Upward Only Rent (Clauses and Reviews) Bill 2013: Second Stage

02.10.2013

To read the full debate click here.

 

Senator Zappone:

I welcome the Minister of State to the House. I wholeheartedly welcome this Bill which has been introduced by Senator Quinn and is supported by Senators Barrett and Norris. Having listened to Senator Hayden, it is a loss and a pity that the Government did not draw on her expertise to write a Bill that we could be discussing here now. However, that did not happen so we have before us this Bill which I welcome. I wish to echo a few things that both Senator Quinn and Senator Darragh O'Brien have said.

The impact of upward only rent review clauses, that this Bill will render unenforceable, is that businesses struggle to pay their rent. The inevitable consequence of this is that many of them have to close down, and people lose their jobs and are forced on to social welfare.

The effect of the upward only rent problem is all too visible in towns and cities around the country, where the streets are scarred with closed shutters. Why do we make them go through this? Why do we tolerate a situation where Government inaction - could we call it Government policy from this side of the House, perhaps not - is strangling the small business sector.

The latest figures indicate that there are 435,280 people signing on the live register, which is an unemployment rate of 13.4%. The programme for Government made a series of promises to ease the plight of small businesses. Small businesses hold the potential to be significant employers. The passing of this Bill would do more to help the SME sector to grow than any other small business initiative that this Government has implemented.

To add to that, this is a Bill which the Government had committed itself to implementing. Senator Darragh O'Brien has already referred to the election manifestos of both the current Government parties, as well as the programme for Government, which promised to legislate to end upward only rent reviews for existing leases. In making those promises to the people, both Government parties had the benefit of professional legal expertise. They could only have made such promises safe in the knowledge that they were legally and constitutionally sound and could be delivered upon.

In fact, the Government went so far as to commission the drafting of legislation to fulfil its promise. It was to be called the landlord and tenant (business leases review) Bill 2011. In spite of its promises, the Government appears to have washed its hands of the solution which could save existing businesses from closing down and save countless jobs.

Who benefits from the upward only rent situation? Generally speaking, the landlords of these premises are not ordinary people who need exorbitant rents to fund their mortgage payments. Many of these buildings are owned by NAMA, the banks and institutional investors. NAMA is now the biggest commercial landlord in the State. If the SME sector were to be given the space to agree realistic rents, then NAMA's books probably would not balance. I suspect that banks and institutional investors are also against legislation such as this because they depend on exorbitant levels of rent which are paid by small businesses.

The ordinary people and future generations of this country have been forced to bail out the bankers. Now the SME sector is being forced to pay artificially high rents to banks and investors to supplement their losses elsewhere.

Such is the extent of the lobbying conducted by banks and institutional investors on this issue that the Government appears to be bowing to their demands. This is in spite of the fact that legislation such as this Bill could save businesses and help the SME sector to grow and generate more new jobs.

Another critical point is that many Government bodies and agencies occupy offices which are subject to an upward only rent review clause. Taxpayers are also bearing an unnecessary burden in the payment of exorbitant rents.

Fine Gael and the Labour Party made a solemn commitment to the people that they would resolve this issue. Under Standing Order 56, the Attorney General has the right to appear and speak in the Seanad. I would like to extend an invitation to the Attorney General to come into this House so that we can tease this matter out once and for all. We could also invite in her predecessor, Mr. Paul Gallagher, SC, who advised the Fianna Fáil Government on this matter.

Let us be frank about this, a vote to oppose this legislation today is a vote for banks and investors. Banks have been calling the shots in this country for too long. I support small businesses' need to survive and expand. That is why I urge my fellow Senators to support the passing of this legislation today.

Financial Justice
Financial Justice
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