Simon Coveney (Cork South Central, Fine Gael)

It is nice to have some comic relief in a serious debate. I support the Labour Party in what it is attempting to do this evening. In essence, the Bill proposes to allow the Government to make an order to allow for, in effect, an annulment of the upward-only rent review clause in existing rental contracts in extreme circumstances and in specific market sectors where the Government deems it appropriate to do so. Let us be clear: this is an emergency measure. It is not normal legislative work. We are trying to keep the people watching this debate and thousands of others throughout the country in business.

The effect of upward-only rent reviews in the middle of a recession is that retailers are being driven out of business by the law. We are legislators and it is our job to change the law and to take emergency measures when appropriate. As a result of a law passed by this House, retailers are faced with upward-only rent reviews that landlords will use, at times cynically, to drive up rents for various ulterior motives, often linked with loan book value, property valuations or, in some cases, anecdotal evidence would suggest, to try to get rid of so-called troublesome tenants when they know such people cannot pay.

We have an obligation to solve this problem as policymakers and legislators. No one else will solve it. There are dozens of small businesses in the retail sector at present unable to pay existing rents and facing a demand for significant rent increases. The Minister of State, Deputy Kelleher, knows that is also the case in our city of Cork, as does Deputy Ciarán Lynch who has spoken to many of the tenants to whom I have spoken.

The property valuation bubble has long since burst and we have seen reductions in values of between 20% and 60%, depending on the land valuation or the property valuation but, unfortunately, the rent bubble that grew during the Celtic tiger period is still inflating for many people despite the fact that their revenue and their margins have collapsed. That is not sustainable. Their businesses are not sustainable because of laws that we have passed in the past. We have an obligation to address that problem.

It is extraordinary that even though the Minister of State outlined a number of initiatives and proposals that the Government is trying to take to help businesses, he did not even mention rent, which is what we are discussing this evening and tomorrow night. Let us focus on the issue at hand, which can be summed up by a retailer to whom I spoke today who has two identical premise. For one, in Foyleside in Derry, he is paying €66,000 a year in rent and for the identical 500 sq. ft. property in Liffey Valley in Dublin, he is paying €190,000 a year in rent. He is being asked in the rent review to increase the latter to €220,000 a year. How can businesses in Ireland survive against their competitors north of the Border in that type of mad situation?

The problem must be solved. I do not mind whether it is solved by this Bill or by a new initiative coming from the Government using a bit of imagination, but we need to find answers. It was somewhat depressing to listen to the Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern, spend almost his entire speech explaining why he can not do this rather than trying to give people hope that he is serious about finding a solution to this issue.

We need to stop looking at this in an entirely legalistic way. We must get around the law, but there are policy ways in which we can potentially do that. For example, look at how the UK and the US dealt with bank bonuses. They could not deal with the issue legally because people were contractually entitled to receive bonuses for performance so they decided to deal with it through taxation.

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