Simon Coveney (Cork South Central, Fine Gael)

I will speak for seven minutes and if Deputy Tom Hayes does not come into the Chamber I will continue into his time. Will the Leas-Cheann Comhairle indicate when six minutes are up?

I welcome the opportunity to have this debate. I welcome also the presence of the Minister of State with responsibility for employment, Deputy Kelleher. This motion is very deliberate and specific in its intention, namely, to propose a concept this party already supports, to try to convince the Government to freeze commercial rates at local authority level. The Minister of State will accept that when a country moves from almost full employment and boom time to recession, the priorities must change, as must the way in which we fund local infrastructure and local government. The rules change.

First and foremost, as policymakers our priority in government or in opposition must be to ensure we do everything we can to keep businesses afloat and people employed. The cost of retaining people and preparing them for new types of employment is expensive from an economic point of view and it is also hugely stressful for the people involved. It puts individuals and their families under pressure. We must avoid the creation of a situation where we have a large number of long-termed unemployed people who will lose motivation, leave the country to try to find employment or, worse still, develop a reliance on the State for income.

We have made a decision to ask all our councillors across the country to fight for a freeze on commercial rates to give businesses under financial pressure some breathing space in terms of the expenses they face. The Government will be cutting its costs in the same way because we can no longer afford to survive in terms of what we currently spend on our public sector or on social welfare. We must allow businesses to do the same. With the reduction in the centralised funding for local authorities now that tax revenue has decreased, we cannot force local authorities to lean on businesses that are already under pressure by increasing their rate base to make up the difference to ensure that basic services are provided at local level. The temptation exists to do that. I have had difficult debates with our councillors in making the case that local authorities need to face tough cost-cutting decisions because they are taking a stand to keep rates at the same level they were last year.

There is a purpose underpinning what we are trying to do, namely, the prioritising of employment. I come from the town of Carrigaline in Cork which has a population of 14,000 or 15,000. On one side of the main street in the town 14 enterprises have gone out of business since January. Almost one in every four premises is either unoccupied or up for rent, lease or sale. Small businesses, in particular, cannot afford to take up the extra costs local authorities face because of a reduction in the general income that get from the Exchequer. They are the soft touch. We are trying to protect them to ensure they can stay in business and in two or three years' time we can increase rates as businesses start to grow again and, hopefully, to employ extra people as confidence is restored in the economy and consumers start to spend again.

This is battening down the hatches time in terms of the economy. We must help small businesses. We must give them free advice on how to restructure to prepare for recession. We must also ensure that their cost base reduces or, at worse, stays the same to give them as much of a chance as we possibly can to allow them to survive, to keep a skeleton business in place until we have an economic stimulus and growth again.

The Government amendment to the motion misses the point. We can take specific action in terms of rates and water and refuse charges. We could make a strong statement to businesses that we will not increase the load on their shoulders coming from local authorities for the next two or three years while Ireland tries to struggle out of this hole of recession, that they should do their best to stay in business and that we will give them all the help we can. We are not saying that to them, rather we are saying we are stuck for money and we will target them to make up the difference or at least part of the difference. In doing that we are increasing the pressure on them, which is resulting in the closure of many small and larger businesses. We can do more than simply freeze rates.

I note in particular the reference to energy costs in the Government amendment. I do not know what I have to do in opposition to get the message across to the Government that it is not doing enough to reduce energy prices. It is trying to do a considerable amount in terms of a switch to green energy, a switch to more sustainable energy sources and a move away from a reliance on carbon-based imported fuels. I support all of that, but the priority in recession must be to reduce the cost base for businesses. That is not happening. Perhaps it is because we have a Green Party Minister whose philosophy is that the more expensive energy is, the less energy people will use, and that is good for the environment. That may be a valid ideology when we can afford to do it but it is not valid when we are putting people out of business. That is the position. It is why it is important that the Minister of State, representing the large party in Government - which understands how to prioritise between environmental concerns, which are valid, and competitiveness concerns, which are equally, if not more, valid at present - must take a stand with the Minister. The Minister is driven by an ideology that views high energy prices as a good thing in a world that is rightly increasing the cost of carbon charges. There needs to be a counter-balance that addresses the cost of energy and keeping enterprises in businesses.

A survey of multinationals based in Ireland, released as recently as this month, stated in regard to energy costs that, as with other years, respondents indicated that Ireland's cost base was significantly higher than in comparable locations. When asked to compare the number of costs in Ireland, the most expensive area highlighted was energy. Some 86% of respondents indicated that energy costs were more expensive in Ireland than in competing locations. One company with a base in Ireland stated, depressingly, that cost is the major challenge facing its Irish operation. It stated that virtually all offices globally have a competitive advantage over its Irish operation. It further stated that it had no doubt that if its company did not now have a substantial presence in Ireland, it would almost definitely not establish one. I rest my case.

We must make it easier and less expensive to do business in Ireland. We can take action, particularly in the energy area, in terms of changing the way in which we regulate the energy sector in Ireland and of not allowing energy generators to make windfall profits on the back of carbon charges, which they are required to do by regulation but for which consumers and businesses pay. Last year, Irish consumers, namely, families and businesses paid an extra €220 million to energy companies because of the cost of carbon charges on their bills. We have done nothing to recoup that and to try to give it back to people to boost Irish competitiveness.

See this speech in context