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Dáil Éireann debate -
Wednesday, 22 Jul 1970

Vol. 248 No. 11

Local Government (Temporary Reduction of Valuation) Bill, 1970: Committee Stage (Resumed) and Final Stages.

Debate resumed on the following amendment:
1. In page 2, line 19, after "case" to insert ",other than owner-occupied residential business premises,".
—(Deputy Hogan.)

Earlier today we were discussing this Temporary Reduction of Valuation Bill which might be more properly titled the permanent disappearance of reduction of valuation. The Minister mentioned that he would give consideration during the phasing out period to an amendment I had put down. The phasing out period would last until the end of March, 1972, and during that time the Minister mentioned he would give some consideration to the points raised.

I consider this is totally unrealistic. People who have enjoyed abatement for seven years, if they have not been lucky enough to have made application for building permission before the 9th December, 1969, will have to pay rates in full. Even if the Minister decides in 1972 to give selective abatement the fact remains that these people have had to pay in the meantime. There is no selectivity about this measure and all those who have previously got the benefit of abatement will now be deprived of that benefit. I do not think the Minister's suggestion that he should use the phasing out period to consider this matter of abatement is realistic.

If the Minister intends to give selective abatement now is the time to do it and not to wait until 1972 or even later to introduce a new measure applying selective abatement. I accept the idea that large concerns may not be unduly worried about reduction of valuation but it is extremely important to the less well-off sections of the community. To deprive such people of what they have enjoyed for the past 50 years is too radical a change to be carried out immediately. If we arrive eventually at the stage at which the whole matter of abatement of valuation is abolished this should be done gradually and the Minister would have been well advised to have introduced this measure in a phased fashion. Coming to the House, having decided that certain sections would still enjoy abatement of rates, I put in "owner-occupied residential premises". First of all, I thought of putting down valuations and then certain occupations; it is not easy to draft an amendment covering certain sections in respect of whom one would like to continue the concession. It is a matter which requires thought. I put in "owner-occupied residential premises" to cover one section which might continue to benefit. As against that, the Minister may say that there are others who are badly off whom I have not included. There are those people who live over their business premises who are quite well-to-do. The well-to-do publican may live above his premises. By and large, this is the simplest way I could do it: pick out the small shopkeeper who does not have a house in the suburbs, who is forced to live with his family above his shop, with a kitchen, perhaps, at the back of the shop. That is the usual pattern in the towns and villages throughout the country. These people enjoyed this abatement up to now. The Minister proposes to remove it from them. I see no justification for doing that in this wholesale fashion, lumping everybody in with large insurance companies, banks, supermarkets and so on. He could surely have introduced a more selective type of abolition. By all means let him take the concession away from the large concerns but it is unjust to take it away so abruptly from the less well-off in our society.

The Minister for Local Government announced this phasing out on 9th December, 1969. No warning whatsoever was given until the Minister made the announcement: "All planning applications thereafter will cease to qualify for temporary abatement of valuation." Really this legislation is retrospective. The Minister could have named an operative date. He will tell me that, had he done so, there would have been an avalanche of applications for planning permission. There might have been, but I doubt if the situation would have been all that difficult. By and large, I doubt if there would have been a tremendous rush. Even if there were I do not think it would matter very much. An 11th-hour rush would neither kill nor cure anybody.

I tabled this amendment for the purpose of lending some measure of justice to the Bill. As the Bill stands, it is very coercive. This is something people did not expect. It is something which will be bad for the building industry. These people employed small contractors or small local tradesmen. I think the amendment is a very humane one. Indeed, I think the Minister himself would wish the Bill was somewhat different. He has expressed his sympathy with the ideas I have put forward. I appeal to him to accept the amendment.

I want to make it quite clear to Deputy Hogan that, whatever sympathy I may have expressed, I cannot agree to accept his amendment as it stands. It is most unrealistic. The Deputy has more or less admitted that there is great difficulty in introducing legislation giving remission to specific classes. There is need for a very close study and a full review of the whole rating system before positive proposals can be brought forward in regard to the type of development to which this remission should extend. I should not like the Deputy to think that, because I said this would be considered during the phasing out period, that meant I would not have the legislation until March, 1972. I hope to have it before that.

With regard to the amendment, this is not a precise way in which to identify small businesses which might merit consideration. Straightaway we would be distinguishing between the small shopkeeper living over his premises and the shopkeeper who owned a lock-up shop with no residential accommodation overhead. Such legislation would have many anomalies in it and would be open to different interpretations. The owner of a supermarket, for the sake of qualifying for a remission of rates for seven years, might build a small residence for himself above his supermarket. I do not think the Deputy wants to cater for that kind of possibility.

I should point out that only those owners of owner-occupied shops, which were being substantially improved or reconstructed, would qualify for the remission. In fact, they would qualify for only part of the total increase in valuation arising out of the improvements, a very minimal benefit indeed. Listening to Deputy Hogan, one would think that shopkeepers all over the country were going to have something taken away from them. The remission applies for only seven years and those in business for longer than seven years would require to carry out major improvements to their premises in order to qualify and they would then qualify only for that part of the total increase in the valuation arising out of the improvements. My personal concern, let me emphasise, is with the wider problems facing small shopkeepers and not just with those who can afford to improve their premises.

There are other ways in which this problem could possibly be met. One of them might be a review of the valuation system. It is unrealistic to put forward this amendment. It would create anomalous legislation which would be difficult to implement and which would not be of benefit to many shopkeepers. I regret I cannot accept the amendment. I would ask the Deputy to withdraw it and to accept in good faith my expression of concern, the review and my hope to introduce legislation later which will meet the problem more adequately.

I find it difficult to look kindly on the Minister's suggestion about legislation at a future date to deal with cases which might and should receive sympathetic consideration. He says it may be possible to introduce that type of legislation earlier than 1972 but that the matter needs close study and full review. One would think that, when this Bill was being drafted, the necessary close study and full review would have been applied to the situation. Abatement of rates has been in operation in this country for 50 years.

The Minister could have carried out the close study and full review before introducing this Bill so that it would be a graduated measure. He has introduced a Bill which is taking away abatement from everybody and indicates that he will sit back and carry out what he calls a close study and full review and, when that is completed, return to this House like Santa Claus and announce concessions to certain sections of our society. In the meantime, people will wonder whether they should carry out necessary work; whether they should improve the little shop and have their valuation raised or whether they should wait until the Minister for Local Government has carried out his close study and full review and restored to them what they had before.

This is a laughable piece of legislation. It is an ill-conceived Bill. The Minister implied that the measure was defective when he said he was in sympathy with my proposal. Would society stop if this Bill were not brought in? Can this Bill be deferred until next year? Would our economic situation collapse? There is no urgency about this Bill. It is not an emergency Bill in any sense. The in-between period is quite unnecessary. If the Minister had passed from full abatement to partial abatement—in other words, selective abatement—it would be a logical procedure in so far as he admits that he is in sympathy with my amendment.

I support Deputy Hogan's excellent case. In proposing to oblige shopkeepers who improve their shop premises to pay the full load of rates from the moment of improvement, the Minister is kicking the small shopkeepers of Ireland in the stomach at a time when many of them are being forced to close down because of the immense competition in the retail trade which is financed to a large extent by foreign entrepreneurs. There is no justification for the Minister's conduct in coming to this Dáil with a Bill which he admits will harm small shopkeepers—a Bill which he has acknowledged is lacking in sympathy for and understanding of the problems of the small shopkeeper. The most he can say, in effect, is: "Give me this. Let me put down the small shopkeeper. I will think about giving him back some form of relief in the future." That is not enough. It is an insult to the small shopkeeper and it is an insult to this Parliament. It is totally unworthy of the Minister. He is not obliged to proceed with his predecessor's Bill. On his own admission he accepts that it is a faulty and unfair proposal to make. The honourable and proper thing for him to do would be to withdraw it. If he wants to see to it that the large wealthy investor pays full rates from the start on his building, or from the moment it is completed, he can do that in a measure even shorter than the one which we are asked to pass tonight.

We have to make a fundamental decision. Do we want the small shopkeeper to continue in our midst? Do we accept that the small shopkeeper has a contribution to make to our society? Are we in favour of the personal manner in which the retail trade was conducted in the past? Do we believe that the small shopkeeper is a person with roots in the community, loyal to the community in which he lives and who, because of that, can make a contribution to our society and our economy which we cannot expect from the runners-in who may be chasing profits in the retail trade but have their loyalties elsewhere?

Do we think it is preferable to encourage the small Irish shopkeeper, who has his roots in the community, rather than to facilitate people who, because of their vast capital resources, can move in from abroad and, because of the capital they have to invest, can make vast profits and, having made their profits, can export the profits and avoid paying tax on them? Profits earned from the money of the Irish consumer are leaving this country year in and year out and are not paying the proper share of Irish tax because of various tax agreements we have with other countries. The question is whether or not we want to continue to encourage that development, which may have its own contribution to make to our retail trade and to our economy, and facilitate it against the small shopkeeper who is, as the Minister should know even better than I, the mainstay of rural Ireland and of the towns in the provinces.

If small shops close in rural Ireland at the rate at which many have been forced to close in the past, serious damage will be done to the society and to the economy and the welfare of many rural communities. This is a problem also in many suburban centres where small shops are being put out of business because of the competition of the vast supermarket chains which have been moving in. These supermarkets may offer, or seem to offer, goods at more attractive prices than the small shopkeeper but, if they do, they do it by depriving people of other services they had in the past, such as personal attention. They certainly deprive the community of the kind of worthwhile employment and worthwhile social stability which you get in a community served by small, individual, independent shopkeepers rather than by large impersonal chains.

As a Parliament we have very properly provided incentives for Irish industrialists. We have provided and continue to provide incentives for Irish farmers. We have retraining grants for people in industry, so that if they become disemployed in one activity they can get training to equip them for another. We give tax concessions to industrialists and to exporters. In the past half century, shopkeepers and other sections of the community have enjoyed freedom from the full rates liability. Now, at a time when all other sections of the community are getting tax concessions and grants and assistance of one kind or another from the Government, we are proposing to victimise the small shopkeeper, the small factory owner, the small people who are deserving of more than the sympathy which the Minister has said he is prepared to give.

The Minister's sympathy is of little value if your bank balance has gone from credit to debit and if the bank manager sends for you and tells you he has to close down your business. The Minister's sympathy, offered in the Dáil on 22nd July, 1970, will not be of any assistance to those people when they are ruined. What we should be doing is endeavouring to assist these people. We should take particular care not to do them a harm which is not done to them under our existing legislation.

What is the reality facing many small shopkeepers at present? They are finding the going hard. Their only hope of survival is to modernise their premises. Very often this modernisation requires investment in tearing down an old shop front and putting up a new one. It is a rather negative form of investment. It does not create new wealth. Perhaps it entices people to come in and buy goods which they otherwise might not come in to buy. Because they do that, the rateable valuation of a small one-, two- or threeman shop may be raised by anything from £15 to £20 or £30. Under our existing legislation, the additional rates burden in the following year might be £7 10s or £15. The shopkeeper can weight that against the additional business he hopes to earn. The effect of this piece of legislation will be that, instead of paying £7 10s or £15 in additional rates, he will find himself paying £75 or £150 rates in the following year simply because he has improved his premises. In any case the increase will be big.

This Bill will be another nail in the coffin of the small shopkeepers. It would be utterly unworthy behaviour for this House to give its approval to a measure of this kind merely because the Minister says: "My predecessor introduced this. I am in sympathy with the people it will harm. I promise to take a look at their problems and bring in another measure later on." As Deputy Hogan has very properly said, the thing is not to do the harm or not even to propose to do it, and to accept his amendment which I think is very reasonable, or to give an undertaking to consider an amendment which would meet the kind of problems which Deputy Hogan has very properly outlined.

My only criticism of Deputy Hogan's excellent amendment is that it is limited to premises which are owner-occupied. Of course, there are many lock-up shops in which there is no residential accommodation available. The owners of such shops should have facilities similar to that which Deputy Hogan suggests. It seems to me that if the Minister is looking for a ready and easy way to provide relief for the kind of people he should be assisting, he can do so by providing that the relief which has hitherto existed will continue to apply to persons with rateable valuations of £50 or less. Something of that kind would meet, in a fairly simple way, the problems of the small property owners who are deserving of a continuation of the reliefs which they and their fathers hitherto enjoyed.

Not only are the Government proposing to kick the small shopkeeper in this respect by providing this discouragement to improve his premises but, as we have been debating over the past few days, the Government also propose to increase the stamp duty on the sale of goodwill of shops from 1 to 3 per cent. Here, again, we have this deliberate effort, apparently, by the Government to do down the small man in our community. I believe this is unfair to the individuals involved and that it will do untold harm to the moral fibre of many of our communities. The small shopkeeper has enough to contend with as things stand, with the large international investment of capital in the retail trade, and with the development of mobile shops which are not paying an appropriate share of either rates or taxes. In that situation, to select for further punitive treatment those who have to carry the most and are least able to do it is a proposal totally unworthy of the Minister.

This Bill also proposes to deprive householders of new houses which do not qualify for the Government grant of the relief of rates which they previously enjoyed. All this is done because the Minister has argued—rightly, I think—that the wealthy should be asked to pay their full share of rates. With that argument nobody disagrees but we assert that, as it is right to ask the wealthy to pay what they can afford to pay, it is wrong to drag into the net people who are not in a position to pay. That is exactly what the Minister is doing. It is not good enough to say: "I shall take a second look at it. So long as you will give me this stick with which to beat the small man I shall promise to soften the blow but I must have the big stick before I am prepared to continue the concessions they enjoyed in the past or to give them any concession in the future."

The Minister said that the assistance offered by way of relief of rates was offered in the first instance and throughout the past 50 years because it was of assistance to the building trade, that it was a concession to the construction industry which does not need it at present because the industry is working at full output. Reconstruction and improvement which is the kind of thing we must encourage if our existing stock of property is to be maintained in good condition is done mainly by the small builder or contractor and he needs encouragement today as much as he did in the past. That encouragement to the small contractor will be withdrawn if the small employer is discouraged from reconstruction and improvement. That is what this Bill will certainly do, discourage people from reconstruction or improvement or building small additions to their property. It will, therefore, do very serious harm to small builders and contractors, and the group that the present Government have selected for further burdens in this year's Finance Bill because they are to be caught under new tax proposals and subjected to more rigorous tax impositions than those which previously applied to them.

When difficulties arise in the construction industry—and this has been the sorry cycle of events through the years and it is not likely to be cured for ever—the first people to suffer and suffer most grievously are the small builders and contractors. It is entirely wrong, therefore, that a Bill aimed at requiring the proper contribution from the wealthy and at removing benefits which were available for the big contractor should cause harm to the small contractor. That is certainly the effect of this Bill.

This is a wholly unworthy Bill. We are providing a disincentive to improvements and imposing a new burden on people who are not in a position to bear it. The way in which the Minister can mend his hand is to be magnanimous enough to say: "I shall meet the point the Opposition are making by providing that people with smaller properties will still enjoy this concession in future." He is allowing the concession to apply to people who live in small dwellings. Why not also allow it to apply to people who are trying very hard to make a living for themselves and their families in the small properties? That is all we ask. It is not a great deal. If the Minister has in mind providing some kind of concession for these people in future—I think he has —let him be big enough to do it now. Certainly, as Deputy Hogan said it will not do untold harm to our economy to allow that concession to continue for the small man for a year or two while the Minister takes another look at the situation.

The main reason for introducing the Bill, as I have said previously, is to ensure that whatever assistance we give by way of rate remission is given to the section of the community most deserving of it. All those who qualify for State housing grants will continue to qualify for this rate remission. That should be quite clear. It is the policy of the Government as far as possible within our resources to ensure the channelling of as much assistance as possible towards the provision of houses for people of modest means—those who, in the main, cannot afford to build houses without State assistance.

My concern in regard to the Bill lies with the ratepayers. Under this remission of valuation a hidden subsidy has been granted to certain sections of the community at the expense of the ratepayers. This subsidy amounts to between £1¼ million and £1½ million and, in the main, it goes to a section which, in my firm opinion, are not in need of this kind of help. Those who can afford to come here and establish supermarkets, to my mind, should not be aided by the State granting them two-thirds remission for seven years of the rates on the valuation of those buildings. It is quite unworthy of the Deputy opposite to suggest that the removal of this particular remission will operate in some secret way against the shopkeepers and cause them great financial difficulty. The purpose of the Bill is to ensure that the State is not giving assistance to the type of persons who, as I have readily admitted, are creating difficulty for small shopkeepers. The idea of highlighting the effects if this section on small shopkeepers is most unworthy. I regret that the Deputy has twisted my obvious concern for that section of the community in such a way. Obviously, this is being done from political motives and not out of genuine concern for the people involved. I cannot accept the amendment. It is impracticable as drafted. It is imprecise and would not be operable. For those, and the other reasons I have given, I cannot accept it.

Amendment put.
The Committee divided: Tá, 51; Níl, 63

  • Barry, Peter.
  • Barry, Richard.
  • Begley, Michael.
  • Belton, Luke.
  • Bruton, John.
  • Burke, Joan.
  • Burke, Richard.
  • Burton, Philip.
  • Byrne, Hugh.
  • Clinton, Mark A.
  • Cluskey, Frank.
  • Collins, Edward.
  • Conlan, John F.
  • Coogan, Fintan.
  • Cooney, Patrick M.
  • Corish, Brendan.
  • Cosgrave, Liam.
  • Crotty, Kieran.
  • Cruise-O'Brien, Conor.
  • Desmond, Barry.
  • Dockrell, Henry P.
  • Dockrell, Maurice E.
  • Donegan, Patrick S.
  • Dunne, Thomas.
  • Enright, Thomas W.
  • Esmonde, Sir Anthony C.
  • Finn, Martin.
  • FitzGerald, Garret.
  • Flanagan, Oliver J.
  • Fox, Billy.
  • Governey, Desmond.
  • Harte, Patrick D.
  • Hogan, Patrick.
  • Hogan O'Higgins, Brigid.
  • Jones, Denis F.
  • Kavanagh, Liam.
  • Keating, Justin.
  • L'Estrange, Gerald.
  • Lynch, Gerard.
  • Malone, Patrick.
  • O'Donnell, Patrick.
  • O'Donnell, Tom.
  • O'Donovan, John.
  • O'Hara, Thomas.
  • O'Leary, Michael.
  • O'Reilly, Paddy.
  • O'Sullivan, John L.
  • Ryan, Richie.
  • Taylor, Francis.
  • Timmins, Godfrey.
  • Tully, James.


  • Aiken, Frank.
  • Andrews, David.
  • Barrett, Sylvester.
  • Blaney, Neil.
  • Boland, Kevin.
  • Boylan, Terence.
  • Brady, Philip A.
  • Brennan, Paudge.
  • Briscoe, Ben
  • Browne, Patrick.
  • Browne, Seán.
  • Burke, Patrick J.
  • Carter, Frank.
  • Carty, Michael.
  • Childers, Erskine.
  • Colley, George.
  • Collins, Gerard.
  • Connolly, Gerard C.
  • Cowen, Bernard.
  • Cronin, Jerry.
  • Crowley, Flor.
  • Cunningham, Liam.
  • de Valera, Vision.
  • Dowling, Joe.
  • Fahey, Jackie.
  • Faulkner, Pádraig.
  • Fitzpatrick, Tom (Dublin Central)
  • Foley, Desmond.
  • French, Seán.
  • Gallagher, James.
  • Geoghegan, John.
  • Gibbons, Hugh.
  • Níl
  • Gibbons, James.
  • Gogan, Richard P.
  • Healy, Augustine A.
  • Herbert, Michael.
  • Hillery, Patrick J.
  • Kenneally, William.
  • Kitt, Michael F.
  • Lalor, Patrick J.
  • Lemass, Noel T.
  • Lenihan, Brian.
  • Loughnane, William A.
  • Lynch, Celia.
  • Lynch, John.
  • McEllistrim, Thomas.
  • Meaney, Thomas.
  • Molloy, Robert.
  • Moore, Seán.
  • Nolan, Thomas.
  • Noonan, Michael.
  • O'Connor, Timothy.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • O'Malley, Des.
  • Power, Patrick.
  • Sheridan, Joseph.
  • Sherwin, Seán.
  • Smith, Michael.
  • Smith, Patrick.
  • Timmons, Eugene.
  • Tunney, Jim.
  • Wyse, Pearse.
Tellers: Tá, Deputies R. Burke and Cluskey; Níl, Deputies Andrews and Meaney.
Amendment declared lost.
Section 4 agreed to.
Title agreed to.
Agreed to take remaining Stages today.
Bill reported without amendment, received for final consideration and passed.