Darragh O'Brien (Fianna Fail) | Oireachtas source

I am not sure how to follow Senator Conway. I know that his sentiments are valid and well held. He mentioned a number of things such as how we need to think outside the box; how where there is a will, there is a way; and how we need to fast-track this and that. That is correct but there are no solutions there.

I commend Senator Quinn for producing this Bill. I have no doubt the Minister of State will say it is unconstitutional and that a referendum would be required. That is the script he has been given. I would tell him that this Government tends to have a referendum once every couple of months and it could have included a referendum no this issue in conjunction with one of them so it would have had a real effect on businesses.

Successive Governments have failed in this regard. I remind some colleagues about what was said when Fine Gael and Labour were in opposition before the general election. In 2011, the Fine Gael manifesto stated that Fine Gael would pass legislation to give all tenants the right to have commercial rents reviewed in 2011 irrespective of upward-only or other review clauses. The Labour Party manifesto, which is not a document to which I often refer, stated that it would enact Labour Party legislation to abolish upward-only rent reviews for all commercial leases as a matter of urgent priority. The Tánaiste and Labour Party leader, Deputy Gilmore was quoted as saying that there was a crazy law on the Statute Book which did not allow for downward revision of rents. He was quoted as saying that the Labour Party would change that law so that businesses that got stuck with high rents at the height of the boom will be able to have them renegotiated. These were election promises.

I agree that this needs to be done. The programme for Government, which both parties said was an agreement between Labour and Fine Gael, states that the Government would legislate to end upward-only rent reviews for existing leases. It did not say there was a constitutional problem. I would support it on that. I argued with the previous Minister for Justice, Deputy Dermot Ahern, regarding this issue at the time. As Senator Conway rightly noted, the previous Government brought forward the Land and Conveyancing Law Reform Act 2009 which stipulated that there could be no upward-only rent review for leases entered into after the Bill's enactment in February 2010. What has changed since then? Only five months after Labour and Fine Gael entered Government, the Minister for Justice and Equality in response to a parliamentary question tabled by Deputy Calleary effectively said that the Government was seeking further advice from the Attorney General and that it still hoped to do this. Following budget 2012, the commitment was abandoned because it was deemed legally impossible to implement it. I know some very eminent legal people back Fine Gael and Labour. Both parties put forward very clear pre-election positions. They put it very clearly in their programme for Government.

Senator Quinn has set out very clearly how this measure is constitutionally sound. I agree with him on that. It will give businesses a fighting chance. Let us be honest. Why has this not happened? Most smaller landlords - people who live in the real world - have had to review their rents to keep shops in main streets in Swords, Tipperary or anywhere in the country open. Who are the landlords who are not doing it? They are the institutional investors - the pension funds and banks. It is because they are keeping rental yield on their property funds artificially high. I worked in the pensions industry for 15 years. That is what we know. Go 200 yards down the road here to Grafton Street. Most of the properties are owned by institutional investors. They will ensure they get the rents they want to artificially prop up their pension fund and their own returns.

We have a commercial market, part of which is starting to move again which I very much welcome and which is partly due to some of the measures taken by Government for which I commend it. However, it is now a two-speed commercial market. There is a level playing field for anyone entering into a lease since the enactment of the Fianna Fáil legislation in 2010. Anyone who entered into a lease before that date does not have this level playing field. That is a crazy situation. All of us agree that this situation is untenable and unfair. Senator Conway spoke about sympathy and concern and he is right but to paraphrase another Minister, concern and sympathy do not butter any parsnips. The Minster for Communications, Energy and Natural Resources would be the first one to tell him that. He said deals in Europe do not butter any parsnips for the Irish people. I will tell him what would help, to actually do something for the small and medium-sized business sector in this regard. This House can genuinely support that.

I understand that the Minister of State and the Government have a job to do but allowing this Bill to go through on Second Stage may refocus minds. Things are moving in certain sectors of the economy, which is great. All citizens want to see that happening but if we look at indigenous Irish industry, particularly the retail sector, we can see that upward-only rent reviews are albatrosses around their necks. They cannot move on. In respect of cutting their salary costs and costs across the business, the major cost is the their rent. I will not even talk about the revaluation under the Valuation Act. There is something we can specifically do about rents.

Who will challenge it? If the Government says this Bill is not constitutional, who do people think will challenge it? I will tell you who is going to challenge it. It will be the institutional investors. Have the Departments of Finance and Justice and Equality received advice from or been lobbied directly by institutional investors? What stick are these investors holding over Government on the basis that if it does this, they will do something else? Everyone knows that is the case. Let Canada Life or Friends First challenge the Bill when it is enacted.

Let an institutional investor go to the High Court, the Supreme Court or the new court of appeal, if it is established. There is nothing to stop us. Senator Quinn has clearly outlined his opinion, which my party shares. Our view used to be wrong. At the time, I stated my disagreement with the previous Minister with responsibility for justice that we could not remove and render unenforceable a clause contained in a commercial lease where a review process took place to set the rate at a level that was above the prevailing market rent. The playing pitch has been changed for those who sign leases after 20 February 2010, but what about people who signed before then? Consider how much rent they are paying.

Of whom are we and the Government afraid in passing this legislation? Of whom was the previous Government afraid? I do not want to sound partisan, but we have an opportunity to provide a solution by allowing this Bill to pass. Let it go through all of its Stages and into the Dáil. Let a bank, insurance company, pension fund or hedge fund challenge us. Why are we afraid? I do not understand it.

I hope the Minister of State, whom I welcome to the House, understands this position in light of his own constituency. We all know it. There are vacant properties everywhere. New start-up businesses would take them. Existing tenants are being crippled by upward only rent reviews and prevented from expanding. The Minister of State has a chance this evening. Senator Conway asked us to think outside the box. I agree with him, but the Minister of State should think inside this room. Senator Quinn's Bill can be passed on to the Government. It is part of the solution.