The 1971 census figures suggested that about 50 per cent of private rented accommodation was then controlled. A rough estimate at the present time would lead us to believe that about 40 per cent of the total privately rented stock is controlled. These proportions must also be borne in mind when looking at the figures quoted by Deputy Keating.

I do not accept that section 5 will not achieve its purpose in relation to the remaining tenants. For tenants who have been continuously in occupation from before the start of 1978, a clear entitlement is spelt out. Tenants will have the support of the courts in securing this entitlement.

Deputies have expressed concern about the position of new tenancies. As far as these are concerned the question of rates does not arise because if these tenancies were taken up after 1 January 1978 there were no rates on the accommodation and therefore the question of rates should not enter into any letting arrangements or agreements that might have been reached.

Both Deputy Fitzpatrick and Deputy Keating referred to the unauthorised access by certain people to an early draft of the Bill and certain other documents relating to the Bill. They asked about the present position in the matter. As I told this House last May, I had the matter referred, at the Government's instruction, to the Garda Commissioner for investigation. Recently we have been informed by the Commissioner that the investigation has been completed but that it has not been possible for the Garda to establish the sources of the unauthorised disclosure. I am further informed that no proceedings are intended in the case.

As everybody else should be, I am concerned at the breach of confidentiality involved in the unauthorised access which was had to the documents in question. The incident and the investigations by the Gardaí have alerted everybody concerned with the handling of such documentation to the necessity of intensifying preventive measures against any further such occurrence. I should say that the Garda investigation found no evidence whatever that any official of my Department was involved in the unauthorised disclosure.

Mr. Keating

Is this the official Government statement we were promised arising out of this incident? Will there be a further statement later on?

Mr. Barrett

I was asked to inform—

An Leas-Cheann Comhairle

It was raised by a number of Deputies. The Minister is making his speech in reply to matters raised.

Mr. Keating

I just wished to know if this is the end of the matter or is the Minister proposing to issue a further statement.

Mr. Barrett

This is the exact position. Deputy Keating is one of the Deputies who sought the information.

Mr. Keating

I am not in any way begrudging what the Minister says. I am delighted to receive this information but I want to know if this is the end of the matter or if we will hear further about it.

Mr. Barrett

The Commissioner informed the Government that no proceedings are intended in the case. This involves more than the Department of the Environment. It involves the Director of Public Prosecutions.

Mr. Keating

That is precisely the point. I may not have made myself clear. I do not want to delay the Minister but this is important. He said in reply to a question some months ago that, in due course, a statement would be issued at the termination of the investigation. In view of the fact that other Departments are involved I wonder if the Minister's statement this evening constitutes that statement. Are we to hear further on this matter or is this the closing of that chapter?

Mr. Barrett

In order to clarify the position I can arrange to issue a statement.

An Leas-Cheann Comhairle

Deputy Keating is not entitled to raise the matter like this. The Minister must be allowed to continue with his speech.

Mr. Barrett

I mentioned a short time ago that the investigation found no evidence whatever that any official of my Department had any involvement in this unauthorised disclosure. I refer specifically to my own Department because of the fact that a statement was made by an individual involved in this issue that the documents arrived in an envelope stamped "Department of the Environment". Unfortunately it was found during the investigation that the envelope was missing. No evidence whatsoever was found that any official of my Department was involved.

Mr. Keating

There could be another leak tomorrow.

Mr. Barrett

I said certain measures have been taken. Deputy Ryan from North Tipperary and some other Deputies suggested that the Valuation Office is getting too active on non-domestic property. Deputy Keating mentioned this also. Deputies should realise that the initiative in listing property for revision rests with the local authorities and the Commissioners of Valuation can act only on the cases listed for revision by the local authorities. The Commissioner of Valuation and his officers cannot freewheel around the country up and down streets as Deputy Ryan tried to suggest suddenly revaluing non-domestic properties. This does not happen and it has not happened during the year.

The facts are that the growth in total buildings valuation this year is provisionally estimated at about £650,000. This compares with £647,000 two years ago, indicating that the allegation is without foundation. It is important to remember that only local authorities can submit lists for revaluation. If they are not submitted and listed by a local authority, the Commissioner of Valuation—and this comes under the ambit of the Department of Finance—and his officers cannot revalue properties just because they feel like it. They must be listed and if there have been drastic increases in Nenagh, as Deputy Ryan suggested, it is because of lists sent up by the local authority of which he is a member.

Deputy Quinn spoke about the provision in section 2 of the Bill under which the rates remissions given under the various Housing Acts could be brought to an end. I can assure the Deputy and the House that there is nothing at all sinister about that provision. The Bill simply provides the legal framework for later decisions on this whole question. The provision cannot have effect unless it is brought in by a ministerial order under section 2 (2). Not alone is the ministerial order necessary, but the draft of such an order must be brought before both Houses of the Oireachtas and a resolution of both Houses approving the draft is essential before the order can be made. All that is involved at the moment is a provision to clear the way for a simple streamlining of administration at some future date.

With the abolition of domestic rates, the idea of rates remissions for new or reconstructed houses makes little sense. People are no longer paying rates on their dwellings so the idea of giving them a remission of rates, as individual ratepayers, has no meaning.

Mr. Keating

Except flatdwellers.

Mr. Barrett

I have dealt with that.

Debate adjourned.

The Dáil adjourned at 8.30 p.m. until 10.30 a.m. on Thursday, 2 November 1978.