Retrospective rent reviews and jobs
Eamon Gilmore argued that Government should support employment by extending the ban on upward-only rent reviews to existing leases, rejecting constitutional objections. The Taoiseach maintained that retrospective interference with private contracts and property rights was legally and constitutionally impermissible, while promising a fuller explanation from the Minister for Justice.
I convey my good wishes to the Minister, Deputy Martin Cullen and, I am sure, in the course of time we will have the opportunity to do so more fully. His announcement yesterday that he intends to retire from the Government and the Dáil has again focussed attention on the question of jobs in Government. One reason the Government lacks the confidence of the public is that while thousands of people are losing their jobs, those in Government appear to be preoccupied with protecting their own jobs, reshuffling and rotating them.
I am informed that, in its present manifestation, as of today the Fianna Fáil Green Party Government is in office 1,000 days and that it is 13 years since Fianna Fáil was re-elected in 1997. The Government's record during those 1,000 days is staggering. Some 270 jobs have been lost per day in the 1,000 days so far. It will be a record very hard to best.
I wish to ask the Taoiseach specifically about one measure which, the Labour Party and I believe, would help greatly to save jobs and get people back to work, that is, a proposal on the Labour Party agenda for this evening to change the law to allow for the downward revision of commercial rents. As the Taoiseach and every Member is aware, one of the areas worst affected by job losses is the retail sector. In every shopping street and centre in the country, retail businesses are pushed to the wall. They are trying to get costs down, custom through the door, to survive and to keep people in employment. One major problem many such businesses face is that they have been locked in to leases negotiated in much better and more promising times. Sometimes, they were locked into these leases in circumstances in which their arms were twisted by landlords or property developers and they signed up to leases with very high rents. Now, they are informed these rents cannot be revised downwards. The proposal by the Labour Party would allow for the downward revision of those commercial rents and would be of very significant help to retailers. It would help to save jobs in these businesses and it would help some retailers to re-employ people and get moving again. All that is required is for the Government to agree to accept it. I call on the Taoiseach to accept the proposal from the Labour Party to allow for the downward revision of commercial rents. It is a specific, positive measure that would help to save jobs and, hopefully, create additional jobs in the retail sector.
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I refer to the questions raised by the Deputy regarding employment in the country. Unemployment in the European economy is running at 10% and, unfortunately, we are at 12.5%. We will do everything we can to protect and create jobs. I assure the Deputy that were we to follow policies put forward by his party in recent years, the numbers unemployed would be far in excess of what they are today.
I refer to the specific matter raised by the Deputy. We introduced a provision prohibiting upward only rent reviews on future leases. This is contained in section 132 of the Land and Conveyancing Law Reform Act 2009, which came into force on 28 February last. Were it possible and constitutionally valid to do so, we would not wait for an initiative from the Labour Party. We would have used that opportunity to proceed with downward reviews in rent were it possible. We will have an opportunity later this evening to put forward the position as we are advised on the matter. Unfortunately, the situation is that it is not constitutionally valid to interfere in contracts in that way; that is the strong advice available to us. We will allow the debate to articulate and amplify these issues.
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It is remarkable that every time a positive proposal is presented to the Taoiseach and the Government, designed to protect and create jobs, the Government always seems to have a reason why it cannot be done.
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Our legal advice is that it is constitutionally possible to do so. Professor David Gwynn Morgan, a professor of law at University College Cork, agrees. In a letter to a newspaper written last week, he stated, "It is reported that the Attorney General has advised that to extend this change to existing leases would be "retrospective" and therefore unconstitutional". He stated: "With respect, this view seems to me to be wrong."
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Therefore, there is legal opinion that says it is constitutionally possible to do it. The Government did not seem to have any constitutional difficulty when it decided to set up NAMA and it did not seem to have any constitutional difficulty when it decided to revise unilaterally the contracts of the employees of the State last year when it cut their pay, but it suddenly wraps itself in the Constitution when it comes to protecting the interests of landlords and some of these very property developers who have landed us in this difficulty in the first place. That is what the Government's constitutional problem is about.
This is a positive measure. I hold here a letter from a businesswoman in my constituency who states that some landlords are now being inflexible and seem happy enough to let good businesses sink while they swim. That summarises it in a nutshell.
If the Taoiseach thinks there is a constitutional problem with this, let him publish the Attorney General's advice and let us see it. What is the big secret? Our advice is that the proposal that the Labour Party is putting this evening is perfectly constitutional and is perfectly possible to implement. It is a measure that would provide significant help to the retail sector, would help to protect jobs and would help to ensure that there is an opportunity for people to get future employment in the retail sector.
Instead of putting up obstacles and telling us why he cannot do it, will the Taoiseach join us and the other parties in this House in doing something positive today? We should send out some kind of a signal from this House that the Government is concerned about jobs other than its own, the jobs of the people working in shops and businesses up and down this country who are at risk and who are worried about losing those jobs. We should send out some signal that the Government is on their side and will agree to this proposal tonight from the Labour Party that would allow for downward revision of rents and that would keep good retail businesses in operation with the employment that belongs to them.
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I am on the side of people throughout the country who want to try to create jobs and maintain jobs, but I cannot agree to a proposal where it is clear from a legal and constitutional perspective that wholesale interference with existing lease arrangements,——
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——which, essentially, are matters of private contract between private parties, is not a feasible option.
It is also clear that any move in the direction of imposing a rent freeze across the board would be impossible to implement in a constitutional manner. To put it briefly, the advice received from the Office of the Attorney General is that——
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——real, legal and constitutional difficulties would arise if property rights were to be affected retrospectively.
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Not where it is a national emergency.
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I will come to that point. The other point is, obviously, that the Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern, will be in the House tonight to explain in detail the Government's position on this matter, and the situation. Obviously, his argumentation will incorporate the advice available to Government in the matter. Were all of these matters legally possible they could be considered, but they are not legally possible in the context of the Constitution and property rights, as I have outlined.
In addition to the retrospection issue, concerns have been raised about the ability of tenants to obtain reliable and comprehensive information in the context of the rent review process. The Minister for Justice, Equality and Law Reform has established a working group to examine the adequacy of the information available to parties in the context of the commercial rent reviews.
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The group has also been asked to explore how the arbitration system can be better used in these cases.
I make clear to Deputy Gilmore that in every way we can assist, Government will seek to assist. However, it is not true that one can decide, based on the proposal that he put forward, that one can disregard the constitutional guard that exists, and that can be amplified in the House later this evening.