Wednesday, 4 July 1984
Seanad Eireann Debate
Mr. Durcan: Perhaps I have a complete lack of understanding of what we are talking about, but I do not understand why the extension is for three years. Could the scheme not be left in operation indefinitely?
Minister for Justice (Mr. Noonan,: Limerick East): The Scheme could be left in operation indefinitely but it was originally intended that ground rents would be purchased over a limited period. The idea of limiting it to five years was to provide an incentive for purchase. Open-ended schemes may not be availed of on a certain time scale. Of all the ground rent applications for purchase Senators will notice that half of them came in in the first four years and then the other 50 per cent from 1 January 1983, when it was clear that the scheme would not last for long more.
The original idea of the five-year period proved to be an incentive. Last year there was a flood of applications when it was indicated that the fees would go up on 1 August. I assume that there will be extra applications now. There is  a backlog because the Land Registry is affected by staff embargos and therefore the number of staff dealing with applications is limited. At the moment there is a backlog of 16,000 applications. Consequently, the fees we are charging if somebody applies now or before August when the new fees are in operation mean their applications would not be dealt with for two years, so in the last 12 months of the duration of this scheme people will be encouraged to purchase and we may have another flood of applications in about two years from now.
Mr. E. Ryan: In spite of the Minister's speech I have to disagree with this section, with the increases in costs and expenses. The costs were increased threefold a year ago in the 1983 Act. It seems extraordinary that a year later the fees are being increased again, almost doubled, and that there is an open-ended power given to the Minister. If there was galloping inflation one might be inclined to listen to a case for a galloping increase in costs, but that is not the case. Regularly, the Government have been taking credit for bringing down inflation. Of course inflation is coming down and the Taoiseach promised or held out great hope that in the coming year inflation would be down to 5 per cent.
In these circumstances it seems extraordinary that fees that were increased last year should be increased again and that the Minister should be given the power to increase them further. Therefore, I cannot accept the terms of section 3. Apart from looking at it purely from the point of view of compensating the State for services, there is the wider argument, which I mentioned on Second Stage, that I regard the ground rents campaign as a futile one and that those who are promoting it in a very vigorous way have put forward largely misguided arguments. Nevertheless, the campaign  exists. The vast majority of ground rents were created in comparatively recent times and if they had not been created the probability is that the houses would be £100 dearer to compensate the owners of the land. Ground rents were just another way to get value for the land. The people concerned would have paid the extra £100 or something more. To that extent, ground rents are just a variation of the amounts the owners of ground get for their land.
I will not go into these arguments now. I merely say that the campaign is in existence, whether misguided or not, that it is the source of a considerable amount of agitation, it is a problem that will continue to give trouble in one way or another and consequently every effort should be made to provide a means to deal with the problem as simply and cheaply as possible. The Government in the circumstances, even though they can make a case for charging more to compensate for the service they provide, should lean over backwards to keep the cost of proceeding in this way as low as possible. For those reasons I feel the section should be opposed and that the costs that existed one year ago, increased threefold then, should be quite sufficient for the next three years. The Minister has said he will review this and introduce some reforms. He said that if costs got out of hand he would have an opportunity to review them within the three years. I think that the existing costs are quite sufficient and I will oppose the section.
Mr. B. Ryan: I wish to comment on something the Minister said on the Second Stage. To assume that everyone who owns a house is quite well off is a sweeping assumption. Even the Department of Social Welfare, not known for their generosity, realise that people who own houses are eligible for non-contributory old age pensions because owning a property, no matter what its value, may not mean that an income will be generated.
Therefore, as I said on Second Stage, what for many of us might look a reasonable sum becomes quite an enormous  sum for others. For instance, there are large numbers of old age pensioners who own their own houses. There are people made redundent in middle age who lose the entirety of their incomes. We only hear of the people who get extremely generous redundancy payments, but increasingly large numbers of people do not qualify for anything, yet people who own houses are to be grouped with those who can afford to pay for things like this. Although acknowledging that an old person who lives alone cannot afford to pay a television licence and we pay it for him and at the same time to assume that an old person living alone can either afford to go on paying ground rent or can afford to buy it out seems contradictory. To go further and to increase the fees pushes the point even further. It is easy to say that the taxpayer should not subsidise everybody but if we have to live with the provisions of this Bill we should live with it in a way which shows appreciation of the fact that, whatever about the history of ground rents, generally those who benefit from them are much better off than those who have to pay them.
Mr. Noonan: (Limerick East): The increase in fees is not intended to compensate for inflation. It is aimed at covering administrative costs so that the scheme will not be subsidised by the general taxpayer for the benefit of the people who will avail of it. No new ground rents on dwelling houses have been created since 1978.
Consequently, persons who come within the terms of this scheme could have availed of the scheme any time from 1978 onwards. If they had availed of it in the first five years of the scheme there was a fee of £5 to cover the administrative costs. It is not as if people had not been given an adequate opportunity to avail of the facility at a low fee or as if we are introducing a scheme for a new group of people. It is the same group of people who could have availed of it in the first five years at £5, who could have availed of it last year for £15 and can avail of it now for £26, which is to cover general administrative costs. The Seanad divided: Tá, 28; Níl, 15.
Cregan, Denis (Dino).
Dooge, James C. I.
FitzGerald, Alexis J. G.
Hourigan, Richard V.
Quealy, Michael A.
O'Toole, Martin J.
Tellers: Tá: Senators Belton and Harte; Níl: Senators W. Ryan and M. O'Toole.
Question declared carried.
Question proposed: “That section 4 stand part of the Bill.”
Mr. Ferris: I spoke on Second Stage about the fee for owners of local authority housing being increased to £20 from the nominal fee which applied heretofore. The Minister said that they were also becoming householders. Usually people who acquire local authority houses by way of a vesting scheme or a purchase scheme do so over a long period of time, possibly on a 30-year loan initiated by the Department of the Environment. In an age of widespread unemployment, when people are trying to meet their repayments to local authorities for houses, this fee might be a further penalty on them if they want to redeem their ground rent.
I would respectfully suggest to the Minister that he might confer on the Minister for the Environment under this section the power to include the fee for the transfer of the title in the actual cost of the  house and have it spread over the 30 years. In that way a buyer would become the complete owner of the house and the land over an extended period of time. This would make it easier on them. The Minister might consider this a fair measure, conceding that the purchasers of local authority houses, although in theory and practice they own their own property, are certainly not in the wealthy bracket and purchase their houses over an extended period.
Mr. Noonan: (Limerick East): Under section 4 (2) the power in general being given to the Ministers for Justice to vary the amount of fee charged is in this instance being given to the Minister for the Environment, with the consent of the Minister for Finance. The Minister for the Environment will have the power to vary the fee. The fee is still nominal, being only a £20 charge. I do not see any difficulty. I do not think there is any need for a statutory provision to govern the method of payment. If local authorities, with the agreement of the Minister for the Environment, decide that they will take it by a series of very small instalments or by a series of rather larger instalments, I do not think that needs statutory power. The arrangement for the payment can be worked out. I will bring the Senator's views to the Minister for the Environment.
Question put and agreed to.
Section 5 agreed to.
Title agreed to.
Bill reported without amendment, received for final consideration and passed.
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