New business grouping seeks cap on rate rises

A new alliance of Dublin business organisations has called for an immediate cap on the increase in rates for businesses and for the existing rates base to be broadened to include all commercial establishments and government buildings.

The alliance, comprising Dublin Chamber of Commerce, Dublin City Centre Business Association, Dun Laoghaire Rathdown Chamber of Commerce, IBEC, South Dublin Chamber of Commerce and Swords Fingal Chamber of Commerce, said there should be an automatic cap on the rate in the pound to ensure it does not exceed the rate of inflation as issued by the Central Bank, except in special circumstances pre-agreed with business.

"Last year the Minister for the Environment put a cap of 5 per cent on what local authorities could increase rates by. This year, local authorities have been given permission to increase rates by 9 per cent. This flies in the face of the Government's anti-inflationary measures. In a situation where the major concern for the business community is inflation, especially in a situation where the EMU now has effective control of our finances, the one thing we can control is rates," said Mr Greag Purcell, chief executive of Dun Laoghaire Rathdown Chamber of Commerce. However a Department of the Environment spokesman said it is at the discretion of each local authority to set its own rate increase up to a maximum of 9 per cent. He added that the increase to a maximum of 9 per cent this year took into account improved and added services from local authorities as well as inflation.

In 1999, business contributed £184 million (€233 million) to the four local authorities in the Dublin region, the alliance said, adding that this equates to 45 per cent of the national total. When other service charges are taken into account business could contribute as much as 50 per cent to the annual budget of their local authority, it said.

The commercial rates base should also be expanded to include all government buildings; registered and unregistered guest houses and bed and breakfasts; agricultural land and farms trading and re-claiming VAT; professionals' offices trading from residential premises; and educational establishments, the alliance said.

"This alliance fully accepts its corporate responsibility to pay what is fair and equitable. But there should be a fair and equitable rating base for everybody. That's all we're calling for. However, educational establishments, government buildings and state utilities that are now being used by other companies are not paying rates and we feel this is inequitable," said Mr Purcell.

If central government legislates for the exemption of any such establishments - commercial or government - from the payment of rates it should pay compensation to that local authority, the alliance said.

The revaluation process proposed in the Valuation Bill 1999 is also a major concern, it said. If the process is phased with the first part starting in Dublin, business in Dublin would find itself at a competitive disadvantage relative to those businesses outside the capital not yet re-valued, it added.

"So we are asking for a once-off revaluation of all businesses within the country so that there is no distortion," said Mr Matt Moran, director of IBEC's Dublin regional council.

Expenditure on the maintenance and upkeep of national primary routes should also be funded from central exchequer resources, the alliance said.