Niall Collins (Limerick, Fianna Fail)
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Question 1: To ask the Minister for the Environment; Community and Local Government his contribution to the reviewed EU-IMF agreement in regard to the proposed change of the floor space cap set out in the draft retail planning guidelines; if they argued for a retention of the current floor space cap; and if he will make a statement on the matter. [37874/11]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I issued draft Guidelines for Planning Authorities on Retail Planning for public consultation on 21 November 2011 aimed at ensuring that the planning system plays a key role in supporting competitiveness in the retail sector; advancing choice for the consumer while promoting and supporting the vitality and viability of city and town centres; and contributing to a high standard of urban design and encouraging a greater use of sustainable transport.

In response to the requirement in the EU-IMF programme of financial support for Ireland for an economic analysis of the potential impact on competition and consumer prices of eliminating or relaxing the floor space cap on retail premises, my Department and the Department of Jobs, Enterprise and Innovation commissioned Forfás to undertake an evidence-based and focused study to analyse the potential economic impacts of eliminating the cap on the size of retail premises. The draft guidelines take into account the recommendations of the Forfás Study Review of the Economic Impact of the Retail Cap, which I also published last week. The draft guidelines are open for public consultation until 20 December 2011, and I look forward to good engagement through submissions and observations which will be considered in finalising the guidelines in early 2012.

Niall Collins (Limerick, Fianna Fail)
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I thank the Minister for his response. I am sure he will agree that small business is facing great pressure and stress at present in terms of falling consumer demand as a result of the pressures on the wider economy. The Government has signalled that an increase of 2% in the higher VAT rate will be part of next week's budget and the retailers have reacted quite angrily to that. They also reacted angrily to the kite that was flown by the Minister for Social Protection regarding sick leave pay. Furthermore, they are concerned about the proposed reduction in the amount of the redundancy rebate. All these pressures are feeding into business. There is also the existing pressure of commercial rates, which we debated in the House last week. During that debate we highlighted the actions that must be taken in terms of recognising the changed economic circumstances and people's ability to pay.

Small business, retailers and family businesses throughout the country have an issue with increasing the cap on retail space for the bigger multiples. The EU-IMF deal did not specifically provide for an increase in that cap, and the Minister must acknowledge that. It provided for a study. Increasing the cap would allow for more space, which would squeeze the smaller retailers in town centres. It is a core function of proper and good planning that we develop from the core of towns and villages outward, rather than enhancing the already developed out-of-town shopping outlets. My native city of Limerick is an example of that, where the doughnut effect around the city is prevalent and has essentially torn the heart out of the inner city. All sorts of drastic measures will be required to rebalance that.

Our position is that we oppose increasing the cap. What is the Minister's position on it? The Irish Small and Medium Enterprises Association Limited, ISME, the Irish Business and Employers Confederation, IBEC, Chambers Ireland, Retail Excellence Ireland and the Retail, Grocery, Dairy & Allied Trades' Association, RGDATA, as well as the rest of the organisations all wish to know the Minister's thinking on the matter.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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All those organisations have different views. The draft guidelines play a critical role in refocusing on plan-led development rather than a developer-led approach, which has bedevilled cities such as Limerick and other places throughout the country. I recognise that the retail sector plays a key role in generating employment and attracting people to cities, towns and villages. I am also conscious of the fact that in provincial towns, in particular, retail businesses are under pressure, so we do not wish to do anything that will massively distort the marketplace even further for those businesses. For that reason I have no proposals to increase the cap in the context of provincial towns.

Niall Collins (Limerick, Fianna Fail)
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Will the Minister clarify where he will be proposing to increase the cap? Second, will he acknowledge that it is not a requirement of the EU-IMF agreement to increase it and that the requirement was to undertake a study? Where is the Minister intending to increase the cap? Is it just the Dublin area? Will the Minister accept that it is a requirement of the EU-IMF agreement just to carry out the study, and no more?

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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When the EU and IMF ask one to carry out a study, they do so with a particular purpose in mind. There has been contact with the troika about the Forfás report and over the summer months we have been negotiating with the troika. The Government made the decision to release for public consultation the proposed changes in that submission to modify the grocery retail floor space cap in Dublin and the major cities but not to change the existing floor space levels for petrol station outlets, retail business parks or neighbourhood and district centres in provincial towns.