The Chair understands that Second Stage of this Bill and the Housing (Private Rented Dwellings) Bill, 1981 are being discussed together.
Rent Restrictions (Temporary Provisions) (Continuance) Bill, 1981: Second Stage.
An Leas-Chathaoirleach
Question proposed: "That the Bill be now read a Second Time."
The difficulties facing any Government in legislating for protection of tenants of dwellings formerly controlled by the Rent Restrictions Acts and for the private rented sector as a whole are immense. Not only must Government policy seek to encourage the supply of rented accommodation and improve its standard but it must also take into account the different circumstances of landlords and tenants and provide the means by which the terms of a tenancy can be determined in a manner which is fair to all. In relation to controlled tenants on low incomes the Government must provide assistance for those tenants who are unable to pay for their accommodation. The Supreme Court decision on the constitutionality of the Rent Restrictions Acts has highlighted these problems and made their solution all the more urgent.
The Housing (Private Rented Dwellings) Bill, 1981, is an attempt to meet the immediate issues arising out of the Supreme Court's decision. It does not deal with all aspects of Government policy towards the sector nor is it necessarily the final answer to the problems arising. What the Bill does seek to achieve is a balanced approach which gives reasonable protection to the tenants and their families of controlled dwellings and at the same time allows landlords a progressive increase in the return from their dwellings. It does not deal with the provision of assistance for tenants suffering hardship as a result of rent increases — this will be dealt with elsewhere — nor does it deal with the longer term problems facing the non-controlled private rented sector.
Within the limits I have outlined the Government consider that the Housing (Private Rented Dwellings) Bill, 1981, will fill the statutory void referred to by the Supreme Court and avoid the social upheaval that would result if no legislative action was undertaken. In preparing legislation in this area the Government were very conscious of the constraints imposed by the provisions of the Constitution and the decision of the Supreme Court. The Government have been advised that the Housing (Private Rented Dwellings) Bill, 1981, is, in all regards, in conformity with the Constitution. Indeed the Government have a duty under the Constitution to protect all the citizens of the State and this Bill seeks to fulfil this duty. In particular, the State is enjoined by Article 45 of the Constitution to direct its policy towards securing that: "the ownership and control of the material resources of the community may be so distributed amongst private individuals and the various classes as best to subserve the common good". The State acknowledges in Article 43 that while man has the natural right to the private ownership of external goods, the exercise of the rights ought, in civil society, to be regulated by the principles of social justice. To this end the State may "as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good".
Over the years since it was first introduced in 1915, rent control has been rigid on the level of rents of certain dwellings and gave considerable security of tenure for the tenants. No mechanism was provided whereby the landlord could increase the rent to keep pace with inflation and no incentive was given to landlords to maintain the property, as he had little prospect of ever regaining possession of it. The result has been a wasteful deterioration in the standards of these dwellings to the stage that many of them became unfit for habitation. This is reflected in the substantial decline in the numbers of such dwellings to the point that at the moment there are likely to be no more than 30,000 controlled dwellings in existence, though this is only an estimate.
It is scarcely surprising, therefore, that a constitutional challenge to the Rent Restrictions Acts would be successful. The Supreme Court, in its judgement on 29 June last, held that Parts II and IV of the 1960 Act, which controlled the level of rent and restricted the landlord's right to recover possession of controlled dwellings, were contrary to the provisions of Article 40, paragraph 3 of the Constitution. That Article provides that: "The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name and property rights of every citizen".
Part II of the 1960 Act was seen as an unjust attack on such rights, being both arbitrary and unfair, in that it restricted the rights of one group of citizens for the benefit of another, without compensation, without regard to the financial capacity or the financial needs of either group, with no limitation on the period of restriction and with no possibility of review. Part IV of the 1960 Act, which curtailed the rights of a landlord to possession of a controlled dwelling, did not have a viable statutory existence of its own, independent of Part II and so, also, was constitutionally defective.
The Government recognise that the constitutional issues arising out of this Bill are highly complex. In order to provide the time necessary to resolve them, once and for all, they introduced and had passed by the Dáil a second Bill, the Rent Restrictions (Temporary Provisions) (Continuance) Bill, 1981, which extends for a further three months the life of the Rent Restrictions (Temporary Provisions) Act, 1981. The Bill extending the life of the temporary legislation is necessary in the event that the President might refer the Housing (Private Rented Dwellings) Bill, 1981 to the Supreme Court in accordance with Article 26 of the Constitution. Of course, such a referral is entirely a matter for the President, after consultation with the Council of State.
Before proceeding to outline some of the main provisions of the major Bill, I would like to advert to two matters which are not dealt with in the Bill but which were the subject of much debate in the Dáil, namely the provision of assistance for needy tenants and the use of a body other than the courts to fix rents and resolve disputes.
In the debate on the Second Reading in the Dáil, the point was made that there was no purpose in giving security of tenure to tenants under this Bill if the tenants concerned would be unable to afford the higher rents to be charged. As I will indicate later, this Bill does go some way towards meeting this difficulty by providing for rent rebates up to 1986. However, I recognise, and the Government recognise, that even with these rebates some tenants will be unable to afford the higher rents they will be asked to pay. It is for this reason that the Government gave a commitment, in both Houses when the temporary Bill was being discussed last July, to provide assistance to tenants suffering hardship. That commitment has been repeated by way of public announcement since and I now wish to reaffirm that the Government remain determined in their conviction to help those tenants for whom payment of higher rents will create hardship. The provision of such assistance, however, is not something that is proper to the present legislation. That is why no mention of it is made in this Bill.
I am not in a position to outline the details of the form of rent subsidiation at this stage. The need for the assistance will not arise until after 25 April next if both Bills before the House are passed. The details of the subsidy will be announced in advance of that date.
The second matter of concern during the passage of the Bill through the Dáil was the use of the courts to fix rents where agreement could not be reached by landlords and tenants. Some Deputies felt that the courts were not the appropriate mechanism to use to fix rents, while others were worried about the capacity of the courts to deal with the volume of cases that might come before them.
It must be remembered that the courts have been the traditional mechanism for the settling of disputes between landlords and tenants. Under the Rent Restrictions Acts, the arbitrating role rested with the Circuit Court or the District Court in cases of dewllings with low valuations, or rents, or where both parties agreed. Similarly, under the Landlord and Tenant (Amendment) Act, 1980, a whole range of matters, for example, fixing rents and the other terms of tenancies, come for settlement to the Circuit Court. These arrangements have operated with a good degree of satisfaction. The Government in their consideration of the Bill concluded that the District Court was the appropriate and best agency to deal with matters under the Act requiring arbitration. The District Court provides a less formal and less costly means than does the Circuit Court and also gives a wider spread of sittings throughout the country. As regards costs, it will be noted that section 17 of the Bill makes a landlord who makes an application to the court liable for the tenant's costs, reasonably and necessarily incurred, unless the court, on consideration of all the circumstances, orders otherwise.
On the question of the capacity of the District Court system, at this stage it is not possible to predict what is the likely volume of cases that will need to be decided by the District Court. The emphasis in the Bill is on the landlord and tenant reaching agreement without recourse to litigation, and these provisions may result in a lower number of cases reaching the court than might be indicated at first sight. However, I accept that a significant increase in the workload of the District Court is possible and the Government will take appropriate measures to ensure that the District Court can deal with the extra workload.
The Bill was criticised in the Dáil for not taking the opportunity to introduce rent tribunals. As Senators will appreciate, the time available to have an entirely new system operational for resolving disputes between landlords and tenants is very short and would not be sufficient to get a new body started from scratch and functioning. This in no way implies a departure from any undertakings in our programme for Government. The system for arbitrating in disputes between landlords and tenants must be operational in a very short time, if the interests of tenants are to be protected. In these circumstances, the Government consider that the arrangements proposed in the Bill are the most appropriate at this time.
I turn now to the main provisions of the Housing (Private Rented Dwellings) Bill, 1981. These will be dealt with in detail during the Committee Stage discussion. The Bill gives existing tenants of controlled dwellings and their spouses the right to remain in possession of their dwellings and their spouses the right to remain in possession of their dwellings for their lifetimes. A member of the tenant's family, bona fide residing with him, who succeeds to the tenancy, will have a right to possession for 20 years from the commencement of the Act. These rights give the tenant and his family security of tenure but also ensure that the landlord can expect to recover possession of the dwelling at some stage in the future. Under the Rent Restrictions Acts, where the landlord had no realistic prospect of ever regaining possession, he had little or no interest in maintaining the property. This feature is removed from the proposed legislation without, at the same time, affecting the rights of the existing tenant or his spouse to remain in possession of the dwelling.
Under the Bill, a mechanism is being provided whereby the District Court will fix the terms of the tenancy, including the level of rent, in default of agreement between the landlord and the tenant. It is hoped that the parties involved will be able to come to voluntary agreements in many instances, but the District Court will arbitrate in others. The terms of a tenancy, whether agreed to or fixed by the court, must be set out in writing. Where agreements are reached between the parties involved, it is expected that the guidelines set out in the Bill for issues coming before the court will have an important bearing on the terms of the agreements. Even where the landlord and the tenant enter into an agreement, there is provision in the Bill for either party, after a period of time, to apply to the court to set the terms of the tenancy.
The Bill provides that where a rent is fixed by the court a rebate shall operate to allow for the gradual increase in the level of rent due over a five-year period. The rebate in the first year will be 60 per cent of the difference between the existing rent and rent fixed by the court. The rebate will reduce by 15 percentage points each year until the tenant is due to pay the full rent fixed by the court in the fifth and subsequent years. Where the financial circumstances of the landlord and tenant so warrant, the landlord may apply to have the amount of rebate reduced. This right is limited to landlords who owned the dwelling concerned before 31 December 1960, the date of the coming into force of the Rent Restrictions Act, 1960.
In fixing a rent under this Bill, the court will take into account improvements which add to the letting value of the dwelling, made by the tenant since 31 December 1960. The formula for fixing the rent is similar to that in the Landlord and Tenant (Amendment) Act, 1980, and is what the court considers a willing lessee would give and a willing lessor would take for the dwelling, on the basis of vacant possession and having regard to the other terms of the tenancy and the letting values of dwellings of a similar nature and in a comparable area. Rent reviews are provided for at five yearly intervals: the absence in the former legislation of any basis for reviewing rents was one of the aspects on which adverse comment was made by the Supreme Court.
In accordance with the normal provisions of rent restrictions and landlord and tenant codes there are circumstances in which a landlord must reasonably be allowed to recover possession. Section 12 entitles the landlord to regain possession for non-payment of rent, a breach of tenancy obligation, where the dwelling is required as a residence for the landlord or other person living with him, or an employee, for the carrying out of a scheme of property development for which there is planning approval and in the interests of good estate management. In certain circumstances where the grounds for possession favour the landlord, as distinct from arising from faults or failures of the tenant, the tenant is entitled to compensation for moving and to pay for alternative accommodation. In addition, on quitting, the tenant may obtain compensation for improvements which he, or his predecessor in title, carried out on the dwelling since 31 December 1960. Repossession of a dwelling can be obtained only where the court considers it reasonable and the other circumstances mentioned above are met.
The Bill gives the Minister the power to make regulations for the registration and standards of all rented dwellings. It is intended that regulations for the registration of all controlled dwellings will be in operation from the commencement of this legislation. Registration will be central to the operation of the procedures envisaged under the Bill since a new rent becomes payable only after registration. The regulations prescribing standards for rented dwellings are intended to replace by-laws under section 70 of the Housing Act, 1966, which are at present operated by some housing authorities.
It is not to be expected that a Bill such as this will satisfy everybody. It is the nature of this area that the main parties involved, landlords and tenants, have opposing interests and any legislative action must seek to balance these opposing interests. Nobody should expect to get everything he or she demands. Given the decision of the Supreme Court, tenants cannot expect to continue to benefit from the protection they formerly enjoyed. One the other hand landlords have to expect the Government to act in accordance with their constitutional obligations to safeguard with special care the interests of the weaker sections of the community, among which are many controlled tenants. At the same time, this Bill represents a genuine attempt to achieve the middle ground, protecting the right of both landlords and tenants without unduly favouring either group.
The legislation attempts to deal with an urgent social problem and to prevent a major upheaval which would leave thousands of persons homeless. I consider that it succeeds in this within the confines set by the Supreme Court decision. The legislation does not deal, nor was it intended that it should, with the longer term problems of the non-controlled private rented sector. Policies in this area can duly be achieved when this urgent legislation is operative.
To deal with the urgent problems I have mentioned, I commend these Bills to the Seanad.
First of all, let me take this opportunity to welcome the Minister to this House and to wish him every success in his new portfolio, plus safe driving in future. The Housing Act, 1969 (Continuance) Order, 1981, is only a holding operation until 25 April and that does not indeed, pose any problems from this side of the House. I welcome the Rent Restrictions (Temporary Provisions) (Continuance) Bill, 1981. It is a Bill long overdue and, indeed, tenants who had to go into flats and housing over the last number of years felt that some better accommodation should be available to them.
First of all, much injustice was done to tenants by landlords in the past, without any redress whatever. I can cite many young boys and girls who came to this city and had to get housing under desperate conditions and at rents that were uncontrollable. These young people had no redress to anybody and were too young to know where to go to have their rights thrashed out except through the courts.
Many young people who came to this and other Irish cities had to accept flat accommodation of a type which meant living in very unsatisfactory conditions. No doubt this Bill will correct many of the deficiencies in the system. I know of dwellings all over the country that are let under a system that obtained even in the twenties and thirties where the rent being paid to the landlord today for premises, perhaps a prospering licensed premises, by that tenant is a mere pittance. That rent cannot be changed, the tenant cannot be evicted and the landlord cannot get hold of his premises even though it had been let in the first instance as a private dwelling and has now developed into a flourishing business, maybe at a rent of £2 or £3 per week.
We have that anomaly and, indeed, many others that I could cite throughout the country. It is time that this Bill reached both Houses of the Oireachtas to put this whole renting system in proper perspective and to give some assurance and guarantee to both landlord and tenant that, on the one hand, the landlord, would be safeguarded and on the other hand, that he would provide a proper house or property with all the modern conveniences available today. That is the least that any landlord would be expected to provide for his tenant in this modern day.
This Bill should mean that the type of property offered for letting would be of a very high standard and would be inspected by the planning officer, the fire chief and the sanitary officer within the local authority of the relevant area. It is essential that a high standard of property should be on the market for letting. With regard to price, the best place to settle on an agreed rent may be in the District Court. People in the field of evaluation, perhaps an auctioneer, an evaluation officer, or an estate agent, may be in a better position to evaluate what type of rent would be necessary to levy on a particular property. However, where agreement cannot be reached, in the final analysis perhaps the District Court where proper valuation advice would be available would be the proper place to set the figure.
I welcome the pro rata subsidy over a period of five years to alleviate the great impact on some people who might be in occupation of property and not be in a position to vacate that property in a hurry. This subsidy over a period would give them time at least to find their feet and to see if they could continue financially in that type of accommodation. The tenant, on the other hand, must be safeguarded under this Bill. In the past a tenant had no redress. Especially with regard to flats, an inspection should take place and the tenants should have some safeguard while in residence there.
In the provision of a reasonable type of flat at an agreed rent for people, especially old people, who are in occupancy at present, they will have under the provisions of this Bill a certain amount of security that they did not have heretofore. The Bill will, therefore, safeguard the old and the young. Plenty of dwellings would not stand up to any inspection at present, but because of the shortage of housing this situation obtains.
There is an obligation on the Government to provide additional finance to accelerate a solution to the housing problem for a population which is continually increasing. Housing is the first essential and is the first base of any family unit. It is the duty of the Government of the day to provide the funds necessary to ensure housing for that ever-increasing population. I am glad to see that this Bill makes some effort to control the rent system. I will have further comments to make on other Stages but at present I am glad to welcome the Bill from this side of the House and give it my full support.
I rise to speak on behalf of the Labour Party in relation to this legislation. I take this opportunity to have my congratulations of the Minister of State put on record. He is, to my personal knowledge, a very welcome officer to that position. I am very happy about the Minister of State but I am not so happy about this legislation.
Generally the situation in terms of people who cannot afford to house themselves has worsened, in objective terms, more over the last three to four years than it has for a long time. A combination of factors has affected that situation. The age of our housing stock has caused problems for a number of people, as has the change in the housing population. This legislation was provoked by an action in the Supreme Court by an individual who sought to obtain his private property rights under the theme of Article 43 of the Constitution. It was done consciously and in the context whereby the contravention of such an Act could be socially calamitous. I believe that the Government have attempted in this legislation to reconcile the irreconcilable. In attempting to produce a legal document that will meet the test of the Supreme Court and meet the test of Article 43 they will, if it is successful in meeting those tests, produce social chaos.
The Minister recognised the validity of the argument that that was a possible outcome and talked in terms of other provisions being made by the Government in relation to the position of needy tenants. Regrettably, there is no more appropriate place and time than here, now. Unfortunately, commitments are one thing, law is another. In the previous item of business in this House the Minister was faced with the unenviable task of having to explain why previous commitments had not in fact been honoured. I fully respect the sincerity with which the commitment has been given by the Government which I support. Regrettably, it is not worth anything in relation to what is printed in the legislation. Commitment is one thing, law is another. We are here as lawmakers in this House, talking about legal rights. Therefore, unless this law deals with all of the human dimensions of the problem, commitments emanating from the Department of Social Welfare, the details of which will be given at some later stage, are not, as far as I am concerned, acceptable.
What, in fact, are we talking about? Estimates are very difficult to make precisely in relation to the extent of the number of people who will be affected by this legislation. There is a consensus both in the replies to various parliamentary questions from myself and in the other House and from organisations such as Threshold, that aproximately 30,000 people will be affected by this legislation. Within that group of 30,000, at least half, and probably as high as two-thirds, are people who would be categorised as (1) elderly (2) either single or widowed (3) living on fixed income with fixed means, whether it be savings with a small annual interest income from it or, alternatively, pensions of one kind or another. Under any categorisation those people are extremely vulnerable. Despite the best intentions of the people who drafted this legislation, I do not believe that the position of these people will be protected by this Bill if enacted in its present form.
At the outset I want to recognise fully and clearly the extremely difficult timetable within which this legislation has been conceived and within which it has to operate. The House is not divided at all on the question of extending the Rent Restrictions (Temporary Provisions) Bill. But to confine ourselves to 25 April is to confine ourselves to an unnecessarily short timetable at this stage, although I recognise that there are great pressures on the legislators and on the Government to keep that timetable as short as possible.
The effect of section 9 in particular of this Bill will be to ensure that people currently paying the controlled or protected rent on a weekly or monthly basis will, within the space of five years, have to move to full market value rent. In some cases there are people who can perfectly afford to accommodate such a change in the rent that they have to pay. Indeed, the Supreme Court case that was undertaken by the individual very cleverly exploited what I believe is a minority situation that occurs around the country. By selecting on the one hand, examples of landlords who were experiencing real and genuine hardship and, on the other hand, tenants who had a substantial income which enabled them to pay rent far in excess of what they were legally required to pay a biassed picture was presented.
In this instance, we have to look at the total situation. The total situation is, I would suggest, not in accord with the one that was presented in the court action to which I refer. I accept the assessment made by Threshold and by others that the majority of tenants covered by this legislation are economically and socially vulnerable.
It is my political responsibility, as a member of the Labour Party in this House, to speak on behalf of these tenants and to defend their interests. In so doing I may very well be accused of not adequately defending the interests of other people in our society. Unlike other Members in this House, and perhaps in the body politic, I do not accept the rather benign view that we are a homogeneous community with common interests and common pursuits. We are not. I do not feel that I represent all the community. Nor do I feel that all the members of the community equally on a proportionate basis voted for me. They did not. I believe that I represent a section of the community some of whom are extremely vulnerable. The Labour Party particularly attempts to represent that vulnerable section of the community.
I want to signal to the House that I consider that a substantial number of people who live in my constituency of Dublin South-East are going to be made extremely vulnerable as a consequence of this legislation being enacted in its present form. I would put the figure at approximately 2,000 people in the postal district areas of Dublin 2, 4, and 6 who would find themselves, within a space of 12 months, unable to meet the market value rent which the District Court would impose upon them when the provisions of this Act are availed of by their landlord or landlords. I shall set out to the House the alternatives that such persons will then have if they are to secure a roof over their heads, if they represent the typical example, because it relates to specific representations that I had during both the last general election and immediately prior to that when the Supreme Court case was being heard. The characteristic profile of the person that I am describing is a single or widowed woman, usually over the age of 60, frequently in her seventies, with a pension or a fixed income of a very small amount — in that context, £25 a week would be quite a substantial income — living in a rent-controlled flat or room or portion of a house and having a very limited or frugal style of life.
One of the biggest problems that such persons have is their total vulnerability to the unreliable public services on which they exclusively depend, such as, public transport, ESB, and so on. They have great difficulty in providing adequate heat for themselves in winter. It is no exaggeration to say that the prospect of this legislation becoming law and the prospect of the protection of their rent being removed has caused emotional and social terror among the categories of people I have described. I have had the letters and telephone calls from them. There is no doubt in my mind that these people live in real fear of what might become of them if this legislation were to be enacted in its present form and if the protection which they have previously enjoyed were to be removed.
When landlords take the opportunity to avail of the provisions of this legislation and get the market rent established by the District Court, even allowing for the discount that will be taken off for improvements that the tenant may have made since December 1960, and even allowing for the five-year phased introduction of that market rent, there will be a substantial number of people who will not be able to meet the increase in the rent that the court has granted. The landlord will say that he is entitled to a just return on his privately owned property and if the tenant cannot pay the rent he should go to the Department of Social Welfare to see if they will make up the balance. That will be a substantial amount of money in some cases and I see nothing in the present economic climate that would provide for that balance to be paid by the Department of Social Welfare. We could be talking about a difference of £20 a month to £200 a month between the gross rent as set by the courts and the current controlled rent that exists on the dwelling, and £20 a month would, in some cases, be high. If the Department of Social Welfare is not in a position to provide the balance of over £100 in the first year, increasing by 15 per cent in each of the succeeding four years, that tenant cannot stay in that accommodation.
The only other choice is to go to Dublin Corporation, as the legal housing authority for the area and say that she is now being made homeless through no fault of her own. First let me explain the operation of Dublin Corporation. That dilemma alone is not sufficient to get overall priority on the housing list. The corporation, in order to ensure that the case is bona fide will demand that a court order be produced by the applicant for housing clearly indicating that she is being made homeless through no fault of her own. The tenant would have to undergo a second court case. The first court case would be the one in which the rent is established. The second would be where one would go back to the District Court and plead inability to pay and the justice would reluctantly have to grant an order for possession to the landlord. The tenant would go to Jervis Street with that court order and on that day Dublin Corporation's housing official would say "We have a number of keys at the moment; we have some keys for Gardiner Street; we have some keys for Ballymun; we have some keys for Fatima Mansions; we have some keys for Dolphin's Barn, and we can make you an offer of one of those." That would be on a good day when there would be vacancies. The person in question may say "I have lived in Baggot Street for the last 35 years; I have friends whom I meet after Mass in Haddington Road at 10 o'clock every day and I would like to stay in the area." The Corporation official would reply with great sympathy that that is a high demand area and all they can offer would be what is euphemistically described as open area housing or areas of low demand where, if the truth were known, people who are homeless do not want to live because of the declining social conditions. This accommodation would be for people with young families of a working-class background who would have some knowledge and understanding of the prevailing culture in the areas. If the applicant declines an offer of accommodation in one of those areas the offer is regarded as having been refused and the applicant is no longer regarded by the local housing authority as being homeless through no fault of her own. That person can then land on the doorstep of relatives, children or friends or on the doorstep of a charitable organisation such as the Simon Community or others. I am not exaggerating when I spell out that scenario. I will add a rider which demonstrates that the situation is even worse. The obtaining of court orders for non-payment of rent was abused by a number of people over the last couple of years to effectively jump the housing queue in Dublin Corporation's functional area and the housing committee of Dublin Corporation recently revised the system so that a person would have to be on the housing waiting list for at least two years or, alternatively, have a number of children before even an offer of open area accommodation would be made. Senator Alexis FitzGerald is in the House and may perhaps correct me if I have inaccurately reported that. But I am given to understand that that is the situation because the abuse of court orders did, undoubtedly, exist.
That is what will happen to 2,000 people in my constituency, and I would put the number, conservatively, at 2,000. With the best will in the world, the multiple commitments that have been given by the Minister of State, which is a repeat of the commitment which he made very clearly in the other House, and the commitments made by my much regarded colleague, the Minister for Health and Social Welfare. Deputy Desmond, are totally intangible compared with what I know to be the reality confronting somebody who would be affected by the provisions of this Bill if it is enacted.
As I said at the outset, I envisage social chaos in certain areas if the Bill is passed in its present form. I do not wish to be alarmist or to exaggerate the situation. But I am aware of the genuine fear that exists in the minds of many of the people whom I have attempted to describe. To be honest, from my knowledge of the housing situation in Dublin over the last ten to 12 years, I share that fear and alarm.
I ask the House, why are we doing this? On whose behalf are we envisaging a situation where this could be the law of the land? On behalf of which constituency of Irish citizens are we enacting into law provisions that would have the effect which I believe they will have?
Who are this category of people who need to get this kind of protection from the laws of the land and from ourselves? They are what are described, in general terms, as landlords. Some of them are people who were left property by their husbands or relatives as their sole means of income and support. Some of them are people who are not dissimilar to the tenants whom I described earlier, elderly women, perhaps widowed, with a fixed and declining income in real terms and perhaps, in some cases, living in worse accommodation than the property they own and for which the tenants pay small rent. I accept that. But there are others who knowingly bought rent-controlled property at times when it could hardly be given away, before the abolition of domestic rates because, at that time, the outgoings from that property were higher than the income and were a net liability. Depending on its location, such a property could be bought for as little as six or seven years' purchase. Such a property could be bought with the legally protected tenants for about £2,000 to £3,000 when its full market value with vacant possession would be ten times that.
These landlords bought this kind of property on the open market. They were wise men, advised by bankers, helped by the legal profession and, indeed, assisted by my own honourable profession. They knowingly bought this property and we are now going to enact massive legislation that will give them a bonanza. We will not provide a balance to the scales. We are going to phase that bonzana over five years, not let it be delivered in one fell swoop. I have no brief for that category of landlord. I say it openly and sincerely. If anybody in this House feels he has a brief for that kind of landlord, let him openly and honestly stand up here and declare that he supports that category of persons. Let him say that he stands here as a Member of Seanad Éireann and represents the interests of that category of persons and let him openly and honestly argue his case, and then let him take his chances before the people of this country in the next election. That is the stark choice, and it is complicated by the real administrative/political dilemma that is in front of this House and in front of the Minister and his officials who are responsible because we are being asked to square the circle; we are being asked, on the one hand, to say to the public at large and specifically to these tenants that we do care about them and we will fight to protect their interests but we must have regard to the Constitution and we must have regard to the provisions of Article 40.3, and we must take into account what the Supreme Court has recently adjudged to be the interpretation of Article 43 When that is boiled down and is presented to Mrs. Murphy in Baggot Street who goes to 10 o'clock Mass every morning in Haddington Road, what it effectively means for her is that when this House has got to decide between ordinary basic human rights and property rights, we are constrained and confined and directed every time into coming down on the side of private rights.
I reject that with all the passion I can command and I reject it on behalf of the strongest defenders of the 1937 Constitution because, whatever about the political conservatism of Éamon de Valera and some of the people who phrased the Articles of that Constitution, at no time in the thirties did the Republican movement ever envisage a situation where the provisions of a Republican Constitution would give more power for the exploitation of Irish citizens than any previous legislation that Mother England imposed on this land.
That is the reality. We are creating a new generation of native born gombeen landlords, protected in a way that Mother England never had the nerve to do in exploiting our own. That is totally and utterly unacceptable. So why try to pretend to ourselves and, even more important, to the public at large and specifically to the Mrs. Murphys, that somehow or other we can attempt to do the impossible and square the circle.
There has been a view expressed that even this Bill, which will operate in the way I described, will itself be found to be repugnant to the Constitution. There has been a view stated that even the miserable attempt to delay giving the full market value for a period of five years as set out in section 9 will itself be taken to the courts, argued with great skill for expensive fees by all of the professional classes — my own included; I make no distinction. At the end of the day the Supreme Court will take the holy document of our Constitution and say that notwithstanding that clause which talks about the exigencies of the common good and all the lovely, flowery Articles that talk about the rights of people, notwithstanding that remarkable Preamble that proclaims us to be a Christian nation, when the chips are down, we have no choice because "private property rights rule, OK?"
This House started its lifetime debating what the Taoiseach requested would be a crusade on the Constitution. A very esteemed Member of this House, Senator Murphy corrected, I think properly, the Taoiseach's description of our Constitution as being sectarian. I agreed with Senator Murphy's distinction in describing our State more accurately as a confessional State. If one stretches the semantic meaning of the word "sectarian" and applies it to the distinction between human rights and property rights, then one could rightly charge that the Constitution is sectarian.
If it is sectarian at all then it is in favour of the people with property and against the people who do not own or who do not possess property and who have no prospect of doing so. We, today, are being asked at Second Stage to write into the tablets of law in this independent Republic another statute that will strengthen the property owners and weaken the tenants. I find the Bill totally and utterly unacceptable.
I find it unacceptable for many reasons. I find it unacceptable for political, ideological and historical reasons. I do not believe that that is what the struggle for Irish independence was about. I know, definitely, it was not for that that my family, both my parents and grandparents on both sides, fought. I reject the Bill on that overall condition first of all. But I reject it for a more precise and more specific reason. I know, clearly and distinctly, from my own political constituency involvement, that the Bill will provoke enormous social chaos, great personal distress, and great hardship for a number of people who are absolutely and totally vulnerable and for whom there is no voice if there is not a voice in this House. I know that despite the commitments that have been put forward clearly and sincerely by the members of the Government, including the Minister here, given the present economic climate, it simply is not possible for us to take out of the provision for the Social Welfare Estimate adequate funds to ensure that those people will not be made homeless. The House knows, and every local authority member knows, that every local authority are not in a position to meet or clear their own housing list let alone add to it the prospect of additional people being provoked on to it as a consequence of this legislation.
If there will ever be a time when the State can democratically invoke some of the powers that run through our Constitution in relation to special circumstances, emergencies and difficult times, surely this is one of them. Surely this is an opportunity for our economic Ministers, independent economic institutions, the Central Bank and so on, to describe in graphic detail how serious is our financial position. Allowing for a certain degree of polemics which political debate inevitably produces, there still is a broad measure of support on all sides of the House about the serious nature of our public finances and the difficulties in which we find ourselves. Against that background there can be no moral judgment or argument in favour of supporting, through public funds, landlords who have no need of the full market price of this privately owned property. If there is such an argument on any side of the House let us hear it and, more importantly, let the public hear it. Let us hear it from where it comes and identify the representatives of such an argument.
The House finds itself in a very difficult position. We all support the Constitution and the idea of constitutional Government. We all recognise that in many ways the Constitution has served the nation well in some parts. We all know that the courts are there to protect and dispense justice to all citizens without distinction. We know that the essence of good Government and efficient administration is to produce laws which work administratively, technically and legally. Yet at the end of the day we take our mandate from the public. We get our supports from people who we think need support. We try to move society on to a higher and better social plane for the majority of our citizens.
I suggest seriously to the House that in trying to reconcile those two objectives we are currently in conflict. The lawyers in the Attorney General's Office are aware of the conflict. They have struggled with a formula of words that would enable us to square the circle. The officials in the Department of the Environment are acutely aware of it. They have been aware of the necessity for this legislation from the time the first court action was successful. That was, if my memory serves me right, two years ago. The people in the parliamentary draftsman's office are very much aware of the contradiction of trying to square the circle. The Minister of State is aware of the difficulties involved. I hope that, by the end of the debate in both Houses, we as politicians will be aware of that difficulty. If we do not pursue a particular course of action, one which I am suggesting, then I do not believe that the public will be aware of the difficulty. If the public are not made aware of it in a deliberate and definite way, the possibility of amending the Constitution to remove its bias in favour of private property or alternatively establishing a climate whereby the Supreme Court will take a balanced view of the entire Constitution — as I would argue they have not so done in the past — then we will not be doing our job as legislators.
There are many sections of this Bill which could be changed or improved. There are many sections which could be more properly fitted within the context of landlord and tenant legislation for all forms of rented residential accommodation. There are many comments which I will make on Committee Stage. In the heel of the hunt, the core of this Bill rests in section 9. We must adopt an amendment to section 9 that will take account of the people I described earlier who can be defined adequately by the parliamentary draftsman, by the Attorney General's Office and indeed by the officials in the Department of the Environment along with the Minister of State and the Minister for the Environment, and who by virtue of their age or income simply cannot meet the rent that the District Court will fix.
I would say to the landlords that where someone is over 60 or alternatively with an extremely low fixed income and without the prospects of augmenting it in any way, the rent for the property which they own and which they rent can only be increased in any given year by the percentage increase in the social welfare allowance in the same year. That would prevail while that tenant was alive. At the end of that time the property would revert in full vacant possession to the owning landlord. I am sure that is outrageously unconstitutional. I make no apology for it. It is the correct social policy. It is one of the kinds of social policy for which I was elected to the House. The view has been expressed by more than one person that even in its present form section 9 is likely to be deemed unconstitutional. Why not test it and try to get some degree of substantial protection for the categories of tenants who are uniquely vulnerable? I am concentrating my argument exclusively and perhaps with a certain degree of repetition on that category of persons in the full knowledge that there are other categories both of landlords and of tenants who have other problems. But the most vulnerable and most urgent case — we are talking about emergency legislation — is the one I have identified. I suggest to the Minister that he consider very seriously the proposal I have put before him. We must confront the emerging conflict between the role of legislators who get a mandate from the ballot box. There are only about 26 countries in the world who have such a form of Government. We are not increasing in number within the family of nations represented at the United Nations. It is a very sacred form of Government.
The mandate from the ballot box was to do things which we are constrained from doing because of the provisions of the Constitution. I am taking the most benign view of that Constitution, the people who signed it and the generation of Irish people who enacted it when they voted for it in 1936-1937 and we would be holding faith with their intentions if we took the progressive social interpretation of the Constitution which I am offering today in contrast to the rather narrow and conservative interpretation that the courts have placed on it from time to time. It is our responsibility to move on this issue. It is not just this legislation which will be in conflict with the provisions of Article 43 and the interpretation placed upon it but the legislation which this Government are committed to in relation to urban building land will undergo exactly the same gauntlet of arguments for and against.
I will close on the following agrument of a generalised nature. This country, within the EEC and even allowing for the proposed enlargement of the Community to take in Spain and Portugal, has a faster rate of population growth than the existing nine members. A greater percentage of our population are under the ages of 15 and 25. We are urbanising at a rate faster than any other State in Europe and there is constant conflict between our social needs, in some areas verging on Third World characteristics, and those of a developed European Community State. We are faced daily with the conflict between the social and political obligations to deal progressively and effectively with the demands of such a state and the constraints imposed by the judicial interpretation of the Constitution. I do not believe that we can meet the basic objective set out in the United Nations Declaration of Human Rights, to provide shelter for everybody at a cost they can by and large afford if we adhere to the narrow interpretation of private property as outlined in the interpretation of the Constitution.
To change the Constitution is far from easy. We are by nature a rather conservative people. But on those of us who feel that we have enough experience as members of local authorities and of the Oireachtas to give leadership to the people there is an obligation to try to take the people with us, conservative and all as they may be, on this question. The majority in any community hall or of any audience in any county, presented with the arguments that I have presented, would accept the need to respond along the lines on which I have argued. It is through ignorance, fear and lack of clear understanding of the implications and restrictions which the interpretation of the Constitution imposes upon us that the people are reluctant to accept changes.
I do not believe that there is a substantial political constituency that would passionately and vehemently defend the interest of the landlord. I do not see it and I certainly do not hear it. If there is, then we as politicians and certainly the Labour Party are prepared to take on that constituency and confront it with the reality of the difficulties of meeting basic social needs such as housing and other forms of shelter, which we will need to do in the next 18 years.
In 1910, around the turn of the century, 20 per cent of the population lived in what we describe as urban areas, towns with the census definition of 1,500 people or more. At present approximately 55 per cent of the population live in urban areas. By the end of the century, which is now only 18 years away, at least 80 per cent of the population — the estimates vary between 70 per cent and 80 per cent — will live in urban areas. We have not the slightest hope of responding to the complex needs for shelter and urban infrastructure of various kinds if we do not deal with the question of urban building land and housing as set out in this legislation. We cannot go on pretending that somehow or other some legal genius, some legal expert with all the wisdom of King Solomon, can come up with a formula of words that will be able to reconcile the circle and the square and will give to the landlord full market value rent and give to the homeless, give to the Mrs. Murphys, a degree of security of tenure or a house at a price their daughter or son-in-law could possibly afford. That is the clear stark choice facing this House and facing society. It is a dilemma in which we find ourselves. This is not imposed upon us by the bankers of Zurich. It is not announced to us by the oil cartel of OPEC. This is an internal constraint that does not fall under any decree of common policy operated from Brussels. It is not subject to any provisions in the Treaty of Rome. This is one of the few areas left in our society where we have total and exclusive control over our own destiny. The issue hinges entirely on getting a new definition of the balance between the clear and necessary rights of private property, which are not in dispute, and the exigencies of the common good.
The argument must be initiated here, must start from here, must be led from here, and must be provoked from here until some time in the future when we have a Supreme Court that recognises the pressures I talk about and will come forward and say the exigencies of the common good enable such legislation to be valid in the eyes of the justices of the court and under the provisions of the Constitution.
There are two tasks which we have embarked upon here on Second Stage.
One is the technical one of dealing with the consequences of a Supreme Court ruling and the other is the political one. I do not profess and I never have attempted to profess to be a legal or a Constitutional expert. I do not have those skills. I recognise that other people have them. But if we leave the task exclusively to the technocrats in the Attorney General's office, in the Department of the Environment or in the parliamentary draftsman's office, they will come forward with a technical solution that will pass the test of Constitutional acceptability and fail totally on the test of political acceptability. That is the conflict, stark and clear.
There will be a test of one kind or another of section 9. That is conceded by everybody in the House. Either the Government may decide in their wisdom to ask the President to review it or the President and the Council of State may decide under their own power to review it. If neither action occurs the people who initiated the legal action from three years ago have now got their tails up sufficiently to do it and within a very short while a writ will be issued and legal proceedings initiated with a view to having the constitutionality of section 9 tested in the courts. I suggest to the House that that is what will happen. Willy-nilly we will find ourselves yet again arguing the case before the Supreme Court.
Do we really want to be in court defending the rather lame and miserable provision of section 9 as set out here? Is that the extent of the protection that we, as an Oireachtas, as a group of Senators representing different political parties, want to give to those tenants who are totally vulnerable? For my part and that of my party that is not the case and I suggest to the Minister and to the Government that having regard to the more general argument which I, with the forbearance of the House, put on record here today about the undoubted conflict between the interpretation of private property rights in the Constitution and their implication for social policy in society, we must clearly articulate in section 9 a much more balanced and protective view for tenants.
That argument is already accepted in principle by the Minister and the Government. In his introductory speech the Minister referred to the fact that the Department of Social Welfare would have to respond to the needs of tenants who will be adversely affected. The Government made a commitment in the introduction of this legislation and he was re-affirming this commitment, but building into this legislation commitments in relation to the Department of Social Welfare was not possible. Therefore, what would stay on the record of the House was a general commitment unspecified in terms of money on the one hand and at the same time specific legislation. Three, four or five years ago I might have accepted the equal value of those two positions. I am somewhat wiser now and I realise that when it comes to the courts the arguments of points of law centre exclusively on what has been enacted by the politicians and, by way of precedent, what has been decided by the court. Statements made by politicians, be they Ministers of State or otherwise, during the passage of legislation are of very secondary and limited value in contrast to the enacted law and the case history that goes with it.
Unless we can build into the legislation clearer protection for the tenant, explicitly phrased and embodied in the legislation, the Supreme Court will not be able to adjudicate clearly and properly in the way that I hope it might. I fully recognise the pressures which are behind this legislation. I fully recognise the constraints that the Minister and the officials have had to operate under. The solution which has emerged, with the best of intentions, will fall between two stools. While I welcome the response of the Government and support the Second Stage, I strongly suggest to the Minister that review be given at Committee Stage of the provisions in the Bill.
There is a rather disturbing tendency which I see emerging from the Custom House on every occasion that they get their hands on legislation. The Minister said:
The Bill gives the Minister the power to make regulations for the registration and standards of all rented dwellings. It is intended that regulations for the registration of all controlled dwellings will be in operation fron the commencement of this legislation. Registration will be central to the operation of the procedures envisaged under the Bill since the new rent becomes payable only after registration. The regulations prescribing standards for rented dwellings are intended to replace by-laws under section 70 of the Housing Act 1966 which are at present operated by some housing authorities.
Will the Minister kindly explain to me who is in the Custom House or what body of opinion is in the Custom House that automatically thinks on every occasion that somehow or other they know better than the officials at local authority level? What kind of demonic colonialist attitude prevails in the Custom House that seems to suggest that local authority officials and local councillors are, by definition, incapable of establishing their own local priorities or drawing up housing regulations and, therefore, cannot be trusted and that somehow or other the know all wise officials and the Ministers who occupy the Custom House, irrespective of party political affiliation, can somehow do the job better? It is an extraordinary arrogance to presume that the officials of Dublin Corporation, which has been in operation longer than the Department of the Environment, are somehow less well equipped to draft housing regulations. It is an extraordinary presumption by any responsible politician to think that in consort with his technical advisers he will draw up regulations which will be more finely tuned to the needs of either Phibsboro', Ranelagh, Finglas or Sandymount than would the local officials and the local councillors who represent those areas.
In the last four years the Oireachtas has seen the consistent rolling back of local autonomy and local democracy in all legislation emanating from the Custom House. I find this totally and utterly unacceptable. I do not know what the motivation for it is. God knows, when the Custom House have to administer matters over which they have taken full control they do not do as well as the local authorities would have done. Let us not dwell on the nightmare of house improvement grants. Every public representative in the House knows the Gilbert and Sullivan pantomine that went on in O'Connell Bridge House in relation to that saga. It would be funny if it were not extremely sad. It got to the stage when even the Minister of State was locked out by the porter in the building because of the chaos that was generated in the early part of 1980. I am saying this in a lighter vein to the fundamental points I have already made.
My mind goes back in memory to the many hours that I, along with Senator Alexis FitzGerald, spent on the Housing Committee of Dublin Corporation drafting regulations for private rented accommodation, looking at the reality of rented accommodation on the ground in areas that we both represented, like Ranelagh and Rathmines and as recently as three weeks ago at a residents' association meeting we listened to the response of responsible citizens who give their free time to work in a residents' association. How somebody in the Custom House, who would not even know where the streets are or what the housing situation is like and who complains of being overloaded with work, would do this better——
I do not want to interrupt the Senator but it is the Minister who is responsible to the House.
I am directing all my comments to the Minister and I do it with some regret. There is no personal animosity involved as the Minister well knows but somewhere buried in the political corpus of the Custom House, somewhere soaked into the plasterwork of the ministerial office and the Minister of State's office, there is a kind of odorous centralisation that invariably begins to affect all incumbents. That is a symptom of bureaucracy and there is absolutely no necessity for it. First of all, it will take weeks and months for the work to be done. Secondly, the regulations prescribing the standards for rented dwellings are intended to replace by-laws under section 70 of the Housing Act. It may come as a surprise to the Minister but those by-laws were actually approved by the Department. They went up to the Department. In local authority legislation the Minister has the right to approve of virtually everything and this applies also to the Minister for Finance. Local government in itself is a euphemism. Effectively we have local administration with democratic councils who are consulted every so often by the county manager. Let us not even talk about local government. Virtually everything that they do has to be approved by the Minister. In this instance, the regulations that are to be replaced were approved as recently as 1975.
Has there been some revolution in thinking at the Custom House in relation to the administration of private rented accommodation that would require their replacement? It is incredible. I have a healthy respect for the political commitment both of the Minister of State and the Minister for the Environment. I also have a very clear idea of the enormous workload that both they and their officials have to undertake to make the present baggage of responsibility function. What are they doing taking on more when they will leave redundant people in local authorities, who can do the job more effectively, more efficiently and with the greatest degree of fine timing to the peculiar requirements of the locality in which the housing regulations are going to be applied?
I ask the Minister either to drop that section or let it expire but much more important, since it is only four weeks since he took office I ask him to get the relevant insecticide or pesticide that would be needed to cleanse and delouse the Custom House from the kind of atmosphere of pervasive centralisation which has characterised all of its legislation in the last five years. The local government financial provisions legislation and the last Housing Act ensure that everything goes to the Custom House to cause unnecessary delay and confusion and to create an entirely new growth industry of public representatives writing to the private offices of the Ministers, and ministerial secretaries devising formulae of words that can be used in standard replies such as thanking the public representative for being interested in the matter and so on. I believe that is something that should be dealt with.
Perhaps I have lightened the tone from my earlier contribution by digressing into that area. I take the whole question of local government decentralisation of powers and responsibilities very seriously. I hope the Minister will respond to the points I have made.
I implore the Minister and the Government, and indeed this House, to recognise what is the nub of the political argument in this entire matter and to grasp the nettle very firmly on behalf of the people who need it most.
I am very pleased that the Minister of State is here and will be dealing with this matter as legislation is processed through the Houses of the Oireachtas. I believe in dealing with the Minister of State concerned, we are dealing with a man of great commitment and industry. If there is a way to find a solution to this problem he will play a great role in doing so.
Many of the concerns expressed by Senator Quinn a few minutes ago are concerns I share. We are dealing with an extremely sensitive problem. We are dealing not just with an urgent social problem to which the Minister of State referred earlier but are catching up with the extremely grave repercussions of the Rent Restrictions Act on property and on the very important area of the housing stock through the many years in which the Rent Restrictions Act has been operating. I say that in the interests both of the landlord and tenant. The housing stock in which so many old people live has been deteriorating over many decades and for many of the people the conditions are appalling. New standards are required in this area. I hope there will be an increased amount of accommodation as a result of the passage of this Bill and the recent result of the Supreme Court.
Debate adjourned.