John Browne (Wexford, Fianna Fail) | Oireachtas source

I welcome the opportunity to speak on the Bill. I am pleased that Deputy Bannon sees fit to recognise the talents of Mr. Albert Reynolds, the great former TD from Longford-Westmeath.

One would want to be here a long time to deal with all aspects of the Bill. It is 1,136 pages long and its organisation has been ongoing for the past 12 years. I understand the last time changes were brought about in this way was when Mr. Seán Lemass was Minister, which is a long time ago. Obviously, therefore, the companies legislation was due to be brought into the modern era in order to bring about change. We have had the reports and recommendations of the tribunals in recent years and I hope many of those recommendations are enshrined in the Bill.

The Bill is one thing and its implementation is another. How it will impact on companies for the future is very important. We have had many company failures in recent years and I wonder what the Bill will do for companies in trouble. For the fifth year in succession, there has been a rise in the number of company failures, with 1,684 having collapsed during 2012 according to figures compiled in Kavanagh Fennell's Insolvency Journal. A notable feature was the dramatic increase in corporate receiverships. If someone had said to me a couple of years ago that A-Wear, Greenstar or Lyrath Estate in Kilkenny would be going into receivership, we would all have been shocked. I wonder what the Bill will do for such companies into the future.

A growing number of companies turned to examinership last year, including Atlantic Homecare, Cappoquin Poultry and the Ritz-Carlton Hotel, which were some of the high profile applicants among 27 or 28 such applications. I believe examinership is a far better way to proceed than receivership. When a matter goes to the courts, for judges to make a decision on receivership is far too easy, whereas if a company is put into examinership, the company might be saved. We have seen situations where examiners were appointed and companies were able to trade back out of their situation with the support and help of the examinership. In a recent case, Mr. Bill Cullen's hotel in Kerry was in receivership, it was then put into examinership and the judge then decided he would put it back into receivership. It is quite obvious there are problems in this area. I feel examinership should be the way to proceed and receivership should be the last resort.

There are many reasons companies collapse. Deputy Bannon referred to some of these, including the high rates being charged by local authorities, upward-only rents, service charges, water charges and planning charges. When retailers decide to upgrade their stores and apply for planning permission, the planning application is straightaway sent to the Valuation Office in Dublin. It sends its officials to the store and, sure as hell, the size of the store and so on will be changed and the rates will go through the roof. Therefore, there is no incentive for people to develop, expand and upgrade their businesses because they must straightaway pay a rates increase.

There is also the question of exorbitant legal fees, which increased rather than reduced during the recession.

Legal fees are huge and one must then face planning charges. Companies apply for permission to extend or expand and local authorities levy exorbitant planning charges on them. They will charge them for roads and water and levy community charges and every other possible charge to get money. This is an impediment to the creation of jobs. It is important that these areas are looked at also. I know the Minister of State has been working with small and medium-sized businesses up and down the country to see how they can be protected and saved, but all the charges mentioned are major impediments to companies, large and small, in surviving. The charges applied by local authorities to businesses are completely out of kilter with what they can afford to pay. These charges were grand during the Celtic tiger era, but we still see the same charges being levied on businesses, even though they are put to the pin of their collar to survive. I have raised this matter a number of times with my local authority which has told me that it is reviewing the county development plan and that when it is completed, it might then be in a position to look at the issue of charges. For many businesses, waiting for the county development plan in every county to be reviewed and changed will take too long and they will go out of business in the meantime. The Minister of State should work with local authorities to substantially reduce these charges in line with the current position rather than what it was in 1996 and 1997 when major money was being made. It is not being made today.

The Bill is a step in the right direction and the Minister has put much time and thought into it. It was initiated when we were in government. As we initiated it, we cannot criticise it too much, but it has taken a long time to get to this stage. I often wonder why it took the best part of 12 years and about six Ministers to bring it to do so, given the personnel available in the Department. The last major tidying up exercise in company law was undertaken by the then Minister for Industry and Commerce, Jack Lynch, in 1963.

It is very important that the legislation is clear and accessible. The company law reform group, CLRG, has pointed out that company law reform has often been driven by the need to comply with EU directives and regulations. I am sure this issue has exercised the minds of many Ministers in recent years. The European Union makes regulations and directives that must be transposed into Irish law. Sometimes the regulations and directives issued from Brussels bear no resemblance to how companies operate in this country and are out of touch with what is happening in the real world. Their implementation certainly causes major problems for companies.

The company law reform group made a number of recommendations. The aim was to simplify the Companies Act, bring greater clarity and transparency to the companies code and increase its intelligibility to the businessperson. In making a proposal for simplification, the CLRG recommended an increased focus on the needs of the small private limited company. In this respect, it fully endorses the "think small first" approach favoured by the English company law review steering group. The three principles to be followed are that the law should be clear and accessible; that accuracy and certainty should not be sacrificed unduly in an attempt to make the law superficially more accessible; and that the legislation should be structured in such a way that the provisions that apply to small companies are easily identifiable.

Many small companies believe they were left out by this and previous Governments and that we seem hell-bent on looking after the larger companies coming into the country such as pharmaceutical companies. These companies create many jobs, which is good in itself, but many smaller companies believe they are not receiving the same service and support from the Government, the banks, legislators and other bodies that could be of major support to them. Deputy James Bannon spoke about IDA Ireland and Enterprise Ireland. In Wexford we believe Enterprise Ireland and IDA Ireland have not been very supportive or helpful during the years. There have been a few announcements in recent years, but we have not received our fair share of visits om the past 15 or 20 years. We certainly have not received our fair share of job announcements. We have heard today that Ebay will be locating outside Dublin in Drogheda. All of the major companies coming into the country seem to want to centre their operations in the cities - Limerick, Galway, Cork and Dublin. It seems it is very difficult to get them to set up in counties such as Wexford which has the necessary infrastructure - the port of Rosslare, as well as roads, sewerage and water facilities. For years IDA Ireland and Enterprise Ireland told us we did not have the necessary infrastructure, but now when we do have it, we are still not getting our fair share. It is important that some of the good companies, as we call them - pharmaceutical companies and the likes of Intel and Ebay - are not placed closed the cities but that IDA Ireland and Enterprise Ireland encourage them to locate in rural counties which can offer services and locations equally as good as those on offer in the cities.

I welcome the Bill, which is essential. The questions of how it will be implemented, the wherewithal to do so, the financial package to back it up and the staff that should be available through the different arms of government are very important. In general, the Bill is good in itself, but it will only be as good as the manner in which it is implemented and the support and help given to companies that want to stay in the country, expand and develop. Many of the roadblocks I mentioned need to be dealt with. I hope the Bill will go some way towards achieving this. However, I have my doubts about whether it will deal with some of the issues I have raised because all of the agencies of State, including the Department of the Environment, Community and Local Government, the local authorities, Enterprise Ireland, IDA Ireland and the EPA, are not overly helpful when it comes to supporting industry. It is very important that the Minister of State lead and drive and, in particular, takes up with the local authorities the issue of charges which is an impediment to companies setting up not only in my county but also in every other county.

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