When speaking on this matter on the last day, I emphasised that the Fine Gael Party had already announced it was part of their policy to introduce legislation to permit tenant occupiers to purchase out their ground rents. The fact that this motion is moved by the Labour Party indicates that that is the outlook of the Labour Party in regard to the problem of ground rent. It may be argued by the present holders of ground rents that to abolish ground rents would do them serious injury and deprive them of certain property rights which they have. The same can be said of any means by which people held private property in the past.
It is my contention that this matter of ground rents is being discussed in this country for the past 70 years. As far back as the year 1889, there was a committee on town holdings which considered this matter. Any people who have bought ground rents, certainly in our lifetime, have done so at their own peril. Any person who now or in future years buys ground rents is doing so in the full knowledge that two political Parties in this State are pledged to abolish this feudal property right of ground rents. They do so at their own peril. They have no right to expect that in another generation, ten years, twenty years or less, they can expect to get as compensation the price which they are paying on what is now a monopoly market.
It is a monopoly market because only those with large amounts of money can purchase ground rents at the highly competitive prices now offered. The ordinary individual paying ground rent has an extremely remote hope of ever purchasing that ground rent. It is almost invariably the practice that it is purchased by some person or other who has thousands of pounds or hundreds of thousands of pounds at his back. The number of cases in which an individual ground rent is sold are few and far between. If they are sold at all, more often than not they are sold to the occupier. It is because it is a monopoly market, a market reserved for those with vast sums of money, that anything up to 15 or 18 years purchase is paid for a ground rent. The tenants are unable to compete at that level. That is why this motion deserves support.
The intention behind it is that the tenant occupier who has purchased a substantial interest in the property should be allowed to get rid of this vexatious private tax which is imposed on him because some people think it more important to maintain a feudal aristocracy in the twentieth century than to give moral justice to the small man. I believe it is far more important to encourage people to purchase their own houses. It is far more important that people should get a sense of ownership over what they are paying for. That is what this motion endeavours to achieve.
In his remarks moving this motion, Deputy Larkin referred to the fact that a great number of our citizens purchased their houses under the Small Dwellings (Acquisition) Acts scheme which allows them to collect loans from local authorities or are buying by means of building societies or through an insurance company. People who own property on the outskirts of our cities and towns would not have made the colossal profits they made in ground rents or in the sale of land in recent years were it not for the fact that Oireachtas Éireann introduced many Acts which enabled people on limited means to purchase their houses.
These people acquired great wealth. They acquired a system of personal property for themselves because of the social legislation passed by the Parliament of Ireland. I think they have no right to expect that we would tolerate a situation in which socially desirable legislation is going to pass profits into the pockets of private people. That is what happened under our various Housing Acts and various schemes, public and private, which have been in operation for the past 30 or 40 years enabling people to purchase houses.
It is argued by the people who are in favour of maintaining this feudal system that it is nothing to get heated about; that the rents are very small in any event. In relation to the outgoings which any property owner has, a levy of £12 or £15 per annum, which is an average rent for newly-built houses, is small but I do not think that is an answer. It is a privately-imposed tax on what is substantially the property of another and on that account I think it unfair.
The usually imposed ground rent on houses built in the past five years for a plot of land 50 × 60 is about £15 per annum. Over a period of 999 years that would amount to approximately £15,000. To my mind it is farcical that any person by an accident of history should have, because of social legislation, that profit put into his lap. I cannot see it is unfair or unethical on the part of those opposed to ground rents to say that is a gross and exorbitant profit and one that should not be continued.
It is also argued that the cost of acquiring ground rents is prohibitive and that people would not acquire them. I do not think that is so. The very few houses available at the present moment without a ground rent have imposed on them an additional £150 to £200 over and above the actual cost of the building. This is supposed to be compensation to the owner of the land because they cannot earn a ground rent.
It is argued by those who do not believe that ground rents should be abolished that you would discourage people from buying their own houses if they had to pay that extra £150 to £200. Let this be appreciated: if we no longer allow people to charge ground rent on land, then the earning capacity of the land no longer exists and, therefore, there is no longer any justification for imposing a fine of £200 to substitute for a rent which, by law, could not exist. I believe that if we were to pass a law prohibiting the creation of any new ground rents, this notional fine of £200 on a plot of land would no longer exist and it is certain that those who own land in areas where there is a demand for houses would be quite willing to sell their land at the open market price without any consideration for ground rent.
It is purely theoretical objection to argue that the abolition of ground rents would increase the initial cost of house purchase. At the moment it is not theoretical because land can earn ground rent. If a man has plot A, he can charge £15 per annum on it, and plot B exactly beside plot A under the existing legal position, can also earn a rent of £15. If a rent is not charged on it, the landlord charges an extra £150 or £200 fine to compensate for the loss of rent. Abolish the right to charge rent at all and the landlords could no longer get any compensation for a profit which the law would not entitle them to earn, in any event.
It is also argued by those who favour the continuation of the ground rent system that long leases on estates preserve the amenities of the estates, because the landlord retains certain control whereby he can prevent undesirable development. If it is a residential area, he can prevent the erection of shops and factories. It is argued that if the ground rent system is abolished, control goes with it. I do not agree. I think our local authorities superintend the development of different areas adequately. I do not believe that we need any more legislation to give local authorities control over the type of dwelling or building that can be erected, or the manner in which it can be used. We all know that local authorities have power at the moment to prevent the owner of a private house from converting his drawingroom into a shop.
There are ample powers under our legislation as it exists. I believe local authorities have the power to superintend the development of estates and areas, and, even if they have not the detailed power which landlords have, there is no reason whatsoever why we should not confer that power on them and preserve the one advantage the ground rent system has—the advantage whereby some independent and impartial person can control the general development of an estate.
Let us look at what investment in ground rent produces. Does it produce any new wealth? Is it a productive investment? Is it the kind of investment which is nationally desirable because it produces new resources and new wealth? I do not think any person can seriously suggest that it is. I believe investment in ground rent is a deadweight investment which will produce nothing new. It does not produce houses: it does not produce goods: it does not produce services. It is extraordinary that no accurate statistical assessment has been made of the amount of money tied up in this country in unproductive investment in ground rents. I venture to say the figure runs into hundreds of millions of pounds, producing no wealth and serving no useful purpose whatsoever. I have a feeling that if we were to abolish ground rents, we would release for productive purposes a colossal amount of wealth which is invested in this system of private tax levies. That would be socially desirable, and for that reason I believe the motion deserves support.
It is suggested, too, by some people, that to abolish ground rents by one stroke of the pen would be unfair to certain charities and trusts. To use that argument is to use the old argument: "Don't hit me now with a baby in my arms." I do not think society can be held up to ransom because certain charities or trusts may have money invested in ground rents. A red light of warning has already been flashed in this House on other occasions when a substantial and representative number have gone into the Division Lobby and voted against ground rents. If the bell was not heard tolling in the past, I am glad this motion allows it to be tolled once again.
