I think you politely but very firmly controlled me when I tried to put the first of these Bills into the perspective of the ones which were to come. I said on that occasion, as well as I could through the impediments you were placing in my way—quite rightly no doubt—that I never had much sympathy with the agitation against ground rents. I was accurately reported but misinterpreted and misunderstood in that regard. I should like to take this opportunity to say again what I feel about this problem.
In a society like this, which is a capitalist one, for better or worse, even people who are not capitalists—and I am by no means an unqualified supporter of capitalism—must understand that it is a capitalist society. Perhaps it will not be in ten or 50 years time, but it is at present. At present, for better or for worse, rightly or wrongly, people are permitted to invest their money in a wide variety of ways. Some of these ways have got social dimensions which are, very rightly, controlled. The question of housing is one of these.
Investment in house property—if there are tenants in the house property —will attract all kinds of social controls under the Landlord and Tenant Acts, Rent Restrictions Acts and so on. That is perfectly proper. But by and large people are entitled to invest as they please. That may be a bad thing, and perhaps the political wheel will turn to the point that that will no longer be possible. But at present, and for the 55 or 56 years that this State has run, it has been lawful. The State and the law have drawn no distinction between one kind of investment and another. They have drawn basically no distinction between one kind of operation of the market forces and another. When I hear people singling out ground rents—even though I understand well that the thing has got overtones connected with features of a very unhappy national past—when I hear people singling out this particular imposition, attacking it as though there was something different in kind about it from other situations in which one man is drawing an income which he has not earned by his sweat—at least is not at present earning by his sweat —I ask myself why, what is there about this imposition which is so objectionable?
Do not forget that during all the years when developers were putting up houses and reserving ground rents for themselves, presumably they were doing that on a calculation of how they were going to get the best return on their money. That may have been very selfish of them, very unsocial of them, but it is not against the law of this country—not yet anyway—and never was. Every developer who decided he was going to sell the bricks and mortar, as they have been described, for £8,000, £9,000 or £12,000 and reserve a ground rent for himself, in the operation of a free market, could have been faced with the competition of another developer who was simply going to sell the freehold. There was not any reason in the wide world why developers might not have sold freeholds. Many of them have done that and are doing it, putting themselves, prima facie, in a favourable position from the point of view of competition with the builder who was reserving a ground rent for himself over and above the purchase price. In that event presumably the builder selling the free-hold would have calculated his return on his investment in a different way and that would have been reflected in a somewhat higher capital price of the house.
It seems to me a strange thing that there should be so much heat generated about a situation in which a man who calculated his investment in a housing estate, charges so much by way of a lump purchase price and reserves something for himself which, if he were not allowed to reserve it, would be reflected instantly in a higher purchase price should be held out as being a remnant of landlordism in the sense in which the word was understood in the year 1800. It seems to me a strange thing that a house purchaser who has benefited from the fact that the capital cost of a house is presumably that much lower—on the whole a ground rent is not very large when weighed against the average family annual budget— should complain about this particular incident of life into which he has entered with his eyes open. He freely signed a contract which was quite open to him not to sign. Nobody forced him to buy this particular house to which this rent was attached.
I hope there are not people so unconscionable as to represent those words as being a defence of the ground rents system as such. It is not. It is a plea for straight thinking on this and related topics. If we do not want a free-market economy, if we do not want the free play of competition and of capitalism in this field, let us say so and let us cut out the whole question of bricks, mortar and roofs from the free market area of our economy. The Constitution permits that, and I doubt if I would vote against it; but so long as that is not against the law I submit that we should not go along weakly with agitations which are irrational.
I do not own any ground rents. I do not pay ground rent: I bought my small ground rent seven or eight years ago, a very small one. I do not hold any brief for any person who owns a ground rent, but I say that this is no different in kind from any other question of investment. They all represent unearned income. A man who develops a surplus has sweated all his life for it. He has accumulated his savings, by his deciding to put money by instead of spending it on drink or on holidays. A man like that who invests his money in anything, be it post office savings or a State-issued security, is essentially putting money into other people's sweat and by way of return from that he will get the product of other people's sweat. I am not an economist, but that seems to me to be a proposition so clear that I apologise to the House for wasting time arguing it.
I cannot see any difference in the world between investment of surplus money, assuming one has earned it fairly and squarely, in ground rents or in an industrial security or in post office savings. If one gets a percentage return on that one is profiting without earning it from somebody else's effort. Exactly the same is true in regard to an investment which the possession of a ground rent represents. In this matter I am not fanatical one way or another. I would willingly go along with my party and I believe my party hold that ground rents are socially undesirable. What I object to is the weak-minded throwing of every cheap sop a political party can think of to every pressure group in the country when it comes to election time.
With the exception of the abolition of motor taxation, for which there is absolutely nothing to be said, and possibly the abolition of wealth tax which was not, I admit, promised in the pre-election manifesto, the party who made these promises had no notion of fulfilling the one in respect of ground rents, or in the terms in which that promise was made. That promise was perhaps the most unjustifiable part of their campaign.
I do not want to drag the discussion too far afield or to drag people into it who possibly do not belong in it, but I have to note that the day before the Bill was introduced one of the most significant and important Ministers— if the Minister for Justice will not mind my appearing to put the other Minister momentarily above him—the Minister for Economic Planning and Development, spoke here with considerable heat about the hypocrisy of the Leader of my party having taken the line he did about the budget. I will make allowances for others as I hope they make allowances for me in regard to things said in the heat of the moment which one might not write down and stand over if one got the chance to look at them again, but I must note that this leading member of the Government said, as reported at column 751, volume 303, of the Official Report of 7 February 1978:
I should be the last to claim perfection but I should try to claim honesty. That is why I am so vicious or so bitter in this attack—because I will not stand for hypocrisy, humbug and double talk. When I come here to make a political speech I make a political speech. I use one hand. I state my view and I stick to it. When I want to write an academic paper I know where to go and do it in academic form. I cannot stand anyone sailing under false colours, claiming to be doing one thing while doing the opposite. I am sorry for being so firm on the issue but I have my views also.
Later on he thundered:
Presumably we would have been more mortal still had we not said anything specific last summer; in other words fudged the issues, go in for the traditional approach—if you can avoid saying anything specific, for heaven's sake do not commit yourself to anything, just talk in general terms and hopefully you will fool enough of the people enough of the time to get yourself re-elected. It was because we were determined to put an end to so much of that political humbug that we said what we did in our manifesto and what we are now doing in government. We said: we will spell out very specific commitments and we will carry them through, deliberately....
It was a fine exercise in contrived indignation. I should like to hear this saintly Minister who has such a high line of morals, who is so well able to tick off men like Deputy FitzGerald, come in here and put his reputation for fairness and honesty, which I do not dispute, on the line. I am saying this because it will cast light on what is going on in the House. I should like to see the Minister come into the House and put his reputation for being intellectually honest on the line in defence of this Bill. I cannot command which speakers come in, even of my own party, even when I was Whip, and I certainly cannot do it now for the Minister's side——