Bernard Durkan (Kildare North, Fine Gael) | Oireachtas source

There is one other element which I need to bring to the attention of the House. I wish to emphasise the importance of the impact of rates. It would be a huge boost to the commercial activity in our towns and villages if, as a result of this review of the valuations, there was a reduction in rates. There is no use in having it any other way. There are competing demands affecting the commercial sector. If, as a result of this, there is an increase in rates, there will be two effects. It will demoralise people and it will negatively impact the sector.

There are other competing factors. We had upward only rent reviews in the commercial sector. Do Members remember this? Some genius thought up this some years ago. I have always believed them to be unconstitutional and that, if practised on a large scale, they would ultimately undermine the budget of the State, which they did. To my knowledge, they are illegal now. The practice, in general, has been hugely detrimental. If people are facing bills from rates and should they in the future face an upward only rent review, the income of the entrepreneur, householder, investor, shopkeeper or launderette will be controlled by factors outside of their control. It must be remembered that only a certain amount of activity can be generated within a particular space. This needs to be borne in mind when considering the measurement of the properties.

One of the oldest difficulties we have relates to planning permission and a change of use. Let us take, for instance, a pub. It is to be hoped that pubs will improve, but it must also be remembered that they have provided a social service to communities. One classic example is where the owners of a pub decide to put in a restaurant upstairs. Someone does a head count and bingo, up go the rates straight away. Whatever hope the owners have of operating on the basis of the existing commercial premises, out of which they were barely able to eke an existence, if they decide to be enterprising and to provide jobs for people in the locality, they are put down very quickly. There is an extra supercharge on the rates and this defeats them.

The biggest single deterrent in terms of commercial activity in our towns and villages brought to my attention over the past nine or ten years, but particularly during the economic crisis, is without a doubt the rating system and its impact on business and enterprise.

See this speech in context