Mr. Ian Talbot:

Mr. Murphy and I will do a double act as we have overlapping and complementary expertise in many areas. Both Deputies raised the issue of credit. Plenty of work is being done separately on credit. The group which worked on these proposals was very much focused on taxation and business costs specifically rather than the credit issue. This is why there is very little focus on credit in the document. Our overall view on the credit situation is that the predominant issue in the economy is still a lack of demand. Businesses are still consolidating and waiting to see future opportunity before they invest.

We are now six years into the crisis and many of the survivors are coping where they are. There are many issues as companies have property debt, for example, that may be interfering in core business, and we still need to find a solution in that regard. Our gut feeling is that the core economy is not investing for the future, and it is important to ensure the banking system has money to lend when the economy starts to pick up and turn around aggressively. It is important that the banking system is fit for purpose in future as there is currently a demand issue in place as much as anything else. That is the feedback we are getting from members.

The issue of double rent reviews has been raised twice in different ways. Deputy Tóibín has summarised our views on the upward-only rent situation quite well. Around the country we are finding that most landlords and businesses have managed to get together and find accommodation, so it is not a matter that preys on our members' minds significantly. Ultimately, contracts are what they are so it would not be smart for the Government to overturn an agreed contract. That is why we tried to suggest that the Government could find some way, in the absence of being able to legislate historical upward-only rent reviews, to recognise particular cases that may threaten jobs and provide some form of capping process. It is not that we are saying there should be unlimited relief rather that there should be a form of capped payback for somebody who can prove it was impossible to renegotiate rent with a landlord on a contract going back before the start of the recession, for example. That is the thrust of the recommendation in that area.

With regard to breaking down silos in Government, we do our best to ensure we present our ten-point plan, for example, to every Department that will entertain us. Nevertheless, breaking down silos in Government will always be a challenge and we will do everything we can to socialise the work we do with the various Departments with an impact on us. That is a combination of the Departments of Foreign Affairs and Trade; Jobs, Enterprise and Innovation; Environment, Community and Local Government and so on. We deal with multiple Departments on multiple issues but we cannot manage to solve the challenge of breaking down those silos.

With regard to overall cost and velocity of money, hardly any of these measures will have any significant impact on tax revenue, as almost everything we are proposing is targeting an area where nothing is happening at the moment anyway. A 5% VAT rate on housing repair, maintenance and improvements, where virtually nothing is happening anyway, amounts to 5% extra revenue. We are also considering velocity of money, and we have tried to come up with areas that have connected impacts. If somebody does a kitchen extension or attic conversion, they would buy new fridges, dishwashers, televisions, carpets or curtains, and all of these would create VAT at 23%, making back the small margin between a 13.5% rate and a reduced rate. We would propose the imposition of a sensible cap on any of these proposals to get things moving at the bottom end, so there would be no licence for people to rebuild a mansion.

We may never agree with Deputy Tóibín on capital gains tax, as our idea is that low tax generates increases in taxes paid. We also feel that decreasing corporation tax in this fashion would just help velocity of money, keeping more of it circulating in the economy and helping to regenerate economic activity. That was the basis for our introduction.