Rents impasse - U-turn on rent reviews unacceptable

Last week Taoiseach Enda Kenny declared that his party had reneged on their election pledge to tackle upward-only rent reviews for business because of “constitutional difficulties”.

For any business renting a premises covered by a pre-2010 deal — upward-only rent reviews have been banned since then — that trite dismissal is more than disappointing and, in the face of ever mounting state-generated costs and untouchable Celtic Tiger-era rents, unacceptable.

It is equally unacceptable that the Taoiseach should imagine that his “constitutional difficulties” wave of the hand closes the issue. Hundreds of businesses and the security of thousands of jobs depend on change on this lob-sided featherbedding. That Mr Kenny referred to the issue at a function on job creation is the blackest kind of bathos. That he is prepared to contemplate businesses closing and thousands of workers turning to the State for welfare support to protect property speculators suggests our leaders have not learnt all the hard, bitter lessons of our economic collapse.

It also raises the basic issue of whether the election promise was an off-the-cuff crowd pleaser or if it had been assessed properly by Mr Kenny’s party before it was made. Either circumstance is so unprofessional as to be unacceptable. It also epitomises the cavalier attitude to election promises, as if they were a kind of one-night stand — a great idea at the time but maybe not so later and then quickly forgotten — that has so discredited politics and discouraged thousands of people who would have a positive contribution to make from becoming involved in the shabby business.

That Mr Kenny and his Government have staked their reputation and future on unstitching another bad deal — the immoral terms transferring private bank debt to the public purse — shows policy inconsistencies. That Nama, to its credit, has acceded to nearly 100% of the requests for rent reductions in properties they control underlines that inconsistency.

The situation is so untenable that some businesses — Pamela Scott and B&Q most recently — have taken refuge in examinership to break the rent stranglehold.

Unfortunately, this is another instance where the property rights, as they are celebrated, are put before everything else. Just as those who invested in rogue banks were saved by State intervention, some landlords, no matter how imprudent their investments, are protected by upward-only rent reviews. This has a price — thousands of jobs and hundreds of businesses.

Last week, as Mr Kenny tried to fob off any idea that he might deliver on an election promise, German Chancellor Angela Merkel reminded us all of how evil asserted itself in her country. It was, she recalled, facilitated by a smug and ineffectual political class and political system. The issues are disproportionate but unfortunately for Ireland the comparison is valid. Mr Kenny must decide whose side he is on — Irish workers or the investors who, to protect the risks they took, are holding tens of thousands of jobs to ransom.