I think we may say that this Bill represents almost the last vestige of war control. Whatever we may think about war control, or the control that was necessary during the war, I think most of us will agree it is desirable that the earliest opportunity should be taken to rid ourselves of the various and many embarrassments, mainly of our economic life, that control imposes, but unhappily in this matter of rents we have not been able to do so. Under the policy now announced by the Government we will suffer a further three years of control, and to judge by certain utterances from the Opposition in the Dáil, if at the end of three years they happen to be in power we may be subject to a further interminable period of control. It is hard to see at this late stage who is served by this control. I think the judges who have to administer and pronounce upon this Act say it is intolerably complicated. On more than one occasion our judges have said that the complications of these various controls are most obscure. No doubt lawyers have prospered from these Acts. They take advantage of Acts of these kind, as they always do when legislation becomes complicated and opportunities for litigation are likely to arise. But we must address ourselves to the general principle, and I think it will be admitted by all that control arises out of conditions of scarcity. What, after all, are the conditions of scarcity as applied to our economic life? They simply arise from a shortage of supply in relation to the demand, and the cure for that has been long established. In fact, ever since people have existed and civilisation has been known, there has been only one cure, and that is to allow natural forces to operate.
Undoubtedly shortage of supply leads to increased prices, and increased prices lead to the attraction of capital to take advantage of these prices. Capital is apt to be caught by booms. Then there is an over-supply and prices readjust themselves. That is the simple fact. Still, it requires to be recognised in this present case that the law of supply, allowed free play, will meet the demand in due course. Of course, in the initial step, once decontrol is put into operation, it is an inevitable fact that high prices will follow, and you have to face it on every occasion. They had to face these difficulties, which were not quite the same, but analogous, in England. They got back to the gold standard successfully after a certain amount of dislocation. We will also have to face dislocation here to get back. I am puzzled for the moment, and I was also attracted, by an argument advanced by the leader of the Opposition in the Dáil, where he said: "What have people who built houses before the war got to complain about? If they had invested their money in gilt-edged securities and in railway shares they would not even have got the increases that are now permitted under this Rent Restrictions Act." If you look no further and think no further that sounds plausible, but apply that to the general doctrine of capital, and I think most of us in this House, whether we like it or not, will be forced to admit that capital must remain part of our economic system, and the experience of other countries which tried to do without it is not an encouragement to us to pursue it as a policy.
Capital lives on averages, whereas certain socialist politicians will say: "Oh, no, where capital is losing we do not complain. We only complain where capital has its rewards." Of course that doctrine is very simple. It is the socialist's doctrine of "Heads I win, and tails you lose." But what will become of capital? We all know that capital is a shy bird. It is fluid and will migrate. It will not remain and allow itself to be exploited in any community where that doctrine exists. Capital must be allowed to reap the reward of high prices and scarcity, and at the same time it has, and always will have, very heavy loss from adverse conditions. It is only on the average that capital will continue to be employed. It raised my hopes very much regarding the future for capital in this country when I read that the Minister for Justice made the remark that he himself did not understand what was meant by the word "profiteering."
The understanding of this fundamental economic doctrine is the only cure for profiteering; a period of high prices is an overdose to the disease itself. As soon as you get high prices you will get the corrective applied, and these high prices are a preliminary to falling prices. If that were understood we would hear less nonsense talked about the iniquities and the extortionate action of so-called capitalists. When we come to apply these principles to the Bill itself you may ask, and it was said also in the other House, what is there in these various control measures that prevents houses being built now, or, rather, what reason is there that any more houses should be built? There is a reason, and the main reason —very often the best reason is not obvious—is a psychological reason. Capital feels that it is being limited and restricted in the free play of its operations by this Act, and as long as these measures are there capital will not come to the aid of the housing problem.
It is only when it feels that this control is removed and that the open play of economic forces is allowed, that capital will continue to operate freely. Then also decontrol will lead to fluidity in respect of those persons who let houses. There is a certain number of people comparatively well-to-do who can pay higher rents than they are paying now and who are sitting—I do not blame them, for the law enables them—whereas they should be competing and offering a market for new houses, which would undoubtedly be built, and possibly would be built with the assistance of labour at economic prices. Then again it would encourage letting against sale. We know perfectly well what happens in these cases. Capital does not allow its hands to be tied down. There are various avenues for it. There is no law which can prevent it being exploited. A house becomes vacant and the owner refuses to let that house. He sits on it until he can sell it. That will go on as long as the rent restrictions continue. Of course a free market would also encourage speculation. We hear a lot talked about speculation, but speculation is a very good thing sometimes. Civilisation and progress depend on speculation and taking risks. It is the essence of capital to take risks.
To return to the measure itself, I should like to deal with what I regard as the prominent blemishes of the Bill we are now asked to pass into law. First of all there is the notice to quit. I think most members of the House are aware of the fact that purely under a technicality the formality of not serving a notice to quit when a new agreement was made invalidated the agreement and tenants have largely—I do not say entirely—taken advantage of that technicality to obtain a refund of the rent overpaid. I would like to say that as far as the information at my disposal goes thirty per cent. of the tenants have a sufficiently sympathetic understanding of the landlord's difficulties—I was going to say they had the decency, but I do not think it indecent to take advantage of what the law allows—as not to avail themselves of that blemish, and they continue to pay these increased rents which otherwise, on a technicality of the law, they would not have to pay. In England that matter was put right three and a half years ago. From December, 1922, that injustice was removed. Yet it has been allowed to continue here for over three years, and all the time tenants have been taking advantage of it. By the time this Bill is passed into law every tenant who intends to take advantage of that will have done so, and it will be somewhat of an empty gesture to stop it then. Then as regards the rates, I have a certain sympathy with the provision which enables rates to be charged on empty houses which are deliberately being held up for sale because the landlord does not want to let them, but there are certain houses, especially in the country, where such a provision has been a great injustice. There are many country houses, what we call lesser demesnes, of considerable size but not of much value. They cannot be let, not even to a suitable tenant, and they certainly cannot be let to a tenant who could keep them in the manner in which they had originally been kept. They are a drug on the market, and many of these houses pay rates though the owner cannot afford to live in them and a tenant cannot be found. I am hoping that the Minister will see his way to accept an amendment which will go further than the Bill on the Committee Stage to meet that case.
With regard to the classification of premises, it has been held that so long as somebody sleeps in even one room of a business premises, that house, although ninety per cent. of it and all its externals, in every reasonable respect, is a business premises, is still held to be residential, and only the lesser increases of rent are permitted. That seems unjust. I think the question as to whether premises are mainly business or residential should be a matter of fact upon which the courts should be allowed to pronounce and where it is proved that a person is sleeping mala fide in the house to give it a residential character, the Act should not be allowed to operate. With regard to sub-letting, one tries to restrain one's feelings as to the injustice of that. You take a house, and you put in a tenant, who can perpetuate all the iniquities of so-called profiteering that the Act is preventing the landlord from doing. Can anything be more unjust? We know that the argument is that sub-letting tends to meet the housing demand, but surely if a person's property is being used in that manner and profiteering is permitted in the case of the occupier, portion of that profit at least ought to find its way to the owner of the property who is not enjoying the increases that other people have enjoyed and did enjoy, owing to the enhanced prices of commodities.
I know it has been said by the Government that it would be difficult to administer any provisions of that kind. But with respect I disagree. I suggest it would be quite possible to make the head landlord a party to any sub-letting agreement, and no sub-letting agreement to which he is not a party would be legal. Then the profit rent of the sub-letting would be divided in proportion. It has been said that if there were two people, two landlords, that the rent would be higher still. I very much doubt if the occupier has any feeling of gentleness towards sub-tenants, and I rather think that it might operate the other way, if you had a head-landlord, and the head-landlord was to get a profit out of the letting. Lastly, I come to the matter of vacant houses. When houses become vacant, owing to a surrender clause or death or any other cause, they still remain subject to control and they have to be let under the Rent Restrictions Act. Now, as we are approaching a period of decontrol, surely it is well to see what will happen when decontrol comes into operation. At present these houses when they become vacant are not let or sold. They certainly do not become occupied by the people who most want the houses. In fact, these people do not benefit at all. I recognise that this Act is moving in the right direction, and I am glad to be able to testify to the spirit of accommodation and compromise with which the Government are meeting the various positions and conditions of those who are attempting to solve this housing problem. I notice the popular idea is that when the Government make an effort to meet this propertied or capitalist class, they are acting in a manner inimical to the community. That is the popular doctrine. It is cheap and it goes down well in certain quarters. The only possible conditions under which we can get progress are by being able to offer opportunities for enterprise and capital to come in. Capital has to earn a living just as well as labour, and I am glad to see from the way they have made certain amendments in this Bill in the other House, that the Government have recognised that and it is a good augury for the future that they have done so.
