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Archive for October 28th, 2012

Readers of the Phoenix magazine (available here with subscription) are treated in the current issue to a centrefold advertisement by John Corcoran, the owner of Korky’s shoe shop on Grafton Street in Dublin who has been locked in a legal battle with his landlords for several years. The advertisement takes the form of an open letter to Minister for Finance Michael Noonan challenging the decision announced by Minister Noonan in his Budget 2012 speech last December 2011 to abandon promised changes to Upward Only Rent Review provisions in leases created before February 2010. The open letter is accompanied by legal commentary from barrister and judge Gerard Hogan, whose views conflict with those of the Government and who appears to conclude that imposing changes on UORR leases would not be at odds with the Constitution.

There hasn’t been any response from Minister Noonan to the open letter, but in the Dail this week, the Sinn Fein spokesperson for Enterprise Jobs and Innovation Peadar Toibin asked the Minister for Justice Equality and Defence Alan Shatter to outline “steps or proposals under active consideration” in respect of reforming UORR leases. In his response the Minister did not allude to any “steps or proposals under active consideration” and appears to draw a line under the issue with last year’s announcements.

However the Minister does say that “NAMA is playing a role in dealing with problems caused by upward only rent reviews applying to NAMA properties, and since the start of the year has approved cumulative rent reductions of over €6 million” We previously learned that NAMA is approving practically all applications made to it to reduce rents, though there have been exceptions. €6m is a major reduction in income to NAMA though Minister Noonan has previously said that the long term survival of businesses in their commercial tenancies will more than offset any short-term reduction in income to NAMA. Given that NAMA has approved about 150 rent reductions, the €6m cited by Minister Shatter equates to an average annual rent reduction of €40,000.

Somehow I get the impression that we have not heard the last of the push for UORR reforms.

The full parliamentary question and response are here.

Deputy Peadar Tóibín: asked the Minister for Justice and Equality the steps or proposals that are under active consideration by him to address the issue of the operation of upward only rents.

Minister for Justice and Equality, Alan Shatter: The primary responsibility which I have in relation to this matter relates to possible legislative intervention to ban upward only rent reviews in existing commercial leases. The Deputy will recall that following extensive consideration of this matter, the Government announced in December last that it had decided not to proceed with such legislation. There was a substantial concern that any legislative scheme involving interference in the contractual relationships of private parties would find it extremely difficult to survive a Constitutional challenge. In addition, the Government was advised that any model proposed would require the payment of compensation to landlords whose rights were infringed in order to ensure that the proposal would be compatible with the Constitution and with the European Convention on Human Rights. The Government was strongly of the view that payment of compensation to landlords in such circumstances could not be justified in the current economic climate.

Although legislative intervention may not be feasible, NAMA is playing a role in dealing with problems caused by upward only rent reviews applying to NAMA properties, and since the start of the year has approved cumulative rent reductions of over €6 million. I would also mention that I have commenced the Property Services (Regulation) Act 2011 which, amongst other matters, provides for the establishment and maintenance of a Commercial Leases Database by the Property Services Regulatory Authority. This Database will assist in providing readily accessible, accurate information in order to determine the market rent payable in respect of comparable commercial properties. Work is underway to ensure that the Database will be operational at an early date.

Finally, I wish to highlight the existence of a rent review arbitration code which was drawn up by a group of experts whose membership was drawn from all stakeholders in the commercial property arena. The code, which can be found on http://www.justice.ie, provides a mechanism to deal with the resolution of rent review disputes in the commercial property sector.

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One of these fine days, RTE news is going to come a cropper with its liberal use of the word “murder”. Remember the tragic death of journalist, Eugen Maloney on Camden Street in Dublin in June 2012 when RTE reported the death as murder? Four months on, and there is a trial where the accused faces the charge of manslaughter. Where would RTE be if the accused’s lawyer claimed his client couldn’t get a fair trial because the national broadcaster had described the death as “murder”? RTE is not alone in this practice, and the print media also reported the death as “murder” but somehow, our publicly funded broadcaster should be held to a higher standard. It is one of the very few faults in RTE news, and it almost comes as a surprise to conclude on here that RTE is actually quite good, with generally clear and reliable reporting of the events of the day. Yes, there have been a few blips like showing the “Georgia” that was invaded by Russian/southern Ossetia in 2008 as Georgia USA on a map, but speaking as a consumer of RTE news, overall it is quite good.

The same can’t be said about RTE’s current affairs and it won’t have escaped your notice that TV current affairs is being revamped under the tutelage of Kevin Bakhurst, the BBC man who came on board at RTE in September 2012 in the wake of the clearout and fallout from the Fr Kevin Reynolds scandal. The Week in Politics, which is the by far the best current affairs offering on RTE in my view, will in future be broadcast at lunchtime on Sundays with an evening repeat. Whether this allows the flaghship politics programme, fronted by Sean O’Rourke, to adequately assimilate the contents of the Sunday press remains to be seen, but there is no reason why the programme shouldn’t continue to provide first-rate reporting and analysis of the political scene – a “scene” that is all important in Ireland with the State owning banks and most media organisations, or at least the debts therein.

There are changes afoot also at the Frontline and Prime Time strands at RTE. And about time too. They stand out as godawful programming, oftentimes with the production standards you would associate with a community college media project. Characterised by lack of research with little fact checking, unchallenged claims from participants, poor topic selection, programming which at times seem to break RTE’s own producer guidelines, incoherent with a failure to deliver a story to its audience, hectoring interviews which glean nothing for the audience all thrown together with expensive graphics and sound which at times veer from MTV video to horror movie soundtrack, but add little to the understanding of the topic at hand.

Although both strands have generated programming of note and of value, both are generally awful and so it came as no surprise that these two strands were facing revamps also. To date, little has changed – someone seems to have stuck a 5v electrode in Miriam O’Callaghan’s bra and she now seems to jerk her upper body every few seconds, perhaps to confer the impression of life to proceedings. Pat Kenny has been recruited to Prime Time where his hectoring has so far extracted little in the way of hard information from interviewees. George Lee is a welcome addition to the strands for his economic gravitas. Clare Byrne has been drafted into Prime Time as a presenter, and the jury is out on her performance, but in truth, it will be the quality of the research that provides the foundation that will make or break both strands in future. Like good barristers, TV presenters should know the answers to their questions beforehand and should try to lead proceedings in such a way as to present a coherent story to their audiences. That doesn’t mean new information is discarded or ignored because it doesn’t fit, but it does mean that the needs of the audience should be paramount.

Prime Time Investigates, which was suspended in 2011 after the Fr Reynolds affair, has yet to return to our screens but there is a sore need in Ireland for such an investigative strand. We wait to see how Kevin Bakhurst will develop what is generally regarded as very difficult programming – investigative journalism – which is expensive and time-consuming, legally problematic and can ultimately result in abandoned projects.

So far, and with just eight weeks under his belt, there doesn’t appear to be any great change at Prime Time or Frontline, but it is early days yet and the man from the BBC is contending with entrenched ways of doing things, not to mention a maze of relationships, some of which are poisonous to the overall prospects of current affairs. It will be a subject worth re-examining in a few months.

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“The Irish people shall agree to assume responsibility for a share of the present debt of the United Kingdom and of the liability of pensions arising out of the Great War, the share in default of agreement between the Governments concerned to be determined by an independent arbitrator appointed from within His Majesty’s Dominions.” Extract from British proposals for a Treaty in July 1921

If I ever make it onto the TV quiz programme “Mastermind” one of my specialist subjects could be NAMA and it would be enjoyable spending a couple of minutes responding “I can’t answer questions on individual transactions” or “I can’t discuss individual members of staff” or “I can’t answer questions on individual court cases” or “that is commercially confidential” or “the NAMA Act prevents me from answering that”. But a backup specialist subject would be “The Irish Boundary Commission 1921-25”, a subject which bears strong similarities with the current debt negotiations in Europe.

The Boundary Commission might seem like a dry old subject for a Bank Holiday Sunday morning, but its development and ultimate failure 90 years ago echoes down the ages, and for those of you amenable to seeing history repeating itself, it might give you cause to be anxious.

In 1921 as the War of Independence with Britain was drawing to a close, a Boundary Commission was proposed as part of the settlement which nationalist Ireland hoped and believed would ultimately yield a large portion, if not all, of what was Northern Ireland. The previous year however, the British had practically pulled the rug from beneath nationalist Ireland by partitioning the country with six of the nine counties in Ulster – having a 25% Catholic population – forming what was first called the SixCounties and North-East Ulster but then became known as Northern Ireland. Interestingly Cavan, Monaghan and Donegal were omitted from the new Northern Ireland because their inclusion would have meant a 40% Catholic minority in Northern Ireland which was deemed too dangerous by Unionists – in 2012, the Catholic minority is well over 40%.

It was hoped by nationalists in 1921 that the Boundary Commission, which would ultimately decide on the final territory of Northern Ireland would lead to Fermanagh, Tyrone, Derry city and Newry all being transferred to what was then called the Irish Free State but today, the Republic of Ireland. You will see from the extract shown at the top of this blogpost that the terms initially sought by the British in the Treaty were cheeky – impoverished Ireland repaying British war debt, indeed!

The Boundary Commission didn’t start its work until late1924 – our Civil War in 1922/3 and Northern Irish non-cooperation delayed matters. But the 3-man Commission which had an Irish member Eoin MacNeill, an English member James Fisher who stood in place of what was intended to be a Northern Irish member and the Commission chairman, a South African, Dick Feetham did their work over the course of 12 months. They inspected the 1911 Census, determined the Catholic populations of electoral areas of Northern Ireland and produced a wonderful map which was only published in 1969.

Their map showed that most of Tyrone and Fermanagh were Catholic as were areas of south Armagh. Derry was Catholic on the Bogside but beyond Derry in Donegal there were non-Catholic majorities. So, the 1925 map proposed that Northern Ireland would INCREASE to absorb bits of Donegal but because they didn’t want to create “islands” Fermanagh and Tyrone would remain in Northern Ireland, but south Armagh would be returned to the Irish Free State.

When our Taoiseach-equivalent William Cosgrave and Northern Ireland’s leader James Craig were presented with the plan, BOTH said they preferred the existing Border to the proposed changes. And so we have Northern Ireland and the Republic of Ireland today, with Northern Ireland territory exactly matching the six traditional counties of Fermanagh, Tyrone, Armagh, Down, Antrim and (London)Derry. Despite the hopes of nationalists in 1921, they ultimately got nothing and indeed were presented with a plan to give over territory to Northern Ireland.

The similarities

(1) Expectations. All the evidence in 1921 on the Irish side points to an expectation that the Boundary would eventually be drawn so as to include Tyrone, Fermanagh, Derry city in county Derry and Newry in county Armagh in the Irish Free State. This would have represented half the territory of what had become Northern Ireland. On the British side, the evidence points to a determination to keep the Border as it was first determined in 1920 “for good and all” – somehow that overarching British view was never fully appreciated on the Irish side, and yet, it was the British view which prevailed in 1925. In the present day, an expectation has been allowed to develop that Ireland may get €64bn from “the Europeans” or that we might get €30bn for the State’s stakes in our banks which are only worth €6-8bn on the open market.  In 1925 Ireland faced the prospect of losing territory to Northern Ireland, something unthought of in 1921 – in 2012, Ireland faces the prospect of paying €11bn into the European Stability Mechanism fund, and although Ireland portrays a one-way flow of funds, in truth Ireland may need bail out Greece (again), Spain, Italy and even France.

(2) Vagueness of commitments. Back in 1921, Article 12 of the Treaty merely said “Provided that if such an address [exercising Northern Ireland’s right to opt out of the Irish Free State] is so presented, a Commission consisting of three persons, one to be appointed by the Government of the Irish Free State, one to be appointed by the Government of Northern Ireland, and one who shall be Chairman to be appointed by the British Government shall determine in accordance with the wishes of the inhabitants, so far as may be compatible with economic and geographic conditions the boundaries between Northern Ireland and the rest of Ireland, and for the purposes of the Government of Ireland Act, 1920, and of this instrument, the boundary of Northern Ireland shall be such as may be determined by such Commission.”. In June 2012, the EU summit communiqué said “We affirm that it is imperative to break the vicious circle between banks and sovereigns… The Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme. Similar cases will be treated equally” In hindsight, some historians are suspicious of the term in the 1921 Treaty because the equivalent term in the Treaty of Versailles in 1919 was very specific indeed. Lack of specificity generates suspicion today.

(3) Negotiations behind closed doors. Yes, in 2012, the Information Age with the Internet, mobile phones and 24-hour news, we still know next to nothing about the negotiations about the debt deal, and the suspicion these days is that the participants on the Irish side are not doing very well at all. It was the same back in 1921-25 though absent radio even, that shouldn’t be surprising. But in November 1925 the Irish people were presented with a fait accompli, Northern Ireland was to keep the six counties, and that was an end to it. No apology for dashed hopes, little explanation for the failure. “We are where we are”

(4) Poor planning and leadership. It was decided by the 3-man Commission that the 1911 Census would be used to determine Catholic areas. But between 1911 and 1924/5 there had been significant migration of Catholics into what had become Northern Ireland to assist with the war effort in particular. And of course Catholics tended to have larger families, so you would have expected that over 14 years between 1911 and 1925 the demographics of Northern Ireland might have changed considerably but that was not deemed sufficiently important by the Commission. In addition, the basis for determining a recommendation to relocate land in the Irish Free State or in Northern Ireland was base on the Catholic/non-Catholic split, which in hindsight is an atrocious error on the Irish side. What would the results have been if the split was Protestant/non-Protestant? Probably, significantly different.

(5) Pre-judgment. It was claimed on the Unionist side that back in 1920/21, the British had given a pledge that there would be no subsequent change to the territory of Northern Ireland. This was denied by the British, but in hindsight, it seems to have been borne out by coincidence of events. In these negotiations, the Irish have consistently failed to identify the “Santa Claus” in Europe who will magick up compensation, and this prompts the suspicion that the negotiations have been prejudged. If there was a commitment or at least a suggestion by Chancellor Merkel that German people might contribute a sum of money to Ireland for compensation for protecting the EuroZone’s banking system at the behest of the ECB, then that would change matters, but that hasn’t happened. All we have are vague commitments to examine the Irish debt situation and no European country has suggested it will hand over cash to this country, at a direct cost to its people.

(6) Complicated. We have been hearing for the past 14 months that the work involved in our debt deal negotiations is “technical” and “complicated”. And so it was back in 1924/5 when the 3-man Commission assisted by a secretary and a cartographer went about analysing the terms of the Treaty, analysing the 1911 Census and “perambulating” around Ireland and Northern Ireland examining territory and meeting with vast numbers of representatives. What could be more complicated than deciding of Derry city was to be split between Bogside and Waterside, or extended to Muff in county Donegal, how was the waterway in Lough Foyle to be split, how would the arrangements affect the shirt and collar industry for which Derry was famous. Is extending the period by which the  promissory notes will be paid off from 20 to 40 years any more “complicated”

(7) Poor personnel. The English had Stanley Baldwin who might be remembered for being a mediocre prime minister, but they also had the Establishment which had learned its rough trade on the rugger fields of Eton. Winston Churchill was to the fore of the final negotiations in November 1925 just as he had been at the Treaty in 1921. The Irish member of the Commission, Eoin MacNeill might be regarded as an embarrassment today for his lack of engagement and failure to see issues from the outset, issues which would cause immeasurable problems or undermine what was the Nationalist hope from the work of the Commission. Why we fielded the young Kevin O’Higgins in the 1925 final negotiations is incredible, and points to a lack of resources available to, and leadership by, William Cosgrave. Who have we batting for Ireland today? How did we allow the negotiation of the territory of our state to be concertinaed into two days on British territory at Chequers on 26-28th November 1925?

(8) Leaks. There was one huge leak in the work of the Boundary Commission and that was in November 1925 when a map was published in the Morning Post (later taken over by the Daily Telegraph) showing in remarkable detail and matching the actual map constructed by the Commission, the areas for relocation. The finger has been pointed at the English member of the Commission, James Fisher who corresponded on friendly terms with the widow of a prominent Unionist, but the effect of the leak was that the Irish member of the Commission, Eoin MacNeill resigned. The leak prompted an intensification of the Northern Ireland Unionist campaign founded on the principle of “Not an Inch”. Nationalists were gutted. We haven’t yet had leaks as such in the present debt negotiations, though we constantly have statements from the participants which sway opinions and hopes. It is almost beyond comprehension that the full text of the letters and communication from then-ECB president, Jean-Claude Trichet to then-finance minister, the late Brian Lenihan in October and November 2010 have not been leaked by our side.

(9) Loss of Negotiation Positions. In the present financial crisis, whenever we paid bonds in busted banks, we lost some more of our negotiation position. Most of the bonds in Anglo have now been repaid. The money has gone, that ship has sailed, though there is still a battle to be had about AIB, the 99.8% state-owned bank that has to date cost us €20.7bn. This loss of hard negotiation chips closely matches the strategic decision by the British/Unionists in 1920 to create Northern Ireland, which once created was very, very difficult to set aside, particularly with the heroic efforts of Unionists to consolidate their position with the establishment of government, and to their immense credit, they established a working government and state in a very short period of time.

(10) Small Dog Syndrome. Back in 1921-25, the Irish focussed on their own territory which was understandable, but there seems to have been a lack of appreciation of how the world had changed. The British had won the Great War but at a terrible cost. All around the world, territories were being carved out from eastern France, Poland/Ukraine, Austria and elsewhere. The Irish had little sensitivity to this and seemed to forget they were negotiating with a country which controlled, in vary degrees of dominion, Canada, Australia, New Zealand, Palestine, India, Pakistan, Bangladesh, South Africa, Gibraltar, Hong Kong, bits of the Pacific and Carribean. Today we are dealing with a Germany which has spent €1-2tn on reunification, with countries which have also had expensive bank bailouts or which have dealt with their own crises and disasters by themselves. We also conveniently forget that it was us, acting unilaterally, who decided to implement a guarantee in 2008 which was opposed by many in Europe.

In July 2012, An Taoiseach Enda Kenny unveiled a commemorative plaque to Kevin O’Higgins, one of the key negotiators with the British at Chequers in November, 1925. Kevin was to be assassinated in 1927 at the tender enough of age of 35 for his role in signing the execution orders of 77 anti-Treaty prisoners during the Civil War. The utter failure of the Boundary Commission resonates through the ages, and those players in today’s debt negotiations might do worse than examine the parallels and avoid the mistakes of the past.

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