Mr. Fergal O'Brien:

I will comment first on the rates issue and Mr. Burke will come back to the more substantial aspect of Senator Davitt's question. It is important that while we recognise fully the particular challenges rates cause for small businesses, we also see more significant employers facing very large increases in their rates bills running to the hundreds of thousands of euro, with some of them taking bills now into the millions. These are costs which are actually registering for manufacturing and other businesses at international HQ level, with Ireland now seen as a very expensive place in terms of the cost of local government. We have particular challenges around town centres, to which Mr. Burke will refer in some detail, and particular challenges for small businesses, but we do not accept the view that big businesses are all gaining here at the cost of small ones. We are seeing many large manufacturing companies operating in quite tough competitive environments and facing significant cost increases. These are not incidental cost increases. They are costs at the firm level which could run into millions. At an aggregate level, business is paying €1.5 billion towards the cost of running local government, in most cases with very little say as to how that money is spent. It is a real challenge for all businesses, not just the smaller retailers.

My colleague, Mr. Brady, might like to come in on the cost of finance. At the height of the crisis, Irish businesses were paying a very significant premium for credit above what businesses across the rest of the eurozone were paying. This was most acute, again, for the SME sector. Clearly, the single European banking transmission system is not working the way it was prior to the crisis and we are not getting the full benefits of the eurozone banking system. There are things that can be done at EU level to address this around a capital markets union, which is really important. That union would give us a much stronger common European financial sector which would allow Irish businesses to gain greater access to capital funds at a eurozone level. I go back to what I said at the beginning of my contribution on what is crucial. Prior to the crisis, Ireland was, by far, the most bank-lending reliant business community of any in the eurozone. We need to drive diversity of financing options and Government needs to look at what it can do to ensure that the schemes we have, such as the employment incentive investment scheme, are working effectively and are not too restrictive in the terms and conditions which apply. There are other schemes that will be particularly targeted at small exporters around export credit and trade insurance which will be critical to small businesses which are trying to diversify post Brexit. Any further measures we can implement to diversify the financing mix are important.