Oireachtas Joint and Select Committees
Tuesday, 12 March 2013
Joint Oireachtas Committee on Jobs, Enterprise and Innovation
Retail Sector Report: Discussion with RGDATA
I welcome Ms Tara Buckley, Director General, RGDATA, Mr. Gary Morton of Mortons, Ranelagh and Mr. Rob Murphy, Murphy's Centra, Ballinrobe, County Mayo who are here today to discuss their report entitled "Nightmare on Every Street - Town Centres, Car Parking and Smart Travel" and the overall retail strategy, including the black economy, which issue the committee will focus on in the context of its development over the next couple of months of a retail strategy.
Before we commence, I remind witnesses that by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to the committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a person or persons or entity by name or in such a way as to make him or her identifiable. I remind members of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House or an official by name in such a way as to make him or her identifiable.
I now invite Ms Buckley to make her presentation.
Ms Tara Buckley:
I thank the committee for the opportunity to discuss our report. My colleagues will give some detail later on their shops, employee numbers, the key challenges they face and on the car parking report, the black economy and the future of the independent retail sector, which topics the committee asked us to consider for today's meeting.
RGDATA has been the voice of the independent retail grocery sector in Ireland for 70 years. Collectively, its members own and operate more than 4,000 shops, convenience stores, forecourt stores and supermarkets throughout Ireland. RGDATA members are present in every community in Ireland and collectively hold over a third of the retail grocery market. It is an extremely competitive, highly dynamic sector providing consumers with convenience, choice, quality and value. RGDATA members provide 90,000 jobs in the independent retail sector and contribute €3.6 billion annually to the Irish economy. While small individually together we are a force.
RGDATA is a strong supporter of vibrant towns and villages, sustainable retail development and shops to which people can walk. Independent grocers are the biggest supporters of Irish producers and suppliers. RGDATA members provide a vital route to market for many small and medium sized food suppliers and producers. RGDATA welcomes this opportunity to highlight the true value of local shops. Every €1 spent on Irish goods in an Irish owned shop is worth four times more to the local economy than is a euro spent in a UK or German multiple. RGDATA is a champion for vibrant town centres and self sufficient local communities. Its members are town centre traders, local heroes who play a significant role in their local communities. Like the committee, RGDATA wants to ensure that independent shops survive and thrive and that our towns and villages remain vibrant places in which to live, shop, work and get together as a community.
Frustration with car parking is a significant issue consistently raised by our members. For this reason, RGDATA carried out a study of car parking regimes in 16 towns and villages throughout Ireland and reviewed car parking practises in other countries, leading to the publication of its report "Nightmare on Every Street – Car Parking and Smart Travel". We have circulated that study widely and it is available on our website. Our key recommendation is that national guidelines on car parking be developed, in respect of which we seek the support of the committee. As evident from the report, restrictive parking policies are a major disincentive in many towns. Rather than attracting customers in to do their shopping, conduct business or spend time in the town centre, car parking policies are driving people to out-of-town retail parks, where parking is free of charge and widely available.
RGDATA is seeking a more equitable, flexible and sustainable policy solution to reverse the damage that has been done. We understand that local government must be funded and that anti-traffic congestion policies must be maintained. However, we believe this needs to be done in a way that enables town centres to flourish. A survey of RGDATA members' views on car parking indicates that more than 60% of the shops in town centres that have pay-parking are in direct competition with edge-of-town or out-of-town shopping centres such as Tesco, Dunnes Stores, Lidl and Aldi, all of which offer free parking. The RGDATA report also shows that there is a disconnect between the various policies on this issue. Government policy measures like the smarter travel strategy, guidelines for planning authorities on spatial planning and national roads, and the retail planning guidelines recognise the disparity between parking regimes between town and out-of-town centres. However, they do not address how the issues should be remedied in a coherent manner. The result is an ad hoc approach among local authorities, which is largely conflicting with current government policy. For this reason, RGDATA is seeking the support of the committee in addressing this issue and reversing the decline in Irish town centres.
A key recommendation of the report, which we would like the committee to consider, is the introduction of national guidelines on car parking and smart travel. We would welcome the introduction of more flexible parking services to customers and incentives to shop in the town centre, including streamlining of parking charges and fines, special offers on short-stay parking, special day rates for long-stay parking, low off-peak charges, free parking for special occasions, more flexible payment mechanisms and graded fines. We are also seeking strategic pricing structures in order to complement sustainable transport initiatives and ensure that there is no congestion of traffic. We are not suggesting there should be no charges, we are saying rather than this being about a revenue grab it should be about ensuring parking is utilised properly and people can come and go and do their business. We are asking for equitable and fair systems across towns.
We also believe that clamping and parking fines should not be used to unduly penalise car users in town centres. My colleagues will elaborate later on how this is damaging businesses in their communities. We believe there should be a rates reduction in recognition of the negative impact of town centre parking charges on town centre businesses. Many of our members in town centres are struggling, having lost business because customers are opting to shop out-of-town where parking is free. We believe it would be fair to equalise the system between town centres and out-of-town centres.
This could be done through ending the practice of free parking at out-of-town shopping centres by imposing a levy on the operator of the out-of-town retail outlet to be paid to the local authorities. Operators could decide whether to pass on the cost of the parking levy to the customer. A paid parking system should be established on all new out-of-town or edge-of-town retail developments if a paid parking system exists in the town centre.
The committee also asked us to address the black market, which is a huge issue for the independent retail grocery sector, which is being particularly hard hit by the rise in the illicit trade in fuel, tobacco and alcohol. The black market is having a significant impact on the legitimate retail sector in the current climate, causing a significant drop in retail sales and the loss of jobs. Illegal trade in smuggled and counterfeit goods has reach epidemic proportions, and according to industry estimates it costs the Exchequer more than €860 million a year in lost excise duties and VAT. The black market also makes a farce out of the annual compliance costs for established legitimate retailers which amount to an average of approximately €5,500 per year for permits and licences. This does not even include the cost of staff time to fill out compliance forms and the further cost of management time.
RGDATA has witnessed a significant increase in the number of rogue traders in unauthorised premises in recent years, and this significantly undermines the work of retailers in established shops. The total cost of compliance for the 4,000 members of RGDATA is estimated at more than €26 million. To add further insult to injury, retailers operating outside the law impose extra costs on law-abiding retailers through loss of sales and increasing difficulty in maintaining a viable business, not to mention the impact on jobs and the criminal activities being funded by these rogue traders.
Fuel laundering is another significant black market issue for RGDATA members, many of whom operate petrol forecourts. The illegal fuel trade is estimated to cost the Exchequer €155 million in lost taxes every year and 12% of all diesel sold in Ireland is illegal. This has a significant impact on our members and we support the recent introduction of a registration system for fuel users. However, we note the irony once again that legitimate traders must pay new annual fees to fund this system. The good guys are taking the hit again. We urge the committee to recommend more inspections of rogue traders and more punitive penalties for those found laundering fuel, selling illegal fuel or dumping toxic waste.
With regard to casual trading, if the committee is serious about tackling the black market it should ensure that the Government and the authorities enforce practical measures which would stamp out rogue trading practices. This should start with strict enforcement of planning and casual trading laws. Authorities must break the link between rogue traders and their clientele, this link being their trading premises. When proper planning and trading laws are observed, illegal traders do not have access to a means of distribution or a premises through which to sell their goods. On a very basic level, we suggest more regular and thorough checks on the casual trading sector, which would ensure best practice is observed and counterfeit products are not for sale.
The Government should re-examine the provisions of the Casual Trading Act 1995 to ensure the authorities are adequately equipped to effectively regulate all markets. Banning the sale of tobacco products at any market or fair would be helpful and the penalties for those caught selling tobacco products in these markets should be increased under the Casual Trading Act. They should be brought in line with penalties in the Finance Acts.
RGDATA believes an extensive public awareness campaign on the health and economic consequences of purchasing illicit goods, particularly tobacco and alcohol, should be co-ordinated between all relevant Government agencies. It is vital to make the general public aware of the extent and effect of black market activity on the legitimate retail sector, jobs in the sector and the local economy. The public should also be made aware of the criminal activities funded by these purchases. Further awareness must also be created about avenues for reporting such crime and trading practices, including the confidential free phone number operated by Revenue with regard to tobacco smuggling. Revenue should consider providing an incentive for more members of the public to come forward and report cases of illicit trade by providing a reward for cases which result in a conviction.
Much work could be done on policing and penalties with regard to illegal trade. Specialised investigators and trained personnel must be engaged by the Government to work with Revenue and the Garda in efforts to ramp up actions in this area. It is a cross-Border problem between North and South and between Ireland and mainland Europe, in which action needs to be taken at EU level with cross-border agencies and joined-up policing initiatives. On a very basic level, high profile Garda checkpoints can be an effective means of monitoring transport and traffic movements and controlling the trade in illicit goods. They also make the public aware of the seriousness of this issue. Customs officials should be resourced and scanning equipment should be available at all ports.
RGDATA supports the introduction of sufficient deterrents to stop criminals engaging in counterfeit sales. The authorities must prioritise the most serious of offences with custodial sentences, and must engage the Criminal Assets Bureau to deal with criminal activities which involve illicit operations on a bigger and more complex scale.
I invite my colleagues to say a few words about their shops and the key challenges they face.
Mr. Gary Morton:
Morton's is a third generation shop which will celebrate its 80th year next year. We employ 75 staff and we operate two shops, one in Dunville Avenue, Ranelagh and the other on Hatch Street. Our principal focus is on food, particularly fresh food, and wine. I am here because our business is in an area with much strong activity by clampers. Clamping is a problem for us. An inordinate level of clamping occurs in Ranelagh and the business is hugely affected. People learn a very nasty lesson when they are clamped and are very quickly dissuaded from returning. They are encouraged to go to other places where there is no clamping. Invariably this means carparks provided by other shops, in this case multinationals. It is driving business away from our shops to other businesses. I am aware of a number of personal upsetting stories of some of our customers which I can go into later. The penalty for being clamped is very harsh.
We are very proud of how we engage and are involved with many Irish suppliers, growers and artisan producers. Our involvement is greater proportionately than that of the multinationals and this warrants recognition.
Mr. Rob Murphy:
I am from Ballinrobe in County Mayo and our family business is a Centra food market. We have traded in groceries for 56 years and the shop was established by my grandmother. We employ 17 people in full and part-time work. Our weekly wages amount to almost €4,000. Our shop is down 20% in trading since 2007 and our income has reduced by 50%. Like many small towns, our town is suffering. Eight years ago, a multinational arrived on the edge of town and created a rival town centre. We have a major issue with car parking charges in the town. On the basis of the free market we understand the logic of multinationals coming to rural Ireland but also on the basis of the free market we seek a fair and level playing field. I am not here to ask anyone to prop up the local corner shop. We live in a free market and such shops will survive only if we can provide a quality service and value and something consumers want. We believe we have this but we do not have a fair playing field. We are calling for towns to be regenerated by being given a chance to compete with the out-of-town developments that have sprung up throughout the country.
Ms Tara Buckley:
Last week we came before another Oireachtas committee where we discussed a grocery code of practice, red tape, food labelling and a level playing field for independent shops.
We were with another committee last week to discuss a groceries code of practice, red tape, food labelling and a level playing field for independent shops. The committee deals with enterprise and jobs and I am proud that during these extremely challenging times independent retailers are not closing down. They are rolling up their sleeves and getting on with creating jobs and making sure businesses adapt and compete. Mr. Gary Morton, Mr. Rob Murphy and I are not here to whinge and moan or to ask to be bailed out. We want a level playing field to allow us to continue to operate. On a positive note, we have recently surveyed our members to find that over 1,000 jobs have been created in 230 shops since 2011. We are creating jobs. If the Oireachtas allows us the opportunity to compete and gives us a fair, level playing field, we will help it get small businesses and artisan producers up and running to create jobs.
Key upcoming legislative issues include the current review of the retail grocery joint labour committee. We ask that we not be given higher wage rates than other retailers. Keep it level across the sector. The National Lottery Bill proposals mean our retail margin is under threat. We would like it to be ring-fenced in the legislation whereas the Minister has said he will ring-fence it in the licence. That leaves wriggle-room which is why we would prefer it to be provided for in the legislation.
Our Dublin members are getting their commercial rates evaluations currently and are astounded by how much rates are increasing. These businesses are struggling to survive. Increasing rates by 50% or 100%, as is happening for some of these businesses, at this time is not on. We would welcome the committee attacking the issue. We thank the committee for its time and are happy to answer questions.
Some members might be shocked to discover that there are 4,000 shops in the independent retailers grouping. The problems which have been outlined are common to every one of us. I come from the small town of Ballinasloe in east Galway and could have written Ms Buckley's script for her. It is what I hear from retailers in Ballinasloe on a daily basis. There are three multinationals on the edge of the town with lots of free parking spaces. The town council charges for parking. Retailers are divided in Ballinasloe on the issue of charging for parking. Some feel that while we should ease the price and provide better value to customers, others feel it should not be abolished given what happened where free parking was allowed over the Christmas period. Many people who worked in shops or who were going somewhere else for the day parked their cars along the main streets of the town which meant valuable spaces were not available for the customers who wanted to shop. We must try to get the balance right.
I agree with Ms Buckley that there must be a levelling of the playing field. When we grant planning permission to out-of-town developments in future, we should impose a charge for parking or we should provide for rates which reflect the fact that free parking is offered. That would rebalance matters for retailers who are operating where parking is subject to charges. We do not have clamping. I sympathise with Ms Buckely. Clamping arises in Galway city and is a cause of great concern for people.
I have spoken about the black market at the committee and in the Seanad. We must clamp down on the rogue traders, cigarette smuggling and diesel laundering. Have the witnesses seen in recent times any additional Garda or Customs and Excise activity? Do they see any improvement in the situation in recent months following the great deal of publicity on these issues in the period?
I support the points Ms Buckley makes about the National Lottery Bill 2012. I would like to ensure that margins are protected for retailers through the legislation rather than through the licence. I will support such an approach. All public representatives, particularly those who live in small towns, strongly support RGDATA's campaign. We will certainly push the agenda Ms Buckley has advocated to us every chance we get. I fully support everything she has said.
Ms Tara Buckley:
There is no doubt that our members in the Border area work very closely with local gardaí and the Revenue Commissioners. There is very good co-operation but there is probably a requirement for more resources for the Garda and Revenue Commissioners. A young member attended our meeting with Senators recently and she made the good point that when she raised with her friends the fact that they were buying illegal cigarettes, they could not see what the problem was. That is why we say that more awareness is important. People forget that by buying illegal, counterfeit product they are funding criminals and criminal activity.
Ms Tara Buckley:
Absolutely. And I thank Senator Mullins for his support. We agree with him about getting the balance right. We are not advocating getting rid of parking charges. We are asking for uniformity, consistency and charges which are about managing a scarce resource and not about penalising the customers who want to come into town. We accept that parking charges are required to stop people staying in a space all day, but there is a way to grade use to make it attractive to come in for a few hours, do one's business and go.
I welcome Ms Tara Buckley, Mr. Gary Morton and Mr. Rob Murphy to the committee. Ballinrobe is a perfect example of the car parking issue, unfortunately. I was shocked to see this time last year how the town centre has gone down in direct parallel with what has happened with the multiple on the outside. The joint committee is due to visit south Mayo at the end of April and should take the opportunity to see Ballinrobe for itself. The town centre has gone down very quickly since the multiple was built. It would be a good chance for the committee to see what happens in practice.
Can the levy proposed on out-of-town outlets be made retrospective? I know there are all sorts of issues around upwards-only rent reviews and constitutional rights. If we were to say in the morning that we support the levy, can it be put on the development in Ballinrobe? Is it legally proofed?
The black market and licensing were mentioned. The Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy John Perry, is announcing a review of retail licensing. Has RGDATA been consulted on that to date? It was mentioned that approximately 20% of all diesel sold is illegal. One of the difficulties for motorists is that they do not know anymore. One hopes one is buying legitimate fuel when shopping at one of the large, branded fuel retailers, but how does one know? Would RGDATA get involved with its industry partners in an awareness campaign on what to look for when buying fuel which may be illegal? As well as being illegal, it is bad for one's car.
I have a beef about casual trading in Ireland. We go to the market when we are on holiday. It is an attraction and seems to benefit everyone. Here, it is a nightmare. Why is it the way it is here and a completely different experience abroad? Has RGDATA worked with its European partners to find ways to enhance trading here in a way that helps everybody?
Will the witnesses talk the committee members through the practical difficulties surrounding the retail joint labour committee, although I am familiar with it? There is eating in and eating out, Sunday issues, matters of age and qualification. It would be no harm for the committee members to get their heads around being a business person and having to operate in such a process on the ground.
On the banking side, will the witnesses indicate what the organisation's members have experienced with banking issues in the past few months in particular? Has there been any improvement in dealing with the so-called pillar banks? What are the views on new banking practices relating to coin deposits and coinage around the country?
Mr. Rob Murphy:
We would welcome a visit to Ballinrobe. We have a committee, Ballinrobe Beo, which is a trader alliance in the town working very hard with the council in trying to develop strategies to deal with this issue. Long-term parking has been mentioned and I should have stressed earlier that our call in the town is for one hour of free parking. We also want to work with the council in ways to regain the revenue lost in the first hour; maybe levies could be a great way of doing this but there could also be an increased charge in the second hour.
With our town's consumers, it is important to remember that the cost of parking is nothing for major city centres. There is a mentality around collecting dry-cleaning or meat for dinner. It should be a simple process with plenty of spaces, and one should be able to do this without fearing a ticket from a traffic warden. In that regard, the shop door used to be a great social meeting point for people, and there would almost be an issue with the number of people having a chat at the front of a shop. It was brilliant and it created a great vibe. However, that is completely gone as customers are panicked, running in and out. They think they get five or ten minutes leeway but they are not sure, so they do not enjoy the experience.
Ms Mary Portas mentioned in her report in the UK that one of the most important elements of town centres is what they bring to communities. It is about social fabric, and we have people coming from a 15-mile or 20-mile radius to Ballinrobe, as it is often their social outlet. Ireland has much focus on pubs as a social outlet and although they are brilliant, shopping is a social process for many. The act of meeting people and discussing stories is gone now as people run back to the car when they collect their dry-cleaning or meat. Ballinrobe has great potential as a town and there is a tremendous amount of goodwill there. We are all determined to keep fighting and we really believe our food store can survive. We provide convenience, service and long-serving staff who people love to see. As we are part of the Musgrave trading group, we provide good value and we can compete on price.
We are seeking a one-hour free parking slot. We are not saying to the council that we do not understand its problems and we want to see if we can offset the cost. We want to work with the council but there must also be a national policy, as Ms Buckley explained, which can deal with the issue developing in small towns.
Ms Tara Buckley:
When RGDATA did the survey of the 16 towns, it struck us that every town was different, and that is why some kind of national guidelines would be helpful. If people arriving in a town in Ireland knew the same rules or grace periods applied, or that costs or fines were the same, it would be helpful. Clamping is particularly evident in Dublin city and can be very frustrating. It can add the stress and burden of waiting for the clamper to release the vehicle, and people can end up in frustrating positions. A person may be shopping in a town before meeting somebody and going into the coffee shop next door for a cup a coffee. When that person arrives at a car five minutes late, it could equate to a fine of €120 in some towns. That is the last time that person will come to that town. We would miss the social interaction and the business for shops - including the coffee shop - and it puts people off. People are being driven away.
We got much publicity when we launched the report, with supportive e-mails from the public. We were told that there should be no charge for out-of-town shopping facilities as the public uses them because they are free. Our point is that this should be a level playing field. Vibrant town centres will be important to local economies if we can keep them vibrant. We should not kill them with overly zealous car park policies. There is a way of doing this, as people will pay modest fees for parking. Nevertheless, they do not want to feel that this is about a revenue grab when they are trying to do some business in a town. The levy has been mentioned. There are many ways of introducing this levy, and we can return with more detail rather than going into all the detail here. If a Government wants to introduce a tax it can do so, and we all know that is happening every day. It would be a very positive step. If parking is to be paid for in a town, it should be applicable wherever people go. RGDATA has been very involved in the process of streamlining licensing. We did a report in 2009 and 2010, highlighting the issue, and we welcome the fact that the Government has taken the issue on board and is considering a portal for licensing. RGDATA is involved in the process and we appreciate the work and hope it can be moved on to facilitate the streamlining of inspections. That would make things more efficient and cost-effective.
With regard to illegal diesel, we say to any consumer that if something is very cheap, the consumer must be aware. With such fuel, the driver is putting his or her car in danger and if it is too good to be true, one should be beware. It is very obvious who are legitimate traders. Our members have been involved in various campaigns promoting legal fuel and they will continue this work. We are very happy to co-ordinate with any progress made with the Revenue Commissioners or An Garda, and members have been actively involved in such work.
The retail grocer is subject to a joint labour committee, JLC, wage setting. The off-licence next door, the bookshop and the flower shop are not subject to it. Nowadays, the retail grocer has had to adapt and survive, and many of these businesses have a small café area. That is not covered by the retail grocer JLC but rather the catering JLC, meaning the employer must deal with two different JLCs. It is a cumbersome and complicated system and much employment protection legislation must be introduced. The JLC system is obsolete and it must be scrapped. Having surveyed our members, 96% of them agree with that view.
This would not be a race to the bottom. Since the JLC system was found to be unconstitutional, the 230 members who responded to the survey have taken on 1,000 new staff, with many of those taken on at the old JLC rate. Most have been taken on at the minimum wage, as the starting rate in the trade should be that level. These members did not change the terms and conditions of existing staff as our members appreciate their staff. A new survey will be out shortly indicating that members want to invest in staff, training and stores. The business wants to get on, compete and survive, but it does not want law and regulation binding and stopping it in doing what it does best, which is the running of good local community shops.
There is absolutely no doubt that the independent retail sector, like every other small business sector, is having significant issues with access to credit. The banks have indicated they are open for business but if one goes looking for a loan, bank officials want to renegotiate every loan. That is not an option for somebody who is trying to expand business and does not want terms changed.
Everybody is striving to make the banks profitable and get them back on their feet but we must be careful. As banks have terms and conditions are changed, we must be careful not to pass a burden of security to the business community and independent retailers. For example, the change in lodgement structures in banks and not being allowed to lodge large amounts of cash on certain days has a significant impact on an independent business in a town with regard to security, cash on premises and concerns about family, staff and personal safety. Such issues must be addressed as banks are moved to a more profitable state. Banks should not be increasing charges and we are concerned about the loss of the personal relationship between banks, retailers and small businesses.
Automated banking does not take into account the flexibility that is needed to run a small business. These are the businesses that are providing 90,000 jobs. It is important that is not forgotten in the drive to make the banks more profitable. The Government may be squeezing small businesses and putting much extra pressure on them in terms of security.
Go raibh míle maith agaibh. I welcome the delegates. The real economy is made up of businesses such as those before the committee and has not got the attention it deserves. In recent years, there has been a shift within the resourcing of local authorities. The local government grant has been reduced and as a result local authorities have leaned more on retailers as a source of income. It has not been a strategic issue in the main but how it deals with its retailers has been purely on the basis of where it can get the money and parking is one of those areas. That is what is happening. We are forcing people out. We are incentivising people out of the centre of towns through our policies. The whole idea of a level playing field is very important. I mentioned to Senator Feargal Quinn that there is a benefit-in-kind to the consumer for a free parking space in an out of town centre. We do not want to make life hard for the consumer but at the end of the day perhaps some level of rate should be charged on parking spaces in out-of-town centres. In Meath, we have the lowest rates base per capita in the State which means we have the lowest expenditure per capita in the State. The money that a local authority gets in is directly related to the money that is spent by a local authority. The out-of-town shopping centres on the edge of Dublin are one of the reasons we are losing retail in Meath. I would be in favour of some rebalancing of that process.
In the North of Ireland it is interesting that the local authorities focus on strategies and local enterprises. For example, Down District Council would run mentoring, marketing, merchandising programmes for all their retailers in the centre of towns and would have a strategy with regard to Internet, social media and general marketing and branding for that town to enable it start competing in the region. That does not happen to the same extent in the South. The county enterprise boards have stayed away from the retail industry in the main because of the displacement issue. That needs to change. With the advent of the new local enterprise offices, LEOs, we need to promote local enterprise and local retailers.
In regard to rates, my party has been working on the idea of a progressive rate. In other words, a rate that is being charged to a business would reflect three aspects - what it sells, the size of the premises and the profitability of the business. A seriously profitable multinational such as Tesco pays roughly the same rates as a small indigenous Irish business in the corner shop which is hardly breaking even. In general, we agree on progressive taxes in every other aspect of society, therefore, it does not appear that a block rate is being placed with no understanding of the profitability of the business.
On the issue of smuggling between North and South, the only long-term solution is for the State to get real about equalising taxes, charges and excise with those in the North of Ireland. While there is a differential there will always be an incentive. We can invest in policing and customs but while there is a differential, we will never resolve the issue. The Administration in the North of Ireland is seeking to resolve the issue from its perspective. We believe there is an opportunity for the Government to seek to equalise with the North on these issues.
I have heard on the grapevine that some of the JLCs are in trouble as difficulties are arising. It might be interesting to have some of the unions come in and give their perspective as well as what we have heard from RGDATA.
What can local authorities do to incentivise the development of local strategies for retail? I assume the representatives have looked at the levy. What is their view on the progressive rate issue? I mentioned it to some enterprise organisations that represent the multiples. Obviously they have been less enthusiastic about it because they are minding their members' business. I would like to hear the perspective on that issue.
Ms Tara Buckley:
Absolutely, we would support that. We find that our members, because they are the town centre traders, quite often pay inordinately high rates compared to those on the edge or out of town. Other small traders around them are paying the lion's share. Our argument is that if there is not a mix of shops in a town centre and a lot of vibrancy there is not really a town centre. It should be about encouraging these businesses.
We certainly agree that the rates issue needs to be addressed. When the downturn started every small independent retailer in the country had to look at its costs. They all came back to me and said they should have done this years ago. They had taken a third of the costs out of their business. We cannot understand the reason local authorities will not take a third of the costs out of their business, they way we have done, and pass the benefit on to the businesses in the town who are struggling to survive. It should not be that the local authorities cannot change their costs and that they will just take more money off businesses. As more shops close, a smaller pool is paying the commercial rates. We need to have this issue addressed. People have said it is only a small issue and that if one cannot pay the rates one should not be in business. For many of our members, rates is a significant issue. It is an issue which, if their business and turnover is down the rates should be going down, not increasing every year.
Does RGDATA work in partnership with any retail representative agencies in the North of Ireland? The chambers of commerce do so and I think IBEC used to. There is a challenge here, especially given the effort to tackle cross-Border smuggling.
I might come in on that issue rather than lose momentum because my question relates to what Deputy Peadar Tóibín said about progressive rates. The RGDATA document focused on parking being not necessarily the panacea to the issues retailers face in towns as opposed to out-of-town places such as the Dunnes, Tescos, Lidls and so forth. Has RGDATA done any costing or analysis on what amount of money we are talking about to pack up the argument? I agree with the representatives. I represent Finglas which is falling on its knees. It is very tough.
Deputy Tóibín raised the issue of a progressive rates system. The planning guidelines essentially state that the main objective of retail is within the towns. In other words, any other policies we develop should reflect the planning guidelines. The new development contribution guidelines, launched recently will be rolled out in the next couple of months, reflect this view. The guidelines state that out-of-town retailers must pay a higher development contribution than in-town retailers. The next step is to look at the rates and whether they should follow in the same way. Are we about saving jobs or, God forbid, creating jobs? If all the car parking spaces in Finglas are filled because we change our policy and get people to go into the town centre, at the end of the day that will not open up some of the other vacant units, of which there are many.
The stronger hand that has most potential, in line with the parking issue, is that there should be a rates regime that reflects the planning guidelines, that is, putting retail at the centre of the town. All our objectives should suit that. Tesco in Clearwater, for example, provides free parking. I understand exactly to what RGDATA refers there where the village is really suffering, but there are many vacant units. If the rates were significantly different or reflected that, surely it would be an incentive for others to open there.
It is not as simple as that, but I would be curious to hear Ms Buckley's view on those two matters. The first is the cost analysis on it. RGDATA has not brought anything forward in that regard, although I agree with doing something on parking because it is something we face everywhere. The other matter is a further comment on the differential rates because I am conscious we may go on to different topics and I do not want to raise it again.
Ms Tara Buckley:
The reason we have not done a cost analysis is that we looked at what was happening in 16 towns and they all had different charges and prices. It is quite difficult to do a cost analysis. It is possible we could look at returning to it.
The main point we were trying to make is that it is different everywhere. We accept that local authorities need to be funded. We certainly would believe that town centre regeneration should become a priority and needs to be funded, but the town centre traders who are making all the contribution should not be the only ones who fund it. The town centre regeneration should be funded by all the businesses. Those on the edge of town which have killed the town centre should make their contribution too.
Deputy Calleary made a point earlier. In fairness, as it is, the out-of-town retailers have paid a development contribution on their parking spaces. That does not mean we cannot challenge imposing such a levy, if that is the route Ms Buckley is suggesting, but one should bear in mind that they have paid a development contribution on those spaces. To be as impartial as possible, it would be remiss of me not to at least point that out.
Mr. Gary Morton:
In response to the Vice Chairman, they have paid additional fees. One may park there, but without the fear of being clamped. I refer back to clamping. Senator Michael Mullins spoke of paid parking. Paid parking works. Paid parking allows the freeing up of spaces and allows for activity to take place and for customers to go in and out of shops. If one did not have that, the same cars would remain there all day blocking up the roads.
The issue in our area, including Ranelagh, parts of Rathmines and Dunville Avenue where we are, is that there seems to be an immense amount of activity. Some of the stories I can recount are most upsetting. The €80 penalty for somebody who is held up in a dentist's chair or at a doctor's surgery and who is five or ten minutes late returning is much greater than he or she deserves when compared with some chancer who wants to park all day or somebody who has parked illegally or dangerously. These are different offences and should be seen differently. If anything can be done in the local authorities, that needs to be recognised.
I welcome the delegation to the committee. I was a member of RGDATA for many years and I am familiar with its work. I support entirely the point Ms Buckley makes. RGDATA's members are great supporters of Irish industry and business. They do it because it is good for business. The vast majority want to buy local products. They want to buy their own.
I am also a great believer in the market economy. It is dangerous to solve all problems in one way, by suggesting customers pay where we do not like what they do. I agree with Mr. Morton. We must find a way.
I would hold the same view on any suggestion that one should charge for parking in out-of-town centres. If that is what the customers want and that is where the customers go, then the incentive must be for the towns to work in some way or other to bring customers back into them. It is not fair or correct to state that the Government or town council should do something about that. Each town itself must do it.
In recent years I have been involved in a television programme and have visited many small towns to which I would not have been previously. One can see some success stories and some failures. Edenderry, for example, is a town with three shopping centres. There is Lidl, Tesco and Aldi on one side and a big Dunnes Stores on the other, and the centre of the town is deserted and the shops are closed. Somehow or other, the town, whether the town council or the shopkeepers themselves, will have to do something about that. What they must do is somehow or other find a way to put life into that town.
I have also been involved in Drogheda. When we went to Drogheda first, the various organisations representing the different streets did not talk to one another - there was no cohesion. When they got together and worked together, they were able to do brilliantly in the town. They did not solve every problem but they were able to do a great deal. They have in-town car parking as well. It does not solve all the problems. They were able to do a considerable amount.
What I am saying is it is in their own hands to a large extent and RGDATA must encourage each town by saying that if they want to get business back into the centre of the town, they should not rely on the Government or town council, and they must do something themselves. One can see some towns that are doing a marvellous job where they are able to get together to provide a mixture of retail and food, alcohol and entertainment.
Mr. Morton touched on this. I remember well that we had a problem in Bray where there was no car parking charge. The staff and the owners of the shops came and parked outside their own shops all day long to the extent we had to say there must be a charge applied because otherwise there would be nowhere else and nobody could come in to shop. One could see car parks filled with those who park there all day long. It is up to the shops themselves to find some way of solving it. Given what Mr. Morton said, it does not look as though clamping is the ideal arrangement. There must be some other arrangement that we can find. To a large extent, it will be in RGDATA's own hands.
There are other aspects RGDATA brought up that will not be in its own hands. The State must solve the black market problem. It must solve the issue of illegal tobacco smuggling and fuel laundering. We, as citizens, cannot do that ourselves. There is not nearly enough focus of attention on how we will do that, but that is up to the State. We must find a way to do something about that.
On the other hand, RGDATA makes a strong point about the joint labour committees, JLCs. I am fully convinced that many jobs cease to exist once one goes above a certain level. Perhaps having a minimum wage which is the second highest in Europe explains why there is such high unemployment. In Germany, where there is no minimum wage, they do not have an unemployment problem. That is not a popular statement to make.
There really is a need to state there are steps we ourselves can take and there are steps the State must take. I believe the steps RGDATA is taking are in the right direction. It is drawing attention to those matters about which we can do something as a State. There are some steps which, individually, each town and each group of traders themselves must take. The way RGDATA is working is merely to remind its members that they themselves can do a significant amount.
There are some good examples around the country of where traders are taking wonderful steps. Ennis has done a marvellous job in the centre of the town. It is a joy to walk around. I am not sure how they have done it. I do not have the detail, but there is no doubt. One can go to Ennis, park and walk around the streets because they are pedestrianised. There are success stories. If one looks around the country and sees where the success stories are, the vast majority of them are not the result of State imposition but where the town people themselves say, "If we want to make our town vibrant and alive, we ourselves can do it." I do not know how one will do it in Ballinrobe because I do not know the town well enough, but I am sure one can learn from some of the towns I have seen.
Mr. Rob Murphy:
The Senator mentioned Ennis which is a good example. It has many multinational and major retailers in the centre of the town. My father has often said he would welcome multinationals if they came to the heart of the town. Ennis is blessed in the sense that it does not have major out-of-town centres dragging people out. I have visited Edenderry several times and it scared me. I feel very sorry for the people of Edenderry and the businesses trying to establish themselves.
If we got one hour free parking tomorrow morning it would not solve all of our problems by any stretch of the imagination, but it would be a beginning. Ballinrobe Beo as a collective traders' association is the way of the future. I would like to see town councils throughout Ireland seeing themselves as businesses. If four or five new businesses in our town were paying rates the revenue would more than cover all parking charges for the entire year. If town councils considered themselves as a shopping centre with empty shop units, and there are approximately 70 empty shop units in Ballinrobe, they would examine how many of these they could fill and realise that if ten were filled it would cover parking charges for a year.
We do not want free parking all day because of the issue raised by Mr. Morton; we just want one hour free parking to encourage casual traders. We need a strategy which shows town councils want more businesses and people in the centre of town, with the option of going to the out-of-town competition. At present we do not have this balance. While traders and business people would have to carry the vast majority of the load, it is up to us to make our businesses work. I would love to see a proactive council acting almost like a business in trying to get the best profit out of a town. The best way to do this is through rates and not through parking charges or attacking consumers, particularly in small towns which are far from big city centres.
I welcome the witnesses from RGDATA. I fully accept and understand the importance of local small businesses, particularly family owned businesses, which are very much the heart of small towns. We have heard many stories, and Senators Mullins and Quinn spoke about what happens in some towns. A chamber of commerce in my constituency urged the local authority to introduce paid parking because its own employees were taking up valuable spaces. As it was a tourist town it was particularly noticeable during the summer. Every town is different and in a nearby town the local authority is developing a car park in the middle of the town, which will be of major benefit as it will take business owners and employees off the streets and free up spaces for customers and passing trade. As Senator Mullins stated, the phenomenon of people parking in a town for the day and then taking a bus to a city detrimental to the town and needs to be addressed.
RGDATA's recommendations include that local authorities should distinguish between commuters and shoppers. How does it propose that this be done? It would not be simple. A town may issue permits, but people may travel 15 miles to reach a town.
The Chairman and others have spoken about out-of-town centres. A developer must provide car parking spaces or be levied for them. Developer contributions are also applied. If a small business in a town centre had a car park with ten or 15 spaces, it would raise similar issues. Should levies be imposed on them for providing car parking spaces for their own business? I understand the point being made by the witnesses but I am a little wary. Perhaps it could be considered in terms of rates in the valuations Bill which is being prepared. There has always been a dichotomy between small businesses crucified by rates and larger businesses which can afford higher levels of rates.
It has been mentioned that the cost of permits and licences is €5,346. Do the witnesses have a breakdown of this? Would they be able to forward information on what it encompasses on average? It would be interesting.
I thank the three witnesses for their interesting presentations. I agree with most of what was said and disagree with some parts. I agree to an extent with regard to the car parking issue. It is a big problem. When people go to shop they need car parking space. We all accept it is more difficult to provide free parking in city and town centres and easier in out-of-town centres. Part of the problem is that retailers often try to put all of the focus on local authorities, when in fact in most towns and cities the private car parking sector is part of the problem. We look to local authorities to provide free car parking, but they are in competition with private parking operators and they must also step up to the plate. Their charges can often be very high, which adds to the problem. They, along with the availability of sufficient car parking spaces, must be part of the solution.
I share some of the Vice Chairman's concerns about out-of-town shopping and retrospectively applying charges. This would have to be teased out but as a concept it should be explored.
I come from Waterford city which has held the line on retail policy, often in very difficult circumstances. Senator Quinn stated he supports a market approach. During the Celtic tiger years the market went mad and people wanted to build any amount of out-of-town shopping centres and, if allowed, would have destroyed many city and town centres including Waterford city. I am sure many other towns and cities also held the line as much as they could. Not regulating the market is not the way to deal with this. We must have sensible policies. At national and regional level, the hierarchy is city and town centres first after which come retail parks and neighbourhood centres. It can be very difficult to hold this. Part of the problem is that even where the authorities have held the line, under significant pressure from people in the cities and towns who see the convenience of having out-of-town centres, some of the big retailers have been lost. Waterford city is a good example. The cost of doing business in city centres includes rates and rent, which is a major issue including for big retailers who have pulled out of some cities. HMV had pulled out of Kilkenny and B&Q pulled out of Waterford and other places. Rent was a big issue. While car parking is important, retailers tell me issues such as rates, utility costs and rents are bigger issues.
With regard to JLC rates, Ms Buckley stated we may have too much employment protection legislation. I am against using a review of JLCs to drive down wages in this area. I found it offensive, to be quite frank, when Senator Quinn stated having the second highest minimum wage is one of the reasons we have an unemployment crisis. To try to pin the blame on low-paid people is inaccurate. The retail sector is suffering because people do not have money to spend. The very same low income workers throughout the sector and State have had their pockets emptied after six austerity budgets. It is why many retailers tell me they do not have footfall or customers but now I hear retailers state they want to be part of this and that the wages of the low paid, mainly women and immigrant workers, need to be reduced. I do not have a difficulty with reforming JLCs. It needs to be done because many of them are outdated, but I do not want to see such reform used as an opportunity to drive down wages and nor should low paid workers be used to somehow prop up businesses which are not viable. If businesses cannot pay the minimum wage then the businesses are not viable. I fully support RGDATA with regard to rents, the cost of doing business and car parking, but I do not support any reduction in the pay of people working in the retail sector.
Ms Tara Buckley:
I wish to clearly state that the views expressed belong to Senator Quinn. RGDATA does not share his views and has never campaigned for a reduction in the minimum wage.
I hope that I did not give the impression that there was too much legislation. I said that there was a body of employment legislation that did not exist when the joint labour committees were originally set up. It is proper that employment legislation applies to all employees in the State. RGDATA believes that is the right thing to do. We have an issue with hiving off one little section of the retail sector, the grocers, and giving them a different set of rules. We are happy to play by the rules and want to play by the rules. However, the same rules should apply to all retailers, not just give the retail grocers extra rules. That is our position. We disagree with the comments made by Senator Quinn. We have never campaigned for a reduction in the minimum wage.
Staff are very important because independent shops are about service and customer interaction. Our members want to employ people. We have clearly showed that our members, comprising 230 shops, have taken on 1,000 new people over the past two years. We want to employ people. We have research that will be released shortly which shows that our members want to train their staff. Training is important because the retail sector is changing, is quite dynamic and needs good engaged staff. We want to train staff and help them because the work is becoming more computerised and they must deal with a lot more issues. Good staff are valued in the independent trade and we think that we treat our staff very well. Our members work with their staff and it is like having family in the shop. Our members would not like to be seen as rogue employers because they are not. We agree that it is important that people have jobs in order that they can go shopping.
In terms of parking, a key point that we wish to make is that we want an open and free market. At present businesses in the town centre and the shoppers who travel into the town centres must carry the burden of collecting this type of funding. That burden should be shared and it should not be left to town centre shoppers to pay all of the fees. We agree that we need parking charges to ensure the proper use of parking spaces. Some councils have gone too far because it is now about a revenue grab rather than managing car parking.
Senator Quinn said that RGDATA members must do it for themselves. Our members are doing it for themselves. Look at Murphy's Centra in Ballinrobe and how its town centre trade works. Our members are all over the country and they work with other town centre traders to revitalise town centres. They spend time and effort doing so and know what they must do. We do not seek a handout. Parking is a big issue in Dún Laoghaire. Our members have even become parking angels and put 50 cent in a parking meter in order to prevent people being awarded a ticket. It is exactly how Mr. Morton explained. A customer will never return to a shop if he or she has a bad experience. For example, if he or she receives a fine of €120 or a clamp is applied to his or her vehicle along with an €80 fine, plus an hour's wait, all this would cause a lot of stress. That is the unfairness of it. We need help to solve the problem. We do not seek a handout but let us get on with doing what we do best. Let us get on with working with the other town centre traders but do not hinder us by trying to collect these huge fees from people who want to do business in the towns.
Ms Tara Buckley:
Mr. Murphy made a good suggestion of one hour's free parking. There could also be national guidelines established. There are very good systems in other counties where the problem has been addressed. I am talking about a person who wants to spend between one and three hours in a town. We view them as shoppers. If a person wants to park a car for a full day then provide separate facilities for them and provide spaces for people who want to shop. A shopper is a person who wants to spend an hour or two in a town and some people may want to do business. They could spend two hours and then leave without using up scarce parking spaces.
Ms Tara Buckley:
The Government has announced that it will set up a portal, commencing with the retail grocery trade and we hope that the measure will assist us. At present we have 21 different licences and inspections and they have been outlined in one of our reports. I can forward a copy to the Deputy. The Government has announced that it will provide a portal to allow our members to sort its licences in one sitting. The applications will then be sent off in cyberspace using a portal format and members will get their various licences returned to them. We welcome the move and will work with the Government to ensure that the system works.
We have all listened intently to the delegation and realise the extent of the issues. Town centres are struggling to survive. The solutions outlined go some way to solving the problem but we need to do more. I thank the witnesses for attending and look forward to working with them in the future.