Tuesday, 23 June 2020

Ceisteanna (386)

Imelda Munster


386. Deputy Imelda Munster asked the Minister for Business, Enterprise and Innovation the actions she plans to take to ensure that businesses can continue to meet their rent obligations, in particular those that will not be able to reopen in the long-term; and if she will make a statement on the matter. [12562/20]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Business)

My officials have raised the matter of commercial rents and leases across a number of Government Departments and continue to give it consideration. Interdepartmental discussions have taken place and there has been engagement with a range of stakeholders, including groups representing businesses and landlords, to gain additional insights and gather intelligence to inform any further discussions. I have also asked my officials to look into the different responses from other countries and to identify possible options to address the issues involved.

While different options are being explored, I would point out that any support to business in respect of rents alone would ultimately end up as a support to the landlord. Not only would it be difficult to estimate the costs involved for such a scheme, but the offering of support, or even the perception that such supports will be forthcoming, may affect the market and lessen the impetus for landlords to renegotiate with tenants.

Engagement between the landlords and tenants should be the first route taken. Tenants and landlords are encouraged to engage with each other on this matter and come to some arrangement, as it is in everybody’s interest that terms are amicably agreed. Mixed reports from stakeholders have been received on the extent to which commercial tenants have been able to negotiate with landlords. Many landlords are being constructive at the moment with informal, temporary arrangements being agreed with tenants. There is, understandably, some reluctance by landlords to disclose such arrangements due to commercial sensitivities. However, it appears that other landlords have been less flexible.

The Government is committed to ensuring as many businesses as possible survive this challenging period, and it will continue to look at how we can support businesses that have been impacted by the COVID-19 crisis. The Government recognises the issue of ‘out of pocket’ costs for businesses which have to pay ongoing fixed costs such as rents, despite not being able to trade. We have introduced a suite of supports to assist businesses which includes the wage subsidy scheme, grants, low cost loans, deferred tax liabilities and the waiver of commercial rates. Full details on all supports are available at: https://dbei.gov.ie/en/What-We-Do/Supports-for-SMEs/COVID-19-supports/

The issue of supporting fixed costs, including commercial rents, was very much to the fore of our minds when the Government recently introduced the Restart Grant which will give direct grant aid to micro and small businesses to help them with the costs associated with re-opening following COVID-19 closures. he grants will be equivalent to the rates bill of the business in 2019, with a minimum payment of €2,000 and a maximum payment of €10,000.