Any Bill dealing with landlord and tenant law is of its nature complex. In this case the complexities are compounded by the misleading manner in which this Bill is presented as being a scheme leading towards the abolition of ground rents. The first question that occurs to me is : what has this Bill to do with the abolition of ground rents? It has nearly as much to do with it as a Bill restricting the import of butterflies from Afghanistan; it has nothing to do with the abolition of ground rents as promised by the Minister and his party. I once read a book called "The Big Lie" which dealt with the science of propaganda, and while I should not like to compare the Minister for Justice with Dr. Goebbels it appears that there is a major propaganda exercise being carried out by the Minister and his colleagues to mislead the public into believing that this Bill in fact honours their election commitment.
Black is black and white is white, and the fact that the Minister pretends that the Bill honours the commitment, the fact that Government speakers will continue this pretence inside or outside the House, the fact that 84 pairs of Fianna Fáil feet will troop through the Lobbies in support of this Bill, will not transform its provisions so as to lead to the abolition of ground rents. Very simply, abolition means to do away with. The word was used very much in the context of the great abolition debate in connection with slavery, but in that case it was properly used because the problem involved was dealt with and slavery was abolished. Here, we have a situation where the Minister produces a Bill which, without going into detail, is a rehash of the Bill produced by the National Coalition before the dissolution of the Dáil. But the most serious point about it is that he produces it on the basis that it is by way of implementation of a Fianna Fáil commitment, that in effect it is a scheme leading to the abolition of ground rents. On that basis initially I have to say to the House that the presentation of this Bill has the odour of deceit and dishonesty about it. It smells of subterfuge and cynicism. It smells of misrepresentation and fraud. It amounts to a confidence trick on the public, the press and, most of all, on the thousands of householders whose hopes, aspirations and expectations were raised by Fianna Fáil prior to the election, and these hopes, aspirations and expectations have now been dashed.
What is the background to the situation? The 1967 Landlord and Tenant Bill gave the tenant the right to purchase his freehold. Difficulties arose in some cases, particularly where the tenant's immediate landlord did not himself have a freehold title and there was a pyramid of interests leading back to the ultimate freehold owner. Next, the National Coalition produced a Bill last year which provided a simplified procedure. The tenant had only to apply to the county registrar, lodge the purchase money and he would be issued with a vesting certificate which would be absolute proof of freehold title. Subsequently—this is the most important part of the whole business, that it was subsequently— Fianna Fáil promised to introduce a scheme leading to abolition. This promise was hawked from door to door by Fianna Fáil canvassers: "We are going to abolish your ground rent."
The Minister is correct in referring to small print in the manifesto. In some ways I should liken him to the shady salesman selling shoddy goods on the doorstep giving plenty of fast talk—"sign here" and so on—but when trouble arises he refers to the small print. Even taking the small print and taking the commitment in the context of its full expression in the manifesto this Bill does not in any way measure up to the honouring of that commitment. We already have the right to acquire. We have the National Coalition Bill removing the difficulties by appointing the county registrar to handle applications and issue vesting certificates. In what way is this Bill an advance on the previous procedure? It changes the system whereby you go to the Registrar of the Land Registry instead of going to the county registrar. How can anybody accept that, this being the only basic change in the Bill, it can lead to the abolition of ground rent? The National Coalition never pretended or attempted to mislead the public into believing that they were abolishing ground rents or introducing a scheme which would lead to their abolition; they merely said they were simplifying the procedure and, in fact, that is what the Minister is doing and no more.
As regards the change from county registrar to Land Registry, in many ways it is not important in the context of the major attack which I must make on the Bill, but it is important in the context of the ultimate law of this country. In many ways the system under the county registrar was a far better system, particularly for those people living outside Dublin city. I can imagine it would be far easier for a tenant of Lord Bantry in West Cork to deal with the county registrar in Cork than have to deal with the Land Registry in Dublin.
I must also point out from my own practical experience as a lawyer that the Land Registry at present is totally overworked and as a result of this and also, I think, probably as a result of inadequate accommodation, there are very long delays in the lodging of existing applications in the Land Registry. For example, we have applications under the Registration of Titles Act, 1964 under section 49 where somebody applies by way of a possessory application to the Land Registry to be registered, or somebody is not registered at all applies for first registration. It is my experience that the normal time taken to complete such an application works out, on average, at about 18 months. This then is the office which is going to solve the problem for ground rent tenants.
The other major item in regard to the Land Registry to which I must refer concerns the fee payable. It was referred to by the Minister recently in an interview published in The Sunday Press. a £5 fee, the bargain of the century. I do not know if the Minister is aware of the fee presently payable in relation to applications to the county registrar under existing legislation; perhaps it would be as well to advise him that the fee, taking into account £1.50 on the application and 50p on the order, is £2. That is the level of fee presently payable by a tenant resorting to the county registrar under existing legislation.
I ask : how can changing the system from the county registrar to the Land Registry, even if it is a sensible step —and there is an area of doubt here— be construed as leading to the abolition of ground rents? The Minister knows very well that it will not. He accepts at this stage that his Bill, apart from fixing an increased fee in the Land Registry over that presently payable to the county registrar, is basically on the same lines as the National Coalition Bill. It is worth recalling what the present Minister had to say about the National Coalition Bill. On 23 February, 1977, at column 162 of the Official Report, he stated:
One of the principal provisions of the Bill as it stands at present is an extension of the role of the county registrar in the operation of the Act. We see in it the elimination of certain impediments in former legislation and a widening of the scope of the categories who would benefit. It aims, as the Minister says, at reducing legal costs. I hope that it will achieve that aim.
He accepted then that the National Coalition Bill simplified the procedure and would reduce legal costs. The National Coalition Bill was not presented as having anything to do with abolition, this Bill is, but both Bills are remarkably similar.
To delve further into the Minister's mind it is worth recalling what he had to say in relation to abolition when dealing with the National Coalition Bill. On the same date, at column 163 of the Official Report, he stated:
There is disappointment that the acceptance of the principle of the abolition of existing ground rents is not in the Bill.
How then can the Minister suggest that a Bill he is now presenting, almost similar to the National Coalition Bill, has the principle of abolition? He gives the lie to that argument out of his own mouth. The Minister referred to the manner in which ground rents could be abolished, and I agree with him, they could be abolished only by a system of confiscation or compensation. One addition was suggested by a colleague of the Minister in an earlier debate that could be a scheme which would lead to the abolition of ground rents which would not fit, strictly speaking, under the heading of either confiscation or compensation. I shall revert to that later. In relation to confiscation the Constitution provides, in Article 43, for the protection of private property rights. Therefore it is unconstitutional to terminate a landlord's interest without compensation and any ground rents Bill providing for such would be declared to be unconstitutional by the courts. Of course the Constitution could be changed by Referendum but it is quite clear that there is no such intention. Apart from that it is no harm to mention that if such a course of action were suggested the ground rent tenants, who would appear to benefit initially from such a move—because of the diminution in the rights of private property involved in such a change—would find that the very thing they were seeking would be lost. In effect their legitimate aspiration to ownership of their own houses would not be constitutionally guaranteed. This argument is apart altogether from the question of morality of confiscation. On this point, for once, I am in agreement with the Minister. I do not believe that the question of confiscation can arise either constitutionally or morally.
Having disposed of the question of confiscation we look at that of compensation. Under this heading I am trying to divine what exactly was promised or proposed by the present administration. We had already a system whereby ground lessees could purchase by paying a certain sum to the landlord. The Coalition, while not in any way pretending that the 1977 Bill would abolish existing residential ground rents, provided a cheap and effective way of purchase by house-holders. The Fianna Fáil commitment, made subsequently, was to introduce a scheme leading to the complete abolition of existing ground rents; in other words, according to the dictionary definition, do away with them.
The only reasonable interpretation to be drawn from this commitment is that the Government, either by way of providing compensation or through some other scheme, would appreciably improve the situation as it obtained under the National Coalition Bill; in fact, as a result of this scheme, we would have the cessation of ground rents. In no way can this Bill be interpreted as leading to that end. Therefore it seems clear to me at this stage that Fianna Fáil never had the intention of providing compensation. It seems clear further that they never had any intention of producing any other scheme. Therefore the only conclusion I can reach is that Fianna Fáil deliberately deceived the electorate on this point.
If there is any doubt about the deception we can go back further to delve into the Fianna Fáil minds. Here we have further proof of Fianna Fáil's duplicity in the matter by referring to speeches made on the Ground Rent Motion in the House on 9 December, 1975. On that date, at column 1123 of the Official Report, Deputy Collins, then spokesman for the Opposition, said:
It is part of the Fianna Fáil package in relation to the ordinary householder that not only should he be relieved of the burden of rates but also of ground rents.
Later in the same column he had this to say :
We are absolutely in favour of the total abolition of ground rents, but we are acutely aware that this could cause constitutional problems and that by doing away with one injustice you might be creating another.
At that stage the Minister was totally aware of the problems involved but still was committed to total abolition which, to any reasonable person, would indicate that he had a scheme in mind at the time, or was working on one, which would lead to such abolition. In the same debate his colleague, Deputy Ray Burke, now Minister of State, developed the argument somewhat further when he said, at column 1358 of the Official Report :
I appeal to the Government to ensure that something will be included in the new legislation to reduce drastically the legal fees involved in the purchase of ground rents. Even if that were done you still do not grasp the nettle.
We have heard that expression before somewhere——
the abolition of existing ground rents. That will remain until some Government decide to abolish them by some method and until then you will have legitimate agitation and bad feeling about the payment of this barren tax.
At that stage the Minister's colleague had in mind that some scheme other than simplifying the procedure and reducing the cost would be necessary to lead to the abolition of ground rents. At that time the Minister's colleague made a suggestion which was worthy of consideration. I wonder if it has ever been given consideration since then. On 10 December 1975, at column 1359 of the Official Report, Deputy Ray Burke said:
But some Government must produce a solution to the constitutional difficulty. This Government have a responsibility to use all the legal expertise available to them in the civil service and courts to devise a scheme that will get around this constitutional difficulty.
He went on to say:
It could be done in many ways, and one way we have suggested is by the setting up of a board similar to the Land Commission.
At that stage there were ideas floating around as to how it might be done. What is clear from the foregoing is that Fianna Fáil gave a commitment on ground rent abolition which they have no intention of honouring. Even worse, they have the gall to pretend that in some way this Bill measures up to that commitment. It is patently obvious that this is not so. I urge the Minister to cut out the humbug and indicate either that the election commitment will be honoured and the Bill amended accordingly or face the public and say that he cannot or will not honour that commitment.
As Opposition spokesman it is not for me to say how it can be done, but it could be achieved by doing it as most householders thought and expected it would be done, by way of compensation being paid by the State. If the Minister was not willing to do that he has further precedent—something along the lines suggested by his colleague when speaking on the 1975 motion.
The system of agricultural tenancies was abolished, and the abolition was achieved by the 1923 Land Act. Very simply this was done by way of the compulsory taking over of the landlord interest by the State on payment of land bonds, the vesting of the free-hold interest in the tenant subject to an annuity, with the proviso that that annuity, which was far less than the rent, would terminate after a number of years. Therefore the Minister had a precedent for a system.
If the Minister was serious about honouring his commitment, a similar system could be devised and possibly administered by the Land Commission, that is, payment for the landlords by way of ground rent bonds and vesting freehold in the tenants subject to an annuity which would terminate after a short number of years. I looked in vain in this Bill for any scheme of this nature or anything which would resemble such a scheme and failed to find anything like that.
Before coming to the Bill proper there is another aspect to which I would like to refer at this stage—the question of the cost of the purchase. Let us not forget that the basic cost to the tenants relates to the number of years' purchase he has to pay on his ground rent. This has not been materially altered except to his detriment, which I will come to in a moment. To understand the situation one has to look at the procedure under the 1967 Act. The right to purchase was there. The cost of the purchase, that is the number of years purchase of the rent which I referred to as the multiplier, arose in certain fixed instances. In most cases, and this applies to the majority of modern residential ground rents, the price should not exceed the amount which if invested at the date of purchase in the most recent Government long term loan would give a gross annual return equal to the amount of the ground rent. In simple terms, you take the interest rate on the last long term national loan, divide it into 100 and you get the multiplier.
This system has not been changed. The basis on which the amount is computed is also included in this Bill. A rather unusual thing has happened, and is worthy of mention. If a householder bought last year under this provision, the multiplier would be about 7½. This was related to the 13 per cent finance stock, which was the last national loan. What is the position today? Last Friday we had a new long term national loan introduced at 11½ per cent. What is the effect of this? The multiplier is increased to approximately 8½ years purchase. We now have the ironic situation, admittedly not totally related to this Bill but related to the interest rate on the most recent national loan, that if the National Coalition Bill had been passed last year, and if somebody had bought then, it would have been cheaper for him to do so than it will be under this Bill. The increase in the purchase money is of the order of 13 per cent as between 1978 and 1977. That is some way to lead to abolition.
At this stage it is relevant to look at a simple comparison between the tenant buying out in 1977 had the National Coalition Bill gone through and the tenant buying out in 1978 under this Bill. Under the Coalition Bill the tenant lodging his money with the county registrar would have paid approximately 7½ years purchase on his ground rent plus, unless there had been an alteration in the fee scale in the circuit office, a sum of £2 in Circuit Court fees. If he wanted to employ a solicitor he would have paid solicitor's fees, which would have been at a low rate because of the simple procedure involved.
What is the position in 1978 under the Fianna Fáil Bill? The tenant will be paying 8½ years purchase, £5 fee to the Land Registry and the same legal costs, because the same simple procedure is outlined in this Bill. I accept that this is a simple procedure. Why should it not be? It was modelled on the Coalition Bill. We now find, it is easy to argue, that a person buying out under the Fianna Fáil Bill in 1978 would be paying more than he would have paid last year had the National Coalition Bill gone through.
These points are arguable. The Minister can justify, pointing to international factors which caused a fall in interest rates to explain the increased purchase money. I accept that would be a good point, but he has been pretending he would abolish ground rents and it was up to him to deal with this factor.
Summing up the Bill, Fianna Fáil promised to introduce a scheme leading to the abolition of existing ground rents. It is beyond dispute that this Bill does nothing to implement that promise. Under the 1967 Act the tenant already had the right to purchase. The National Coalition's Bill simplified the procedure. Subsequently Fianna Fáil made their famous promise. It is interesting to look at the leaflet handed out by ACRA prior to the election. According to that leaflet, ACRA considered that the National Coalition's Bill would have done very little to end the ground rents system. I accept that point. It would not have abolished ground rents. It would have helped to simplify the procedure, but it did not pretend to lead towards the abolition of ground rents.
When the Minister was spokesman on justice for Fianna Fáil he said he wished to state that, on being returned to office, Fianna Fáil would provide a scheme which would lead to the abolition of existing residential ground rents. He said he was prepared to commit his party to introduce the necessary legislation within six months of becoming the Government. ACRA urged people to read the leaflet and judge the facts for themselves before they cast their votes in the election and to make sure their vote was a vote to end the ground rents system. God help the poor householder who thinks this Bill will end this system.
I want to look at the Bill in a general way now. There are a number of points I will be raising with the Minister on Committee Stage. I am glad the Minister, who is attempting to mislead everybody, has had the sense of propriety not to include in the long title to the Bill any suggestion that it will lead to the abolition of ground rents. I commend him for that. Section 4 provides that the Act shall not bind a Minister of the Government, the Commissioners of Public Works in Ireland or the Irish Land Commission. It is interesting to refer back to what the Minister had to say in this regard on 23 February 1977. As reported at column 165 of the Official Report he said:
Whereas on the one hand the State is being protected as a tenant, on the other hand the State is not giving the same protection to its own tenants. It protects itself as a tenant, but its tenants are not protected. If I am wrong perhaps the Minister will correct me, but if I am right perhaps he will say why the State's tenants should be excluded from the protection of the Bill.
If I am wrong perhaps the Minister will tell me why the State's tenants should be excluded from the protection of the Bill.
The Bill can be criticised on one other score, although the Minister points to this as a fact in favour of the Bill. I would not argue with him too much about it. The Bill has limited terms of reference in that it deals only with ground rents. The Minister accepts that there are considerable problems in the landlord and tenant field particularly following the Byrne and Loftus decision in the Supreme Court. There is the problem of business tenants whose leases have expired and who are seeking renewals. The National Coalition dealt in one Bill with three items, the trilogy to which the Minister referred in his opening statement—future ground rents, existing residential ground rents and general landlord and tenant reform. The Minister seems to make it as an excellent point in favour of Fianna Fáil that they are being dealt with in three Bills. I will not fall out with him over that.
Let us have the three Bills. Where is the Bill dealing with general landlord and tenant reform? The result of tackling the problem in this way is that the National Coalition measure covering the three points fell on the dissolution of the Dáil and has been gone for almost a year and major landlord and tenant reform has been put in abeyance. I appreciate that there are pressures on the Minister, but the Bill dealing with future and existing ground rents is largely a rehash of the National Coalition's measure. I would ask the Minister to produce another rehash as quickly as he can to cover general landlord and tenant reform not have these measures in one There is no reason why we should general Bill, or by the reintroduction of the National Coalition's Bill, or in three separate Bills before the Dáil very quickly. All the ground work has been done, and further delay will cause further problems in the landlord and tenant field.
I will not go into detail on the various sections of the Bill. People have been in touch with me about the definition of subsidiary and ancillary. There are people who have dwelling houses on land which might not be considered totally subsidiary or ancillary.