Eamon Gilmore (Dún Laoghaire, Labour)

——an increase of 7.5% in the price of a house amounts to approximately €25,000 in the space of a year. That is not something about which the Minister of State should congratulate himself or about which he should be smug.

The contribution of the Minister of State follows a pattern to which we have become accustomed when Ministers speak on matters. They bask in the reflected glory of the economy. Everybody in the House applauds the success of the economy and wishes it to continue. Many people on all sides of this House have contributed to this success. However, the people who have contributed most are those who get up early in the morning and work long days, having left their children with a child minder in one of the satellite towns around our cities and whose labour, effort, initiative and enterprise has contributed to the economy. Ministers do those people no service when they attempt to clasp to themselves the credit for what working people are achieving in the building of this economy day in and day out.

I am pleased that 77,000 new dwellings per year are being built here. I am also pleased at the success of the construction industry, as outlined by the Minister of State. However, what I am not happy about is the failure of the Government to convert the economic success that is taking place and the record levels of house construction activity into meeting people's housing needs. The Minister of State acknowledged during Question Time last week that between 12% and 15% of the 77,000 dwellings built in the past year are holiday homes. Good luck to people who can build and buy holiday homes, but the question the Minister must answer is why housing activity for which he is directly responsible, the production of public housing to meet the needs of those who cannot afford to buy one house let alone two, is only half the level of construction of holiday homes. We are building about 5,000 local authority houses here. The number of holiday homes annually for several years has been about double that figure. That is no reflection on the construction of holiday homes, but it is on the failure of the Minister of State to produce housing to meet the needs of people in need.

Some 15 or 20 years ago a Minister could justifiably tell the House there were areas of social need that he or she would like to satisfy, but that the Government did not have the resources with which to do it. At a time when the Government has the resources and when the economy is performing as it is, with record levels of revenue accruing to the Exchequer, why is it failing to meet the needs of those who cannot afford to provide housing from their own resources? The official figures for those who are on the housing list at the moment is 48,000 families. That is based on an assessment done in 2002. It is three years out of date. A new count is now under way and we can all guess, as to what the figure will be.

However, there is an interesting figure in the Minister of State's contribution tonight, which gives some indication as to where it will be. He tells us that 58,000 people are currently in receipt of rent allowance. To qualify for rent allowance one has to be on a local authority housing list. Only those in receipt of social welfare, by and large, are entitled to claim rent allowance. So the 58,000 on rent allowance is only part of the story. Are we to conclude that when the numbers of people on local authority housing lists who are not eligible for rent allowance are added, the actual number of housing applicants could be as high as 70,000, as against the 48,000 we were told about, before now? No matter which way one looks at it, that is a record number of applicants seeking local authority housing. Never before in the history of the State have so many families sought housing from a local authority because they cannot provide it from their own resources.

Can somebody on the Government side explain why, when the economy is doing so well and there is so much money coming into the Exchequer and being spent on the provision of local authority housing, there is a record number of people in need of housing? The answer has to be that this is a failure of Government. This is the area of housing policy for which the Minister of State is most directly responsible and he has failed to deliver on it. It is interesting that he mentioned, in passing, the NESC report. It got two passing references in the Minister of State's contribution tonight. The NESC does not give its vote of approval to Government housing policy. In fact, on page 199 of the report where the conclusions are summarised, it is stated:

The magnitude and significance of the challenge of sustainable neighbourhoods and social balance needs to be recognised. It bears comparison with two other great challenges that Ireland faced and met in the last half century — the opening of the economy in the early 1960s and the creation of a new economy through partnership in the mid-1980s.

There is no recognition or acknowledgement of that challenge in the course of the Minister of State's entire contribution, where he says that it is "important to note" that the NESC has somehow given its approval and "recognised that the general thrust of policy was well directed". That is not what the NESC is saying. The NESC is telling the Minister of State, this House and the country that there is a very big problem with housing and its associated areas of public policy. It is saying to us that the problem is so big that it is on the scale of the economic challenge the country faced when Seán Lemass and Ken Whitaker produced the famous economic blueprints in the late 1950s and sought to implement them in the early 1960s. It also says that it is on the same scale as the related problems of unemployment, economic under development and emigration that the country faced at a time the concept of social partnership was developed, in order to turn it around, to which many people contributed. If the NESC had felt the general thrust of policy was correct, it would hardly have put it in such dramatic terms.

There were not many specific recommendations in the NESC report and I regret this. Inevitably, in a council that represents such a diverse range of economic interests, by the time a report is published, some of its punches are pulled. However, the one specific recommendation on which the NESC was agreed was that the output of social housing needs to increase by an additional 73,000 units by 2012. In other words, it needs to double. Again, there has been no acknowledgement of that, tonight, in the Minister of State's contribution.

I also found it interesting that some of the matters we were told were so essential, in dealing with the housing problem in recent years were not referred to, either. Just over two years ago the Taoiseach told us, and I agreed with him at the time, that at the core of the house inflation problem was the issue of development land and its price along with the inflation and speculation that was occurring. To address that, he asked the Joint Committee on the Constitution to examine the issues and come back with a report. That was in January 2003. The Joint Committee on the Constitution worked right through the summer of 2003, and produced an excellent report this time last year about which there has not been one word from Government since. It was almost as if it had never happened. There is not a single reference to it or to the issue of development land in the Minster of State's contribution tonight. Two years ago we were led to believe this was at the heart of the problem. That clearly has been buried as well.

Similarly, the commitment given to the social partners under Sustaining Progress, that 10,000 additional affordable houses would be constructed in the lifetime of the agreement, has not been fulfilled. Not a single house has been built and every time there is a contribution from the Minister of State or anybody else, we hear about all the sites being produced. I am coming to the conclusion that whatever the commitment in Sustaining Progress was about, it certainly was not about the provision of houses. It remains to be seen what will eventually happen to some of the sites identified. That is an area I will watch with considerable critical interest.

When the Planning and Development Act 1999 was published, I was happy the Government borrowed the idea, floated by the Labour Party, that a proportion of private development land be set aside for social and affordable housing. The headlines claimed this radical new measure was being taken by the Government to deal with the issue of housing affordability. Six years later, only 800 units have been produced under Part V regulations. Approximately €10 million has been provided to allow landowners to buy out of the withering arrangement which was supposed to give meat to the Act. The Government let landowners off the hook.

The Government's record of delivery on social and affordable housing has not been good. However, there are several areas I want the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Noel Ahern, to address when dealing with the NESC report and drawing up new proposals. A deposit support scheme needs to be introduced for first-time buyers. One difficulty faced by first-time buyers is that, whereas they can afford the mortgage repayments, thanks to low interest rates and not to the Government, assembling the deposit can be problematic. I regularly encounter people who are paying high rents, cannot assemble the deposit and, therefore, cannot buy. Often their mortgage repayments on a similar property to the one they are renting would be less than the rent charged.

The NESC report suggests developing a deposit support scheme, the guest idea, where the house buyer gets the main loan from a financial institution and the deposit through a State loan. A variation on this would be a system whereby the State would give the deposit, not as a loan but in return for equity in the property. Similar arrangements apply in the shared ownership scheme where the equity can be redeemed or bought out by the house buyer at a later stage. An SSIA scheme to allow people to save for a deposit has also been suggested. The need to enable people to assemble a deposit is the critical measure that needs to be taken to free up people who cannot get into the house purchase market.

Rent allowance is another issue that needs to be addressed. Rent allowance is, by and large, only available to those on social welfare. I know of many working families, renting privately, who are being fleeced. Recently I encountered a young family whose net monthly income is €1,800, €1,100 of which goes on rent. The family receives no rent allowance and will not qualify for a shared ownership scheme. Even if the family qualified for the scheme, house prices in the Dún Laoghaire area are beyond the maximum available. Affordable housing, because of the rate at which it is produced, is not an option. This family is entitled to some support. A housing benefit scheme or an extended rent allowance scheme must be made available. The idea of losing rent allowance when one returns to work is a disincentive, creating a new poverty trap.

See this speech in context