Leo Varadkar (Dublin West, Fine Gael)
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Question 45: To ask 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]

Conor Lenihan (Dublin South West, Fianna Fail)
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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-----

Leo Varadkar (Dublin West, Fine Gael)
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On a point of order.

Brendan Howlin (Wexford, Labour)
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If the Minister of State would yield to a point of order.

Conor Lenihan (Dublin South West, Fianna Fail)
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I am not inclined to do so.

Brendan Howlin (Wexford, Labour)
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I am the one who calls.

Conor Lenihan (Dublin South West, Fianna Fail)
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I said I was not inclined, given the Deputy's-----

Brendan Howlin (Wexford, Labour)
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I was being respectful to the Minister of State. I will allow Deputy Varadkar on a point of order.

Leo Varadkar (Dublin West, Fine Gael)
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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-----

Damien English (Meath West, Fine Gael)
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Deputy Lenihan should continue with the second page of his reply.

Leo Varadkar (Dublin West, Fine Gael)
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-----to give an irrelevant answer.

Brendan Howlin (Wexford, Labour)
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The Chair has not control over the content of answers. There is long-standing precedent-----

Leo Varadkar (Dublin West, Fine Gael)
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It is about relevance. What has a scrappage scheme got to do with rent reviews?

Brendan Howlin (Wexford, Labour)
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Deputy Varadkar, please at least listen to the full answer before coming to a conclusion about its content.

Leo Varadkar (Dublin West, Fine Gael)
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This is a case of copy and paste.

Brendan Howlin (Wexford, Labour)
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I call the Minister of State.

Conor Lenihan (Dublin South West, Fianna Fail)
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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.

Leo Varadkar (Dublin West, Fine Gael)
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There is no need to do that.

Willie Penrose (Longford-Westmeath, Labour)
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The Deputy and everybody else is very tetchy, except for Deputy Morgan and me.

Conor Lenihan (Dublin South West, Fianna Fail)
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I am not tetchy, I am delighted to be here.

Brendan Howlin (Wexford, Labour)
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A question, Deputy Varadkar.

Leo Varadkar (Dublin West, Fine Gael)
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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.

Conor Lenihan (Dublin South West, Fianna Fail)
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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.

Leo Varadkar (Dublin West, Fine Gael)
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We said we would freeze them and we did.

Brendan Howlin (Wexford, Labour)
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Please allow the Minister of State to reply.

Conor Lenihan (Dublin South West, Fianna Fail)
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Nothing has been done by your party since. You opposed a more than 3% reduction in Fingal -----

Leo Varadkar (Dublin West, Fine Gael)
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That is not relevant.

Brendan Howlin (Wexford, Labour)
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The Minister of State should direct his remarks to the Chair. I call Deputy Varadkar for a brief reply.

Conor Lenihan (Dublin South West, Fianna Fail)
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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.

Leo Varadkar (Dublin West, Fine Gael)
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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.

Conor Lenihan (Dublin South West, Fianna Fail)
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The Deputy's party promised bigger reductions.

Brendan Howlin (Wexford, Labour)
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The Opposition should ask the questions and the Minister of State to reply.

Leo Varadkar (Dublin West, Fine Gael)
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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?

Conor Lenihan (Dublin South West, Fianna Fail)
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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-----

Leo Varadkar (Dublin West, Fine Gael)
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Not the institutional landlords.

Conor Lenihan (Dublin South West, Fianna Fail)
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-----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-----

Leo Varadkar (Dublin West, Fine Gael)
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The restaurant had to close.

Conor Lenihan (Dublin South West, Fianna Fail)
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The Deputy should supply the follow-on vital piece of information whereby the rents were reduced by the landlord-----

Leo Varadkar (Dublin West, Fine Gael)
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After the restaurant closed its doors.

Conor Lenihan (Dublin South West, Fianna Fail)
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Yes, under pressure.

Leo Varadkar (Dublin West, Fine Gael)
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That is not a very good example, a business forced to close.

Conor Lenihan (Dublin South West, Fianna Fail)
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I know one cannot argue with medical doctors.