I propose to share time with Deputy English.
Private Members’ Business.
Land and Conveyancing Law Reform (Review of Rent in Certain Cases) (Amendment) Bill 2010: Second Stage (Resumed).
That is agreed.
I thank Deputy Ciarán Lynch for proposing the Bill and for giving us an opportunity to debate this important issue. In coming to a decision on the Bill it is necessary to consider four questions. First is the nature of the problem and whether it requires a new law; second is the question of considering the other sides of the argument; third is a recognition that in debating any such legislation we are also debating the law of unintended consequences; and, fourth, we must debate whether the Bill contains any defects.
I will deal first with the nature of the problem, which derives from the volatility of commercial rates. They increased significantly during the boom and are now decreasing significantly, perhaps by as much as 20% or 30%. The problem relates to institutional investors who are refusing, for various reasons, to reduce the rents they are charging, with the result that businesses are being driven to the wall and jobs lost. We are all aware of the need for the State to restore its competitiveness. However, competitiveness is not just about wages but also about utilities, the cost of services and, in particular, the cost of property. Whereas property prices and commercial rents have declined significantly, it is clear that when it comes to institutional investors and financial institutions, many are resisting market pressures to reduce rents. That is unacceptable.
Nevertheless, the second issue to consider is whether there is another side to the argument. Landlords and institutional investors claim they cannot reduce rents because rental yields are linked to pension returns, investment returns and insurance premia. There is probably some validity to that, but it leads to another question in regard to capitalisation and the capital values held by pension funds and institutional investors. In many cases values are being attached to commercial leases that no longer reflect their real value. The reason institutional investors will not reduce rents is that they are maintaining the pretence that their leases are worth more than they are. That is similar to what the banks did before the banking crisis. It is a cause for concern that these pension funds and insurance companies may be two years away from the same type of crisis and that the values listed on the balance sheets for these leases, properties and linked rental yields are not reflective of reality.
I put down several parliamentary questions on this issue to the Minister for Finance in recent days. In addition, I asked the Minister for Justice, Equality and Law reform whether any banking institution, pension fund or the NTMA had, in the past 18 months, made representations to him in regard to the potential impact that a retrospective end to upward-only reviews would have on commercial prices and, if so, whether he would publish those representations or the minutes of those representations. The Minister confirmed today that he received, in May 2009, a representation from the Irish Association of Pension Funds commenting on the impact that a retrospective abolition of upward-only rent reviews would have on property values. This confirms what I am saying.
The third issue to consider is whether there may be any unintended consequences arising from the Bill. I cannot see any such consequences. The fourth consideration is whether the Bill contains any defects. The answer is that it may do so in that it interferes with existing contracts and there is also the constitutional issue in regard to property rights. However, this is not the first Bill that interferes with existing contracts. The Judicial Separation and Family Law Reform did so, as did the divorce legislation and the legislation introducing financial emergency measures in the public interest. Moreover, when it comes to property rights, that is ultimately a matter for the Supreme Court to decide, where the legislation in question is deferred to the court by a decision of the President, perhaps in consultation with the Council of State. There is no reason we cannot pass this Bill today and allow the President to refer it to the Supreme Court where a judgment could be delivered quickly as to its constitutionality.
In summary, this is a substantial problem that requires intervention. The proposal does not remove the protection that exists for landlords; just because we eliminate this clause does not mean they have to reduce rents but simply that they must negotiate them. If it is the case that financial institutions have bogus capital values attached to certain properties and certain leases, we will have to deal with that problem sooner or later and we may as well do it now. I cannot see any unintended consequences of the proposal. It probably has defects but they are not insurmountable. On balance, therefore, it is a good legislative proposal which addresses an issue of genuine concern. It deserves a Second Reading.
I compliment Deputy Ciarán Lynch on introducing this Bill. I see no defects in it and welcome its provision of measures to address this serious situation immediately. I was disappointed at Question Time yesterday when the Minister of State, Deputy Conor Lenihan, told us that we must gather more information and set up a review group before taking action on this issue. How many more review groups and agencies does the Government need to consult in order to discover there is a problem that is getting more serious by the day? There is evidence of shop closures, with the associated job losses, on every street in the country. I am fed up with the Government's recourse to review groups, which amounts to nothing other than inaction. We have seen that in the past two years since we began discussing the jobs crisis in February and March 2008. We have had two years of inaction and nothing different being done by various Departments. I am tired of it.
Retail Excellence Ireland conducted a survey in September 2009 on rental contracts in the retail sector. Members of that organisation told the Joint Committee on Enterprise, Trade and Employment that more than 80% of business indicated a need for immediate reductions in rent. Of those, more than 50% required reductions of 25% or more just to survive. Some 64% predicted they will be out of business within two years if they do not succeed in securing a reduction in rent, with most of those likely to shut up shop in the first year. At the committee meeting we asked departmental officials what plan there is to assist the retail sector in respect of rent reviews and everything else. They looked at us as if we were talking gobbledegook. Even though all forecasts at that time were pointing to a loss of 60,000 jobs in the retail sector, the Department had no plan in place to prevent such losses. Since then, 30,000 of those jobs are already gone. Are we simply to sit back and wait for another 30,000 to be lost? Departmental officials, who are the responsibility of the Tánaiste, could outline no plan or strategy for saving retail jobs. That is what we are seeing across the board in all sections of enterprise. I tackled the Tánaiste on this point yesterday because I am firmly of the view that she is failing to help small businesses.
This simple Bill can be agreed tonight and implemented shortly in an effort to assist retailers. Last night Deputy Ciarán Lynch read out a letter from a constituent of mine in Navan, County Meath, Ms Kathryn Lynch, who ran an excellent business in Sage and Stone. That young woman and her sister, mother and friends have worked hard for years to get the business up and running and had achieved considerable success in selling Irish-made products. They paid high rents and other costs and provided employment, but they had to close the business after Christmas. Even that does not end her misery because the landlord, who may be a large investor and have some property which will go into NAMA, will, more than likely, pursue her for a personal guarantee. She could also lose her house.
Nobody gains in such a situation. Businesses in Navan and all over the country will lose jobs and close. Nobody will gain. The landlords will not get tenants to sign a lease because they cannot afford to pay rent. They can chase them through the courts for personal guarantees, but when they get them they will not be worth much. Nobody is gaining. What is needed is for the Government to take some responsibility and action in order to sort this situation out and put heads together. It is fine to say some landlords are giving rent reductions, but the large investors and institutions are not. Those who have personal guarantees are not giving reductions in rent because they do not have to. It is the Government's duty to fix that situation. This is one way to try to help to make a difference. If we do nothing, we will have massive job losses, which will be on the hands of the Taoiseach, the Tánaiste and Ministers.
The Minister, Deputy Dermot Ahern, said we need to send out a strong message in the Bill in order to fix the problem. There will not be a problem with rents in the future because people will have realised the market does not exist. We have had a problem for the past number of years. Inaction and a failure to do anything about it will cost us thousands of jobs. That is a shame. I have said it before and I will say it again — politics, at a time when it is badly needed in the country, is failing the people, small businesses and the people they employ. We will have major increases in unemployment. The most annoying aspect of the problem is that it could be prevented with some imagination, effort, action and some new strategies.
I wish to share time with Deputies Chris Andrews, Mattie McGrath, Ciarán Cuffe, Michael Kennedy and Timmy Dooley.
Is that agreed? Agreed.
I welcome the opportunity to contribute to this debate, although it is difficult to follow the previous speaker. I have never varied my tradition on these occasions. I compliment Deputy Ciarán Lynch on his work in this regard. I was out and about in Tallaght this morning and I broke off from what I was doing in order to sit in my car to listen to the Deputy being interviewed. He tells a fine story; I mean that genuinely. Sometimes it is difficult for those on the Government benches to listen to some of the comments on these issues, but the Government and the Minister have made strong points on the legal situation. I will allow Deputy Lynch to deal with the politics of that.
I agree that we need to be innovative and accommodating as far as job creation is concerned. All Members know I live in Tallaght which has lost almost 7,000 jobs over the past year. I am standing on the Government side saying that. This is a day when Tallaght has been in the news for all sorts of different reasons. I was reminded today that a secretary said——-
The Square will not cut rents, unlike Blanchardstown.
Let me make my contribution. Some years ago a secretary told me not to panic because another crisis would be along in ten minutes. It has been that sort of day for those of us who represent Tallaght. However, this is an important issue and I appreciate the many e-mails and calls I received from all over the country. I thought I was not known outside of where I live, but I have received e-mails from the Dublin region. I am a proud Dubliner. I have also received e-mails from all over the country and my constituency. This is an issue. Private Members' business is good because those on the Opposition benches can raise issues of concern, some of which are serious, help the debate and provide an opportunity for Government Deputies to make a contribution on the various matters.
Deputy Varadkar referred to the Square. It opened in October 1990 and has been a great place for Tallaght. When it opened, we said Tallaght had the population of a city and the status of a village. Thank God the situation has improved significantly. Tallaght was always a great place but it is now even better and has the kind of facilities one would expect in a major population centre. It is the third largest population centre in the country. I admit when I get off the Luas and go into the Square that I see the challenges faced by small, medium and large businesses. For example, in the past number of days, the 12-screen UCI cinema in the Square closed, a decision which astounded me and resulted in 50 more jobs being lost.
Shops are closing in the Square, something which is happening in other shopping centres and the streets of Dublin. I do not know if all of these issues are about rents and the inflexibility of landlords. It is a good debate and we should tackle this issue. When I had the opportunity to discuss jobs at a meeting yesterday with First Step, I found the days of Japanese and Americans coming in with thousands of jobs are gone. We must find ways to help small businesses in whatever way we can. The Government spoke about the legal status of the Bill. The principle of tackling this problem and helping people to create jobs and survive and prosper is good. I am sure the Minister of State, Deputy John Moloney, will take careful note of what all Government speakers said during the debate and pass it on to the Minister, whom I expect to take account of these matters.
I am delighted to have the opportunity to speak on this issue. It is particularly important because there are more than 280,000 people working in the retail sector across the country. It is estimated that some 30,000 of those workers have lost their jobs in the past year. Tonight we are focused on the issue of rents, but other issues affect retailers, such as rates, wages and other costs which make operating a business in Dublin particularly difficult. Research indicated the 5th highest rent rates in the world are achieved in Grafton Street. For a country which has a population equivalent to that of the greater Manchester area, it is unrealistic and unsustainable, as previous speakers have said.
Retailers in 2009 in Dublin, including members of the Dublin City Centre Business Association, have paid more than €80 million in rates to Dublin City Council over the past year. If the Labour Party is serious about helping retailers, it would ensure its colleagues on Dublin City Council would further reduce rates for retailers in Dublin city. It should reduce rates in line with deflation. The Labour Party could do so and help retailers, but I do not think it will do so. As a party so long in Opposition, it is more used to playing to the gallery than doing anything concrete.
Over the past number of months a large number of retailers have been in touch with me regarding the issue of commercial rents in the city.
They are wasting their time.
You are doing a lot.
They will not bother the next time.
It would appear the biggest problem they face is the refusal of institutional landlords to discuss anything in terms of a reduction in rents or a realistic rental rate. In some cases people are locked into 25-year leases, with nowhere to turn if the landlord does not show any willingness to negotiate. The drastic change in the economy over the past 18 months has meant the existing leases into which people are locked with upward-only rent clauses are no longer realistic. In addition to the problem of the unwillingness of institutional landlords to talk, there is also the issue of the arbitration process which is currently used in rent reviews. It is flawed. When one sees a small newsagent at the top of Grafton Street having its rent increased by 18%, there is clearly a problem with the arbitration process which has to be dealt with as a matter of urgency.
I very much welcome the recent decision of the Minister, Deputy Ahern, to set up a working group. Deputy English said it is a review. It is not review; it is a working group seeking to ensure we have a sophisticated response to a very complicated issue.
I was quoting the Minister, who called it a review.
It is not just a simple black and white issue, as Deputy Varadkar indicated. There are two sides to it and we have to tread carefully to ensure that we do not give a cash injection to lawyers throughout the country.
The Labour Court currently provides a system whereby employers and employees are encouraged to negotiate and bring about dispute resolution. If a similar framework was put in place for property owners who are unwilling to engage, it would certainly be a step in the right direction.
The Government''s employment subsidy scheme is very positive and there is also the enterprise stabilisation fund. However, these will be negated if we do not ensure institutional landlords negotiate and support small and medium enterprises. We have torn up the rule book when it comes to the banks, venture capitalists and big business. We need to tear up the rule book when it comes to the small retailer and small and medium enterprises throughout the country. We have to think outside the box and take action as a matter of urgency.
I am delighted to speak on the Bill. I compliment the Minister on ensuring that, since 28 February, all new rent review clauses will be construed as providing that rents can go up or down without reference to the rent payable immediately prior to the review date, which is a welcome development.
With regard to leases already entered into, it is clear from a legal and constitutional perspective that wholesale interference with existing lease arrangements, which are essentially matters of private contract between individual parties, is not a feasible option. While this is a pity, that is the legal advice we have received. It is also clear that any move in the direction of imposing a rent freeze across the board would be impossible to implement in a constitutional manner.
To state the position briefly, the advice received from the Office of the Attorney General is that real legal and constitutional difficulties would arise if property rights were to be affected retrospectively. Opposition efforts to pretend otherwise are mischievous and have no basis in legal reality. There is nothing of practical value for hard-pressed businesses from these Opposition efforts. I wish I could agree with the Opposition and say there is something of value, but I cannot.
The real issue is that ordinary businesspeople who have properties for rent, of whom there are many in my constituency, have for the past two years or more negotiated their rates with their tenants in an effort to keep them. They have been very fair and, when tenants have shown their accounts, the tenants and landlords have struck a deal which is manageable and which, hopefully, the tenants can live up to in order to maintain the employment in these small businesses.
Small and medium businesses created 500,000 jobs between 1996 and 2006, which is a startling figure given that most of them have fewer than ten employees. These are the businesses on which this country depends to maintain employment and to revitalise, reinvest, re-engage, expand and try to keep going.
I condemn out of hand the old style of landlord from past times, when we had tenants on one side and landlords on the other. We had the tenants' bank and the landlords' bank for big institutions. This is where the problem lies. All of these people are playing a merry game at this time, namely, waiting to get into NAMA and artificially putting up their prices while trying to keep a level to the value of their property, despite some areas having become ghost towns and ghost villages. They are playing a game whereas the tenant is trying to survive and pay his way by paying his rates, tax, insurance, PRSI and all the other charges, while attempting to keep his doors open for an ever longer time to compete with the big businesses. In some cases, landlords got badly burned with these bankers but that was not the fault of tenants. Some landlords are playing an artificial game which must be brought to an end. The sooner NAMA gets up and running, the better for all of us.
I could refer to many other issues, including that of bank credit. Ordinary business people and SMEs cannot get the credit which is the lifeblood of their business and they cannot get paid on time while, at the same time, they have to deal with joint labour committee, JLC, orders which are out of date at this time. All of these matters were negotiated in the boom times. I am all for a fair day's pay for a fair day's work but we have to revaluate where we are going. We have to maintain jobs for our people and maintain our small businesses, which are the backbone of the country. We must also try to combat out-of-town developments through the planning guidelines.
I welcome the opportunity to speak on the Bill. This issue is critical for us, particularly in regard to the difficulties in the retail sector and the many thousands of small and medium enterprises which are struggling at this time. Many individuals and families are struggling and experiencing heavy pressure but there is no monopoly on struggle at this time, when there is worry about paying the bills, whether domestic bills or rent and service charges, which, in many cases, are levelled by faceless pension companies and offshore companies simply popping these rate and rent demands through to struggling retailers.
I have personal experience of this, having been a victim of upward-only rent reviews before I got into politics. I can tell the House it is a shock when one's rent and service charges are doubled. While there may not be an upward-only rent review clause written into the contract, the tenant negotiates with the landlord, some of whom, quite honestly, have no conscience when they are negotiating with struggling retailers. I experienced this for many years as a bookseller, so I believe this debate is very timely.
The gravity of these issues should ensure that all of us, not just politicians, take issues such as rent reviews and rent prices seriously. Regrettably, I am unable to decide whether the Labour Party is being serious with the Bill it has brought before the House. It brought a similar Bill before the House last year and that legislation was panned by Government and, indeed, by Fine Gael because of its legal infeasibility.
The Deputy should read it.
Yet, here it is, bringing a similar Bill to the House again.
The Labour Party — well done to it — has garnered great publicity for this Bill, but it has given false hope to some in the commercial and retail sector about what the Bill could do.
Hope is all they have.
I find it hard to believe the Labour Party actually believed the retrospective imposition of downward rent reviews on existing commercial leases was possible. As others have stated, including Deputy Chris Andrews, we simply cannot tear up the rule book for those who enter into contractual agreements. The wording of Labour Party's Bill demonstrates that extending section 132 of the 2009 Act to current leases is not possible. The Minister has outlined for the House the practical difficulties arising from this Bill, such as the issue of a mechanism to ensure compliance by landlords with the Government's version of retrospective rent review.
I welcome what the Government has announced in the area of helping retailers and those paying commercial rent with leases. The ban on upward-only rent reviews last month was welcome, and something the Green Party and I highlighted the need for to the Minister on several occasions. I trust that the new working group established by the Minister will provide creative and sensible solutions before issues get into court and before people have to close their doors.
If the Leas-Cheann Comhairle took a walk around many of the shopping centres in Dublin or any of the major urban centres, he will see boarded-up shops with lovely pictures of strolling couples with babies in buggies, but nothing behind the mural except a closed-up shop and a story of heartache. If we can get this working group together and ensure there is strong negotiation between landlords, pension companies and retailers, we could get some of the 42,500 small and medium enterprises up and running again, particularly in the retail sector.
The Labour Party, which long talked about implementing the Kenny report but never did anything about it, should pay heed in this regard. The new windfall tax on the sale of land rezoned after purchase will prevent speculation on land. A site value tax, when implemented by this Government, will also help as it would incentivise development and investment on a site rather than speculation on new lands. The commitment by Government to amend the Data Protection Act to allow the publication of sale of property data and a new Department of the Environment, Heritage and Local Government database of residential and commercial property sales will also help to ensure decent rental prices for all in the future. Like anything else in life, dialogue is important whether in personal, political or business relationships. With dialogue we can ensure decent rents.
I welcome the opportunity to speak on this Bill. We all realise the value of small businesses and retailers to the economy as they account for approximately 250,000 jobs. Like other speakers I have concerns about the big institutional banks and insurance companies who drive rents upwards. I acknowledge they are in business to make a profit but in the current context, they have a social responsibility. They should recognise that our economy is going through troubled times and endeavour to facilitate their long-standing clients, their tenants. Politicians should encourage them in every way to be realistic about rents. It is not much good for them to close down a business and have vacant premises. It has been commented that NAMA is responsible for some of these upward rent reviews and this is not the case. NAMA has neither an impact on nor regulatory authority for rents.
Legislation on upward rent reviews has been enacted but this cannot be changed retrospectively in the case of existing leases, which is a significant difficulty. In my view, landlords have a social duty to try to accommodate their tenants in the short term until the economy moves out of the current downturn. Rents should be based on the turnover of a retail unit. This is a more equitable way. If a business is doing well, the landlord will gain if a percentage of turnover is agreed as rent. I will make this suggestion to the new review group. The Minister for Justice, Equality and Law Reform has taken the right approach by setting up this review group and all interested parties, including Departments, will have an input. The deadline for the report is 30 June 2010 and this is welcome. I am sure all Members will look forward to the report.
I take issue with Deputy Ciarán Lynch, although I congratulate him on his work on the Bill. I heard him speak on RTE radio this morning. He was asked a simple question as to who are the legal advisers to the Labour Party but he refused to answer. At the same time he is decrying the advice of the Attorney General to the Minister——
That is not the issue. I am only asking that it be provided to the House.
What is sauce for the goose is sauce for the gander. If the Government has legal advice and is prepared to say who provides it and what it says, I hope Deputy Lynch will inform the House who is providing the Labour Party with legal advice——
That is a silly argument.
To suggest to business people going through difficult times that there is an instant solution is wrong.
I wish to refer to the issue of consumer spending. A problem for retailers is that people are not spending as much money as they used to, for good reasons as they have less to spend——
They are being forced to go elsewhere to spend.
Statistics tell us that a total of €88 billion is on deposit in the banks and this does not include what might be lying under the mattress. If the prophets of gloom in this House were a little bit more responsible and were not spreading this daily doom and gloom, people might spend a little. If only 5% of the €88 billion was spent — €5 billion — we would achieve an income on VAT alone of €1 billion. I ask the Labour Party to talk positively about a change and not to go through the motions of putting people into further doom and gloom.
I accept that this is a Labour Party initiative but it is recognised as an issue of fundamental importance by all sides. There is a difference of opinion about how to proceed. On the basis of legal advice provided, the Government has no choice but to vote against the proposal. However, there should be no misunderstanding of the concern that resides on this side of the House. We all know the stress and strain suffered by the retail sector, much of it as a result of the recession and the expansion of the retail sector that took place in the boom years. The sector is now undergoing a contraction. It is clear it will not be possible in a normalised environment to retain the same level of retail activity that took place at the height of the boom. There will be a contraction because the retail sector grew to meet the splurge of the boom.
There is a fundamental problem with the rent structure. I support the objective as set out in the Bill of trying to find a method to get rid of upward-only rent reviews. The Government initiative with regard to new leases is welcome but there is a fundamental problem in dealing with property rights retrospectively. The Minister has alluded to this difficulty.
Many landlords, particularly those outside the more recently developed entities, have taken a practical and pragmatic approach. They are working with their tenants, notwithstanding the conditions of the lease, and have reduced rents and this is to be welcomed. To tar all landlords with the same brush would be wrong and I recognise that many landlords have acted responsibly.
A number of landlords who are predominantly within the institutional sector are landlords of the big retail developments and they are holding a strict line for their own reasons. Some developers are in the same boat and they have no choice because their financial institution is demanding that they continue to retain rents at a very high level to support the payback of loans. Some banks are playing the game of inflating property values in advance of the transfer of loans to NAMA. I urge NAMA to take a critical approach to the valuation — as required by the legislation setting up NAMA — to ensure the level of return on the leases is apparent and to establish the kind of return on the leases that is sustainable in the long term. I have no doubt NAMA will do so and that it will not be in the interests of the banks to retain the level of rent roll to somehow prop up a false or misleading value for the loan.
It is regrettable that the working group is not reporting sooner than June but I understand that time is required to produce the report. Despite what Deputy English said, I believe this will be a very effective mechanism for dealing with what has been a cloak and dagger operation of understanding the forgoing of rents in particular areas. Pressure must be applied to the financial institutions and this can be done by means of the public interest directors who have been appointed.
I wish to share time with Deputies Brian O'Shea, Jan O'Sullivan, Seán Sherlock and Joe Costello.
Businesses in Ireland have been placed under enormous stress since 2008. Despite plenty of warnings, the Government has taken little or no action to prevent major employers such as Dell, Waterford Crystal or SR Technics from leaving Ireland, the result being thousands of redundancies. As a result of these job losses and closures, thousands of workers have no option but to join the ever expanding queues at the social welfare offices up and down the country. The Government continued with this approach with jobs in Cadbury's under threat and when 300 jobs were lost in the hangar 6 fiasco.
The Government pins its hopes on bailing out the banks. So far, we have put €11 billion into the banks, not including NAMA. It is estimated that we may have to put an additional €10 billion to €15 billion into our banks once their loans have been transferred to NAMA. What do the citizens of Ireland get for all of this? Increased lending charges, bankers telling us to tighten our belts and no lending to businesses.
Despite the blather from the Government that NAMA was necessary to get credit flowing, the opposite is happening. A reply to a parliamentary question from the Tánaiste stated: "There is no doubt that banks are making significant credit available to businesses." The facts speak for themselves: the ISME bank watch survey from 1 March showed that 55% of businesses were refused funding. This compares to 42% in October 2009 and 20% in May 2008. According to Central Bank statistics, private sector credit declined by 6% in the year to December 2009. Whatever the Government's stated ambition to get credit flowing, it has not worked.
This Labour Party Bill is about protecting jobs and businesses by allowing for a downward review of commercial rents on existing leases. Consumer spending has collapsed from the highs of 2006 to 2007 and will not recover for a long time. Since footfall and spending is down, businesses must cut their costs. We have a crazy situation here in Ireland where existing rents can only be reviewed upwards.
During the boom, Dublin was one of the most expensive places to rent in the world. By contrast today, Irish towns and cities are blighted by abandoned shops. One of the most disgraceful practices that is occurring is that a number of landlords are attempting to substantially increase their rents despite the economic reality whereby almost every business has a substantially reduced turnover on the Celtic tiger levels. It seems that some of these landlords are increasing rents in order to make the valuation stronger when they are transferred to NAMA. Dundrum Town Centre is planning to increase rents by 60% in 2010 and the Pavilion in Swords has attempted to increase rents by 100%.
Small enterprise and local shops are shedding jobs and going quietly into the sunset. The small trader feels the pinch every bit as much as the large enterprise. A job lost, a shop closed or a restaurant on the brink are all equally painful for the person at risk. The Government has stated that the Department of Justice, Equality and Law Reform has established "a new group to look at the issue of commercial rent reviews". Does it not realise that the situation is at crisis level? Has it fallen down the rabbit hole with Alice, living in a land where, if it can protect the banks and the developers, the rest of the economy will magically recover? We need action right now, not another report which may not be acted upon for over a year. Like every other Deputy and Senator, my e-mail inbox has been inundated by messages from businesses urging the implementation of this legislation and talking about the number of jobs that will be saved in companies across the country if rents can be renegotiated.
As spokesperson on tourism, the failure of many restaurants, gift shops and other retail outlets is highlighted to me on a daily basis. The tourism industry is hugely important to this country and if the infrastructure is not sustained, apart from the impact of the immediate job losses, it will take years to rebuild the industry. There are many complex issues underpinning the tourism industry but exorbitant rents are a large part of its ailment. For the protection of one of Ireland's most important industries a downward rent review is essential to their survival.
There are 436,000 people on the live register. There are a number of businesses which are on the edge and the continuation of unsustainably high rents will force them to cease trading, destroying the Irish economy as well as pushing more people into the ever expanding queues at the local social welfare offices. We need action now to give business every chance to survive and help bring Ireland out of the economic morass in which it resides. Everyone gains from this Bill with the exception of the landlords, many of whom are foreign pension and investment funds with no ties to Ireland. The choice for the Government and backbench Deputies is to choose with whom they stand. Do they stand with the businesses that provide employment and can help power Ireland's economic recovery or do they stand with the foreign pension funds, landlords, bankers and developers who have already done so much to destroy this country?
At the outset, I compliment my colleague, Deputy Ciarán Lynch, on introducing the Land and Conveyancing Law Reform (Review of Rent in Certain Cases) Amendment Bill 2010 to the House. This critically needed legislation, which would allow downward reviews for commercial rents is most timely.
I would like to quote from an e-mail I received today from Mr. Michael Garland, the chief executive officer of Waterford Chamber of Commerce:
The general situation here in Waterford is that businesses have cut so much out of their cost base that often the only costs left to tackle are rates, rent, water charges, employers' PRSI etc. These cost centres are out of their control. There needs to be direction on all of these issues for businesses, and not just for rents. Simple small changes to all these costs will have a huge cumulative effect, a positive one, for any business. For example, a reduction in the PRSI rate, as well as a reduction in rent, could be the very thing that stops business making a person unemployed.
It really is as simple as that. I understand this and I do not have to be an economist. Of course, upward-only rent reviews should be addressed, and businesses, where they find themselves in this situation, must tackle their landlords as soon as possible and put a coherent business argument or plan together to get a reduction or moratorium on any rental agreement.
Strong direction from Government would help act as leverage for individual cases. Clear Government advice on the issue must be communicated. We need strong leadership on the issues facing business at the moment. Immediate action now will secure many jobs and immediate action will mean we are better placed to take advantage of any future upturn in the economy. Businesses have collectively made these brave, strong decisions and we must see others follow suit.
Commercial rates in Waterford are a massive issue for business. Businesses are hanging on by their fingertips in the hope that a strong summer tourist season will arrive. Without that, the consequences for business and employment will be catastrophic. We are in the sharpest economic downturn in the history of the State with banking decisions no longer being made in cities like Waterford, but in Dublin, and credit for small and medium size businesses being scarce at best. This is in spite of the vast resources the State continues to provide to the banking sector.
The Minister for Justice, Equality and Law Reform stated last night that we as legislators need to be here, breaking our backs to find workable and practical solutions that will lead to real jobs and real prosperity. I could not agree more. What evidence is there, however, that the Government is producing such solutions? The Government's response to Deputy Ciarán Lynch's Bill, which was thoroughly researched and backed by legal opinion, is to dismiss it as legally and constitutionally unsound. This was done without the production of the legal opinion underpinning the Minister's dismissal of it. Let us test the opinion in the light of day and work as a Parliament to find an urgent, agreed solution for those many business people and workers, who live with the daily fear of their businesses collapsing and their jobs disappearing.
Urgency in problem solving appears to be anathema to this weary Government. It is bereft of the ideas and energy needed to overcome obstacles such as the one this Bill seeks to address. People need hope, leadership and confidence that jobs are being created and economic recovery pursued, but the Government's inability to take bold action will only push them deeper into despair.
When governments cannot, or will not, do the jobs they are elected to do, it is time for them to go. The Government's opposition to this Bill is further evidence of a siege mentality which is paralysing its will to address the many urgent problems which have been inflicted on Irish people as a result of the wasted years since 1997.
I found the contributions from speakers opposite to be somewhat pathetic. They spoke about the importance of protecting businesses and the unfortunate legal reasons that they cannot do what obviously needs to be done. The Government is taking a cannot-do attitude. It cannot get the banks to lend to small businesses or help them hold on to their employees and it cannot do anything about upward-only rent reviews. We need to see a can-do attitude because we were elected to this House to solve the country's problems.
Deputy Ciarán Lynch has stated that he introduced this Bill, for which I commend him, in the knowledge that the Government may not be willing to accept it in its entirety and that he is happy to see it amended as necessary. All we have heard from Government Deputies, however, is that they wish to do something but unfortunately they cannot. This must be an extremely dispiriting outcome for the thousands of people who have contacted us by e-mail over the past week or who have followed the debate from the Visitors Gallery. These people are struggling to keep their businesses alive but now they are being told the Government can do nothing for them.
If contractually agreed rents can be adjusted upwards, I do not see why they cannot also be reviewed downwards. I do not understand why these obstacles are being erected. We have been told by the Government that this is because of constitutional imperatives but I understand the Landlord and Tenant Acts allow rights to be taken from landlords in certain circumstances and I have been advised by someone with legal expertise that an escape clause or compensation mechanism might address any constitutional infirmity in the legislation. Nominal compensation to the landlord may be a way around the obstacle.
We are here to solve the problems that face our country rather than hide behind obstacles. If we are worth our salt as public representatives, we will listen to the people when they tell us about their problems. Like everybody else, I have spoken to business owners in my constituency. In areas of Limerick which have been subject to urban regeneration schemes, the very landlords who received sizeable tax incentives from the public purse are now seeking to increase rents.
We are beginning to see ghost streets where businesses are closing in the heart of my city and, I am sure, elsewhere. We simply cannot allow this to continue because these businesses are the bedrock of our economic recovery. Multinationals will come and go but indigenous companies are our hope for the future and we have to find ways of supporting them. We cannot allow them to close their doors because of legal mechanisms that make no sense in the current economic climate. They have clearly experienced decreases in sales volumes and are facing significant difficulties in paying overheads and remaining open. The idea that one cannot revise downwards a rent set at a time when the economy was in a completely different position is nonsense.
If constitutional obstacles arise, I suggest we can find remedies for them, and if the Government wishes to amend elements of the Bill, it should do so. The Labour Party is attempting to address an extremely serious issue for businesses in this country and the least we expect from the Government is a can-do rather than a cannot-do response. Hiding behind the advice of the Attorney General when nobody else is allowed to examine it is not acceptable for a Government, even one which I hope will not be in power for much longer.
I listened with interest to the arguments put forward by Government Deputies, particularly from the Green Party Member from Carlow, because I never heard such patronising drivel in all my life. To suggest that we are giving businesses a false hope by bringing forward this Bill reflects the unreality of Green Party Deputies. This legislation tries to find positive solutions to the real problems that people face in villages, towns and cities throughout the country because they cannot renegotiate their rents.
We are taking a realistic approach to the problem, backed by a sound body of legal opinion. Deputy Kennedy's demand that we put our legal opinion before the House is merely a digression from the issues at hand.
He has some cheek.
Fianna Fáil and the Green Party are aware that we are offering a genuine solution but they will not even entertain our attempt to build a positive outcome. I remind Deputy White that the Bill seeks to address the emergency that has arisen in regard to upward-only rent reviews and the substantial economic havoc that such provisions are wreaking on small and medium-sized enterprises. Rent reviews, which normally occur every five years, are resulting in the wind up of a large number of companies. In many cases, liquidators are having to exercise special statutory powers to disclaim onerous leases and the effective abandonment of businesses results in substantial employment losses. This Bill attempts to find a solution to this serious issue. We are not giving anybody false hopes when we seek to find a way to help these businesses survive and flourish.
I do not know if Deputy White received as many e-mails on this issue as I did. I wish to share with her one such e-mail I received from a lady in Mallow who operates a small niche business called Fountain of Angels. Her rent is €8,500 per annum. She told me in her e-mail that the upward-only rent review clause is unfair and discriminates against tenants. It is putting her under significant pressure and calls into question the viability of her business. If she tries to leave, however, the landlord is entitled to pursue her for loss of income for the remainder of her lease, which happens to have a term of 11 years. This situation is not helped by auctioneers who give misleading information and it reflects every e-mail we have received on this issue. This is a real issue and it must be dealt with in a real political sense and that is what we seek to do tonight.
Other matters that must be tackled include the hold on legal opinion and the hold that auctioneers, landlords and property owners have over people. We should think more laterally about how to allow businesses to survive, a purpose at the heart of the Bill. The proposals are perfectly realistic for people who live in the real world. We do not contend that we are giving people false hope. We are serious enough to put forward a Bill of this nature because we wish to tackle this issue realistically such that we can give small businesses an opportunity to flourish. That is the motive from which this Bill emanates.
Since there is no other offer to speak I call the Minister of State.
In opposing the Bill, the Government is very conscious of the fact that many in the retail sector have welcomed it and have approached Deputies on all sides of the House seeking their support for its content. It has been presented as an emergency solution to a very pressing problem. However, the solution proposed will not work in practice and is not legally tenable.
Reference has been made to the possibility that a parallel exists between the emergency action sought in this area and the legislation introduced last year to address the difficulties faced by the State with regard to the public finances. However, entirely different legal issues arise in the case of the Financial Emergency Measures in the Public Interest Act 2009, which concern the financial obligations on the part of the State. The rationale and justification for that legislation includes the overriding public interest in controlling public spending, reducing the shortfall between expenditure and revenue and reducing the unsustainable levels of public borrowing. These imperatives do not apply in the case of commercial leases entered into between private parties.
As a general principle, great care must be taken in altering by legislation the contractual rights of parties in respect of contracts which have been freely entered into where the effect of the alteration would be to impact directly upon the amount of rent which has been agreed as between those parties. Such an alteration would also impact upon constitutionally recognised property rights and great care is necessary to ensure any impact is necessary and proportionate and does not amount to an unjust interference with those rights. In terms of broad principle, legislative restrictions which affect property rights retrospectively are prima facie unjust, as they seek to alter the effect of previously completed legal transactions.
I intend to elaborate upon one point which was referred to during the course of this debate, that is, the alleged link between NAMA valuations and demands on the part of some landlords for high levels of rent increase. It has been already stated that any attempt by landlords to increase the value of their property by seeking to impose unsustainable rent increases would have no impact on the valuation placed on such property by NAMA. NAMA will purchase land, development loans and certain associated loans from participating credit institutions. The valuation of these loans takes account of the underlying security attached to them. However, NAMA's valuation experts will take account of the rents they deem likely to be realised on a sustainable basis as opposed to optimistic projections supplied by participating institutions, debtors, associated debtors or other interested parties.
Deputy Leo Varadkar referred to a reply to a parliamentary question, dated today, which indicated correspondence had been received in the Department of Justice, Equality and Law Reform concerning the impact on investment property of a retrospective change to existing leases. He drew certain inference from that correspondence. However, the Deputy neglected to refer to the second element of the reply which indicated that the decision not to apply the prohibition on upwards only rent review to existing leases was dictated solely by legal and constitutional considerations.
I refer to the way in which Government continues to be active in supporting local businesses and employment and in stimulating local economic revitalisation throughout the country at all levels. The undoubted problems of the retail sector cannot be divorced from this wider perspective. Among the actions taken by local authorities is one to keep commercial rates increases to an absolute minimum. Last year, some 34 local authorities held their rates at 2008 levels. For this year, the annual rates on valuation have decreased by a national average of 0.62%. Local authorities are also taking steps to ensure reductions in staffing levels are rot focused on front line services and are rigorously examining their costs to maximise efficiencies.
In addition, all county and city local authorities have now established business support units or equivalent arrangements in their areas. These support units are effectively a one stop shop for businesses and aim to facilitate local enterprise creation and retention. They work in co-operation with a number of other public agencies such as the IDA, Enterprise Ireland, county enterprise boards and local development companies to assist and support projects and entrepreneurs. The units also co-ordinate the services of the other council departments in areas such as planning, water and roads.
Measures have been also taken in respect of VAT to assist businesses and individuals in the current difficult economic circumstances. Thus, with effect from 1 January 2010, the standard rate of VAT was reduced from 21.5% to 21%. This reduction applies to all goods and services which had been subject to VAT at 21.5%. It is hoped that the measure will improve competitiveness and consumer confidence and give a necessary lift to business and the community.
In the energy sphere, the Government is determined to promote competition in the energy market to maximise the pressures for greater efficiencies in the sector. Government action has already seen a fall in energy prices for Irish business with reductions in 2009 of more than 15% for electricity customers and 20% for gas customers. The restoration of competitiveness is also a key factor in rebuilding our economy. There are encouraging indicators in this regard and the Government is firmly committed to exerting downward pressures on prices in all relevant areas and to build upon the significant progress made in 2009.
Overall, the Government is committed to maintaining low business taxes and a favourable regulatory environment and will work to ensure its policies keep pace with the way business is changing. Job creation is a key priority and is a driving force behind much of our work in stabilising the public finances and in getting our banking system working again.
As the Minister for Justice, Equality and Law Reform has already observed, in addition to prohibiting upward only rent review clauses in leases entered into on or after 28 February last, he has established a working group to consider the issue of rent reviews in the context of the arbitration system which operates at present and to assess the adequacy of the information available to all parties during the rent review process. The group has been mandated to report by the end of June and its establishment is a practical step towards addressing a particular problem which has been identified by the retail sector as giving cause for concern.
A Leas-Cheann Comhairle, I am happy to let Deputy Costello say a few words if he wishes.
We would be grateful for that.
I can keep going until 8.15 p.m., if he wants. Normally, at what time would the time slot finish?
The Minister is in charge of this time slot. Normally, he would have five minutes and, fortuitously, he has up to 14 minutes, but as soon as he sits down, I will call the next Labour speaker.
I wish to be helpful, given that the Labour Party has sponsored this piece of legislation.
I thank the Minister of State.
In general terms, the Government is committed to doing all that it can to address the problems of the retail sector. However, Government can only act within the appropriate legal and constitutional parameters. Our opposition to the Labour Party's Bill is informed by that reality.
It is merely a legal opinion.
The Minister, Deputy Dermot Ahern, spelled out clearly last night the legal and constitutional reasons this Bill cannot be supported by the Government side. He went into a deal of detail in that regard. It is not fair to say during the course of the debate here this evening that the legal and constitutional issues were not seriously debated by the Government side. The Minister put forward his views clearly and in a forthright way on the basis of the advice that he was given. The Government recognises the problems which the retail sector, in particular, is facing at this time and is doing everything possible and practical to deal with that situation.
I wish to share my time with my party leader, Deputy Gilmore, and Deputy Ciarán Lynch.
I suppose I should start off by thanking the Minister of State. It is the first time that I have had the opportunity of thanking him for sharing his time with me and with the Opposition.
The present convulsions in the Irish economy have revealed some strange practices in commercial activities. What ordinary citizen in his or her right mind would have imagined that commercial rent reviews could only be upward and that a downturn in the economy could not be reflected in a similar downturn, or reduction, in the existing rent of commercial premises?
The Government's attempt to rectify the anomaly last year, in the Land and Conveyancing Law Reform Act 2009, only applied to new leases and thus fails to address the existing business leases which are the real cause of the problems. The Government has refused to move beyond this point referring, as the Minister, Deputy Dermot Ahern, did last night, to the Attorney General's advice, which the Minister has not published, and blaming the Constitution as the obstacle.
This is exactly the same hands-off position adopted by the Government on the Kenny report on land valuation after rezoning. If implemented at the time it was published, the Kenny report would have prevented most of the corruption of the planning process and the reckless rezoning, which has destroyed much of our urban, and indeed, rural landscape and has given rise to a number of tribunals of inquiry.
The question that the Government should have put to the Attorney General was whether it was constitutionally correct that a one-sided system of upward-only evaluation of commercial rents that could benefit only one party, namely the landlord, should be recognised and was enforceable in the common law of the land. That was the question that should have been asked.
The constitutional requirement of natural and social justice, fairness and the public interest would seem to suggest otherwise. For example, liquidations or assignees in bankruptcy cases can disclaim or walk away from the leases of insolvent companies or bankrupt individuals where they believe — mark my words, they need only believe — the terms of these leases are unduly onerous. That can be done within the present law without infringing constitutional principles.
Indeed, a better example is to be found in the Minister's Act, the Land and Conveyancing Law Reform Act 2009. Section 50(1) of the Act states:
A servient owner may apply to the court for an order discharging in whole or in part or modifying a freehold covenant (whether created before or after the commencement of this Chapter) on the ground that continued compliance with it would constitute an unreasonable interference with the use and enjoyment of the servient land.
The Act goes on to state, in section 50 2(f), that the court shall have regard to “whether compliance with that obligation has become unduly onerous compared with the benefit derived from such compliance”. Thus, if it is constitutionally possible to set aside or modify a freehold covenant or agreement where the obligation to pay is unduly onerous, then surely it cannot be unconstitutional to set aside a leasehold covenant where the obligation to pay has become unduly onerous? There are precedents. The Minister did not choose to go near them. If he had done so, then this piece of legislation could now be enacted.
First, I compliment my colleague, Deputy Ciarán Lynch, onbringing this Labour Party Bill to the House in response to the economic emergency in which we find ourselves.
The evidence of the economic emergency mounts by the day. Some 270 people lost their jobs every day since this Government took office. One in every three young men of the workforce is on the dole. Established businesses, such as Hughes and Hughes, are going to the wall because of unrealistically high rents. Empty shop fronts are spreading across our towns, cities and suburbs.
While the casualties of the recession grow, this Fianna Fáil-Green Government prefers to stay in its bunker, more concerned about its members own job security than the security and livelihoods of the people who keep this country on its feet. Only people who are living in a bunker can ignore the desperate plight of businesses experiencing the sharpest economic downturn in our history, while trapped in leases that only allow for an upward revision of rent. Only people who are living in a bunker would ignore the steady stream of redundancies from mostly small and medium-sized businesses, which are folding under the twin pressures of their rent burden and their inability to access credit.
The Labour Party first raised the issue of upward-only rent reviews in commercial leases in June of last year. We raised it on the floor of this House on numerous occasions because we believed then, as we do now, that this is an issue of vital national importance. We believe that every job, and every livelihood, is worth fighting for in this recession. If viable businesses are going to the wall because they cannot legally negotiate a more appropriate rent, then we as legislators have a duty to respond and we have a duty to find a solution.
Unfortunately, this Fianna Fáil-Green Government does not agree. In response to pressure from the Labour Party last year, it made a small change to the law to allow for a downward review of commercial rents. However, this change only applies to new leases negotiated on or after 1 March this year. It does nothing for the vast majority of businesses placed under unbearable pressure because of the terms of their existing lease.
In fairness, the Minister for Justice, Equality and Law Reform has not entirely forgotten the sector. He decided to do what the Government always does when faced with an urgent problem — he set up a committee. This committee, he tells us, is due to report on the negotiation process for commercial rent reviews in June of this year — almost a year to the day after the Labour Party first raised the issue. I want to ask him how many viable businesses have had to shut up shop since last June because they were not entitled to negotiate a more appropriate rent, and how many more will close before next summer, when his committee is due to report.
In 2009 alone, 30,000 people lost their jobs in the retail sector, at a cost to the Exchequer of €600 million. How many more jobs will be lost because the Government would rather save face than pass the Labour Party's legislation?
Make no mistake about it, more jobs will be lost. There is already evidence of owners of NAMA properties demanding large increases in rent from their tenants in order to maximise the value of their property in the NAMA process. It is clear that some landlords are not interested in the long-term viability of their tenants' business, but rather are looking to save their own skin now that the property bubble has burst.
Yesterday in the Dáil I asked the Taoiseach a straight question, whether his Government would support our legislation to allow for downward revision of commercial rents in existing leases for a limited period. I asked would he and his Government support a straightforward measure that would ease the pressure on the retail sector, and save jobs. He said, "No." He stated that our proposed legislation is unconstitutional, but he refused to publish the advice he received from the Attorney General to that effect.
This is a typical response from this jaded Government — negative, closed to solutions that come from outside and closed to compromise. The Taoiseach will shortly be meeting a world leader whose motto is "Yes, we can.", yet our country's leader and the Government seems in every instance to say, "No, we can't."
The Taoiseach is mistaken in this. We can have a solution to this problem. The Labour Party's proposal is in keeping with both the letter and the spirit of the Constitution for the following reasons. First, our proposed legislation is in the public interest. It is a clear response to the national emergency of high unemployment and a devastated retail sector. Retail sales fell by 14% in 2009, following on from their sharpest ever decline in 2008. The value of goods sold in 2009 was down almost 20%. People are consuming less overall and spending less when they do. This is a response to the catastrophic rise in unemployment on the Government's watch, a drop in people's disposable income due to a raft of income tax increases and pay cuts and a steep decline in consumer confidence and security. On top of this precipitous drop in demand, businesses find themselves unable to secure credit from the banks. In short, they find themselves in an impossible situation without any of the usual means of weathering a downturn.
The Labour Party has made positive proposals to address these issues to get our economy moving again. The Government, however, has consistently chosen to ignore them. This legislation would provide some immediate relief to businesses experiencing the sharp end of the Government's economic mismanagement and going some way towards halting the haemorrhaging of jobs in the retail sector.
We are not proposing, as the Minister claimed last night, a wholesale assault on property rights. It is far from it. Our legislation is a measured and proportionate response to the perfect storm that has beset our economy. Our legislation provides for a two-year period, in which rents under existing leases may be reviewed downward, upward or remain the same. This is simply to allow viable businesses and their landlords to negotiate a realistic market rent, which reflects the prevailing economic climate.
We are not asking that landlords accept less than the market rate for their property. Rather, we are proposing the market be allowed to find its level in a way that is equitable for both landlords and tenants. As the law stands, it is only tenants who are feeling the full brunt of market economics while landlords are cosily protected. As one business owner in my constituency wrote——
Will Deputy Gilmore give way?
No. The Minister did not bother to attend the full debate. He just came in at the tail end.
Please allow Deputy Gilmore to continue without interruption.
A Labour Party Deputy suggested we compensate landlords.
Please allow Deputy Gilmore.
Does Deputy Gilmore agree that we compensate landlords?
I suggested a nominal compensation as a way of fixing the constitutional problem.
Deputy Gilmore, despite all his rhetoric, will not answer that question.
Please allow Deputy Gilmore without interruption. Deputy Gilmore is in possession and Members will not be shouted down.
I want to put this to the Minister. He and some of his colleagues came into the Chamber yesterday claiming the Labour Party was offering false hope. People whose businesses are to the wall need some hope.
The Minister claims this proposal is unconstitutional.
I will publish the Attorney General's brief on the matter.
The Minister is not going to do that. I know his form.
It would weaken Deputy Gilmore's arguments.
Minister, please allow Members to speak without interruption.
Instead, he should agree to allow this Bill to pass on Second Stage tonight and then on Committee Stage we can all put our respective legal opinions on the table.
If it turns out the Minister is correct that there is a constitutional obstacle, we can then withdraw the legislation. At least, it should be given a run instead of being shot down at the first opportunity. The Labour Party is trying to find a solution to what is a real problem for people whose businesses are in trouble and losing jobs.
It is a constructive proposal. The Minister does not have to shoot it down just because he does not agree with it. The world will not end if the Bill passes Second Stage. Allowing it to proceed to Committee Stage would allow an opportunity for the law on upward rents to be teased out. Doing so might also offer some practical assistance to those businesses trying to negotiate some relief on their rents. That is assistance they will be deprived of if the Government votes down this Bill tonight. If it does, the message that will go out to those negotiating rents will be that the Government has taken the side of the landlords on what are now active rent negotiations.
I reacted to the Labour Party Deputy who wanted me to compensate the landlords.
The Minister would be better reacting to Deputy Gilmore's proposal.
The Minister should have listened to what I said.
She said we may have to compensate the landlords.
I said we should try and remove the obstacles to reviewing upward rents.
Deputy Gilmore is in possession.
The Minister should save the usual partisan knockabout stuff.
It is not a game.
I want to ask Deputy Gilmore a question.
Will the Minister allow Deputy Gilmore to continue without interruption?
Will the Minister agree——
Will Deputy Gilmore confirm that it is Labour Party policy to compensate the landlords and that is what his spokesperson said?
Will the Minister resume his seat?
Will the Minister let it go and stop his old nonsense?
I ask the Minister to have some regard for the Chair.
That is what his spokesperson said.
That is old L & H society nonsense from the Minister and has no place in a serious debate.
The Minister is just twisting her words.
Will the Minister allow the Bill through tonight, proceed to Committee Stage and then we can all put our legal advice on the table to address it? If the Minister is right, we will withdraw the legislation. However, if there is some prospect of this forming a basis of giving some relief to people, at least it will have done some good.
The Minister does not have the authority to do so.
I clearly said last night——
Please allow Deputy Ciarán Lynch without interruption.
I wish to clarify some matters for the record. Last evening, the Minister claimed, on a procedural point, he only received a copy of the Bill on Monday afternoon and said in future it would be important that Bills were made available to him as soon as possible.
The Journal Office was notified prior to 11 a.m. on Friday as to the subject of the Labour Party's Private Members' time. At 11.38 a.m., the Journal Office e-mailed political parties and several individuals as to the business. Among those who received the e-mail was the Chief Whip's office and an individual in the Department of Justice, Equality and Law Reform. The e-mail advised copies of the Bill were available from the General Office.
If there was a problem with the Minister receiving the Bill on Tuesday afternoon, it was an internal problem in his Department. The Minister may want to address that.
On a point of order. I have in my possession a letter from the Bills Office which acknowledges my Department did not get a copy of the Bill until Monday morning after 11 o'clock.
That is not a point of order as the Minister knows.
Will the Minister sit down?
Yesterday evening, in his unique style as just seen, the Minister dismissed the Bill, me, the Labour and Fine Gael parties. He also dismissed those in the Visitors Gallery as a rent-a-crowd brought to the House by the Labour Party. They were 50 members of the retail industry employing 15,000 people. They were probably more interested in what the Minister had to say than what I had to say. It would have done the Minister the world of good if he returned them the courtesy. The Minister of State, Deputy Kelleher, delivered a short script that made no mention of the Bill.
I have many rebuttals I can present to the Minister's legal arguments and which Deputy Gilmore has challenged him to take to Committee Stage. The Minister's legal opinion is ultimately about defending the NAMA portfolios and protecting the rental property bubble. If this Bill were to proceed, it would show the whole valuation process the Government has put together is a house of cards, based on notional values that do not stand up in the market place. It is a market place in which retailers are now finding employment, materials and energy costs are secondary to meeting the rent for institutional landlords.
Up to 20,000 retail stores employ just under 300,000 people with 30,000 losing their jobs last year in the sector. The upward rents are a significant national matter. This Bill recognises the emergency the country faces in this regard. It is a wake-up call to the Minister and the Government that there are real problems happening in the real economy affecting real people every day. The Minister, along with his party colleagues and the Green Party, which is now indistinguishable from Fianna Fáil, must allow this Bill to proceed to Committee Stage where it can be tested and give some measure of hope to businesses struggling every week. It would send out the signal that there is light at the end of the tunnel, that the country believes in recovery and that the unsustainable, unrealistic, uncompetitive position in which retailers find themselves can be dealt with.
As a teller, under Standing Order 69, and given the failure of the Government to recognise the importance of the issue at hand, I propose that the vote be taken other than by electronic means.
As Deputy Emmet Stagg is a Whip, under Standing Order 69 he is entitled to call a vote through the lobby.
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- Roche, Dick.
- Ryan, Eamon.
- Sargent, Trevor.
- Scanlon, Eamon.
- Smith, Brendan.
- Treacy, Noel.
- Wallace, Mary.
- White, Mary Alexandra.
- Woods, Michael.