The purpose of this Bill is to extend the special purchase scheme which Fianna Fáil introduced in 1978 for dwelling houses for a further year and to increase the charges three-fold, as the Minister has told us here this afternoon. Indeed, I was taken by the whole orientation of the Minister's speech and I was somewhat disappointed in it in that a great deal of what he said was about the onus on the householders and the responsibility of the householders. There is also an onus and responsibility on the landowner and those who exercise rights under land ownership. Indeed, it was to facilitate the householders that a scheme was introduced in the first instance. Let us be quite clear about that. It was introduced to facilitate householders and for this reason this would have a bearing on some of the other steps which might be taken at this stage. The vesting of the fee simple in dwelling houses is provided for in Part III of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978. All the Minister is doing here is extending this section of the Act for just one further year.
The Minister has given us all sorts of reasons why he should not allow tenants and householders to be led astray by thinking that the scheme might be there for little longer than a year. Why should we say that to householders? The Minister has said that he tried to press people into taking advantage of the scheme up to this date, now up to the expiry of the first five years. I appreciate that he wanted to encourage as many as possible, as all of us would, to purchase under the existing scheme if they can get reasonable agreements from the landlords. Part of the difficulty that has arisen is in relation to landlords who will not make reasonable agreements. You may say that we have arbitration to sort out what is a reasonable agreement, but that is a different situation. Landlords have come forward and made settlements of three, four, five and six times the value of the ground rent. There are also landlords who say that they want the ultimate pound of flesh and are not prepared to move unless the matter goes to arbitration. It is not quite as simple as it may have sounded in the Minister's speech. Co-operation from landlords in a practicable commercial way was not always forthcoming. I know of cases where people have appealed to the landlords who are fairly well at a distance from the situation. The people who ultimately control the ground rent are not really interested in even responding to correspondence from individuals. Therefore, it is not all on the side of the householder.
The 1967 Act gave the right to purchase freehold. This was a very important development. The 1978 Act then abolished all future ground rents on dwelling houses. This was a major step, a major improvement. Mind you, the sky did not fall in since then. We have had the full term since 1978 up to this time. Before that happened all sorts of dire consequences would follow. Houses would escalate in price and people would not be able to buy them. All sorts of things were suggested. They are gone because people wanted them to go, quite rightly, and, of course, house prices settled down to the market price, which is the price that even the Minister himself and his Government use when they come to determine the residential property tax. Therefore, first and foremost, in 1978 all future ground rents on dwelling houses were abolished and they are gone.
Another important step taken at that time was the removal of the right of the landlord to evict for non-payment and take possession of the house. There was great argument about that before it went also, but that went in the 1978 Act and again the sky did not fall. That major step had very important consequences for the householders. The third major development in that Act was the introduction of a simple non-expensive purchase scheme to facilitate the buying out without the very heavy legal fees which were current at the time. The Minister has made quite clear that the charge which was introduced at that time as part of that Act was a nominal charge for merely nominal fees. The scheme was purposely based on a nominal fee and we contend it should still be based on a nominal fee. That was the principle under which the scheme was introduced.
We now have the experience of the original scheme and we know a good deal more about it. We have advanced considerably. I was aware of the situation in 1976 and 1977 and the arguments which took place at that time. These arguments have all been passed by because this House was prepared to take action in a case which it believed was genuine. We now have an opportunity to revise the 1978 Act, but what is the Minister doing? He is discouraging householders from purchasing by trebling the legal fees. I know in the short term he will be giving some encouragement by saying there could be a higher fee from 1 July on the expiry of this scheme. However, trebling legal fees is a positive discouragement to purchase. That is totally against the principle on which the 1978 Act was introduced and against the principle for which we stand in relation to ground rents. We should be encouraging the buying out of ground rents. There is no constitutional problem in relation to trebling the fees. That is something which will affect everyone immediately when the Bill goes through and the new scheme is introduced. I am afraid it will have a very serious impact on the purchase of ground rents. The Minister cannot claim that the Constitution is pushing him in that direction. He should be committed to the principle of removing as early as possible the ground rents which exist at present. We are talking about people who have been paying ground rent for 20 or 30 years and perhaps whose families have been paying it for 100 years. These people should be encouraged and assisted to purchase their ground rent outright.
The Minister is also indicating his displeasure and lack of support for the scheme, which admittedly was introduced by Fianna Fáil, by extending it for only one year. It may well be that he wants to encourage people to avail of the opportunity to purchase within the next year, but when a new scheme like this is introduced it takes time to get off the ground. For that reason I am not too discouraged by the numbers of people who applied to purchase their ground rent. I asked a parliamentary question on 23 March 1983 about the number of people who wished to purchase ground rent. In the year ended 31 July 1979, there were 3,090 applications lodged from people who wished to take the opportunity to gain freehold; in the year ended 31 July 1980 there were 5,181 applications; in 1981 there were 5,838 applications and in 1982 there were 6,128 applications. In the seven months to 28 February 1983 there were 4,174 applications. If we judged that on an equivalent of 12 months there would be 7,158 applications.
Undoubtedly, that figure will increase because of the scheme coming to an end. However, even taking it as running at the same rate and without any increase, a total of 27,395 householders have lodged applications to purchase under the scheme. The Minister said that approximately 22,000 people have purchased under this scheme and, obviously, in any of these cases the time to complete the purchase is a little after the time of the application. In that sense it is satisfactory progress. There has been a campaign to seek the total abolition of ground rent but some of the landlords have held out for the last penny. In quite a number of cases this has delayed householders coming forward to make use of the Minister's scheme. Therefore, those householders should be facilitated rather than discouraged and this scheme should be allowed to continue.
We should also be looking at other aspects of the scheme. I am slightly concerned at the haste with which it is proposed to end this scheme in one year. The Minister has said, fairly strongly, that there will be no further extension. He said it was never the intention that the subsidy involved in this scheme should continue for longer than five years. I do not know how the Minister can say that because it was originally a Fianna Fáil Bill and, naturally, anyone introducing such a scheme has to set an initial time limit. The Minister is now in a position to revise that time limit if he wants to. We have seen how the five year scheme has worked. I notice that the Minister is smiling wryly, but I know what Fianna Fáil thought about it in 1978 and there is no point in going back over the arguments.
We have now seen the operation of the scheme for five years and revision should take into consideration what has happened in between. That is what we should be basing our policy on now. Why has the Minister not come forward with any new proposals in relation to the revision of this Act? He has introduced very limited proposals and it makes one wonder in whose interest he is operating. Is he operating in the interest of householders?
If we stick to what the Minister suggests and there is a very strict finishing time after a further year, what is the position then? There will be the old situation where there will be a bonanza for the legal profession. If we take legal fees of about £100 on, say, 300,000 houses that is £30 million for a start. This was one of the considerations in the first instance and one of the main inhibiting factors when the scheme was introduced initially. This makes it prohibitive for many people to purchase. If we extend the scheme for just one year, it will help to perpetuate this feudal system.
Work has been done by our predecessors in this contentious and difficult constitutional area. Let us continue that work. I have mentioned some of the steps taken. Great fear and trepidation were experienced in taking those steps, not the least of which related to this special scheme which would leave the legal profession, by and large, out of the arrangements. Let us put an end to ground rents on dwellings as soon as possible. This House of Parliament has already had the courage to prevent the introduction of new ground rents on dwellings since 1978 and that stands now as part of our social order. We took this stand because ground rents are repugnant to the majority of our people. The Minister has said that some people are quite happy to continue paying these rents indefinitely and that is true. However, many who have been paying ground rents for 20 and 30 years believe that they should not have to pay them in the future. They question the right of the ground landlord to exact this payment each year.
We should see how much further we can go in relation to ground rents at this stage. The Minister should be positively encouraging householders to purchase and in this connection he should continue the present nominal fees. The question of reducing the size of the public sector is not at issue. It was a rather heavy topic to bring into this debate, because very little would be involved and this is a very important matter. The Minister states:
In the second place, the size of the public sector is already a matter for national concern and the need to control and, where possible, reduce numbers in the public service again argues against a further permanent purchase scheme beyond the 1967 Act scheme even if it is self-financing.
I am sure that reference should be to the 1978 Act scheme. The burdens falling on the public sector will not be affected very much. If the Minister, while now giving a further year's extension, is open to extending the scheme for a further year or two, I would agree with that. However if his intention is to give only one year in which people can avail of the scheme, I would not agree and hope that the Minister will bear that in mind. While encouraging householders to purchase, the Minister should also be discouraging ground landlords from seeking to exact the ultimate pound of flesh from the householders by demanding the maximum settlement and not being prepared to enter into a reasonable agreement as many landlords have been prepared to do.
I would prefer the scheme to be extended for at least a further three years but if the Minister will consider this in the years ahead that would be satisfactory. The Minister should get a termination date for all remaining local authority ground rents, preferably within three years. This would very clearly show the Government's will and the will of this House to bring ground rents to an end. There may be some minor legal complications, in that some controls are built into some local authority tenant purchase houses and some arrangement might be necessary there. For Dublin County Council, the figures for 1980 show the annual rent payable as £11,000. There is a lot of collecting on that, apart from anything else. There is a great burden on the public purse but those figures give the rentals payable and it would be interesting to know the amount actually collected.
Dublin Corporation give an estimate of £120,000. This, of course, concerns householders and does not refer to the very considerable income from the commercial side. I made some inquiries but have not yet received information on the amount collected last year with regard to householders. It is unlikely to vary very greatly from the £120,000. The Dublin Corporation figure covers 34,400 residential privately built homes. This includes areas like Tallaght, Blanchardstown, Donaghmede, Priorswood, the Tonlegee area and various other areas around the city where schemes were built by private builders on land owned by Dublin Corporation. Added to the 34,400, there are 20,380 under the sales scheme for which there is a charge of something like 5p per annum and 6,700 on tenant purchase schemes, giving a total of approximately 63,480 houses involved in that relatively small annual income which, if collected, must constitute a very considerable administrative expense. I am sure that the situation is somewhat similar for all local authorities around the country. We should be prepared to set a termination date for all remaining local authority ground rents within three years. That would mean that a further three years ground rents would be payable and that, after that period, payment would be terminated.
Anyone who had not paid at that time would owe the ground rent. That kind of action would indicate the Government's clear commitment to the termination of ground rents. It does not involve any constitutional question. The Minister made a great deal of the constitutional issue in his speech, and that is one of the problems which has had to be tackled over the years. However, such an approach would indicate the Government's concern that ground rents be terminated in the near future and that they would do what they could to ensure the termination of the system which has operated for existing ones which go back before 1978. The Government should also indicate that it is their intention to examine the termination of existing ground rents on dwellings after a further period even if this necessitates a review of the Constitution.
If the Government wished they could introduce a special tax on ground rents after a certain period. After all they introduced a residential property tax. We should consider the options which are open to us to bring about a termination of the old ground rents.
The Minister mentioned the constitutional question and this needs to be examined in a special way. Those in receipt of ground rents over the years have, in most instances, been well rewarded for whatever interest they originally had in the property and whatever notional interest they may have retained. In these circumstances, it must be contrary to social justice and the common good that such people and their successors in title should continue to exact a benefit from the true owners of the property for 99 or 999 years, when nothing further is given in return. Many of the things which had to be given have been taken away from this right. The right has been circumscribed in many other ways by the actions of this House.
The Government should consider providing for the total abolition of ground rents at some specified date, whether five years or whatever, people being liable for the period in between. It is said such a proposal might be unconstitutional but it could be considered in the context of reconciling rights over property with the principles of social justice and the common good. If the article in the Constitution which guarantees property rights was to be interpreted so as to prevent the abolition of ground rents without wholesale compensation we should examine that article with a view to amending it. The purpose of such an amendment would be to provide the Oireachtas with a greater degree of discreation and flexibility in controlling property rights in the interest of social justice and the common good.
There are other reasons for looking at this. The question of land, its development and use is one in which the absolute right and the way this right is interpreted will have to be looked at. I know the parties to the Government have made it clear that they plan in the near future to examine this question. In the context of that examination the exercise of this right could be looked at. I know the Minister made it clear that the question of compensation should not arise and I agree with him. I would like to see practical commercial agreement to terminate. The ground landlord as well as the householder has had that opportunity for the past five years. I know of many instances where the ground landlord has refused to make any kind of reasonable agreement. There is also that side as well as the case of householders who are holding out.
There is general concern about this question of what is happening in relation to it. The failure of some landlords to make reasonable agreements has led to the appearance in court of 4,500 to 5,000 people. Of that number 31 have received jail sentences ranging from three to 14 days. These included sentences imposed on three housewives. It is not possible for ground landlords to evict people and we did away with that obnoxious situation without all the upsets which were suggested in relation to the Constitution. Now we have the position where landlords can have people committed to jail. At least 31 people have received jail sentences. The ground landlord can exercise these orders at will when he so desires. A number of these cases are in my constituency.
If we do not have a reasonable approach to this problem we could end up with people refusing to pay anything and the system falling into disrepute. This would be regrettable. It would be preferable to have a scheme which would encourage people to purchase and ground landlords to come to reasonable agreements with their tenants.
There is a loophole which has appeared since the 1978 Act. A problem has arisen following a Supreme Court decision in settling new ground rents payable if a lease has expired. The problem relates to determining a new lease or the purchase of the fee simple. Some landlords have become avaricious in their demands in such circumstances. This loophole must be closed and it must be done in the context of the present revision. The Minister must bring forward a suitable amendment at an early date. I would have preferred to see the Minister put down amendments rather than just have a simple one-year extension and a three-fold increase in the nominal fees. These nominal fees were intended to encourage all and sundry to purchase the land which is under their own house and so do away with the system, the termination of which is long overdue.
I am glad that the Minister is extending the scheme for a further year but I am opposed to the trebling of these fees. They were nominal and consequently these arguments about the burden on the public purse are not tenable. They should continue to be nominal fees and on that basis people should be encouraged in so far as possible to buy out their ground rents. I am disappointed also that the Minister has not taken the opportunity of dealing with the important and urgent matter of new ground rents being settled after leases expire.
I ask the Minister to direct his attention immediately to the question of the termination of local authority ground rents and to bring forward an appropriate amendment to the Bill. That is a clear cut situation which does not involve the Constitution. It is a matter that could have been dealt with today without any difficulty but with our full support. In this respect the homework has not been done.
In relation to the general question of ground rents in the private sector, the Minister should make it known clearly that we in this House wish to see an end to the ground rent system in respect of domestic dwellings. In that regard the people concerned should be brought to the table for the purpose of negotiating and agreeing reasonable terms. The Minister should consider also as a matter of urgency the requirements for terminating the overall ground rent system within a reasonable period.