Written answers

Thursday, 12 November 2009

Department of Enterprise, Trade and Employment

Retail Sector

5:00 pm

Photo of Aengus Ó SnodaighAengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 90: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the action she is taking to curtail the drop in volume and value of retail sales here since the volume of retail sales in August 2009 was 9% lower and the value of sales fell 13.4% compared with August 2008; the measures she is taking to protect jobs in the retail and sales sectors; if the employment subsidy scheme is applicable to this sector; and if she will make a statement on the matter. [40771/09]

Photo of Mary CoughlanMary Coughlan (Donegal South West, Fianna Fail)
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The downturn in retail sales is an inevitable consequence of the current difficult economic climate.

The Government fully recognises the difficulties currently being faced by retailers and the importance of ensuring that we continue to have a viable and successful retail sector. It is all the more important in these difficult times that businesses, particularly those with a direct presence in the marketplace, ensure that they present as competitive an offering to the public as possible.

At the macro level, restoring our national competitiveness is a key priority of the Smart Economy Document published by the Government at the end of last year. In this context a number of specific actions aimed at addressing current economic challenges have been taken by the Government.

With regard to access to credit the Government has provided a number of supports for SMEs, including:

A commitment that recapitalised banks should increase their lending capacity to SMEs by 10 per cent over 2008.

A Code of Conduct on Business Lending to SMEs, published by the Financial Regulator and in force since March 2009.

Funding for SMEs of €300 million provided by the European Investment Bank for lending through three Irish banks.

The National Assets Management Agency legislation will also empower the Minister for Finance to issue guidelines on credit supply to participating institutions on an ongoing basis. In addition, together with the Minister for Finance I established the Credit Supply Clearing Group to identify appropriate solutions where flows of credit to viable businesses appear to be blocked.

In the area of local authority charges I and the Minister for the Environment, Heritage and Local Government met with representatives of the City and County Managers Association on a number of occasions to reiterate the importance of providing a supportive environment for business and ensuring that all local charges and levies are applied in a transparent, fair and proportionate manner. Minister Gormley also wrote to the local authorities earlier this year outlining a number of measures that local authorities should consider in order to further support economic activity. Local Authorities are aware of these needs and have already reorganised to provide one-stop shops, or equivalent services, for local businesses.

Insofar as energy prices are concerned, following significant energy price reductions in May 2009, there has been a further significant reduction in gas prices and a modest reduction in electricity prices for medium business customers from this October. Data from the CSO highlight this continuing downward trend. The costs category that includes electricity, gas and other fuels has declined by almost 14% in the past twelve months.

In the area of wage costs my colleague, Minister Kelleher met with representatives of the retail grocery sector in February 2009 regarding the pay rates set down in the Retail Employment Regulation Order (ERO). At that meeting Minister Kelleher urged the employer interests in the retail grocery sector to use their best endeavours, through a process of constructive dialogue with their trade union counterparts, to devise practical measures to tackle the severe challenges facing the sector, so that these might be agreed and implemented through the established mechanism of the Joint Labour Committee (JLC). The employer and trade union interests on the Retail JLC have recently agreed to a 12-month deferral of minimum pay rate increases that had been due to come into effect from 25 October 2009.

In addition, my colleague the Minister for Labour Affairs, will introduce an" inability to pay" mechanism into the JLC/ERO system so as to "re-balance" the existing statutory wage-fixing mechanisms. A reform along these lines will assist in protecting employment in situations where employers are faced with severe economic challenges.

Insofar as the Employment Subsidy Scheme is concerned, this week I announced that a second broader call for applications with extended eligibility criteria open to both exporting and non-exporting firms including companies in the retail sector would be launched next week.

The foregoing demonstrates the concrete actions taken by the Government to assist businesses, including those in the retail sector, to regain their competitive edge. I am confident that the measures which I have outlined will help restore our national competitiveness and ultimately will help in the ongoing fight to protect, maintain and indeed create as many jobs as possible, not least in the retail sector.

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