Oireachtas Joint and Select Committees

Wednesday, 9 November 2016

Joint Oireachtas Committee on Arts, Heritage, Regional, Rural and Gaeltacht Affairs

Sustaining Viable Rural Communities: Discussion (Resumed).

9:00 am

Mr. David Fitzsimons:

I thank the members for their questions. I will commence with the Chairman's. Our digital statistics are pretty depressing. Of everything bought online in Ireland, 70% comes in from international jurisdictions. Deputy Cannon referred to online purchases his son makes. I will say it again. Irish consumers this year will buy €12 billion worth of goods online, but €560 billion worth of goods will be bought across Europe. There must be an opportunity there. McElhinneys may be a one-off, but I am sure we can find 20 such businesses. McElhinneys is probably the best thing in Ballybofey town as it provides 190 jobs. I will say it again. We are prohibited from benefiting from Enterprise Ireland support. McElhinneys applied and was told it was a retailer and should go away.

A Minister of State who was involved in jobs suggested he would go up and open the premises and he was told to go away. This is the rural affairs committee; it is appalling that a small indigenous Irish retail business in rural Ireland is not supported, yet an international company can put a brass plaque up in the IFSC, employ one person and get ridiculous levels of support. Something has to be done.

Virtual towns might be a good idea but going online is not for everyone. Some of my members say the only people who make money online are Google and the consultants. We do not want to lose many people lots of money.

How many town teams exist is a very difficult question. There are three business improvement districts in Ireland, which are legal structures to manage towns. I do not know how many town teams exist. I am involved in three in Clare. I will be in Wexford tonight with its town team. I estimate there are about 50 or 60. The difficulty with town teams and volunteers, which Deputy Troy will tell the committee following his merited efforts in Mullingar, is that voluntarism only lasts for so long. There might be a huge meeting of stakeholders and a town plan but it runs out of passion and energy after time. There is a necessity for local authority support. We did well in Limerick with 40 new stores because the county CEO, Conn Murray, appointed a town co-ordinator, a young guy who ran around the city and told everyone what was going on and got everyone behind the plan.

Brexit is a serious issue. We were promised a Brexit proofed budget but from a retail perspective, we did not see that. We have to be careful about how we comment because we do not want to accelerate the problem but there is significant activity going up North. Online .co.ukretailers are reporting a 500%, 600% or 700% increase in demand. We are facing a crisis. We would have loved a reduction of the 23% VAT that was introduced as a financial emergency. It is now time for another financial emergency to reduce it back. We are price non-competitive. There is little we can do as retailers. We would also like to see a revision of the employer PRSI for low paid workers from 8.5% to 4.25% because those jobs are vulnerable.

The final question was on the vacant site tax. We recommend the immediate compulsory purchase of any building of a particular size within the inner core that is not being used by the property owner. There should be a compulsory purchase order at discount by the local authority and it should be put to good use. It could be split into smaller units and we could go off and get Penneys, or whichever is the brand of the day, to open up. Having these vacant and derelict sites in the middle of towns is not good enough.

Deputy Heydon asked about Kildare. There were many bad planning decisions made over time. One in Naas was extremely bad - it involved an out-of-town big box retailer who invested less than 5% of its turnover in staff while the guys down the town invested over 15% of their turnover in staff. The Minister of the day cut the ribbon on that premises but I knew, as people in the town did, that there was a net jobs loss to the town that day. We need to apply the sequential test which means telling that brand and others that they have to go into the town, split up the offer and put the food, alcohol or fashion into a smaller box. The sequential test must apply. It is hard to compete with out-of-town free parking and all that kind of stuff.

There was a question on beautification. The biggest property developer in the world said at a conference recently in New York that all his money and that of his peers is going into urban renewal. I thought that was great. He said he is building a beautiful civic place that has seating and waterfalls and is architecturally beautiful. If a commercial offer is built around that, people will come. This is not just about commerce. It is about having a place that people can gather, dwell and communicate. The future of retail is human-to-human, where people can talk to people. In the context of pedestrianisation, which Deputy Cannon raised, and some of the issues the Chairman raised, the future is in rethinking towns and having a town centre that is beautiful where people can congregate and breathe. A commercial offering and car parking should be built around that. We need to rethink towns commercially because the future is young people going online. Potentially towns will become places where evening economies are way more important in terms of hospitality and all that kind of stuff. It will be a bit like continental Europe which has huge protections for SME retailers. In France, the local Carrefour cannot sell tobacco, bread and lots of other things. That would protect all these small indigenous businesses in the town centre.

Deputy Cannon asked about rates. One of the worst things ever to happen in rates in Ireland was the revaluation of places in towns and villages. The revaluation rethought how rates work and it linked rates to rent in local authority areas. The higher rent payers paid more rates but who are the higher rent payers? They are the businesses in town centres. The rates of the secondary and tertiary business parks, the local printer's way out the road and the hotels, went way down. If we are serious about towns, there is something wrong if we go and double the rates in town centres.

What Deputy Cannon said about the rates incentive is brilliant. It is illegal so it is not actually a rates incentive; it is a grant equivalent of fixtures and fittings. It is a great idea which we have promoted in about 30 or 40 different places. It has worked in Ennis, where I live. Our economic development director went out with a booklet to talk to retailers about the rates break that was announced. The most important thing is that it should only apply to retail mixed uses, which we need. We have enough coffee, bookmakers, and charity shops. What are we missing? The Deputy's 20-year-old son will tell him what we are missing. We are missing Tiger, Nando's, Pandora, H&M, and all the go-to brands. If we can get them into our towns of a certain size, young people will come in and enjoy it.

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