Brendan Ryan (Labour)

I thank the contributors to the debate, namely, Senators Carty, Bradford, Keaveney, Quinn, O'Malley, O'Reilly, Boyle, Buttimer and Burke and the Minister of State, Deputy McGuinness. Based on price surveys, even before the recent reduction in the VAT rate in the UK, the price of grocery items was approximately 30% lower there than here. The VAT rate change in the UK will make matters worse although, as contributors pointed out, food items will not be affected. The increase in the VAT rate here was a mistake and counterproductive. It will not achieve its objective. The weakness of the pound versus the euro is an exacerbating factor which is contributing to the problem.

These factors explain some of the differences but do not explain them all. Speakers referred to the fact that in July the Tánaiste asked Forfás to conduct a comparative study on the operating costs of running a retail business in this country versus other jurisdictions. As Labour spokesperson on consumer affairs, I welcomed this move as this involved important information which we needed to learn. However, it is now December and I am bitterly disappointed that the report has not yet been completed. This was supposed to be done with urgency. I have contacted Forfás on several occasions since July to see what progress has been made. On each occasion, I have been told that the report is a number of weeks away. Today, I was told it is due for delivery next week and I hope this is the case.

I understand the study examined retail businesses in eight cities, namely, Dublin, Cork, Galway, and Limerick in the Republic, Belfast in the North, Manchester and London in Britain and Maastricht in Holland. They examined items such as rates, telecoms, labour, transport, distribution, electricity, water, property prices and rental costs. These are all factors in the day to day running costs of any business. I understand the delay is due to the fact that some retailers did not co-operate fully with the process and I was disappointed to hear this. If this is the case, I suggest that legislation is required to compel all retail companies to co-operate with Government and or State body surveys when requested to do so. This is important research which will help us understand what is going on, and I look forward to its findings.

When British retailers are questioned and challenged about the overly high prices they charge in this country compared with their stores either on the other side of the Border or in Britain, they usually respond by stating it is due to the far higher operating costs here. The study should tell us whether this is the case. If differences in operating costs exist, we need to understand the extent of them, we must quantify them and set about closing any gaps that exist. If operating costs are ruled out as a factor or if they are insignificant, then the price differentials cannot be justified. I believe that in many cases they cannot be justified. As I stated, price surveys have shown that price differences of up to 30% exist. This study must establish whether the differences in operating costs justify the high prices that recent surveys show are being charged. If retail business costs are higher, this must be addressed so that we can remain competitive.

With regard to what we call for in this motion, the Minister of State responded that while some of the issues are in the control of the Government, others are in the control of other bodies such as local authorities. We need local and national government to work together to bring about the solutions that may be required. The Government must then show leadership on this matter with some urgency.

Several speakers referred to the National Consumer Agency. Its work in carrying out grocery price surveys has been useful in highlighting the issues and in encouraging shoppers to spread their shopping basket across several stores and give some of their grocery spend to the cost-cutting stores such as Aldi and Lidl. We must give credit where it is due in this regard. The effect has been to drive price competition in the grocery trade, with the result that prices have come down.

However, from conversations I have had with suppliers to the grocery trade in my constituency of Dublin North, it seems some vegetable growers are being pressed to take lower prices for their produce to offset any margin loss as a result of price reductions. This is unacceptable. Irish suppliers must not be put out of business to preserve the margins of the British retail giants.

Although the Labour Party motion condemns the Government for lack of action on this issue, something about which Members on the Government side may be sensitive, our call for a shoppers task force, as explained by my colleagues, is reasonable, innovative and deserving of support from all Members. I was disappointed to hear Senator Quinn describe it as a quango. That is not what is intended. We are not proposing the establishment of a public body. Rather, what is envisaged is akin to the type of project team that might have been put together by Senator Quinn when he was in charge at Superquinn to examine certain issues. It is worth putting the task force together to provide a much needed focus on this important matter. The Forfás report commissioned by the Tánaiste and Minister for Enterprise, Trade and Employment, when it is finally delivered, might be the first item on its agenda. I commend the motion to the House and thank speakers on all sides for their contributions.