Ms Rebecca Harrison:

Fishers of Newtownmountkennedy Limited is a family-run department store located in County Wicklow, which is in its 40th year of trading. We have grown from a small country clothing shop to a multidepartment store with concessions. I set up Food at Fishers Limited, a daytime café, in 2013. We have 32 employees in total and there are five other small businesses operating on our site, employing a further 12 people.

I fully support the SFA’s call for a national small business strategy and I congratulate this committee for undertaking a public consultation process to examine the creation of an integrated proposal document supporting the fostering, growth and sustainability of indigenous Irish SMEs. As an owner-manager of growing businesses, I would like to see all parts of the State system get behind small businesses like mine, especially those in the regions and rural areas, so that we can scale, grow and create employment.

I acknowledge that there are many State supports for small firms, given by Government Departments and agencies. I am involved in the Department of Business, Enterprise and Innovation’s retail consultation forum. The forum has proven to be very successful in gaining an insight into the retail sector specifically, and we are delighted to see some real action following the forum’s recommendations, and those of the organisations here today, such as the recently announced online retail scheme via Enterprise Ireland, and the excellent supportingSMEs.iewebsite. I have also availed of the trading online voucher through the local enterprise office, LEO, to maximise our sales potential online and used the Strategic Banking Corporation of Ireland, SBCI, loan scheme for some capital expenditure. Furthermore, I have engaged with the Sustainable Energy Authority of Ireland, SEAl, in relation to upgrading our lighting and heating for cost-effectiveness and energy efficiency.

A small business strategy would create coherence in all policies and instil a business-friendly approach in public officials across the apparatus of the State. As an owner-manager, I would like to see greater understanding from Government officials and political parties of how small businesses work, our concerns and unique challenges, and I believe that all proposed legislation and policy decisions must be assessed for their impact on small business, instead of just on large business. I am a retailer and café owner and these sectors have come under increasing pressure from rapidly rising input costs, regulation, access to finance and taxation.

I have several key areas that I would like to address in the proposed strategy. The first is labour. This forms one of the largest costs, in terms of both time and money, within my businesses. The impact of each increase in the minimum wage is felt most profoundly by SMEs. Our staff are key people and are the most important part of our business. They are not on the minimum wage but their rates are linked to it so our labour costs increase every time the minimum wage rises, substantially increasing our total cost base with no corresponding increase in sales.

The proposed introduction of restrictions in pay and working hours, such as banded hours, and other mechanisms to restrict allowances for seasonal fluctuations worry me greatly. They will lead to laying off people completely or to increased labour costs, to such an extent that the business will no longer be viable. The proposed introduction of auto-enrolment pensions would be a cost too much for my business to bear. Access to good labour is also a problem facing many SMEs. The welfare system, in its current format, is still discouraging employees to work more than three days a week, as their benefits will be lost. A transformation is needed in this area to allow employers to access more hours from their trained and experienced staff and reduce the Government's welfare bill. The impact of these issues go directly against the Government's objective of increasing jobs.

The cost of utilities and insurance was mentioned previously. The high cost of energy is rightly encouraging us to become more energy efficient. I was delighted to see grant supports through the Sustainable Energy Authority of Ireland being made available to SMEs recently. However, in my experience of applying, the burden of information required leads the grant to be inaccessible to many SMEs, even those working closely with a certified electrical contractor, as I was. The need for a consultant to complete the application form defeats the purpose and negates the benefit of the grant, especially for an SME whose total spend is smaller but for which every penny counts. This process must be made simpler and more accessible. We have seen several key insurers leave the retail sector recently, reducing competitiveness and increasing costs. My own business has had to move to a UK based insurer to get cost-effective cover but that relationship is now in jeopardy with the onset of Brexit.

On taxation reform, as a self-employed worker, I would support tax changes that allowed me to invest in my business and to attract and retain skilled employees, especially as we enter full employment. In addition, more Revenue guidance in several areas to assist small firms like mine to reduce the cost of tax administration would be welcome. Specifically for me in the retail sector, I would welcome an ability to pay VAT weekly or even automatically at the time of sale to spread payments rather than paying a large lump sum. Also welcome would be substantial reformation around employer and employee taxation such as fewer restrictions on gift voucher incentive schemes, employer PRSI and assistance with PAYE modernisation. For SMEs, cashflow is our biggest barrier to growth so any schemes that can assist with this to regulate the flow or bridge the gap would be transformative for our ability to grow.

Turning to the regulatory burden, there are many regulations facing all businesses and while many are excellent initiatives, it seems unfair that the burden and therefore the cost is always placed on the business. For SMEs, this forms a substantial part of our cost base. I refer, for example, to costs in analysing ingredients for allergen legislation, installation and high ongoing costs of health and safety initiatives, food safety paperwork and procedures and other areas, alongside continuing professional development, CPD, which we conduct anyway. It seems that while each Department introduces new initiatives, the cost impact on the SME owner of one initiative coming on top of another is not considered.

It is now more important than ever that a mutual trust is developed between the Government and SME owners. Discrimination against the self-employed continues, for instance, in the gap referred to earlier between the earned income tax credit and the PAYE tax credit as well as in welfare supports. It seems that the Government does not trust us to conduct our business properly, yet we operate in an environment that is so burdensome that it is impossible to do anything other than conduct our businesses correctly.

In recent decades, Government policy has been successful in attracting foreign direct investment. The focus must now shift to SMEs. It is time to create a strategy for growth for indigenous small businesses with a special focus on taxation reform, competitiveness and the cost of doing business, especially considering Brexit and the uncertainties surrounding it. The Government must deliver on this commitment to creating a small business strategy in order to gain trust among the self-employed. Any initiatives seeking to foster growth and sustainability for indigenous Irish SMEs must also support this much-needed key policy change. This is the biggest step the Government can take to encourage more people to go into business for themselves. More businesses mean more jobs, greater levels of innovation, increased tax revenues and more vibrant local economies.

On my own behalf and that the Small Firms Association, I thank the committee for affording us this opportunity to submit our views.