Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Tuesday, 9 Mar 2010

Vol. 704 No. 3

Priority Questions.

Departmental Structure.

Leo Varadkar


41 Deputy Leo Varadkar asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has any plans to restructure her Department. [11669/10]

It is a matter in the first instance for the Taoiseach to determine the structures and functions of individual Departments. Ministers, when appointed to Departments, are then responsible for policy determination and the performance of the functions that are assigned to their Department.

My current policy priorities are centred on creating the right policy framework to assist the enterprise community to create and maintain employment opportunities while supporting the unemployed back into the workforce. Specifically, we are continually working to ensure we have the most appropriate policies to nurture both the indigenous and foreign direct investment sectors through current difficulties. We are also implementing several significant initiatives to assist the unemployed, and we continue to examine all options to do more on activation, training and re-skilling opportunities. More particularly, our current focus is on the areas of reviewing enterprise development agency relationships and strategies in light of the current challenges facing their stakeholders and, in this regard, we launched the new IDA Ireland strategy last week; updating the national skills strategy; finalising and promoting a new trade and investment strategy; providing enhanced consumer and competition protections through the merger of the Competition Authority and the National Consumer Agency; driving the competitiveness and green jobs agenda with Government colleagues; maintaining our strategy for science, technology and innovation, SSTI, investments to support the smart economy drive; and delivery of my Department's many T16 employment rights and industrial relations legislative commitments.

In support of policy implementation and monitoring, the Secretary General of the Department, under the Public Service Management Act 1997, is responsible for, among other matters, both the strategic and day-to-day management of the Department. The Secretary General, supported by his management board, keeps the structures and assignment of personnel throughout the Department under regular review to ensure it continues to be fit for purpose.

My question was whether there are any plans to restructure the Department of Enterprise, Trade and Employment, which has existed in its current form since 1997. The question arises from reports in the media of proposals to break up the Department.

That is a matter for the Taoiseach, not the Tánaiste.

It is a valid question for the Tánaiste because I am sure she, her Secretary General and others in the Department would be consulted before the Taoiseach would break it up. Perhaps there is a case to be made for such a restructuring. In the United Kingdom, for example, there is a Department for Work and Pensions which deals with people on social welfare of working age as well as labour market aspects of law.

It seems to me that the reason the Government is considering a reform, break-up or restructuring of the Tánaiste's Department is that the Taoiseach does not want to move her aside or dismiss her and that his own personal loyalty to her means he is considering abolishing the Department from underneath her. Does the Tánaiste accept that is the case, that the reason the Department is under review and may well be broken up is that she is the Minister of that Department and not because any serious consideration is being given to reforming the Department itself?

To clarify, the Taoiseach is answerable to the Dáil for the structure of Departments and the Tánaiste for responsibilities within her Department.

The Leas-Cheann Comhairle has answered the question. This is a matter for the Taoiseach. The political insinuation that is being put across the Chamber is a political charge. As the Deputy knows full well, the development of the structures of my Department is within the remit of the Taoiseach.

However, it is important to say that the Ministers of State at my Department and I have been very much involved in the streamlining of the services we provide to our citizens and the creation of new policy frameworks. We have worked hard towards the greater integration of the activities of Enterprise Ireland, IDA Ireland, county enterprise boards and a number of agencies that are not necessarily our responsibility, such as the Leader programme, Meitheal Forbartha na Gaeltachta and Údarás na Gaeltachta, which are the responsibility of the Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív. We have been working on enterprise policy and supporting that with the activities of Science Foundation Ireland. My colleagues and I have also been working closely with Forfás in using the independent supports available to the State through that body to ensure we have policy that is fit for purpose. We are looking at the proposals put forward in the McCarthy report to see whether there are new opportunities in shared services and new structures that will be more cross-cutting under the remit of several of the agencies within my Department.

The Tánaiste says that this is, in the final analysis, a matter for the Taoiseach. However, has the Taoiseach had any consultations with her or with the Secretary General about breaking up the Department? I am sure he would discuss it with her before he would consider removing one of the elements of her Department or breaking it up.

On "The Frontline" programme last night, an audience member, speaking about the Tánaiste's representation of Ireland abroad, said there was a cringe factor. A recent newspaper article suggests that IDA Ireland representatives are embarrassed by the Tánaiste when she goes overseas with them. Others have said she is unable to talk to business people and that when she does, the language she uses is often inappropriate and vulgar.

Does the Deputy have a question for the Tánaiste?

What does the Tánaiste say to those who level the charge at her that she is not suitable to represent Ireland overseas?

I have numerous discussions with the Taoiseach on many issues which are the privilege of the Taoiseach and me. Unlike others, I do not discuss them in the public domain, nor will I add to any rumours in the context of the final decision of the Taoiseach. I respect that it is a matter for him, as I am sure Deputy Varadkar would respect the leader of his party in his determination as to where the Deputy's responsibility is within the Front Bench or any changes he might decide in order to facilitate the Deputy or otherwise. This issue is a matter for the Taoiseach, and all my colleagues will be very much of the view that it is his prerogative to make his decisions.

On the other issues to which the Deputy alluded, I appreciate very much that many of the nasty comments that have been made are politically motivated. Perhaps the Deputy should take the opportunity of seeing the work I have done on behalf of this country in working with the development agencies to ensure that we continue to have positive foreign direct investment in this country. I travelled on a number of occasions——

Such investment has decreased by 47% since the Tánaiste took up her Ministry.

Perhaps the Deputy has forgotten that there is a new economic reality. Despite that reality, 125 investments were made last year on the basis of considerable hard work by me, the Ministers of State at my Department and the development agencies in encouraging people to invest here. Equally, we have worked closely with many Irish companies, of which we are singularly proud, in providing new opportunities for them abroad. I have travelled abroad to represent Ireland in the context of our strategy in the Middle East, our strategy in supporting companies within the eurozone, in the United Kingdom, in the United States and, later on in the year, in Australia and Brazil.

My personality is a matter for others to decide. My job is to represent this country abroad and I do so with pride and with the privilege bestowed on me by my Taoiseach. Political charges of that nature perhaps show the ineptitude of some in the Opposition who cannot prove that on this side of the House——

These criticisms are not from the Opposition; they are from people in business.

The issue is that the opposition is not in this House——

We did not go on the Tánaiste's overseas trips.

——and the political charges are ones which I may take from the Deputy but not from others.

Grocery Industry.

Willie Penrose


42 Deputy Willie Penrose asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to claims that some major supermarkets are demanding payment of up to €500,000 from suppliers in order to ensure the continued stocking of their products; the steps she will take to end this practice; and if she will make a statement on the matter. [11441/10]

Competition law prohibits retailers from compelling suppliers to make payments for the advertising or display of grocery goods. Anyone who has evidence of traders engaging in such practices should bring this evidence to the attention of the Competition Authority in order that it can be fully investigated.

The renewed programme for Government contains a specific commitment to "implement a code of practice for doing business in the grocery goods sector to develop a fair trading relationship between retailers and their suppliers" and "to review progress of the code and if necessary to put in place a mandatory code". The Government will give effect to this commitment by including a specific provision in the legislation currently being prepared to merge the National Consumer Agency and the Competition Authority that will allow for the introduction of statutory codes of practice in areas such as the grocery goods sector. I expect to publish this legislation later this year.

In the interim period until the legislation is enacted, I intend to explore with all the relevant stakeholders the possibilities of agreeing a voluntary code that would respect the interests of all parties. A voluntary agreement offers stakeholders the opportunity to develop a code most suited to the dynamics of the grocery goods sector and which could form the basis of any subsequent statutory code.

I thank the Tánaiste for her reply. This situation has gone beyond a joke. If Mr. Paul Cullen can find out that Tesco is seeking up to €500,000 from suppliers in order to stock their goods, it is a joke. The Competition Authority has trumpeted its achievements. It has been a waste of space in this area because somebody has to come along and give evidence. Would the Tánaiste agree that such unfair practices are a common occurrence and a regular feature of the supplier-retailer relationship? Is the Tánaiste aware that a report, which has been prepared by Deputy Cyprian Brady, will be issued by the Joint Committee on Enterprise, Trade and Employment next week which examines the issue? The joint committee had to go to great lengths in order to speak to people. Everything one has been told about unfair practices continues because nobody wants to stand up and give evidence on the issue. That is what is happening.

What are the Tánaiste's views on the fact that supermarkets have demanded millions of euro over the past number of months in return for the continuous stocking of products on supermarket shelves? Mr. Paul Cullen has done an excellent job as consumer affairs correspondent of The Irish Times. Is the Tánaiste aware, from media reports, that Tesco has sought €500,000 in order to ensure the presence of goods in 190 stores across the country? It is not unique to any multiple; sums of money are sought by everybody. Does the Tánaiste accept that a sum of money of this magnitude represents normal negotiations with suppliers of produce in this country, as was said in the article to which I refer? Is it the case that demands for pay to play money are not illegal but, rather, pump up prices for the consumer? Suppliers, in effect, are being bullied by the major retailers across the country.

The Deputy is Chairman of the Joint Committee on Enterprise, Trade and Employment and I appreciate what he said, as well as what was said by representatives from agriculture. I have met many of the companies involved who, unfortunately, are not in a position to make a formal complaint. However, today I have asked an independent, eminent person to consider bringing to finalisation a code of practice. I and the Minister for Agriculture, Fisheries and Food, Deputy Smith, have discussed the matter. The person concerned has been requested to take that work on board and I hope he will. Arising from that, it is my clear intention to ensure a number of things.

First, we need to provide value for money and choice for the consumer. Second, as a former Minister for Agriculture, Fisheries and Food, we must continue to support the agricultural base in food and beverage production which we have in this country. Third, we need to ensure that we continue to have a strong and vibrant retail sector which provides choice. In reading all of the work which arose from the initial code which was introduced, there are polarised views on this matter. That being said, it is my intention to bring those matters to finality with a voluntary code as a matter of urgency. The code will then become statutory as part of my legislation. I appreciate the Deputy's concerns. I share them, on the basis that many people bring them to my attention and that of my colleagues. I will be appointing someone to do that body of work.

Does the aggressive behaviour from retail companies amount to an abuse of their dominant position? They exert phenomenal pressure on suppliers with whom they have business relationships. The power imbalance between the supplier and the retailer is an important matter. It seriously disadvantages suppliers which are trying to operate profitably. They are subject to requests for "Hello" money in one form or another. It is extremely onerous for a small business which has limited resources and may put them out of business. If our report, which will be launched next week, identifies the issues in the market, it is incumbent upon the Tánaiste to act in order to eliminate them, which requires a statutory code of practice and the establishment of an ombudsman for the retail trade to police its enforcement. That is critical.

Voluntary codes mean nothing to the retailers concerned. They appeal to all of us to put in place voluntary codes of practice. A statutory code such as that in place in England is required. The Competition Commission in the United Kingdom dealt with the issue following a report. The Competition Authority in Ireland did not do so. It wants everybody to gather the evidence. It is great at coming in and blowing its trumpet. It wants one last man or woman standing. That is all it is good for; it claps itself on the back. I fought with it in the past. It is getting a new director general, but I am not afraid to fight in public with such people, and the Minister of State, Deputy Calleary, knows that. It wants the last person standing, like a Clint Eastwood film with nothing but bushes growing in the ditches and one shop open — a large shop which gobbles up everything else. That is what is happening in the country. The Competition Authority has failed in this area.

It is costing jobs.

It is costing jobs.

The Competition Authority will investigate issues which are anti-competitive. We have banned below-cost selling and "Hello" money. However, as I am sure the Deputy will appreciate, I want to introduce the code immediately. It will take some time to introduce it, from a legislative point of view, which is why it will be voluntary. The authorities in the United Kingdom have returned to consultation. It is clearly not my intention to do that. My intention is to bring all of the consultative work which is being done together, including the report to which the Deputy referred, and the views——

The Tánaiste will have it next week.

——of the members of the committee. Enforcement will be the matrix by which we will be judged. It is very difficult to do, but I will include a specific designated person in the new merged authority to deal specifically with the enforcement issues which arise from the code. Although it is difficult, it is clearly my intention to deal with this matter quickly.

Banking Policy.

Leo Varadkar


43 Deputy Leo Varadkar asked the Tánaiste and Minister for Enterprise, Trade and Employment if she is satisfied that the banks and other financial institutions are making sufficient credit, new loans and working capital available to business; and if she will make a statement on the matter. [11670/10]

The central objective for Government is the provision of normal credit on fair commercial terms in our economy to all viable large, medium and small businesses. It is critical that our banking system is again fully fit for purpose, whether in providing working capital, new loans or other credit facilities to businesses. The relationship between banks and businesses needs to be fully restored, and built on trust and economic and business realism. There is no doubt that banks are making significant credit available to businesses, albeit in the context of a decline in demand for credit against a background of slower economic activity. The independent reviews of bank lending carried out by Mazars show clearly there are reductions in lending volumes going to businesses. Against that, we are all well aware of the demands from businesses for greater access to bank credit, in particular for working capital needs.

The Government has taken a range of actions to sustain the banks and facilitate the flow of credit to the wider economy. The bank guarantee scheme, the bank recapitalisation scheme, the nationalisation of Anglo Irish Bank and the massive effort we have put into the entire NAMA process all have the single purpose of getting our banking sector supporting the wider economy. As the Taoiseach has already announced, the Government's plans to restructure the banking sector are imminent and will be announced over the coming weeks. Further recapitalisation of the banks may feature as part of these plans.

The Minister for Finance, Deputy Brian Lenihan, will issue guidelines shortly in order to ensure that businesses will have recourse to an independent external review of decisions of credit refusal by the NAMA participating banks. It is hoped that banks not participating in NAMA or covered by the Government guarantee will also decide to join the system. The aim is to have a simple, effective review process, run by people with experience and credibility. The banks must comply with the recommendations of the review process or explain why they will not do so. In addition to dealing with individual cases, the credit review system will examine the credit policies and practices of the banks in respect of SMEs. This will help to determine what further action might be necessary to secure the flow of credit. The Minister for Finance, Deputy Lenihan, intends to publish the analysis from the review process in order that the performance of the banks participating in NAMA will be clear to all.

Within my own Department, the enterprise development agencies such as Enterprise Ireland, FÁS and the county and city enterprise boards have continued to assist enterprises through their grant and advisory schemes. Significant allocations were made in my Department's Estimates for 2009 and 2010 to sustain the work of these agencies. The enterprise stabilisation fund and the employment subsidy scheme are additional measures to make funding available to assist SMEs through their current difficulties.

Additional information not given on the floor of the House .

The Government has also introduced formal arrangements to reduce the payment period by Departments to their business suppliers from 30 to 15 calendar days. This commitment has had an effect on all valid invoices received on and from 15 June 2009 and is helping cash flow difficulties for enterprises. I published returns for the quarter ending 31 December 2009 on my Department's website last Friday, 5 March 2010. Departments are generally paying 97.9% of their invoices by value within 15 days. SMEs are central to our economic development and the range of measures and supports in place will be kept under review to ensure that they continue to help the sector adapt to the current economic climate.

Sometimes I think the Tánaiste and I do not live in the same country. I heard her reply, in which she said there is no doubt banks are making significant capital and credit available to businesses. That is just not true. I wonder whether she is spending too much time doing the clinic of Pat The Cope Gallagher, MEP, in her constituency, rather than talking to business people about the realities of what is going on. Businesses are being starved of credit and, in particular, are being starved of working capital. Every business will not survive this recession but what I cannot tolerate is seeing viable and potentially viable businesses go to the wall because they cannot get credit and working capital because their overdrafts are being turned into loans.

It seems we have been talking about this for I do not know how long. It is nearly two years since the bank guarantee and since the Minister, Deputy Brian Lenihan, promised us that credit would be extended to business and that there would be a wall of cash coming at us, to use his own words.

A question, please.

Will the Tánaiste do something about this? Will she introduce an enterprise finance guarantee, as has been done in the United Kingdom, to ensure credit is extended to business again? If she will not do that, will she at least consider establishing a new bank, a national recovery bank, as Fine Gael has suggested to ensure these zombie banks are not relied on to provide credit when we can have a new bank that will do so?

It is not the intention to do so. On the issue of access to credit, it is important to make several points. First, the Minister of State, Deputy Billy Kelleher, on my behalf travelled the entire country listening to businesses, particularly small businesses, to find the particular issues. Second, we set up a review group comprising all of the key stakeholders and all of the banks. The Deputy might roll his eyes but——

The Tánaiste is always setting up groups for stakeholders and all of that.

It really helps to bring people together to ensure that they appreciate the other sides of the argument and how they can work together instead of being adversaries. Third, Enterprise Ireland facilitated the transfer of some personnel between the banks to ensure the experience and expertise on business and business decisions would be made available. That has happened and is ongoing. Fourth, we introduced the Mazars report and, following on from that, a further Mazars report.

Following on from that, it is important to make several points. On my behalf, Forfás, my Department and Enterprise Ireland are examining the potential of a loan guarantee scheme. We are working very closely with the Minister for Finance and his Department to ensure that, in the context of further work within the banking system, access to working capital for businesses will be to the forefront of that decision making. In the context of the European 2020 programme, access to working capital and venture capital is very important and one of the key drivers of many discussions that are taking place at EU level. I will pursue this vigorously and we will continue to be vociferous in seeking to ensure fairness and equity in supporting business.

This is all process. We know this Government is great at process. There are review groups, research papers, committees and task forces which all get together and write another report. We are sick to death of process. It is now two years since the bank guarantee and what we need is action. When will the Minister act on this issue and make a decision on whether there will be a loan guarantee for small business.

As was said to the Deputy's party leader on several occasions by the Taoiseach, if the Deputy's party was on this side of the House, we would not have any banking facilities because we would have no banks.

We have no banks. They are zombies to which the Government gave €11 billion to lend no money.

The differences between Fine Gael and the Labour Party are striking. The one thing we have is a plan, that plan is NAMA, we are working on its development and working out that system to ensure we have access to credit and that we deal with the viability of the banking system. We are working towards examining the potential of a loan guarantee scheme.

Working towards examining.

It is easy to sit over there.

Let us swap places.

Let us hear all about the Fine Gael magic bank, that monument to Deputy Enda Kenny——

What is it called?

——where we will bring all of the organisations together, create one huge monolithic God knows what, to ensure——

Has the Tánaiste read the policy?

George read it and he got out.

Exactly. At least to be fair to him, he realised it is not workable and will not create any more jobs.

It is too complicated for the Tánaiste.

We must move on to the next question.

The Deputy is the very one who came to this House to discuss quangos. He wants to create the biggest quango that was ever created in the history of this State through the development of what he wanted to do on the creation of jobs.

It is not a quango. It is a commercially driven State body. The Tánaiste should cop herself on. This is the Tánaiste trying to dismiss the idea.

So is Garret Fitzgerald.

I am fed up listening to this. It is a stupid argument. It is quite simple to read it. It is in black and white.

If the Deputy is fed up listening, perhaps he should find something else to do. This is a House of Parliament. Please allow Members to speak. I call Question No. 44.

Departmental Review.

Damien English


44 Deputy Damien English asked the Tánaiste and Minister for Enterprise, Trade and Employment, further to chapter 3 of the organisational review programme, a public modernisation initiative under the auspices of the Department of the Taoiseach, the actions she has taken to date to ensure that the capacity of her Department was adapted to meet the challenges identified; the action she has taken to tackle aspects of the report (details supplied); and if she will make a statement on the matter. [11671/10]

The organisational review programme — or ORP — report was based on examination of my Department's capacity to deliver for our stakeholders and was published in November 2008. As part of the ORP process, and in response to the ORP team's findings, my Department drew up an action plan aimed at addressing the specific findings of the report and that action plan was published in conjunction with the ORP report.

The plan set out several specific strategic actions the Department was to implement to further enhance and deepen the Department's capacity to deliver our mission, building on the many strengths already evident among the staff working in the Department. My Department established an ORP action plan implementation group in 2009 to oversee and report on the plan's implementation. This group is chaired by a member of my Department's management board and its membership comprises members representing different divisions of the Department.

The various individual actions in our plan are being delivered through a number of key strategies in the areas of staff training and development, HR, quality customer service, ICT and communications, as well as by undertaking specific actions directed at very particular findings. The action plan is augmented by the necessary and evolving change required to meet the challenges resulting from the radically altered fiscal environment in which the Department operates, as well as in light of reduced financial and personnel resources which obtain now and will continue into the future.

I am satisfied the Department is working diligently to deliver its ORP action plan commitments while managing the significantly changed policy environment created by the global economic downturn of the past two years. While there is more to be done to further improve our delivery, the key policies and initiatives necessary to address the findings of the 2008 ORP report are in place and are being implemented. I am satisfied with progress achieved to date in very challenging times for the public service.

I do not agree with the Tánaiste's analysis. She has published her 47-point plan but most of the points are on minor issues. The whole idea of this review was for the Tánaiste to shake up her Department and get it ready to take on new opportunities and new threats. That has not happened and the results speak for themselves. The fact that more than 400,000 people are unemployed and businesses cannot get credit are two examples. The Department has failed. As a major Department, it was specifically asked to engage with other Departments on cost-cutting measures to drive the competitiveness agenda. It has failed in that as well.

A question, please.

I am asking the questions. I want the Tánaiste to answer me.

The Deputy is making a speech.

If I made a speech, I would take much longer than this. What specifically has the Tánaiste done with her Department to make it ready for the current situation? It does not seem to have worked. Why has she failed to drive the agenda across all Departments? This country is uncompetitive and businesses are suffering as a result. She was given the responsibility in this document to get her Department up to speed to be able to do it. It has not happened.

The Tánaiste was also told in this policy to take responsibility for initiatives in her area. What has happened? The Department of the Taoiseach has taken over the smart economy policy and new innovation fund. Will the Tánaiste explain where her Department has improved or been made ready to take on the job it should be doing now? The Taoiseach is considering chopping up this Department because the Tánaiste has failed. Will she show me where she believes her Department is ready to take on the job it is meant to do?

Time, please. I call the Tánaiste to reply.

If not, we will have it chopped up. That will create more delays and more job losses as each new Department finds its way around. It speaks for itself.

I do not know why I should answer the question. The Deputy is going around in circles. The question is——

The question is clear — what has the Tánaiste done in her Department that might work?

Please, Deputy. Allow others to speak.

That is the question. The Deputy raised the issue of the competitiveness agenda, which is key to the work that has been ongoing in the Cabinet sub-committee dealing with economic recovery, where my Department, as the lead Department, has ensured we have reduced our electricity and gas costs, which are a major issue, and reduced the regulatory burden on businesses. All of that work has been achieved.

We have seen a reduction in energy costs and labour cost inputs.

What about the red tape?

The issue of competitiveness is being dealt with. We will continue to drive the competitiveness agenda, particularly in the more sheltered sectors, arising from the Competition Authority proposals dealing with the non-traded sectors in particular, although I appreciate the Deputy is not always enamoured with Competition Authority proposals. These are the challenges associated with the issue of competitiveness and this is to the forefront in the work of the Department.

A brief supplementary question from Deputy English.

The reorganisation of the Department is clearly focused in establishing much better, well-supported, clearly focused, policy driven initiatives in particular with regard to the issue of competitiveness.

Deputies will note that one minute is allowed to ask a question and one minute to reply.

This review paper gave the Minister the opportunity to fix her Department but she did not do so and as a consequence, her Department will be chopped up. She would better serve the country if she moved out of her Department so that it would not be chopped up. Chopping it up and moving it around will cause delays in strategies and actions and we have had nothing but inaction. She has not tackled the competitiveness issue——

A question, please.

These are questions. She claimed in her reply that she has reduced the burden of red tape but she has not done so. If this is the case then she should prove it to me. Businesses are suffering and unemployment is rising every day. If the actions in this report had been implemented, she might be in a position to hold on to her job and her Department might be in a position to have us in a better place but she did not do it.

The Tánaiste for a final reply.

The Taoiseach takes over responsibility for the two main issues, the smart economy and the innovation fund but her Department cannot handle them.

The Deputy knows nothing about the running of any Department——

The Minister is wrong in that. I have consistently questioned the Tánaiste and her Department.

The Deputy should resume his seat.

I wish I had her job and she would find out.

I would much rather take my chances with him.

I have called the Tánaiste and Deputy English will resume his seat.

May I defend myself afterwards?.

I have called the Tánaiste to reply.

The Leas-Cheann Comhairle should be shown some respect.

The question is about the ORP, the organisational review programme, which is dealing with the structures, the frameworks and the policy initiatives involved in running the Department. I and the team in my Department are fully addressing the competitiveness issue. We are working with a number of colleagues to ensure that from an over-arching perspective the competitiveness and the innovation issues are being dealt with. We have set down matrix and parameters which have——

Matrix again, here we go.

Matrix in the framework.

——been achieved. If the Deputy had bothered to read the work of IDA Ireland, he would clearly see that there is a new narrative in encouraging FDI, foreign direct investment into the country, based on greater competitiveness, a reduction in our energy costs and a reduction in the labour unit costs. That is the reality and we are much more competitive——

We must move on. I call Question No. 45.

——but it will continue to be an issue we will continue to support.

With respect, a Leas-Cheann Comhairle, I am entitled to make one small point.

I am afraid we are well over time on this question. This is Question Time and not a time for speeches.

The Tánaiste cannot stand there and say I do not know anything about running the Department.

Please allow us to proceed.

If I am allowed make one point then I will sit down.

Deputy, we are not here to bargain. Please resume your seat.

I have been insulted. It is to do with changing an organisation to get competitive.

I am sure the Deputy will find a way of defending himself.

She cannot understand the concept.

I call the Minister of State, Deputy Conor Lenihan.

Deputy English is clearly a more fragile creature than the gentleman beside him.

It would be very helpful if the Minister of State did not aggravate an already difficult enough situation.

I understand the Deputy opposite is slightly fragile. I did not realise he was so fragile.

Deputy Morgan and I are the only voices of sanity.


We always thought Meath full-backs were a little bit more robust than that. I am speaking as a Dub, of course.

I ask the Minister of State to proceed with answering the question.

Economic Competitiveness.

Leo Varadkar


45 Deputy Leo Varadkar asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on the fact that businesses are not viable due to high commercial rents; if she will intervene in this; and if she will make a statement on the matter. [11260/10]

My colleague, the Minister for Justice, Equality and Law Reform set up a new working group to look at the issue of commercial rent reviews last week and my Department is represented on this new group. The group will be asked to focus particularly on the arbitration process and the adequacy of the information available to all parties in the context of commercial rent reviews. The Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern, has already banned upward-only rent reviews in new leases, which took effect this month. The new group will bring all the relevant parties together to see how we can deal further with other aspects of concern in existing leases.

With regard to more general measures to support jobs and growth in the economy, Budget 2010 included a number of pro-business, pro-jobs and pro-enterprise measures, including a car scrappage scheme, the extension of the tax exemption for start-up companies, an improved research and development tax credit to 25%, tax treatment of certain dividends, withholding tax on royalty income——

On a point of order.

If the Minister of State would yield to a point of order.

I am not inclined to do so.

I am the one who calls.

I said I was not inclined, given the Deputy's——

I was being respectful to the Minister of State. I will allow Deputy Varadkar on a point of order.

I know the Minister of State is familiar with the standing orders relating to relevance. The question is about rents and it is not about scrappage schemes or any of that stuff. We are being given a stock reply from the Minister of State. It is not in order for him——

Deputy Lenihan should continue with the second page of his reply.

——to give an irrelevant answer.

The Chair has not control over the content of answers. There is long-standing precedent——

It is about relevance. What has a scrappage scheme got to do with rent reviews?

Deputy Varadkar, please at least listen to the full answer before coming to a conclusion about its content.

This is a case of copy and paste.

I call the Minister of State.

I would be delighted to give way to the Deputy and take any questions from the Deputy. I will not finish answering that question but I will circulate it later.

There is no need to do that.

The Deputy and everybody else is very tetchy, except for Deputy Morgan and me.

I am not tetchy, I am delighted to be here.

A question, Deputy Varadkar.

The question is to do with commercial rents. We all know that commercial rents are volatile and I accept they are coming down in many sectors. However, it is clear that institutional investors, pension funds, banks and others, are not reducing their commercial rents. They do not wish to do so because they do not want to come clean about their own capital situation, that they have based their own books on overvalued assets.

Does the Minister of State agree with this analysis? Does he agree that institutional investors, the big financial institutions, who are landlords, are not doing enough to reduce commercial rents? Before he has his group, his committee, stakeholders and matrices and all the other stuff, he has to answer the simple question of whether he agrees with that analysis that the financial institutions are not adequately reducing commercial rents.

We need better information in this regard and this is why the group has been established. It is not a universal fact that all banks or institutions are acting in the way described by the Deputy. An important aspect which seems to have escaped the notice of the Deputy and should be remarked upon is that prior to the local elections, his own party, which now controls most of the local authorities, promised to get local authorities to reduce rates.

We said we would freeze them and we did.

Please allow the Minister of State to reply.

Nothing has been done by your party since. You opposed a more than 3% reduction in Fingal ——

That is not relevant.

The Minister of State should direct his remarks to the Chair. I call Deputy Varadkar for a brief reply.

It is very relevant; the Deputy's party was talking about reducing business costs. His party has direct responsibility for local authorities, along with the Labour Party, up and down this country and Fine Gael has signally done nothing to reduce the rates bill and in some cases the rates bill is bigger in Dublin than the rent bill for many businesses. His party has shown nothing and the first chance they got they did nothing.

I reject that allegation. In most of the local authorities controlled by my party, rates have been frozen as we promised and in others they have been reduced, for example, in Fingal County Council and in Dún Laoghaire-Rathdown, which is controlled by Fine Gael.

The Deputy's party promised bigger reductions.

The Opposition should ask the questions and the Minister of State to reply.

The Minister of State has made it clear he is not yet convinced that commercial rents are not being reduced sufficiently and he wants more information. Will he agree with my analysis on this matter that essentially, landlords today are behaving like they did during the Famine? In the Famine, landlords drove tenant farmers off their lands and now the big commercial institutional landlords are driving businesses to the wall and driving people out of their jobs?

Clearly I do not agree with the Deputy's analysis. It is a much more varied picture than he depicts. I know from my experience as a Member of the Dáil that many landlords are reducing their rents in line with the decline in retail and other businesses——

Not the institutional landlords.

——and many landlords are exercising a preference for delayed or postponed rental payments, precisely because they see the status of certain retail business. For example, this has been the case, literally down the road from Leinster House where a restaurant——

The restaurant had to close.

The Deputy should supply the follow-on vital piece of information whereby the rents were reduced by the landlord——

After the restaurant closed its doors.

Yes, under pressure.

That is not a very good example, a business forced to close.

I know one cannot argue with medical doctors.