Mary Coughlan (Donegal South West, Fianna Fail)

The issue of competitiveness is key to my response to business needs, especially for the SME sector. Ireland has consistently been an economy in which it is easy to do business, and it has seen the growth of a large number of successful new enterprises, many of them SMEs.

Ireland is a leader in having the lowest cost for setting up a business and is lightly regulated, which in itself lowers costs for business. Ireland also has the third lowest rate in the EU of corporation tax, which lightens the tax burden on businesses and gives them an advantage over competitor countries.

Current trading conditions for companies are difficult and challenging because of various issues such as the devaluation of sterling, energy and wage costs, tough competition and the decline in exports. Some issues are outside the control of the Government as a whole, but where possible and appropriate, we can address some key areas, for example, energy and local charges. We are addressing our cost competitiveness as an essential element of our economic recovery. Nothing should come in the way of these firms to inhibit or stop them from growing their businesses.

I am conscious that energy costs for businesses in Ireland are a source of concern, particularly as businesses are attempting to cut costs to remain competitive in the current economic environment. However, in recent months, the trend of energy prices has been downward. In response to this trend, the Commission for Energy Regulation lowered electricity prices for residents and SMEs by 10% from 1 May. Gas prices were reduced by an average of 12%. According to the latest published Eurostat comparisons, smaller SMEs are paying 1% below the average EU 27 price. Approximately 60% of ESB's SME customers are in this category.

On 8 May, the Government launched the national energy efficiency plan. This reiterates that the best method for businesses to cut energy costs is through energy efficiency. The new plan includes advice and mentoring for SMEs on how best they can reduce these costs. In addition, we have provided incentives to business to purchase energy efficient equipment and we will continue to promote energy efficient best practice. Sustainable Energy Ireland also offers a broad range of assistance to enterprises in achieving significant cost savings.

The Minister for the Environment, Heritage and Local Government, Deputy John Gormley, and I have impressed on local authority managers the concerns of Government about costs for enterprise, including local authority charges, and asked them to consider measures to support new or existing enterprises in their area by, for example, reduced development contribution rates, or deferral of payments.

The Government has also implemented an 8% reduction in professional fees for public service bodies from 1 March of this year.

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