Jan O'Sullivan (Limerick City, Labour) | Oireachtas source

I thank Senator Denis Landy and his Labour Party colleagues for giving us the opportunity to have this debate. I have heard many bright ideas which I will certainly consider with my colleagues in government.

As I will be staying for the rest of the debate, I look forward to others that will be brought forward.

We are all very much aware of the negative effect of money being sucked out of the economy because of the recession, whether it be through unemployment, emigration, lower incomes or otherwise. This has had a negative impact right across our society but particularly so in the decline of business activity in our city centres, rural towns and villages. Many shops and businesses, both new and even some which have been in operation for decades or generations, have not been able to survive the downturn in economic activity, resulting in increasing numbers of shop closures and vacant units in town centres.

I know this a source of great concern for all of us in our local areas and across the country. The retail sector, combined with the wholesale sector, plays a very important part in the domestic economy, representing over 15% of the workforce. However, over 48,000 jobs were lost in the retail and wholesale sectors in the period from the first quarter of 2008 to the first quarter of 2012 and while the volume of retail sales has shown some marginal increases in recent quarters, consumer confidence remains low. Senator Jimmy Harte has made the point that people are afraid to spend and afraid to borrow. Certainly, the level of consumer confidence is a real concern and many retail outlets remain vulnerable. In addition to the impact of the recession, upward-only rents, parking charges, commercial rates, rising energy costs and online trading, an issue referred to by some Senators, are all factors which are threatening the viability of small and medium-sized businesses in the retail sector and threatening the fabric of urban centres.

The Private Members' motion put before us by the Labour Party Senators deals with an important issue and clearly reflects the difficult circumstances faced by retail outlets and small and medium-sized businesses in towns throughout the country. There is no one simple solution or panacea to the situation faced. An integrated cross-sectoral approach is required, but this must also be combined with proactive action by the retail sector and individual businesses within it. The vitality and viability of town centres are central to our policy in government. We recognise the vital role towns play in the social, cultural and economic life of communities around Ireland. We have all seen the effects of urban sprawl and poorly planned out-of-town retail developments, as referred to by Senators Mary Ann O'Brien and John Whelan. Families all over Ireland are paying for these mistakes through more expensive infrastructure, longer journeys and congestion. Vibrant town centres also contribute to social inclusion and are better suited to multipurpose trips. They provide for greater diversity of uses and create more interesting spaces where people can interact and do business.

We have done a lot within my area of responsibility. As I said, I will certainly consider the suggestions made both in the motion and the contributions I have heard. However, I would like to outline some the things we have done. New development contribution guidelines were introduced earlier this year directing planning authorities to put in place reduced development contributions or waivers to support town centre development. I am encouraging local authorities to do this because it is a practical measure we can take to encourage development in town centres. New guidelines on retail planning are aimed at promoting and supporting the vitality and viability of city and town centres, ensuring the planning system plays a key role in ensuring competitiveness in the retail sector and advancing choice for the consumer. In retaining the previous caps on store size in less populated and smaller towns, the retail planning guidelines strike the right balance by ensuring local monopolies are not created in smaller locations, which would be detrimental to competition.

Local authorities have been asked to exercise restraint or, where possible, reduce commercial rates and local charges to assist local businesses in the current economic climate. The response to this request has been positive, with, for example, 87 out of 88 rating authorities either reducing their annual rateable valuation or keeping it at the same level as in 2012. This follows similar trends in commercial local authority rates charges in both 2010 and 2011.

Retail outlets can also help themselves to survive the current difficulties by coming together and adopting innovative proactive initiatives. In this regard, there is scope for the business community to utilise the business improvement districts scheme, BIDS, which is mentioned in the motion and was also mentioned by Senator Denis Landy, to a greater extent than has been the case up to now.

A fundamental feature of BID schemes - which is governed by legislation sponsored by my Department - is that it is the local business community, rather than central or local government, which is the sponsoring party for such schemes with the funds collected from local businesses being used to pay for the services and improvements to be carried out in the local area.
In terms of Government action other than by my Department in providing assistance to retail businesses, a number of measures have been introduced since 2011 including the following: the introduction of the 9% rate of VAT on certain goods and services; the halving of the lower rate of employers' PRSI; the introduction of the microenterprise loan scheme and credit guarantee scheme, both schemes have had take-up from the retail sector; and the extension of seed capital and the employment and investment incentive scheme to the retail sector.

Recognising the importance of the retail sector to the economy, the Action Plan for Jobs 2013 contains a number of specific measures aimed at supporting the sector. These include: an initiative to increase the number of small businesses trading online; an initiative to streamline business licence application procedures; and the establishment of an interdepartmental group to identify possible further actions that could be taken to support the maintenance and creation of jobs in the sector. This interdepartmental group has already been established and is mandated to submit a report encompassing various recommendations and actions before the end of the year. Perhaps the idea of the task force as suggested by Senators Denis Landy and John Whelan could be looked at in conjunction with that group.

In addition, the Government has strengthened the Credit Review Office to deal with problems in getting access to finance, and has begun the process of integrating business supports into a stronger local enterprise office network to support micro and small businesses. The introduction of the JobsPlus scheme from the beginning of July should also be of benefit to employers in the retail sector. While some of the measures proposed in the motion are already being implemented to a certain degree at local level - for example, pop-up shops are promoted in some local authority areas and councils contributing to the painting and regeneration of shop front facades to improve the appearance of town centres - it is not possible to properly assess the contribution which some of the other measures proposed would make to addressing the problems faced without subjecting them to detailed examination and cost-benefit analysis. Clearly some of them are the responsibility of the Department of Finance. We can examine them into the future but we did not have time to do all of that work before addressing the motion.

The introduction of a first-hour free parking scheme might have negative revenue consequences for local authorities who would have to find the money for services elsewhere in an already constrained council funding environment. I am aware that a number of councils have used the initiative in respect of parking. However, within the commitments given in the programme for Government, both I and the Government are supportive of further consideration being given to some of the proposals in the motion before the House.

Members can also be assured that I and the Government are fully supportive of the need for local authorities, within the context of their own economic and development planning processes and the Action Plan on Jobs, to actively promote measures to stimulate and support local investment and associated job protection and creation. Relevant Departments and national agencies also have a role in ensuring that the necessary legislative, policy and financial supports are available to local authorities in this regard.

My Department in its on-going interaction with local authorities in the context of development planning and the enhanced role envisaged for them under the programme for local government reform, Putting People First,will continue to be as supportive as possible of the development of innovative approaches to economic stimulation and associated job creation in local communities.

There is one last thing that was not included in the motion but might greatly add to the overall vitality of towns. I refer to the quest to see more people returning to live in towns either living over the shop or in buildings that no longer have a commercial use. There is a great wealth of untapped uses in our towns that we, in central and local government, need to explore further. For example, vacant dwellings could be used by artists and is an initiative that has worked well in my local authority, in Galway and some other areas.

I recognise in the motion the appreciation for the Irish town as the heart of a wider community. There is much to celebrate in the built form, the architecture, the civic life and the history that breathes life into our urban centres and makes them more than just centres of commerce. However, commerce is the lifeblood that makes the urban heart beat. I realise that the economic difficulty of recent years has placed a strain on businesses in urban centres. While many initiatives and measures have been introduced I assure the Senators that we will continue to explore all options for further action, including the proposals outlined in the motion. I am determined that we will do all that we can to ensure that our towns are able to function to their full potential in order that they can be centres of our social, cultural and economic life. I look forward to the rest of the debate.