Willie Penrose (Longford-Westmeath, Labour)

I am glad of the opportunity to contribute to this debate and thank Fine Gael for tabling the motion. I have indicated my concern in this regard throughout my tenure as Chairman of the Joint Committee on Enterprise, Trade and Employment. The committee has been examining on an ongoing basis the bureaucracy and regulation to which businesses throughout the country have been obliged to submit. This includes the cost of various licences, registrations and fees that have to be paid, either at local or national government levels, to Government agencies or whoever. It is not just a question of the amounts but the multiplicity of charges businesses face. They are subject to commercial rates, water charges, development contributions etc. These charges increase year on year and damage competitiveness in the process.

We are all acutely aware of the importance of competitiveness. We in the Labour Party are focusing on our own policy document in this regard, which shows how Ireland has lost its place in the competitiveness league. While the Fine Gael motion is laudable and noble, to freeze local authority rates, while welcome in many quarters, is too wide-sweeping an initiative. It could result, ultimately, in extra burdens being placed on many workers and on those on social welfare, as local authorities seek to make up the deficit as a result of such freezing. The thrust of the motion appears to be that commercial rates should be frozen at their existing levels for the next three years. While this might be politically attractive, without alternative sources of finance being put in place, it is utopian. We must face reality. My family has a small shop and we pay rates. We would be delighted if the rates were abolished and everything would be grand until the day we would step outside the door and find the refuse and litter has not been cleared up. It is not difficult, in theory, to freeze local authority charges and rates. However, such action directly affects jobs in local authorities.

I would like to see a strengthened role for local authorities as regards being in the vanguard of job creation, providing a base and local knowledge to promote employment opportunities. One of the mysteries when I was a member of a local authority was that everyone in the place seemed to get money to provide assistance and advice and to give a boost to the community. However, the local authority, a county-wide structure, did not get a penny. It was starved of finance, strangled. Somebody seemed to have had an agenda to cut out the local authorities because they were left bereft of finance at critical times. Local authority members often had to make very difficult decisions. I note that services in our local authority, Westmeath County Council, which were half-privatised have been fully privatised in the past 24 hours. The council had maintained a waiver system up to this, for the benefit of the elderly, people on social welfare and those less well off. With the recent privatisation, that has been wiped out. This caused great angst for my Labour Party colleagues on Westmeath County Council, and they were right, notwithstanding the snide remarks emanating from some quarters. Their concerns were to ensure that the people less able to bear the costs being visited upon them by the removal of the waiver system, which created enormous difficulties for them, should not suffer.

To take that proposal in isolation would lead to paralysis and the ultimate collapse of local authorities, unless the tax base were widened or an alternative source of funding were provided. Anyone who has served on a local authority knows that significant duties and obligations were imposed on them, deriving from the Oireachtas, without any concomitant level of finance to implement such burdens. Even as we speak burdens are being placed on local authorities. I therefore believe the Labour Party would not be in a position to support the Fine Gael motion, as constructed, despite its thrust being something to which everybody aspires. The Government amendment misses the point as well, and we certainly shall not be supporting that. It ignores the problem and is far too self-congratulatory in its tone, mode and tenor.

The Leas-Cheann Comhairle will appreciate that a review of the business environment was carried out in his home county of Wexford. Councillor George Lawlor is very diligent as regards his duty as a local representative and we are very proud of him for the role he plays in that regard. He carried out a survey, the results of which showed that one of the biggest problems for businesses was not rates but rents. Rents are a multiple of the rates bill for many businesses, and it would not be a profitable solution for small businesses to destroy the local government funding base and local authority jobs. The Labour Party has been always to the forefront in trying to protect local authority and public service jobs. These workers are out at 5 a.m. cleaning streets. If there is an accident, they are out at 3 a.m. clearing away the fallen tree or whatever. Those are the people on the frontline who would suffer if we supported this motion in its current form, and the Labour Party would not do that.

We all know about upward-only reviews of rents, tenancy and lease agreements. That is crazy stuff and does not take cognisance of the economic environment. This was all part of the Celtic tiger mentality that deluded people into thinking nothing was going wrong and everything was all right.

Deputy Morgan, who is here, played a prominent role for the committee in going around the commuter belt while the survey was being conducted. Commercial rates vary throughout the country and there needs to be consistency. We have the ridiculous situation of two companies operating side by side, or perhaps the same company operating in Louth, Westmeath or Roscommon, with people paying widely different charges for the same services. We must bring a degree of logic to this. The relevant levels can be seen as a way to increase local funding, and this is often unsustainable. Recently, there were a number of SME people before the committee when regulation and bureaucracy were frequently highlighted. One such person was Mr. Patrick Cooney, the owner manager of Gleesons, a fourth generation wholly-owned Irish company engaged in the manufacture, marketing and sale of alcoholic and non-alcoholic beverages for the home and export markets. At the committee meeting he stated, "It appears that there is a Government agency or quango for every conceivable activity. Generally, these boys see themselves as implementing to the letter a particular piece of legislation, without any consideration for the knock-on effects of their actions. The sheer volume of work and paperwork necessary to provide all the various combinations with this information or that statistic is mind boggling." He is right. Ordinary business is subject to too many inspections by various agencies, often duplicating work and bolstering irrelevant bureaucracy. There are CSSO documents to be filled out, environmental health levies, as well as this, that and the other examination. These initiatives may be justifiable, but there should be free-flowing unified inspection. If people are coming to inspect for X, they also inspect for Y and Z on the same day.

I want to mention oil and energy costs. I visited a horticultural and fruit growing company recently in north Dublin, with Deputy Morgan, which directly employs 460 people on a farm site and 180 in ancillary services, a total of almost 1,000 people. The company has an energy bill of more than €1 million, equivalent to about 35% of its costs. It is competing with Dutch companies in the horticultural area. There is no support within the Common Agricultural Policy for horticulture enterprises and Enterprise Ireland does not fund them either, even enterprises with that level of jobs. The industry competes with the UK. Gas and electricity costs are 30% to 50% higher than there for different aspects of business. It is engaged in significant research into combined heat and power, CHP, energy models, which are particularly suitable given the need for carbon dioxide emitted by-----

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