Paul Coghlan (Fine Gael)
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I move: "That the Bill be now read a Second Time."

I welcome the Minister of State to the House for this important Bill which I am delighted to introduce. As the House is aware, it aims to address a serious loophole in the law which leaves consumers at a distinct disadvantage when purchasing houses. In particular it reduces their bargaining power, adds considerably to their costs and involves them spending up to 90% of the price of their house before getting possession of the property.

This Bill proposes to abolish the practice whereby developers demand stage payments from house purchasers for houses built on housing estate developments. Such houses are generally built to the specification, timescale and requirements of the developer and are not specifically constructed for individual purchasers. This Bill seeks to address the demanding of stage payments by the developer for such developments. It does not seek to outlaw the provision and contracts for stage payments where a single house is being built to the specification of a consumer, particularly for one-off housing. In such instances the practice of stage payments may be justified, given that the consumer is intimately involved in the design, construction specification and financing of the project. In that case the builder is constructing the house specifically for an identified named consumer and payments are made on certification by the client's architects.

The practice of stage payments being demanded for houses in housing developments occurs only in certain parts of the country. I am sure the Minister of State will agree that the country is a little too small to be lacking in uniformity. In most cases house purchasers pay a deposit of 10% on a new house and pay the balance when they occupy the premises. This is the normal practice throughout most of the country. However, in Cork, Limerick, Galway, Sligo and Mayo, purchasers of new houses in housing estates are required to make stage payments before and during the construction phase of such houses. There is also evidence that the practice is re-emerging in other areas and that must be of concern to the Minister of State and his Department.

This practice is wholly one-sided and entirely anti-consumer. It is entirely inequitable that a consumer ends up paying up to 90% of the price of a house before gaining possession of it. As a direct result of stage payments being demanded in such circumstances, purchasers end up paying their mortgage repayments well in advance of living in the house. This is entirely unfair. I am sure the Minister of State agrees.

The fact the consumer has paid over the bulk of the purchase price of the house before the house is completed inevitably lessens the consumer's bargaining power with the builder and provides little incentive for the builder to complete the project on time and to specification. It also involves transferring certain financial risk inherent in the stage payments system to the consumer in addition to imposing unwarranted costs on consumers. This is unreasonable and incompatible with the ability of many consumers to carry such one-sided impositions.

A recent report commissioned by the Law Society outlined the cost of stage payments to consumers. This report was prepared by an eminent firm of accountants, Peelo & Partners. It determined that stage payments cost consumers an extra €7,000 each. The majority of these additional costs come in the form of extra interest on obligatory payments drawn down before the consumer got possession of the house. In addition there were certification and survey costs that had to be met. When one considers the 25,000 new houses being built annually in the affected counties, the total cost to consumers is €75 million annually.

It is rare that we in this House can implement legislation that can have such a direct and immediate benefit for consumers. By accepting this Bill and allowing it to survive beyond Second Stage we can alleviate a considerable burden for house buyers. I appeal to the Minister of State. He can take heed of his own expert advice if the Bill needs amendment and we can live with that.

The reality of stage payments in these instances was brought home to me by an article in the Irish Examiner yesterday. None of us could fail to be moved by the plight of the two families who purchased houses in housing estates that were subject to stage payments. One woman purchased a house in October 2002 yet along with her boyfriend and six year old daughter is still living in a flat attached to her parents' house. The total house purchase price was €146,000 and the couple paid the builders €110,000 in three stages for the house in Castledermot in County Kildare. The mortgage payments are already costing the couple €500 per month, but the house is not ready for occupation. The purchaser believes the house will not be ready for another few months. In addition to the costs imposed on this couple, they are also unhappy with the specification of the house. The purchaser was quoted as saying: "The fireplace, windows and sockets are all in different places and the survey includes a six page list of defects". I cannot help thinking that if the builder had only received 10% of the purchase price as a normal deposit, the house would have been completed on time and to the specification required. Another ancillary aspect to the stage payments system is that the couple missed the deadline for the first-time buyer's grant because the house was not completed and occupied by 2 April this year. In this case, the stage payments system is likely to cost the couple nearly €10,800 at a time when their finances are already stretched.

Another woman purchased a house from the same developer and was due to move in in April 2003, several months before her wedding last September. However, her house is still not complete and her husband is now sleeping in the dining room of her parents house while she shares a room with her sisters. The couple's wedding presents are being stored by friends and relatives.

No Member of this House can be satisfied that a loophole in the law is causing such direct and avoidable hardship for consumers and house purchasers. There is no justification for continuing the system of stage payments. It is imposing additional cost, inconvenience and heartache for purchasers of houses around the country. I was encouraged that the Consumers' Association of Ireland is steadfastly against the practice and has told me, thorough its general secretary, that it supports this measure wholeheartedly. It is a one-sided practice that offers no benefit to consumers.

I do not accept the arguments advanced by some in the construction sector that abolishing the practice of demanding stage payments would result in dearer houses for consumers. Due to an absence of transparency, there is no evidence that house prices in counties where the practice persists are any cheaper than those in other parts of the country where it does not. This is a plain and simple rip-off which consumers must continue to endure unless the practice is outlawed.

In recent weeks, as we have campaigned in the local and European elections and since the results were announced, there has been comment on the need to be responsive to consumer needs. I understand from today's newspapers that there was also comment at the Fianna Fáil parliamentary party meeting yesterday about the plight of first-time buyers and the need to be responsive to them. This measure, if adopted by the Government, could go a considerable distance towards helping first-time buyers. Allowing this system to persist for even another month will be to perpetuate a continued injustice against consumers.

From discussions with the Minister of State, I know his heart is in the right place on this issue and that he is in agreement with me, and I respect his interest in the subject. Therefore, I hope he is willing to accept this legislation. Some 25,000 house purchasers and their families will be interested in the response of the Minister of State, and they have long memories. The Government can amend this legislation in any way it sees fit. It has been discussed on the Order of Business in the House and there is broad agreement on it. Nobody is claiming a monopoly of wisdom on this issue and I see no divisions between us. I commend the Bill to the House.

Brian Hayes (Fine Gael)
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I commend the Bill to the House. The Minister of State, Deputy Noel Ahern, is an accomplished Minister with a distinguished record in his Department and considerable experience in trying to help first-time buyers take their first step on the housing ladder. I ask him to take this Bill on to Committee Stage. There is no need for the House to divide on this matter. There is unanimous support for this pro-consumer measure that my colleague, Senator Coghlan, has so eloquently outlined. I commend the Senator for his endeavours in bringing this matter to the attention of the House.

It is frequently asked in the House what can be done for first-time buyers and young couples faced with difficult financial situations due to the price of housing. The truth is that the best way to control house prices is to have more supply, to build more houses as a means of stemming house price inflation. If this has been the general principle since the first Bacon report, there must be another part of the deal to ensure accountability in property transactions and in the way in which the building industry deals with those who are trying to take their first step on the housing ladder. The problem, which is only a problem in Munster, flies in the face of that deal and in the face of fairness and ordinary consumer rights for people who are making the most important choice and biggest financial commitment of their lives. The Minister of State would be well advised to accept the Bill on Second Stage, move it on to Committee Stage and bring forward the amendments he sees fit.

It is important for this House that this measure should be debated here because we have time available above and beyond the theatre which takes place in the Dáil. I was a Member of the Dáil for some years and believe the time-wasting there is as never before. The Seanad does not have the same wastage of time because Members are less party political. Therefore, we have a real obligation to do serious work in areas such as this and to reform out-dated anti-consumer practices by means of Private Members' Bills and good legislation from the Government side. It would be to the credit of the Minister of State and the Government if, in the course of his reply, he stated the Government would accept the Bill at Second Stage and, as all Members could be part of a Committee Stage debate, the House would then deal with the Bill as expeditiously as possible.

If the Government accepts Second Stage, it could bring forward Committee Stage completely at its own discretion. It is possible that more work needs to be done on the Bill although the net point is clear, as is the practice we are trying to outlaw. The Government should be generous in its response. The Seanad has the time to deal with legislation which the Dáil does not have. Too often, Bills are not properly debated in the other House due to the time-wasting and theatre that regularly occurs.

I was privileged to be my party's spokesperson on housing for two and a half years in the last Dáil. At that time, I brought forward a Bill to outlaw the practice of gazumping in the housing market. I readily admit it is a difficult issue to resolve and that my puritanical legislative response at that time was probably not adequate. However, the effect of bringing forward a Private Members' Bill led the Government to invite the Law Reform Commission to report on the practice of gazumping in the housing market. When the commission reported, not only did it give its view on the issue of gazumping but also on a range of anti-consumer practices that exist in the building industry and housing market. As far as I am aware, stage payments is one of the issues it reported on.

This is long overdue. The Law Reform Commission report was published four years ago but the Government has not responded. We are giving the Government an opportunity, in the context of this debate, to deliver the kind of response the commission made clear should be delivered for first-time buyers. I ask the Government to respond because many eminent bodies, including the Law Reform Commission, have highlighted this practice as unacceptable. If it is unacceptable in Dublin, Donegal and Galway, why are young house buyers in Munster subject to this anti-consumer practice? If there is one housing market, there should be one law for property transactions covering the rights and obligations of the purchaser and the vendor in all of those circumstances. This bad practice has existed for too long and it must be remedied through Senator Coghlan's Bill.

If I buy a new house on an estate in Dublin, I am asked to give 10% of the contract deposit up front, which is fair enough. The other 90% is given on completion, which is fair business practice. It is palpably unfair, however, to ask young people trying to buy a house in parts of the country to give the whole price of the house up front without even their living in it. That only adds to the cost of one of the most expensive decisions anyone will have to countenance in his or her life and it gives the builder additional money on which he earns interest.

This practice is unjust and I ask the Minister of State in his response to ensure we have one housing market that is well regulated, fair and accountable and that the Government will intervene in this minor area to ensure good consumer practice and to stand up to those people who are screwing young couples for thousands of euro they cannot afford at a time when they are trying to save money to buy a house. It would be a good day's work if this Bill was accepted.

Noel Ahern (Dublin North West, Fianna Fail)
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I welcome this opportunity to clarify the Government's thinking regarding stage payments. We share many of the concerns expressed by Senators Coghlan and Brian Hayes, particularly those relating to the needs of consumers.

This Government has made it a priority to tackle the housing market and, in particular, to support first-time buyers. We want to ensure that home purchasers benefit from increased supply and increased choice in the housing market, while also ensuring they are not disadvantaged by any practices in the market that might make it more difficult to access a home. In this regard, the Government's effort has been to increase housing supply to its present record levels.

The Bill proposed by Senator Coghlan seeks to ban the system of stage payments for newly constructed houses in housing estates. The Bill does not seek to interfere with stage payments in the case of one-off houses. We appreciate fully the intentions of the proposed Bill and I have discussed this matter in the past with Senator Coghlan and other Members from the south. I have a feel for what they are saying and I find it difficult to understand why the situation should be different in Cork from that in Dublin. The question, however, requires more rigorous examination before the House should be asked to enact legislation of this kind. The Government is prepared to have such an examination undertaken, taking into account the various views that have been presented.

In opposing the Bill today, I am not ruling out an appropriate legislative intervention, but further work needs to be carried out. While drafting the Housing (Miscellaneous Provisions) Act 2002, consideration was given to taking a legislative approach to ban stage payments in speculatively built new housing estates. Legal difficulties were identified with regard to putting in place appropriate legislation. These difficulties related to its possible effectiveness, its potential consequences on the housing market and difficulties regarding ensuring compliance and effective enforcement. There is a range of potential legal complexities relating to the use of definitions aimed at limiting the application of the proposed legislative approach. These also require further work to ensure that they have the effect intended.

The Senator will agree that it would be important to ensure that any legislative route should avoid such potential obstacles. However, before coming to a legally-based approach, we need to have a closer examination of the practice and its real effects. We all want to ensure we do not hinder or interfere with the supply of houses in any part of the country. I am not saying the Bill would do that but we cannot be sure how some people in the business will react.

While there are currently no legislative provisions governing stage payments, there is a voluntary code of practice regulating these. The Irish Home Builders Association, under the auspices of the Construction Industry Federation, operates a code of practice on stage payments. The code provides that the cumulative value of a stage payment should not exceed the value of works completed at that date and it sets out a schedule indicating appropriate levels of payment at different stages of construction. While this code is voluntary, it applies to approximately 80% of home builders and it includes a complaints procedure regarding members who breach the code.

I am aware that there is public concern about stage payments and that they can present some additional costs. In other cases, they may offer purchasers additional flexibilities. These are the issues we must explore further. For example, I understand that among the complaints which the IHBA has received generally, none of these related to stage payments since the introduction of the code in 1999. In addition, I understand that stage payments have not been an area of significant complaint to the Office of the Director of Consumer Affairs.

While I recognise the code of practice does not currently prohibit stage payments in the case of newly constructed houses in housing estates, it does demonstrate that measures such as a voluntary code can be a very effective tool to shape these matters without recourse to legal measures. Often it is better to secure agreement on all sides on codes of practice for these issues rather than to wave the legislative stick.

The question of stage payments was also considered in a High Court case regarding unfair contractual terms taken by the Office of the Director of Consumer Affairs and supported by my Department. While the court did not consider the propriety of stage payments, it ruled that stage payments that exceed the percentages stipulated in the IHBA code of practice shall not apply.

The Law Society has released a report on stage payments that claims the system adds up to €7,000 to the price for a purchaser but the exact basis for this claim is not spelled out. Under stage payments, purchasers do not necessarily pay additional interest charges, although they may, of course, begin paying part of their mortgages earlier than would otherwise be the case. In particular, purchasers find themselves making stage payments before they are in a position to live in their new homes. That is a burden because some purchasers may also have to pay additional rental or other costs at the same time.

Concerns have also been expressed about the possible risks that the stage payments approach may carry for home buyers. While there are a couple of private schemes that can offer some insurance in the case of stage payments, it is not clear whether this would be sufficient in all cases.

In considering the question of stage payments, the overall impact on home buyers must be the central consideration. This impact occurs at a general market level where our aim is to ensure a healthy supply of quality housing. There is also an individual impact where the aim is to make quality housing as affordable as possible having regard to both purchase and transaction costs. We know it suits some people to make stage payments in one-off houses or where they are retaining a lot of flexibility in the design or individual fit out of their house. In some cases, it is suggested that the existence of stage payments has facilitated smaller developments with fixed price contracts to go ahead more quickly. This may be of particular relevance where smaller local builders are involved. We need to examine all of these aspects. The record house completions in recent years and the measures introduced to assist first-time purchasers speak for themselves. I assure the House that the Government did not achieve these successes to have the benefits undermined by unnecessary market practices. However, given the legal questions that arise, it is vital that we rigorously pursue all potential options to ensure the most effective action can be taken where required.

My Department has already had discussions with the construction sector and the Director of Consumer Affairs on this issue. These consultations are crucial in identifying the exact nature of the problems that may be experienced by consumers, considering all potential solutions and assessing the effectiveness of the current code of practice. The construction sector, which has benefited from the increased demand for housing in the current market, must share responsibility for the impact of its practices on the consumer, particularly if its construction colleagues in other parts of the country do not feel the need to adopt the same practices. In this regard, we consider this Bill is premature and should await the outcome of our exploration of all potential measures.

I assure the House that if the outcome of the rigorous review now proposed and the associated consultations demonstrate the need for legislative action, the Government will deliver. If it becomes clear that the legislative route is the only viable option, we will also take the opportunity to consult with other stakeholders, including the Law Society, to ensure the best legislative option is developed. Let there be no doubt the Government is concerned to ensure house buyers get the best deal and all necessary measures to protect consumers are taken.

I note Senator Brian Hayes said he would prefer if the House did not divide on the issue, a sentiment I share. It is difficult, if not impossible to understand why the system of buying a house in Dublin differs from that in Cork. I would like to carry out an in-depth examination of the system, pursue talks with the CIF or the Home Builders Association and follow through with the Director of Consumer Affairs. I am not convinced that legislation is the appropriate way to go. I would prefer to talk as an equal to members of the construction industry rather than under the threat of legislation. Waving a big stick too soon might not necessarily be the right way to go. It might rub some people up the wrong way.

Joe O'Toole (Independent)
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That is what is happening to young people for the past ten years.

Noel Ahern (Dublin North West, Fianna Fail)
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It will take some months, perhaps to the end of the year, to conclude the examinations that are taking place.

Kathleen O'Meara (Labour)
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It will take years, if it is ever done.

Noel Ahern (Dublin North West, Fianna Fail)
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If the other routes to which I referred do not lead to potential success, I will support the legislation if we decide it is the only route to take. I suggest a period of approximately six months to see if the other routes are successful. I agree with the basic idea in the legislation. I find it difficult to disagree with what Senator Coghlan and others in the House to whom I spoke recently are trying to achieve. It is a case of how to reach a solution on applying the same system to buying a house in Dublin as in Cork. I hope we can proceed but I would not like to talk to people under the threat of legislation. If I do not make progress within approximately six months, I will consider the Senator's Bill.

Joe O'Toole (Independent)
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I compliment my colleague, Senator Coghlan, on bringing forward the Bill. It is a tribute to him and a practical example of how politicians can remain in touch with the world around them and put their finger on the pulse of need. While I welcome the Minister of State to the House, I have great difficulty with his concluding remarks. I do not understand why he is worried about waving a big stick over builders who have been kicking youngsters around this country for the past ten years at least. These people have been scrimping and scraping to buy a house sometimes without even knowing the price of it. Sometimes the price of houses increase after people have had a verbal agreement to purchase them. Sometimes people must go to court to try to force agreement on the price of a house. This happened recently. I would go along with what the Minister of State said if he promised to introduce a pro tem regulation next week to stop this happening.

I fail to understand what the examination is about because it is a clear-cut issue. The Minister of State asked why buying a house in Dublin is different from buying a house in other parts of the country. The answer is very simple, it is the market. Government backbenchers have spoken about the party being pushed too far to the right, being market driven, and this is the outcome of it. It is wrong and unfair. As stated in the memorandum, it is fine for someone who owns a site and gets a builder to build. That is a different arrangement, because whatever happens, the person will always be behind with the payments, will at least own the site and the completed work, and the only difference will be to conclude the work.

This issue is not dealt with in the legislation. The legislation should protect people in the event of a builder going bust. Approximately three years ago, when the price of houses increased, many people could not afford to buy them. This happened to people in Drogheda and north Dublin. Builders went bust and people who had paid money for houses did not get their money back. The money was part of the assets of the company which went bust and people who had paid a deposit lost out. There is nothing to examine in this regard. The Minister of State and I know this is happening and he has not given a logical reason for not supporting the legislation. While he agrees with the proposals in the Bill, he will not support it. The answer is very simple: the Minister of State is afraid of his officials. I know of no one on the opposite side of the House who does not agree with the legislation. I suspect the Minister of State also agrees with it but he finds himself in an awkward position. As the Tánaiste said during the week, it is time people made decisions. They should say to Departments what they want and ensure it is delivered. The Minister of State should be saying this is good legislation and the Government parties will make it even better. If necessary he should say he will table 24,000 amendments on Committee Stage to improve the legislation beyond recognition, make it Government legislation and produce results. This is what needs to happen.

This is the type of thing young people talk about. Why are they always being buried by the big people in society? Why can big builders look down on small buyers, call the shots, insist they get the money and, if not, sell to the next person? This is not the only daft practice. I recently met people from the European Construction Federation. They told me they are amazed and secretly appalled at the practice in Ireland of people buying property off the plans. It is commonplace in Ireland. People are now coming here from Budapest, Prague and other places, putting charts up on the wall of a fancy hotel and Irish people are queuing up to give money for it. It does not happen anywhere else in the world. This is done in the context of the common law caveat emptor so there is no protection whatever. It is bad enough having to buy something without protection but having the dice loaded against one is completely unfair.

Most builders throughout the country share my views on this, for the reasons outlined by the Minister. Most builders who are building a couple of houses at a time expect to be treated reasonably and treat their clients reasonably. The people who are involved in the practices at issue in this Bill are the big boys, those who want to upgrade their helicopters to make life a little more comfortable for themselves.

This legislation could be an example of the Government reaching out to the little people, of Fianna Fáil finding its roots and reaching the people who did not know where Fianna Fáil was last week. These are the issues the party must tackle. Senator Coghlan placed the ball at the Minister's feet today and all he had to do was kick it into the net. However, he has done a David Beckham with it and kicked it wide. This is the type of thing that will be remembered.

The argument I am making is the preferred position of everybody on the Government side of the House but the Minister has employed the classic Fianna Fáil tactic of speaking in favour of the legislation but voting against it. That will not work. It is wrong and it does not become the Minister. He has said many positive things and has stood up to people on the housing issue. I have supported him in that. I have regularly told the House that there were more housing completions in this country last year, approximately 70,000 houses, than in all of Britain which, with a population 16 times larger than ours, only had 150,000 house completions. It is extraordinary. No other country in Europe has managed to supply as many houses as were supplied in this country last year and the Government can take credit for that.

However, the large builder-developers are sitting on land and "releasing" pieces of it into a confined market. They are interfering with supply and demand by ensuring that supply will never meet demand. This Bill is one way in which life could be made easier for the people who are struggling to put a roof over their heads and establish themselves in the community. They are already at the mercy of banks, non-mutual building societies and other financial institutions which are making big profits at the expense of people earning low salaries. This is our chance to do something for those people and it appears that the Government is walking away from it. Shame on the Minister.

Cyprian Brady (Fianna Fail)
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I commend Senator Coghlan on the Bill. However, I have some concerns about it. We are regularly told that hard cases make bad law and Senator Coghlan outlined a particularly bad case. Nevertheless, what about the many people who have benefited from stage payments? I have not heard of even one person in Dublin who, over the last 20 years, has taken advantage of a stage payment.

Paul Coghlan (Fine Gael)
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It does not exist in Dublin.

Cyprian Brady (Fianna Fail)
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I am sure people throughout the country have benefited from it.

Brian Hayes (Fine Gael)
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They are paying thousands of euro.

Cyprian Brady (Fianna Fail)
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We have been warned umpteen times in both Houses of the Oireachtas about interfering with the market. If we do so, we are accused of trying to influence it.

Joe O'Toole (Independent)
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This is consumer protection, not interfering with the market.

Cyprian Brady (Fianna Fail)
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We cannot do it. In fairness to the Minister, it is a good idea to take the time to consider this. The Department is in discussions with the builders. There is also the attitude that every developer is bad. Every developer is not bad. There is 80% compliance with self regulation. As for the other 20%, like in every other industry there will always be cowboys.

Joe O'Toole (Independent)
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That is like saying that 90% of people do not rob so we should not have any laws against robbery.

Cyprian Brady (Fianna Fail)
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That is not the issue.

Rory Kiely (Fianna Fail)
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Senator Brady without interruption.

Cyprian Brady (Fianna Fail)
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Somebody has to build and provide the houses; somebody has to develop the sites. We cannot simply sit back and claim they are all corrupt and so forth.

People have benefited from this scheme but questions can be asked about it. There appears to be a lack of statistics on this. How many cases have gone wrong and how many have succeeded? There is no information on this.

Joe O'Toole (Independent)
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The Senator's party leader has said how difficult it is to get figures.

Cyprian Brady (Fianna Fail)
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There are no details on the outcomes in these cases. Everybody agrees that we should assist first-time buyers. However, every house owner in the country was a first-time buyer. It has never been easy to buy a house. Ireland has a culture of home ownership which is probably unique. People in some countries in Europe find it hard to believe that the ideal in Irish culture is to own one's own home. In Holland, people rent for a lifetime.

Kathleen O'Meara (Labour)
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That is because it is secure.

Cyprian Brady (Fianna Fail)
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Yes, but we have to deal with what is here. Look at the assistance that is given to first-time buyers. The first-time buyer's grant was abolished because it was not effective. We may have paid a price for that last weekend but being in Government means making hard decisions. That was a hard decision. There were internal arguments about it because some members supported the abolition while some opposed it. Ultimately, however, the decision was made to try to benefit first-time buyers in a better way. The annual ceiling on the amount of mortgage interest relief available was increased by more than 25% and there is reduced stamp duty for first-time buyers. These are practical ways of assisting people to buy their first houses.

We should examine the reasons for this so called housing crisis. It has always been difficult to buy a house. I took on three jobs so I could get a Housing Finance Agency loan to buy a house. At that time, after ten years I would have owed three times the amount I borrowed. That was the reality. It is not any easier now. Given the economic progress that has been made, people should not be surprised that there is a huge demand for new housing. There is a range of reasons for that, including the economy and demographics. People change jobs now the way people used to change cars. A young person might work in a job for one or two years and then move on.

Look at what this Government has done. It is not by chance that this country is in the ninth successive year of record house building. This country has a higher rate than the UK, despite the size of the population. It is due to the culture of home ownership so it is something we must do.

However, I agree with the Minister that measures such as this Bill must be considered carefully. I commend the Senator on introducing the Bill but if six months are required to deal with it in greater detail, particularly if there are legal difficulties, so be it. There are other options. As the Minister said, it might not require legislation. The legal issues that will be examined are complicated and must be sorted out.

Self regulation by the industry is a problem and will require further work. We regularly hear about the hard cases but it is not unlike car insurance for young people. When a young person is seeking car insurance, he or she must shop around for the best deal available. People have to be sure they are adequately insured. The same applies to housing. Six months of a delay will not change matters a great deal. The market is booming at present but even the Central Bank agrees that it is stabilising. Other options include examining the role of the Director of Consumer Affairs and the Irish Home Builders Association code of practice.

I commend the Senator on the introduction of this Bill but I have some queries about it.

Kathleen O'Meara (Labour)
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I am taken aback by the attitudes of the Minister of State and Senator Brady to this simple but effective legislation. It attempts to address and overcome a difficult problem for a number of people, albeit probably a small number, which needs to be sorted. Instead, the Minister of Sate is telling us there is no problem, that everything is rosy in the garden of the building industry and we simply need to have talks with the builders and with the Director of Consumer Affairs. The Minister of State said we must avoid interference with the market through regulation of the building industry. Senator Brady spoke as if it is inevitable that customers are ripped off by a busy building industry. It is not inevitable. Our job it to protect people. The Minister of State and Senator Brady alluded to the proposition that one of the reasons the Government parties fared so badly in last week's local and European elections is because the Government is perceived as being on the side of big business, including builders. The small person is not only being ignored but is being kicked around and effectively screwed and expected to take the hit while many builders make large profits without being held to account.

My point is illustrated by an article in yesterday's Irish Examiner, which was referred to by Senator Coghlan. The article details the circumstances of some house buyers in County Kildare, who have been waiting more than 18 months to move into homes they bought through stage payments. One couple has paid €110,000 to a builder in three stages, out of a total price of €146,000. One result of this is that they have missed the first-time buyer's grant. The house is not near completion and the work that has been done does not correspond to the original plan that was agreed. The new house is unoccupied while the couple is forced to pay for rented accommodation as well as interest on the amount of the mortgage already drawn down. These people are being screwed into the ground. Despite the Minister of State's claim to the contrary, the builders' code of practice is not working. The article mentions a married couple who are sleeping on the dining room floor in the house of the woman's parents because this couple's home is nowhere near completion. This is not good enough but the Minister of State has learned nothing from last week's election results. His attitude is that there is no problem and that he will have a chat with the builders to sort it out.

The Consumers' Association of Ireland maintains that the stage payments scheme should be abolished. This short and concise Bill would do that. Its objective is to abolish the stage payment practice in housing schemes. It does not apply to one-off housing involving a small builder, an ideal situation which is used by many people. The Bill is concerned with housing schemes where the stage payment process is exploiting people significantly. A report on stage payments referred to in this newspaper article claims that those buying houses under the scheme are paying an extra €175 million in interest per year. The Law Society of Ireland reports that 25,000 houses were purchased under the stage payment scheme each year, although this figure does not indicate the breakdown in terms of one-off housing and housing schemes. Although the newspaper article deals with house buyers in County Kildare, this practice is clearly widespread in some parts of the country.

There is a problem and having a chat with the builders about their code of practice will not offer a solution. This code was introduced a number of years ago but the examples I have given are current. The Opposition pointed out several weeks ago that house prices have trebled in the last seven years; almost half of new families cannot afford to buy a house; council housing lists have doubled and now stand at over 60,000; and there are twice as many homes as existed in 1997. The affordable housing scheme has not yielded the necessary numbers and the 10,000 affordable houses promised by the Government after the 2002 general election have simply not been delivered. Four years after its publication, the report of the Commission on the Private Rented Residential Sector has not been implemented. The Minister of State and Senator Brady referred to the culture of home purchase in this country whereby people like to be owner-occupiers. This is not surprising considering the low level of security afforded to tenants in the rental sector. People can only attain security through purchasing their own homes, despite the fact that it is very expensive and puts them under extraordinary pressure. The abolition of the first-time buyer's grant has exacerbated this difficulty.

I support this simple and straight-forward legislation, which seeks to address the evident problem with regard to the stage payment process where it is implemented in housing schemes. One is forced to advise home buyers not to utilise the stage payment scheme when purchasing a home in a housing estate. Unfortunately, people often have no choice as such a house may be the only one they can afford and the builder is imposing a stage payment process. These people end up paying more interest than they should while simultaneously paying rent on other accommodation for a considerable length of time. I appeal to the Government to get real, to observe the difficult reality for home-purchasers and to start listening to people.

John Minihan (Progressive Democrats)
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I welcome and congratulate Senator Coghlan's initiative in introducing this Private Members' Bill. I have spoken to the Senator on this matter on a number of occasions outside the House and was surprised that the Bill was moved so quickly. I would have liked to have had further discussions prior to its introduction.

Having experienced stage payments in County Cork, where the scheme is normal practice, I have a certain insight. The problem has been the abuse of stage payments. There have been many cases where stage payments have operated effectively to the benefit both of the consumer and the builder. My concern is that a knee-jerk reaction in changing a practice which has operated in parts of the country for over 40 years would suddenly result in us tweaking the housing market in a way which could damage or interrupt supply which is so important. Due to initiatives taken by the Minister, on which I compliment him, we have increased the supply of housing. I am a little concerned that enforcing this legislation at this time could interrupt this process, particularly for smaller builders. It is true that the big builder should be able to carry the cost, but if we are to limit major housing developments to large builders only, we are in a way being anti-competitive.

It is interesting to consider the variation in practices throughout this small country. These have grown up over the years. There are two particular types of stage payments. In one type, the title to the site is transferred on completion of the transaction; in the other, the title is transferred before completion. In my experience, and according to the people to whom I have spoken, the practice has been to transfer the title before completion of the transaction.

The site purchase is a separate transaction and the site is transferred at a very early stage, thereby giving the house purchaser security of the site. A few years ago in Cork the builder of a large and expensive development went bust when the development was 75% built. As the code of practice, as outlined by the Minister, had been adhered to, the purchasers of the partially built houses, after a period of deliberation, were able to continue the development. That was the stage at which I became involved. I was concerned at the possibility that the rights of the consumers might not be protected, but after a wobbly period of a few weeks it was found that their rights were upheld according to the code of practice.

Senator Coghlan outlined the cases highlighted in yesterday's newspaper. Nobody can stand over cases such as these and I would like to hear an explanation from the developer responsible. Certainly, legislation should be enacted to protect the consumer in this regard. My concern, however, is that if we were to enact this Bill in a short timeframe, we would disrupt and interfere with the out-turn of houses in the areas in which the system of stage payments is practised. I am not concerned about big developers but about small and medium-sized builders who are building badly needed houses. I would like to emphasise that the code of practice as agreed is something that needs to be considered and developed further. I welcome the statement of the Minister of State that he intends to enter into discussions and consider the issue carefully.

In Cork, the financial institutions have set up a system under which mortgages are released at an early stage, thereby avoiding the bridging finance that is otherwise required, and paid in stages where the institutions are satisfied that the money advanced does not exceed the value of the work carried out. The financial institutions that have been supporting house purchasers in the areas where stage payments take place have embraced this.

The system also has legal implications. There is no doubt that the amount of legal work for a solicitor operating on behalf of a consumer who has entered into a contract involving stage payments is greater. There is less work involved if there is only a deposit stage and a completion stage. If a solicitor is working for a scaled fee based on the purchase price of a house, he must do more work for the same fee in the case of a client who is purchasing in staged payments. This means the legal profession will be interested in streamlining the system.

We have a responsibility to protect the consumer. I sincerely believe that is Senator Coghlan's aim and I commend that. Equally, however, we have a responsibility to ensure we do not take swift action that results in an interruption in the housing supply at this time. For that reason, I am disappointed that the Bill was introduced so quickly. I support the Minister of State's somewhat cautious approach. I acknowledge his statement that if he feels there is a need to enact legislation in this area he will do so. He has given a commitment to this effect. I urge the Minister to continue his talks with the Construction Industry Federation and those in the legal profession. Ms Carmel Foley, the Director of Consumer Affairs, has taken a court case in this regard, as a result of which there may be legal difficulties in trying to enact this legislation. For these reasons, we need much more discussion on this issue. We should support the Minister in his endeavours. I commend Senator Coghlan on his initiative. His motivation is right, but we need a little more time to discuss the issue further.

Pat Moylan (Fianna Fail)
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I welcome the Minister of State. I acknowledge the importance of this issue and the amount of work Senator Coghlan has put into the Bill. The Senator has highlighted this issue for quite some time. There are problems with the system of stage payments and he has met people who are very much affected by them. The purpose of the Bill is to abolish the practice of stage payments for certain types of newly constructed properties, thereby reducing the cost to purchasers of such housing and eliminating the risks associated with such practices.

We all welcome the possibility of a reduction in cost to the consumer. However, I support the Minister of State's position. He has given us clearly to understand that the Government is carefully considering this issue and is prepared to take the contents of the Bill into account. In light of this the Bill may be premature as the issue will be dealt with later. Builders must initially buy land and pay for the house to be built. If we cannot continue with stage payments for builders the contract price will be increased. That is the bottom line. Stage payments are essential for builders, who plan accordingly for meeting their commitments to their suppliers. Suppliers are paid in stage payments. If we were to abolish this system, we would create a bigger problem down the road.

The Law Society and the issue of contracts were mentioned earlier. Are we to open that door? In many cases contracts are involved but if we are to provide more and bigger contracts for the Law Society the consumer will end up paying more money to solicitors and others. I have not encountered the problems others have in bigger cities and towns. However, for the private single house builder in rural areas, stage payments have been the normal practice over the years. That was understood before the contractor went on site. Developers and many small builders have always insisted on a payment when the foundation was laid, at the roofing stage, or when second fixing started, and some moneys were always held over in case of a problem later. The other side of the coin is that on the construction side, builders and developers must have bonds in place and guarantee that houses will be completed to a particular standard. If that does not happen, the bond kicks in.

The practice of buying a house off the plans was mentioned. I know people who bought houses off the plans at a fixed price and paid a deposit and not much more, and by the time they were moving into their house some 12 or 18 months later the house was worth €50, €60 or €70 more than when they paid the initial deposit on it. Many of them told me that had they waited for the house to be completed, they would not have been in a position to buy it.

Stage payments must be examined in the context of the cost of housing and from the perspective of people who work on those schemes. In some cases they are big builders. However, there are also small contractors, bricklayers, plumbers, electricians. They cannot go very long without money. They must pay the people who are working for them. However, in order for developers to pay them, they must be paid in stages. What the Minister has outlined to us this evening should, therefore, be very acceptable.

Senator Coghlan and others have highlighted problems that can arise in certain parts of the country. However, it is often the case that when there is one bad experience in an area it is highlighted again and again on radio programmes such as Joe Duffy's "Liveline" on RTE in the same way as happens when someone experiences difficulty in getting a bed in a hospital. The thousands of good jobs that are completed and the thousands of people who are being well treated in our hospitals are never mentioned. We always tend to talk about the one problem that arises.

The Minister was very fair in recognising the points made by other people. He agreed to return to the House with solutions that will address the problems. Thousands of people are buying houses under this system and I have not met many who were disappointed. There are codes of practice in place on all sites with which builders must comply. They must have insurance and they must comply with the health and safety regulations and so on.

Senators on the other side of the House also referred to the housing lists. Affordable and social housing is coming on stream only now because much of the land in respect of which planning permission had been sought in the past did not become available until recently. It is only now that we are seeing the benefits of the affordable and social housing in our large towns, and substantial amounts of money have been made available to local authorities to provide other sites and other developments and that is very worthwhile.

The abolition of first-time buyer's grant was also mentioned. However, in my county only a very small percentage of the houses being built at that time qualified because the inclusion of the garage meant they exceeded the limit for a grant.

As I have the ear of the Minister and his officials I would ask him to consider the reintroduction of what was in the past a very valuable reconstruction grant to help in carrying out essential repairs. Over the past ten years quite a number of people bought their houses in local authority housing estates. However, the windows and doors put into these houses when they were built were often of red deal or in some cases white deal and were of very poor quality. The Government should give consideration to the possibility of introducing a reconstruction grant for people in that category, many of whom have borrowed from banks and credit unions to put proper windows and doors in their houses. That needs to be considered because, although the tenant purchase scheme was a very good scheme that enabled people to buy their houses at reasonable cost, they are now under pressure in regard to providing adequate doors and windows.

I support the Minister and hope Senator Coghlan will take on board the Minister's undertaking to come back to the House if required or if the problem worsens.

Ulick Burke (Fine Gael)
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I welcome the Minister. However, I regret that he has been so negative and is so obviously avoiding tackling the very real problem of house prices. I commend Senator Coghlan on bringing this Bill before the House, but it is regrettable that the Minister has avoided the real issue of the need to take immediate action. It is unbelievable that so many Senators on the other side of the House do not see what the system of stage payments means to people. It means that young couples must pay on average an additional €7,000 per annum for their house without getting access to it. I cannot understand how they can say it will not make any difference to wait six months more before deciding what to do and that nothing can be done because of the increasing red tape or because it would, perhaps, cause an increase in price or a decline in supply. If ever I heard warped logic uttered in this House, I have heard it tonight.

It is regrettable that the first thing this Government did in its first days in office was to abolish the new house grant and interest subsidies for young buyers. Now it will not act because it might increase the price of houses and cause a decline in supply. I remind the Minister that the Department, through the local authority, demands that in turnkey projects stage payments are not allowed and that if there is an agreed price for a house, it is up to the builder to turn it out within the timescale agreed on contract. Why is it then that the Department will allow this to continue for individuals who buy houses directly from a builder in the circumstances referred to in Senator Coghlan's Bill? It is unbelievable that there are double standards once more. Has anybody within the Department investigated the contributory factor of constantly increasing house prices in increasing inflation? The increase in house prices is obviously a contributory factor in increasing inflation. That is going on daily. To say the responsibility for this rests more with the Consumers Association of Ireland than with the Minister is a clear indication that he is afraid to tackle the reality that is blatantly obvious to young people buying houses. The Minister claims he is prepared to listen and to take action. While he is delaying, rip-off Ireland is flourishing and he is not showing a willingness to tackle the problem. All the vested interests involved are unfortunately playing the same game. The Minister and his Department are not allowing it to happen through the local authorities. One instance that I remember quite clearly is the turnkey project, where the Minister allowed the builder to sell the houses directly to the local authority on his behalf so that they can be provided as social or affordable housing. That does not apply in this case, so why does he allow it to continue for individual house buyers?

The Minister claimed that €7,000 per annum is insignificant to individuals. Everyone has said that and that is what the report stated. The Minister cannot contradict that because there are several examples. For instance, the Law Society gave 15 examples of the situation where the average additional payments on the interest on loans was €7,000 and where the occupants had not yet even got access to their house. That is a major contributory factor to inflation in house prices. If we allow that to continue, it will show that there are double standards within the Department. On the Order of Business this morning, everyone was of the opinion that the Minister was going to accept this Bill while making necessary adjustments or changes to it. The word was out that it was the departmental officials that were holding firm on this issue. The Minister has responsibility for housing under this Government and if he allows the permanent government to dictate to him, then he is not listening. It was reiterated time and again yesterday after the Minister's own parliamentary party meeting that the Government was now going to listen. Yet the Minister has come here today and is not listening. He is prepared to allow this to continue and should ask himself serious questions on his determination to support young people who are trying to provide a home of their own. It does not matter if it is in Cork, Galway or wherever, the practice is widespread throughout the country. I am not too sure if it is here in Dublin, but if it is not, I am sure there is some other facility that can be used by builders to compensate them, although not as blatantly as this.

I plead with the Minister to introduce some mechanism whereby this practice can be eliminated from the whole process. If that is done even as an interim measure, many people can avail of it, including young couples who are in dire straits. If €175 million has to be paid in interest per annum by young people, it is time the Minister took notice. He cannot easily fob off the notion that we can wait six months or a year. That is displaying arrogance to the young people who are trying to make ends meet to buy a house for themselves. I support Senator Coghlan's Bill. If the Minister is not accepting this Bill, I ask him to indicate that he will put in place, in the interim, some other mechanism whereby the market will be rid of this particular scam. This cannot be allowed to continue.

John Gerard Hanafin (Fianna Fail)
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While I welcome any Private Members' Bill, the Opposition always tells us to reflect on what is coming through, to be sure of what is there and to check and to double check. The one time we do it, they criticise us. It is only prudent that the Minister would wait. He has made it clear that he fully appreciates the intentions of the proposed Bill. He stated that it requires more rigorous examination and I accept his view.

The Bill proposed by Senator Coghlan seeks to ban the system of stage payments for certain types of newly constructed properties, namely newly constructed houses in housing estates. The Government considers that such a legislative approach may not provide the best method of achieving this goal and that all potential measures should be rigorously explored before opting for the legislative route. Draft provisions in the Housing (Miscellaneous Provisions) Act 2002 with a similar objective of abolishing staged payments were not proceeded with due to legal difficulties indicated by the Office of the Attorney General at that time. It is quite possible that some of the same legal difficulties may apply to this proposal. It is entirely appropriate that the Minister should be prudent and wait.

While there are currently no legislative provisions governing stage payments, a voluntary code of practice regulates these. The Irish Home Builders Association, under the auspices of the Construction Industry Federation, operates a code of practice on stage payments. While this code is voluntary, it demonstrates that such measures can be a very effective tool without recourse to legal measures. While it is often recognised that the practice of stage payments may have provided benefits to home buyers, for example through enabling them to enter into fixed price contracts at an early stage, concerns have also been expressed about the financial burden and risk which stage payments may carry for home buyers. The Government is concerned to ensure that house purchasers are not being disadvantaged by any practices that might make it more difficult to access a home. The Department is currently in discussions with the construction sector on this issue to identify the exact nature of any problems that may be experienced by the consumer, and to consider all potential solutions and to assess the effectiveness of the current code of practice. Therefore, it is right that the Government consider this Bill to be premature and that it is advisable to await the outcome of its exploration of all potential measures. If the outcome of this rigorous review identifies a need for legislative action, this Government will deliver.

The Government has a proud record in housing. Its housing policy is to enable every household to have available an affordable dwelling of good quality, suited to its needs, in a good environment and as far as possible, for the tenure of its choice. The unprecedented demand for housing, fuelled mainly by rapid economic growth and demographic changes, for which the Government can take great credit, has been the major driver of house price increases in recent years. The Government's strategy is to increase housing supply to meet demand and to improve affordability, particularly for first time buyers, and in this way to seek to bring moderation to house price increases. The Government will continue to focus on measures to maintain a high level of housing supply and the prospects for another good year in the housing sector are positive. In other words, supply is meeting demand.

There has been a record housing output. Measures implemented to boost supply include significant investment in infrastructure. In many cases that infrastructure was necessary because we had given planning permission but there was no benefit to the planning permission as given, as the infrastructure was not in place for the population that was to ensue. The measures pursued have improved planning capacity and promoted increased residential densities and these benefits are already obvious. The year 2003 was the ninth record year for house completions, with 68,819 units completed showing an increase in output of 19.3% on 2002.

Ulick Burke (Fine Gael)
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How many local authority houses were built?

John Gerard Hanafin (Fianna Fail)
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Ireland is now building, at the fastest rate in Europe, 17 houses per 1,000 of the population. This is an outstanding achievement. Our sizeable investment in the servicing of land has delivered more than five years supply of serviced residential land nationally and more than eight years supply in Dublin.

The Government has a proud record in the provision of social and affordable housing. The Government is concerned to ensure that the needs of low income groups and those with social and special housing needs are addressed. Almost €5.32 billion was spent in the first four years of the national development plan on social and affordable housing measures to meet the needs of low income groups and those with social and special housing needs, which is more than 10% ahead of the forecast for the period.

Ulick Burke (Fine Gael)
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Does the Senator have the housing waiting lists?

John Gerard Hanafin (Fianna Fail)
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The year 2003 saw the highest level of housing provision under the full range of social and affordable housing measures for over 15 years. The needs of more than 13,600 households were met, compared with almost 8,500 in 1998. The Government is putting in place five year action plans to address housing needs and priorities through new multi-annual programmes, with €1.8 billion being available in 2004. In addition to the shared ownership scheme, the 1999 local authority affordable housing programme and Part V affordable housing schemes, a new affordable housing initiative was introduced under Sustaining Progress last year to further increase the supply of affordable housing. Together with affordable housing coming through Part V arrangements, the sites so far identified have the potential to deliver 6,100 housing units. This answers the interruptions from Senator Burke.

Ulick Burke (Fine Gael)
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How many people are on the housing lists?

John Gerard Hanafin (Fianna Fail)
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The Government is also committed to supporting first-time buyers through a range of targeted measures. We have increased the annual ceiling on the amount of mortgage interest relief available to first-time buyers by more than 25% and the period in which mortgage interest relief is available from five years to seven years. We have introduced reduced stamp duty rates for first-time buyers and a higher stamp duty exemption limit for first-time buyers. We introduced the rent a room scheme, which can also help first-time buyers by allowing them to rent a room or rooms in their home and earn up to €7,620 per annum tax-free.

Ulick Burke (Fine Gael)
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That is all they can afford now.

John Gerard Hanafin (Fianna Fail)
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While the rate of house price increases is still problematic, this has moderated considerably since the late 1990s when price increases peaked at 40% per annum in 1998. A number of market commentators, including the Central Bank, are now predicting greater balance in the housing market over the next few years, as increased supply has a dampening effect on house prices. Indicative data available to the Department shows that first-time buyers continue to have a significant presence in the housing market. This is supported by the CSO quarterly national household survey for the third quarter of 2003, which indicates that almost 50% of house purchasers since 1996 were first-time buyers.

I welcome the introduction of a Private Members' Bill. I commend the Minister of State on avoiding a knee-jerk reaction, something for which the Opposition often criticises the Government. The Minister of State is prudent and is waiting until everything is in order before he brings a Bill before the House.

Ulick Burke (Fine Gael)
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There was a great urgency about things yesterday.

Mary Henry (Independent)
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I commend Senator Coghlan for bringing this Bill before the House. Like other Senators, I had hoped there would be all-party agreement on it.

This is a serious issue. I have constituents all over the country, many of them young people who are trying to buy houses and set up homes. That housing has become so expensive is very hard on people who are at the early part of their careers and are trying to establish themselves in jobs and frequently trying to establish themselves in marriage. The additional amounts of money young people must pay out before they have anywhere to live is a terrible stress on them. Some people are fortunate enough to be able to live with their families but others are trying to pay rent on one premises while making repayments on a house which they cannot inhabit. The stress of this financial burden is huge.

The fact that people sometimes cannot occupy houses when they are finished and have to let them and go back to live with their parents has also been brought to my attention. It is not a joke to say there is no longer such a thing as the empty nest because people are moving back in with their parents. Sometimes this is because of really serious financial problems and the fact that young people cannot meet repayments. Loss of a job, even for a short time, makes the situation even worse.

I am glad Senator Hanafin mentioned two things about which I have been concerned. One is infrastructure. These houses are sometimes built in places where little or no infrastructure has been put in place and some of the estates on which the houses have been built are very badly finished.

The other matter mentioned by Senator Hanafin is the Department's social and affordable housing action plans for 2004 to 2008. I welcome them warmly because they are intended to give transitional housing in some cases and long-term housing in others to people who have been homeless or who need support so that they can live independently. I hope to see better progress than has happened to date. Simon recently communicated with me to tell me that three houses were built for such people in Galway last year but it looks as though only one will be built this year. With that sort of speed of building we are not going to make a great deal of progress in housing homeless people. I ask the Minister of State to ensure these are included in all his plans because the lack of housing is a terrible loss of human rights.

I often walk down Baggot Street, which must have more homeless people on it than many parts of Dublin. As I came in this morning I saw several people sleeping rough in the street. To see that in Dublin 4 and Dublin 2 on this Bloomsday was not a great advertisement for the city where Leopold Bloom made his peregrinations.

Mary O'Rourke (Fianna Fail)
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I welcome the Minister of State and the introduction of Senator Coghlan's Bill. Senator Coghlan has had the Bill available for some time and talked to us about it on several occasions. The House was keen that he put forward a Private Members' Bill on this matter. I also thank the Minister for his support for the Bill. He has said he approves of the thrust of the Bill while the legalities, technicalities and wording of the legislation need to be altered to make it a proper Bill. That is not to denigrate Senator Coghlan's Bill but simply to make it kosher, so to speak.

I have always been a supporter of Private Members' Bills, whether in this House or in the Dáil. We have not been very good about accommodating Private Members' Bills here. When I was a member of the last Government I took three Private Members' Bills, even though the Civil Service, and I do not wish to fault the officials who are present in the Chamber this evening, were totally against them and did not want me to take them. One Bill died by the wayside and never reappeared, one we were able to bring forward in its proper technicalities and one went to a committee. Why should enterprise in individual Members, be they Senators or Deputies, be stifled? It is a fine spirit. Members should not sit back, take every Government Bill and nod like the figure on a collection box.

On the Order of Business this morning, Senators Coghlan and Brian Hayes asked what would happen to this Bill this evening. I went to see the Minister for the Environment, Heritage and Local Government and he told me, as the Minister of State has also said, that he has no difficulty in agreeing with the thrust of the Bill but that its legislative provisions and language, of which drafting people are enormously protective, would need to be tightened.

Following that meeting, the Minister of State, Deputy Noel Ahern, has expressed his support for the thrust of the Bill and has said that he would be prepared to bring forward an amended Bill in approximately six months.

That is quite a step forward. I am well aware of housing needs. A significant amount of my time is spent dealing with matters such as social, council and private housing, construction of housing, planning matters and local authority loans. I am sure all Members deal with such matters in their constituencies.

This issue is of particular concern in rural areas where people are anxious to obtain a house in which they can live and of which they can be proud. It is an issue which takes up a great deal of rural Members' time. Members in Dublin may also deal with such matters. It is certainly a major part of constituency work in rural areas.

The Bill, as proposed, is filled with goodwill and is a measure which would ease people's burden, something which we all wish to do. The issue of bridging finance also arises. However, I do not think banks charge a great deal on such loans anymore. I remember when interest rates reached as high as 17% and when bridging finance was expensive. However, bridging finance is now taken out in smaller amounts, an issue which could also be examined in a more favourable light in order to ease people's burden. Housing remains an enormous issue in a country which prides itself on one's ability to purchase one's own home.

I fully respect Senator Coghlan's diligence in bringing forth this Bill. It is a matter for him if he wishes to press it; it is his right as an Opposition Senator to do so. I would harry and harass the particular Minister as regards his commitment in this regard so that by the end of the year we will have a proper Bill before the House. I am not suggesting the Senator's Bill is not proper but the new one will be kosher in legislative terms. I have advised the Senator of the Minister's commitment in this regard but it is for him to decide whether to press it. The Minister of State's speech was positive. Why should a good measure not be implemented? I hope Senator Coghlan will make his mark on the Seanad, as he has done in various other ways, when this Bill returns to the House with the harp upon it albeit under the flagship of Government.

I ask the Opposition to accept my commitment while fully respecting its position.

Martin Mansergh (Fianna Fail)
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I had not intended contributing to the debate. I came to the House to listen to what was being said on this important issue. In the spirit of the Leader, I compliment Senator Coghlan on producing this legislation. It is a remarkable tribute to the Leader that she effectively went to the Minister for the Environment, Heritage and Local Government, Deputy Cullen, to act as advocate for it. That is in the best tradition of the cross-party spirit which reigns on many subjects in this House.

It is clear the stage payment system as applied to housing estates is an abuse. It takes advantage of young couples wishing to acquire their first home. In principle, it is wrong. I accept that in certain instances such as one-off housing, to which the Minister of State referred, there may be a case for a limited operation of this system. However, there is no case for it in medium or large private housing developments. The principle of the Bill is good.

Senator Hanafin referred at length to the Government's housing achievements which are strong in terms of supply. However, there is no doubt that a serious problem exists regarding the provision of affordable housing which is accessible to young people. I have no doubt that was an issue in the recent local election, especially in the greater Dublin area. I am told it was an issue in certain constituencies where local authorities failed to engage in the provision of social and affordable housing. It cannot be to the satisfaction of anybody in this House, especially those who belong to a party which has been in Government for some time, that it is so difficult for young people to purchase a home. Most things are easier for today's generation than they were for us and our parents. However, that is, unfortunately, not necessarily the case when it comes to acquiring a home. It is becoming more difficult to do so. Young people are frustrated because they are unable to follow in their parents' footsteps.

Sufficiently well-off people may be able to assist their children and so on. It ought to be the case that people can access the housing market without having to commute 60, 80 or 100 miles to do so. The current situation is deeply unsatisfactory. I am not interested in discussing this issue in a party political broadcast manner. It is an issue to which we have not yet found a solution. I was present at some of the previous Government's deliberations and know the issue of housing policy was given a great deal of priority. The three Bacon reports dealt with this issue which is of great concern and worry to the Taoiseach and Government. Increasing supply to the maximum extent is part of the answer. There may not be immediate results; one may only see them when one has sustained supply over a number of years much the same as happened in terms of unemployment in the late 1980s and 1990s when following a period of sustained growth, the jobs came. Perhaps that is what will happen with housing.

A social problem exists to which there are no easy or obvious answers. If there were, we would, between us, have adopted them. I encourage the Minister to continue to monitor the issue and to try to bring social and affordable housing more into focus. There is no point in entering into a war or confrontation with builders and developers which may result in supply drying up. In housing, as in health, we run the risk sometimes of listening more to the suppliers than those who need and buy houses. We must sharpen our focus on policy in the years ahead. There is much unfinished business in this area. I hope that in the next two or three years we will make substantial in-roads into dealing with the problem and that young people will not feel so aggrieved that at a time of plenty and better opportunities and income they are unable to access affordable houses.

While Senator Coghlan's Bill deals only with a small part of the problem, he is to be commended for bringing it forward. Its principle is good and should be adopted with, perhaps, some exceptions and nuances. Obviously, it is the prerogative of the Government to incorporate the principle into some broader legislation. I do not have a difficulty with that. I compliment Senator Coghlan on bringing the matter to debate.

Paddy Burke (Fine Gael)
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I agree completely with Senator Mansergh that we have not yet found the solution to this problem. For the Government to vote down this Bill is certainly not the answer. I compliment Senator Coghlan on introducing this legislation. It is a basis on which to work and represents the way forward. If the Government accepts Second Stage, the Minister can, in his own time, make any amendments he regards as necessary to make the Bill better. There is no point in kicking it to touch and we all know the problems that exist. There is absolutely no doubt that stage payments are anti-consumer. There is a raft of problems concerning housing estates and anybody who has served on a local authority and any public representative will know quite well the problems that have been created in housing estates in recent years in regard to the taking over of roads, footpaths, public lighting and green areas. These problems have concerned local authorities greatly and have generated rows between developers, builders, local authority members and local authority staff.

Ultimately, the person who has borrowed the money to buy a house is the one paying the piper all the time and ends up with all the problems. We all know of people who have borrowed heavily and of cases where there are two people working to provide for their family. Such people have huge mortgages and problems in that the councils have not taken over the housing estates and the developers have not completed the work. All these problems have persisted and will continue.

As Senator Coghlan stated, further problems will arise for those who have made stage payments who have not yet moved into the houses for which they are paying mortgages of 60% or 70%. The quicker we can put something together for those people, the better. As Senator Coghlan pointed out, this is not the case in Dublin. However, it is the case in many parts of the country where people are living in rented accommodation and making stage payments. There is a huge burden on them. In most cases, both parents or partners have to work.

The Bill Senator Coghlan has brought before the House represents a good basis on which to work. The Minister of State knows quite well that he can introduce amendments to improve it, if necessary, and that there is no need to kick it to touch or vote it down.

Paul Coghlan (Fine Gael)
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I thank everyone who has contributed to this worthwhile debate. I have been overwhelmed by——

Mary O'Rourke (Fianna Fail)
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By kindness.

Paul Coghlan (Fine Gael)
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——by kindness and support.

Brian Hayes (Fine Gael)
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And the stage payments.

Paul Coghlan (Fine Gael)
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I totally accept the Minister of State's bona fides because, as I said at the outset, he and I have had several discussions in recent months since this Bill was placed on the Order Paper. I believe we have seen eye to eye. He agrees with me in principle and I welcome 99% of what he said on the matter——

Mary O'Rourke (Fianna Fail)
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But——

Paul Coghlan (Fine Gael)
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I will not come to the "but" because I hope there will not be one. We live in hope. Is that not what we should do? The Leader is always cheerful about this matter and I thank her for her personal support from the outset. She seems to have done a lot — fair dues to her because I did not request it — and she has been very kind in her efforts. I appreciate everything she has said this evening.

However, I have a few small corrections to make. My good friend Senator Moylan should note that this Bill does not apply to once-off housing, but only to housing developments. Senator Minihan referred to speed but the Bill has been on the Order Paper for a long time. We were running out of time this week and maybe the call was not totally mine. However, we cannot get bogged down in this issue. The Senator is well aware that all his colleagues in Cork are concerned about it. Several of them have discussed it with me and offer considerable support, as the Minister of State is well aware. I do not claim any monopoly of wisdom whatsoever in this matter but I know that some of the Minister of State's colleagues from Cork discussed it with him before the Bill was introduced.

Senator Henry referred to various problems and Senator Mansergh referred to unfinished business. We all know about this and it is taken as read. It is great that everyone is so supportive and in agreement. I accept there may be some legal matters to be considered, as the Minister of State mentioned, but this is just a one-page Bill. Would Albert Reynolds not be proud of this single sheet? The explanatory memorandum is slightly longer. I think the Minister of State and his officials agree totally with the explanatory memorandum. I accept that some fine tuning is required regarding the Bill's drafting and I appeal to the Minister of State to let the Bill survive Second Stage — he probably feels this is a good idea in his own heart. Let us not divide the House on it and take the six months to which he has referred to make the necessary amendments. As Senator Brian Hayes said, the entire House will get involved on Committee Stage. The Government has the numbers and, in any event, perhaps the Opposition would not disagree with the amendments the Minister of State would introduce. Why have a separate measure when we have the nucleus and the seed corn in this measure?

We are all pro-consumer. The Minister of State is concerned about the punter, as he would say himself, and that is why he is in the other House with a huge vote behind him. I am sure he concurs totally——

Brian Hayes (Fine Gael)
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He had it behind him.

Paul Coghlan (Fine Gael)
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The Minister of State knows what I am saying. There are not many differences between us over this matter. I am sure we all agree it is totally inequitable and unacceptable that a small country such as ours should carry out the practice we have been discussing. It is not carried out in Dublin but only in pockets in the rest of the country, particularly Cork and Limerick. I am not saying a word against builders and developers and I accept the cowboys in this business comprise a tiny minority, but it is totally inequitable and unjust that citizens, particularly newly married couples, should be subjected to the practice.

I accept that hard cases make bad law. However, all of us, including the Minister of State's colleagues from Cork and Limerick, and with the exception of those of us from Dublin, have listened to countless cases in this regard in our clinics. We have noted that some citizens pay no more than 10%, at most, as a deposit on their houses and not another bob until they have possession of them, thus ensuring that the snag lists etc., are attended to before they pay the balance, while others, over a period of a year or more, will have paid up to 90%. They are crucified with interest and have to obtain bridging finance in some instances. They are in considerable difficulty and are at the mercy of the builder-developer in regard to the snag list. It is not proper that this discrepancy obtains. As I said earlier, the country is too small for this lack of uniformity and I am sure the Minister of State feels this himself.

I accept what the Minister of State said. If the experts say the Bill contains some drafting errors, let us take some time to deal with them before Committee Stage. Nobody will disagree with that. Second Stage should be passed so the Bill can be considered during the summer and autumn. Based on what everyone has said, we are all agreed on the principle on which there is no division in this House. The necessary time can be taken to fine tune whatever amendments the Minister of State believes appropriate.

The Minister of State said the Government wants to ensure house buyers get the best deal and that all necessary measures to protect consumers should be taken, as we all agree. We want the best deal for consumers and this is patently not the best deal. I believe the Minister of State and all Members opposite agree.

We should not divide on this issue on which we are ad idem. I accept the Minister's good nature and all he has said to me in our brief discussions in recent months. I make a final appeal not to divide the House. We should let the Bill survive and take as many months as the Minister of State needs. He can then return with the amendments the experts recommend and they will be accepted so the Bill can be passed unanimously.

Rory Kiely (Fianna Fail)
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When it is proposed to sit again?

Mary O'Rourke (Fianna Fail)
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Next Tuesday, 22 June, at2.30 p.m.