Bernard Durkan (Kildare North, Fine Gael)
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Question 125: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the haemorrhage of the retail sector in the economy brought about by greater competitiveness in adjoining jurisdictions; the measures she proposes to take to address these issues in the short to medium term; and if she will make a statement on the matter. [45001/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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Restoring our national competitiveness is a key priority of the Smart Economy Document published by the Government in December 2008. The Document in setting out a framework to address the current economic challenges also identified a series of priority action points. Progress has been and continues to be achieved in implementing theses action points. Specifically, in the area of 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. · Empowerment of the Minister for Finance under the National Assets Management Agency legislation to issue guidelines on credit supply to participating institutions on an ongoing basis. · Establishment of 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, the Minister for the Environment, Heritage and Local Government and I 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 in the retail sector, employer and trade union interests through the established mechanism of the Joint Labour Committee (JLC) have agreed to a 12-month deferral of minimum pay rate increases in the retail sector that had been due to come into effect from 25 October 2009.

In addition, an "inability to pay" mechanism will be introduced into the Joint Labour Committee/Employment Regulation Order system so as to assist in protecting employment in situations where employers are faced with severe economic challenges.

Insofar as the Employment Subsidy Scheme is concerned, I recently announced a second broader call for applications with extended eligibility criteria, open to both exporting and non-exporting firms, including companies in the retail sector. Further details of the specifics of the Second Call will be announced shortly.

Recent Consumer Price Index Returns from the Central Statistics Office show that prices in Ireland are falling faster than anywhere else in the EU, including Northern Ireland and the UK. This narrowing in the differentials in prices will also benefit the competitiveness of businesses, particularly businesses located in border regions.

Government fully accepts the need to concentrate efforts to restore national competitiveness and is committed to pursuing those issues identified in the Smart Economy Document which are particularly affecting competitiveness such as high prices, cost of services, wages etc.