Tuesday, 18 January 2011
Local Authority Charges
Brian Ó Domhnaill (Fianna Fail)
I apologise for being late. I was at a meeting which was going on. I apologise to the Minister of State and to the Leas-Chathaoirleach.
My matter relates to an issue concerning many businesses in my constituency and in the Border county of Donegal, the high cost of commercial rates, coupled with the cost of commercial water rates. I wish to focus on the issue of commercial rates in the business sector in my constituency. I am sure the issue is replicated in other constituencies.
I am aware of the difficulties faced by businesses in my constituency on a daily basis. Reductions in consumer spending are coupled with the inclination among many shoppers to travel a few miles across the Border to the larger multiples in places like Derry, Belfast and Enniskillen. That issue has abated to some extent with the change in the sterling exchange rate and the increase in VAT in the North.
The business community in County Donegal and along the Border is facing a challenge in making ends meet, holding on to employees and paying large Revenue, ESB and heating bills as well as commercial rates. The law of diminishing returns applies in this area. I have brought many business people in my constituency to meet the finance officials in Donegal County Council. The officials have advised that while they would like to be able to write off a certain proportion of rates, they cannot do so. I brought the managing director of a business which employs 35 people in my constituency to meet the head of finance in the council and liaised with the county manager on the case. The company has been put in jeopardy from a large outstanding rates bill that it simply cannot afford to meet, largely because it is still owed money by other businesses. It would be in a position to pay a reduced amount but it cannot meet the entire bill. This is having a negative impact on its balance sheet and the charges are being carried forward at the end of each year. If rates could be reduced, businesses would make the additional effort to pay them. All the businesses with which I have dealt have stated clearly that they want to be able to pay rates but simply cannot afford to do so. The alternative is to close the business but, to be fair to Donegal County Council, it does not want to see this happen.
This issue needs to be addressed at a national level. Perhaps a forum could be established to consider solutions but it would have to report in a matter of weeks if we were to prevent more businesses from going to the wall. I urge the Government and the Department of the Environment, Heritage and Local Government to assist businesses because local authorities are not able to deal with the issue in isolation.
The members of Donegal County Council responsibly decided to reduce commercial rates by 3.5% for 2011, but we need to introduce reductions of at least 50% over a period of 15 months to two years if businesses are to be able to get through these difficult times by paying what they can afford. When a business closes, the local authority and the Exchequer lose out, as do those who lose their jobs. I ask that a direction be given to local authorities either to reduce rate demands or work with businesses to allow them to survive during the difficult years. I raise this issue to bring it to the attention of the Minister for the Environment, Heritage and Local Government, and I hope he will respond favourably for the sake of people who pay taxes and create jobs. It is incumbent on the Government to protect jobs.