Gerald Nash (Louth, Labour) | Oireachtas source

I welcome the opportunity to speak on this motion on behalf of the Labour Party. For the record, our amendment states:

"further calls on the Government to:

- replace the Defective Concrete Products Levy with a levy on profits derived from construction; and

- commit to the introduction in the Finance Bill 2022 of retrospective tax relief for those already carrying out remediation works on their homes."

Like many, and we have heard it ventilated here this evening, the Labour Party is concerned about the proposal for an €80 million levy on concrete products on the basis that this will inevitably push up the price of new homes. We have already heard straight from the horse’s mouth, as it were, that contractors across the country intend to pass on the value of the levy on blocks and other concrete products to their customers. No ifs, no buts, no maybes - that is what they plan to do and it is frankly inevitable. This is especially problematic at a time when hard-pressed, would-be first-time buyers are scrimping and saving for every cent they can get their hands on to get a deposit together.

House prices in my own constituency grew 7% in the third quarter of 2022. That is considered to be a slowdown, so the language the industry uses is very interesting. It is compared with record growth in recent years, growth that in fact was not even seen during the so-called Celtic tiger years.

Wages certainly have not increased to the tune of 7% for most people. When we speak about slowdowns, all it means is that the rate of increase is slowing down. Greater value or affordability is not provided for customers. I know many proud and hard-working people in their 20s, 30s and 40s who greeted the news of the levy last week and how it would impact on their ability to purchase their own homes with grave concern. They were deflated. It was another obstacle placed in their way.

When we discuss how the remediation schemes, which we all want to see supported, ought to be levied, we have to agree that the most significant contribution of all must come from the construction sector. There is no doubt about that. We can see the consequences of the era of self-regulation - non-regulation, more appropriately - that was presided over for many years. We can see the impact on families who have experienced the trauma of having mica in their properties or on householders across the country who are living with the consequences of apartment defects. Their experiences are shocking and well documented and have been aired in the Chamber time and again on behalf of the people we represent. I agree with the Tánaiste, who has stated that the costs must be socialised in some way. That is inevitable, but the costs should not be socialised while the profits continue to be privatised by rogue players in the construction sector. That is why our preference is for a levy on profits, thereby minimising the risk to would-be homeowners of even more inflated prices.

The apartment defect scandal has left more than 100,000 dwellings with serious fire defects. With one or two exceptions, builders have walked away consequence-free from tackling the defective buildings that they have left behind them. Unfortunately, owners of defective apartments cannot walk away. They are living with fear, anxiety and insecurity every day. The unnecessary risk to the health and safety of residents of apartments with fire safety defects, which was identified clearly by the report of the working group on defective homes, is becoming real. The impact is clear for all to see. We know the consequences of defects for insurance cover, which is a nightmare scenario, but there is more to this than the financial cost. The human cost of having a home crumble and crack before your eyes is devastating. Stress and anxiety levels among apartment owners have increased significantly due to the ongoing risk to their health and safety and the ongoing financial and insurance uncertainty.

To date, the issue of defects has been consequence-free for the construction sector, but not for the owners. In this context, the construction industry's recent concerns and calls for mobilisation against the levy would be amusing were the situation not so serious. This is the same advocacy and lobby group that said nothing on the issue of defects until mid-July when the prospect of a levy loomed large. It did not even bother to show up at the Oireachtas housing committee's hearing on defects in late 2020. The Construction Industry Federation, CIF, owned HomeBond but has paid out nothing to owners of defective homes. Suddenly, it now seems to care for consumers and the impact on the value of homes when a levy is being imposed on the industry. No one should be fooled - the CIF has not cared one jot about the hundreds of thousands of people living in unsafe apartments, given its record to date. Instead, the idea has been perpetuated that there are bad apples around the place. This is the bad apples theory, according to which the sector as a whole should not be scapegoated for the actions of a few. However, the bad apples theory does not wash when we consider the systemic nature of the apartment defects problem. Between 1991 and 2013, approximately 100,000 apartments were affected, mainly by fire safety issues, due to shoddy workmanship and irresponsible work, regulation and enforcement, or the lack of regulation and enforcement in some cases. The theory does not acknowledge the fact that well-known companies which are members of representative bodies are still trading despite being responsible for defects and doing nothing to help desperate owners. They have not been forced to do anything to help owners either. All of this is the result of poor self-regulation, shoddy workmanship and a culture of impunity that has existed within the sector for far too long. This culture needs to change urgently, as must the law. There need to be consequences for those who are responsible for apartment defects and for making and selling defective and deleterious materials. There needs to be a great deal more stick and a little less carrot.

The Minister of State should note what has happened in the UK as regards construction defects. There, those firms that are responsible for defects are under threat of being refused permission to build and sell homes. We understand that the majority of building firms have agreed to remediate defects in their own buildings and to contribute an additional £5 billion immediately to a building safety fund and a further £3 billion over the next ten years through a building safety levy. UK builders refusing to co-operate are being hit with refusals of permission to build and sell homes. This is important, as it stops them in their tracks. They cannot develop and trade if they do not play ball. Inspiration could be drawn from the UK scheme in how we approach this issue, particularly in the Department of Finance's consideration of the measures in the finance Bill that will give effect to any levy that may be introduced.

In our recent alternative budget, we called for a 2% levy on profits, which would raise €50 million per year and would go some way towards financing redress. That levy would be on profits, not product, which is an important distinction. This would minimise the risk of any fallout from the levy being passed on to potential first-time buyers.

Our amendment seeks to ensure that those affected by the apartment defects scandal and the mica scandal are compensated and supported in respect of remediation work that they have already undertaken. We have long supported the Construction Defects Alliance's call for a retrospective tax credit for owners. This would allow essential repair works to continue or to commence immediately. While it is disappointing that no provision was made for this tax credit in last week's budget announcement, the Minister for Housing, Local Government and Heritage indicated that funding would be available in 2023 for amelioration measures. We look forward to seeing precisely what he means. For example, will consideration be given to short-term measures that provide for security and fire wardens where there are apartment defects, as called for by the Construction Defects Alliance?

If we have learned anything from this crisis, it is that kicking the can down the road will only lead to worse problems being stored for the future. We must learn from the experience of all of these scandals and ensure those who are responsible are held accountable. It cannot always be up to the State to step in and resolve issues that have been created by private industry. Private industry is responsible and accountable and it must make a contribution, but one that is properly designed.

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