John Lyons (Dublin North West, Labour)
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I thank the Ceann Comhairle for giving me an opportunity to raise this issue in the presence of the Minister of State. Finglas village is on its knees. It has two large retail centres on its outskirts, one to the north of the village and one to the south. There are many vacant units in Finglas village centre, which is struggling to compete with the two out-of-town centres I have mentioned. Along with my Labour Party colleague, Councillor John Redmond, I have been fighting to protect the village by keeping the post office open and opposing inappropriate developments such as arcades and slot-machine venues. We also have been considering ways to revitalise the village. The local tidy towns committee and the Friends of Finglas Village group are doing Trojan work in their own time to support ways of ensuring the village remains a vibrant place. Finglas is just one of many villages and towns in Ireland that have multiple vacant units. This problem is replicated throughout the country where local communities are contending with the challenges posed by out-of-town centres, which are able to grab more attention.

In the short time available to me, I will speak about the idea of adjusting commercial rates to support retail centres in towns and villages. I appreciate that valuation and planning issues arise in this context. I believe rates should be aligned to incentivise development in core areas; this would be in keeping with the planning guidelines. I also believe it is worth considering the temporary imposition of a large retail levy on massive out-of-town developments. Both of these measures could strengthen local government and increase accountability. With some exceptions, rates are currently applied evenly regardless of the location of the business. While councils have made huge efforts in recent years to reduce rates, this approach is indiscriminate of factors affecting retailers such as accessibility and the amount of parking that is available. Businesses create their own effects. Large out-of-town retailers draw customers from town centres. This was not really an issue during the good times.

However, many of the existing out-of-town developments were built at a time when we had a fast-growing economy and the pie was getting bigger. In the far more competitive economy of today, the advantages the larger out-of-town retailers enjoy have multiplied even more. These competitive advantages are directly impacting on towns such as Finglas, Naas and Ballinrobe, to give just three examples. The knock-on effect is that this is threatening jobs and undermining our planning policies.

I believe councils should set their own rates according to location, giving reduced rates to those in core areas and setting increased rates for outer areas. While it would be up to each council to do this based on local circumstances, I believe it is workable and cost neutral. Consideration could also be given to putting a levy on very large shopping centres in out-of-town locations. For example, in Northern Ireland a three-year large retail levy was introduced on big out-of-town retailers. This levy could be used in conjunction with a revised rates scheme or a stand-alone levy, both of which are worthy of consideration.

This principle has already been established within the new development contribution guidelines, which require local authorities to apply lower contribution charges for developments in town centres and higher ones for out-of-town centres. Furthermore, the Putting People First local government reform document will allow councils to adjust local property tax in certain areas. With a differential rates scheme, which is what I am proposing today, councils and councillors would be able to set commercial rates in their own areas and align them to a policy that would be in alignment with planning policy, thereby enhancing local government reform.

In a nutshell, the current planning guidelines state that towns and villages are at the core of our retail objectives yet our rates scheme does not represent this in any way. We provide the same rates scheme to large out-of-town retailers as to those who are within our planning guidelines in towns and villages. If we really want to promote and enshrine our planning guidelines, which state that locations such as Finglas village or Naas are key retail centres, we must have our rates scheme reflect that. At present, it does not do so. I welcome that our development contribution guidelines have changed to match our planning guidelines. The only piece that is missing in the cake in terms of changing the regulations to be in accordance with our planning guidelines is our differential rates.

If we truly want to bring lifeblood and activity into towns and villages which are genuinely struggling, we need to change our rates scheme to reflect that. The reality is that those retailers which are out of town are in a position to pay higher rates given they have huge car parking space and customers go to these centres for a variety of reasons. If we genuinely care about our towns and villages, we must have some sort of a differential rates scheme which reflects this.

While these large out-of-town retailers of course supply jobs, the businesses in our towns and villages do the same. The big difference is that the majority of retailers in our towns and villages are businesses owned by local people, providing local jobs and buying local produce, which is then sold on further. I hope the Minister of State will take on board my suggestions. While I am conscious it is not his direct departmental responsibility, I look forward to his response.

Seán Sherlock (Cork East, Labour)
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I thank the Deputy for raising this important matter, which I am taking on behalf of my colleague, the Minister for the Environment, Community and Local Government, Deputy Phil Hogan.

Local authorities are under a statutory obligation to levy rates on any property used for commercial purposes in accordance with the details entered in the valuation lists prepared by the independent Commissioner of Valuation under the Valuation Act 2001. Any of us who have served on local authorities would acknowledge the point Deputy Lyons has made in this regard. The levying and collection of rates are matters for each individual local authority. The annual rate on valuation, ARV, which is applied to the valuation of each property, determined by the Valuation Office, to obtain the amount payable in rates, is decided by the elected members of each local authority in the annual budget and its determination is a reserved function.

The Government has no plans at this juncture to introduce a temporary levy on large out-of-town retail operations. In terms of planning policy, the Minister, Deputy Hogan, and the Minister of State with responsibility for housing and planning, Deputy Jan O'Sullivan, published new development contribution guidelines in January 2012. The new guidelines build on the experience gained in recent years and also align development contribution policy with the Government's prioritisation of employment creation, investment and sustainable development, a point the Deputy addressed in his contribution. Above all, the guidelines are intended to support proper planning and sustainable development while also prioritising job creation and economic investment.

All in this House, across the political spectrum, are aware of the pressures on small and medium enterprises and intergenerational businesses in places like Naas and Finglas, to which the Deputy referred. In that context, local authorities have been asked by the Department of the Environment, Community and Local Government, by way of a circular letter, to exercise restraint or, where possible, reduce commercial rates and local charges for 2013. Local authorities have responded well to such requests in recent years and, in 2013, 87 out of the 88 rating authorities have either reduced their ARV or kept it the same as in 2012.

The Deputy referred to the Government's action programme for effective local government, Putting People First. This indicated that, in the context of reorganisation of local governance structures, the proposed new municipal districts will provide an opportunity to achieve a more coherent approach to rates and charges on a county-wide basis, having regard to funding requirements and the need to support employment and business competitiveness. To be honest, I do not know how that dynamic will work in Finglas and it is probably easier to map that potential in terms of counties such as Cork, where there are distinct municipal areas that do not border on a large metropolitan area. It will be a challenge, and I acknowledge the Deputy's point in this regard. The action programme proposes rates harmonisation to cater for differences between ARVs of towns and counties. The Minister's approach to rates harmonisation will seek to ensure, on the one hand, that harmonisation does not lead to significant net loss of revenue in individual counties, with consequential implications for services, and, on the other hand, that increases in rates do not impact negatively on businesses and employment.

The Minister has informed me that he will continue to keep the approach to rates by local authorities under active review and that he is determined every avenue will be pursued to optimise efficiency and contain costs in the local government sector.

John Lyons (Dublin North West, Labour)
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I thank the Minister of State. To be fair, the response is reasonably positive in that there is some light at the end of tunnel and this issue may be reviewed. To give some anecdotal evidence, in a village that has more vacant than occupied units, and in an economy that is just beginning to turn around, two local men in Finglas recently opened up a Four Start Pizza shop with an attached Subway branch. They have only opened the shop since Christmas but as they had the premises before Christmas, their rates were approximately €9,000 for last year, even though they were not even up and running. They are competing with a large supermarket that sells anything from a light bulb to a banana to a computer and everything in between, and this supermarket has plenty of parking spaces, which, to be fair, it would have paid for through development contributions. These two local people are trying to meet our challenge of creating jobs and being innovative, and have set up a business to do so, but they are in an area of the village that is falling on its knees.

This story is replicated in every county. One can drive through the towns from Dublin to Cork, which I and the Minister of State know well, and see that units are closing down because they just cannot afford rates and other charges. At the same time, just outside the towns we can visit large retail units which are thriving because more people can go there, they have no parking issues and so on.

I welcome the fact the Minister for the Environment, Community and Local Government has said he will keep an eye on this issue. However, if we are serious about bringing life back into our villages and towns, whether they are urban or rural, we have to look at the amount of rates we charge.

Those who can pay more should pay more and those who cannot pay as much should not pay as much. This is the way to do things under the principle of fairness. If we want to keep our villages alive and bring life to somewhere like Finglas, we must look at the rates we charge. Surely somebody who operates a branch of Four Star Pizza in a village that is on its knees should not have to pay the same rates as a retail outlet outside the town with multiple parking and significant advantages. That is one anecdotal example. I thank the Minister of State for his response. It was reasonably positive and there was some light at the end of the tunnel.

Seán Sherlock (Cork East, Labour)
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I am getting a bit peckish thinking of Four Star Pizza. It is a long way to Cork. I might pop in. On a serious note, I concur with what the Deputy is saying. We are seeing that effect throughout the landscape. There are factors other than rates influencing that dynamic. The Deputy is right about out-of-town multiples being able to house all products across a broad spectrum, which is certainly having an effect on smaller towns and villages.

Smaller towns and villages must be creative because consumption has modified considerably. Conspicuous consumption has virtually flat-lined and we might have to be more creative about how we re-imagine town centres and villages. I take the point the Deputy is making.