Robert Troy (Longford-Westmeath, Fianna Fail)
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I take it the Minister of State, Deputy Sherlock, has drawn the short straw as he is responding to all the Topical Issues this evening. With no disrespect to him - he is a Minister of State I admire and he has been obliging to me in the past and is very approachable - this is disgraceful on a day when we talk about political reform. The Government promised that the Topical Issues Debate would be taken earlier in the day and would be answered by the Minister responsible for the issue raised.

Having said that, I welcome the opportunity to put on the record of the House the crisis facing many of our towns. Every day businesses are closing down. I see the Minister of State nodding in agreement because I am sure it is happening in his constituency as it is happening in mine. Less money is in circulation and yet business costs are increasing as opposed to decreasing.

The Government is doing absolutely nothing to address this. Businesses believe, rightly, that this Government is not doing anything to help them. Prior to the last general election, the Minister of State's party made a great play by saying it would abolish upward-only rent reviews. The Labour Party has reneged on this. It is a major issue for many in the retail sector.

There is a major issue with commercial rates and the method of calculating commercial rates is archaic and outdated. It needs to be addressed now. I have spoken to people in businesses in Mullingar, Athlone and Longford. They all tell me that this is one of their biggest overheads, an overhead that is totally and utterly controlled by the State. Energy costs have risen significantly. There have been double-digit increases in recent years in this area and the Government has allowed the Commission for Energy Regulation to pass on those increases to businesses.

I have been contacted by people in several businesses who are at their wits' end. They are not getting any support from the State or from the banks. These are men and women who have invested their time, money and many of their own resources to create jobs in our towns, but they are not being supported. The Government introduced the Living City Initiative for the city of Limerick only. Will the Government consider expanding that in order that businesses in all towns will be able to benefit if they reinvest in the community?

The Minister of State may not be able to answer my next question. Where do Mullingar, Athlone and Mullingar stand in respect of the national spatial strategy? It was announced that the Government was reviewing the national spatial strategy but businesses in those areas are unsure when the review will be completed and what the outcome will be.

Longford town has been totally forgotten by this Government. It has had no IDA visits in the past two years. Despite the lack of support from the State, the local authority, local businesses and the local chamber of commerce are doing their best. They are running a project, supported by Leader programme, as part of which last year they renovated 48 derelict buildings and unoccupied shops to ensure that the physical appearance of the town was kept well. This year, the project had a further 37 premises to work on, but what has happened? The Leader project funding that they had been reliant on has been cut. The Leader programme was a great support for the town, supporting market days and such initiatives.

What is the Government going to do? I acknowledge that the Government has had success in the foreign direct investment area and in attracting multinationals to the country. However, for the past two and half years the Government has taken its eye off the ball in respect of small and medium-sized businesses, indigenous firms and family businesses on the streets of every town throughout the country. What is the Government is going to do? The Government must prioritise investment and support job creation in this vital sector.

Seán Sherlock (Cork East, Labour)
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I am rather disappointed because I thought there might be some imaginative ideas from the Deputy opposite in respect of discussing the actions the Government is taking to address the decline of town centres throughout the country. The Deputy referred to towns within his constituency which are probably similar in character to those in my constituency. I have analysed the situation in the towns I familiar with. During the boom years section 23 investments prevailed and in some instances one could argue these were put together by the party opposite. Now, there is a lack of occupancy in many of the buildings and there are empty storefronts throughout the country as a result of those taxation policies and the ill-informed Government policies of the past. They have led us to the point where many of our towns throughout the country have been hollowed out. If we are to have a reasonable and rational debate on this issue we should not start from the premise that economic history or the decline started only two years ago. We need to go back to 2007 and 2008 onwards in order to figure out where towns are now.

I will give the response that I have been given on the rates issue. The action programme proposes rates harmonisation to cater for differences between annual rates on valuation of towns and counties. The approach of the Department of the Environment, Community and Local Government to rates harmonisation seeks to ensure that, on the one hand, harmonisation does not lead to significant net loss of revenue in individual counties with consequential implications for services, and, on the other, increases in rates do not impact negatively on business and employment. In this regard local authorities have already been asked by the Department by way of circular to exercise restraint, and, where possible, reduce commercial rates in 2013. In fairness to many local authorities, this is what they have done or they have maintained rates at pre-existing levels.

There are several issues. Why have town centres declined? There significant property rights in this country such that it is very difficult for a town council or a local authority to intervene where a building is not occupied or where it is falling into decline. The property rights of the owner seem to take precedence over the wider social responsibility in respect of the upkeep of the premises. That is one challenge for local authorities in terms of attracting new activity to the main street. There is also the fact that in any town throughout Ireland at the moment there is an increasing number of courier vans delivering goods that have been purchased online. This is having a serious impact in terms of high street retail sales as well. One need only discuss the matter with one's peers, friends and family to get a sense of how much activity is being driven online nowadays.

The Deputy made a point about IDA visits. I have no specific knowledge in respect of IDA visits in the areas he referred to but I know from my experience in my region that there have been significant IDA visits. However, often the decision is made by the relevant person, business or company that they wish to locate to larger conurbations because of the particular type of business that is coming into Ireland at the moment, especially in the information and communications technology sector. In this sector, younger companies and younger people are looking to move to clusters around larger conurbations because it is deemed to be more attractive than locating to more regional towns such as my town of Mallow. That is a major challenge as well.

Domestic demand has flat-lined. Therefore, to say that the Government is at fault for the flat-lining of domestic demand makes no sense. The Government, in fairness, is trying to create the jobs and replenish the jobs that were lost. A total of 250,000 jobs were lost between 2008 and 2011. Nobody can convince me that if one puts all one's eggs in the construction basket and if that fails, then it would not have a detrimental effect on retail or the shape of towns and retail businesses within towns. We must create the jobs to create domestic demand and we are making a good fist of it although it is taking time.

We must be more imaginative in terms of how the planning guidelines, which were issued recently, will impact. We must ensure, as per the Minister of State, Deputy Jan O'Sullivan, that the planning system plays a key role in supporting competitiveness in the retail sector in order that there is an advancing choice for the consumer while promoting and supporting the vitality and viability of city and town centres and contributing to a high standard of urban design.

Joanna Tuffy (Dublin Mid West, Labour)
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The Minister of State is over time. Could he quickly complete his response?

Seán Sherlock (Cork East, Labour)
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The objective of the guidelines in the manual is to provide a clear framework for the continued development of the retail sector in a way that provides certainty for retailers and communities by strengthening national planning policy requirements for all planning authorities. The remainder of the response will be available to the Deputy. I will respond to Deputy Troy’s supplementary questions.

Robert Troy (Longford-Westmeath, Fianna Fail)
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I thank the Minister of State for his reply. As is the current theme of the Government, it is a hands-off approach. It is not the Government's fault; it is someone else's fault.

Seán Sherlock (Cork East, Labour)
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What ideas does Deputy Troy have?

Robert Troy (Longford-Westmeath, Fianna Fail)
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The Minister of State should allow me to speak for my two minutes.

Seán Sherlock (Cork East, Labour)
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I will stay here for a while.

Robert Troy (Longford-Westmeath, Fianna Fail)
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I thank the Minister of State. I have acknowledged that there is less money in circulation and a reduction in domestic demand, but I also asked the Minister to acknowledge the State’s responsibility and the costs the State can control such as rates. The payment of rates should be based on a business’s ability to pay according to profits made not on an archaic basis such as the size of a premises. It was a core commitment of the Labour Party before the general election to deal with upward-only rent reviews but that did not happen. Energy costs have been allowed to increase, not just in the past two years but prior to that also. It should not be allowed. They are the three major costs associated with doing business in this country.

I asked about the spatial strategy for Athlone, Tullamore and Mullingar but I do not expect the Minister of State to respond today. He might refer the matter to the Minister of State, Deputy Jan O’Sullivan. I also inquired whether it would be possible to roll out the living city initiative that has been introduced in Limerick to larger towns throughout the country. I further inquired about the detrimental effect cuts to Leader funding is having on businesses and chambers of commerce that are trying to do their best for businesses in towns.

The Minister of State asked what constructive proposals Fianna Fáil had made. We launched a document called Streets Ahead, which is a new vision for keeping Inish towns alive.

Seán Sherlock (Cork East, Labour)
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When was that?

Robert Troy (Longford-Westmeath, Fianna Fail)
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It was launched four or five weeks ago by our party spokesperson on the environment, Deputy Barry Cowen.

Seán Sherlock (Cork East, Labour)
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How long was Fianna Fáil in government?

Robert Troy (Longford-Westmeath, Fianna Fail)
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The Minister of State asked me for suggestions and I am giving him some. I was not in government.

Seán Sherlock (Cork East, Labour)
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Can Deputy Troy not understand the cynicism on this side of the House when we hear proposals of that nature?

Robert Troy (Longford-Westmeath, Fianna Fail)
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The Minister of State is in government now. Businesses are suffering. The Minister of State sought proposals and I am making them. First, the Government must review and amend how valuations and rates are charged. If, according to the advice of the Attorney General, it is necessary to introduce a constitutional amendment to bring about the abolition of upward-only rent reviews then the Government should do so.

The Government must change the parking charges structure to encourage people into town centres. It must look at the building usage strategy and develop an initiative to encourage people to take on empty shops. We must change the planning laws to encourage town centre development. That should be done.

We were fortunate that the town of Mullingar did not allow large shopping centres on the outskirts of the town because when that happened it had a detrimental effect on town centres. I acknowledge that mistakes were made but two wrongs do not make a right. We must learn from the mistakes and support businesses which find the situation difficult. Family businesses that are providing employment for up to ten people must be supported. The biggest costs such businesses are facing at the moment are costs that are controlled by the Government, namely, rates, upward-only rent reviews and energy costs. All I ask is that those matters would be given the priority they deserve in the coming months because the people affected deserve support.

Seán Sherlock (Cork East, Labour)
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The memorandum of understanding, MOU, signed by the troika introduced the property tax. Fianna Fáil negotiated agreement with the troika, which is a sovereign agreement. I do not know the Deputy’s position on the property tax but it should be a significant revenue stream for local authorities and should redress the balance in terms of the burden over many decades that has been placed on businesses in regard to the annual rate of valuation. It will be an opportunity, for instance, for councillors of the Deputy’s party to have a clear policy document and prerogative on how it would be implemented at municipal or local authority level. I look forward to seeing some of those ideas within my own local authority, Cork County Council.

The cost of parking is competitive in most towns around the country because there is good interaction between business and local authorities and many businesses are represented on local authorities. The issue is how one regenerates towns. I accept Deputy Troy’s point about energy costs, rates and ability to pay but the singular issue relates to demand. It will take some time to reverse the economic morass in which we find ourselves, such that we can create the jobs to ensure a sufficient level of retail demand. The approach is demand led. I acknowledge the points made about coming forward with ideas for empty shops but because of property rights the local authority cannot force specific types of retail activity into specific areas. It is a difficult thing to do.

Joanna Tuffy (Dublin Mid West, Labour)
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I must ask the Minister of State-----

Seán Sherlock (Cork East, Labour)
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I beg your indulgence, Acting Chairman. We saw the demise of development contributions which were a major source of income for local authorities during the boom years. Cork County Council spent wisely on building up social infrastructure but the funding has practically disappeared. I agree that one can no longer rely on rate payers – businesspeople – to fund local government. That is why I look forward to Fianna Fáil members of local authorities supporting and striking the new rate on the property tax when the time comes in terms of the deviation that is allowable in the legislation to support the type of activity to which Deputy Troy refers.