Sustaining Viable Rural Communities: Discussion (Resumed).

Cuirim fáilte roimh gach éinne agus gabhaim míle buíochas libh as teacht anseo inniu. I welcome all the witnesses, from Allied Irish Banks, Mr. Robert Mulhall, managing director of retail, corporate and business banking and Mr. Denis O'Callaghan, national head of local markets; from An Post, Mr. John Daly, director of retail operations and Mr. Liam O'Sullivan, director of mails operations; from Bank of Ireland, Mr. Liam McLoughlin, chief executive of retail Ireland and Mr. Pat Farrell, head of group communications; from the Irish League of Credit Unions, Mr. Dave Matthew, head of monitoring and Mr. John Knox, of the research and development department; and from the Irish Postmasters' Union, Mr. Ned O'Hara, general secretary and union officers, Mr. Paddy McCann, Mr. Ciaran McEntee and Mr. Sean Martin. I thank the witnesses for their attendance.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they are to give to the committee. If, however, they are directed to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable. The opening statement and any other documents may be published on the committee website.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name in such a way as to make him or her identifiable. Today's meeting is part of a series of meetings that this committee is holding to consider what it takes to sustain a viable rural community. I have been a Member of the Oireachtas for approximately six years and I have never been on a committee that has investigated so deeply all aspects of an issue. This committee has been involved in the greatest level of outreach to different organisations which trade or do business in rural areas. The objective is to have proposals to make rural communities viable which we can then put to Government. I ask witnesses to ensure the presentation is focused on that objective. Today we will deal with the third stream of this, which is maintaining an effective service and presence in rural communities.

I call on the representative from Allied Irish Banks to address the committee.

Mr. Robert Mulhall

I thank the Chairman and members for inviting AIB to appear before the Joint Committee on Arts, Heritage, Regional, Rural and Gaeltacht Affairs. We regard this as an important opportunity to explain the bank's role in the Irish economy and the community, particularly across the wide areas of responsibility covered by this committee.

Allied Irish Banks has over 2.2 million customers and 360,000 EBS customers. AIB group is deeply rooted in every level of the local community. As an example of its sheer reach and range, the banks spend more than €600 million a year in the purchase of goods and services from local Irish suppliers. A total of 60,000 customers use the 205 AIB branches every day. A further 7,000 customers visit our 71 EBS locations each day. Our close partnership with An Post, which has more than 1,100 offices around the country, provides daily banking services to 15,000 customers with approximately 4 million transactions expected to be recorded by the end of this year alone. These combined banking services amount to a remarkably embedded and widespread network across the country. Our 3,000 staff within the branch network are drawn from the community, bringing with them unique local knowledge and understanding of our customers and their needs.

The close relationship between AIB and its customers is crucial to its business and is at the heart of its planning. AIB is currently reorganising its banking model to work closer with customers, retail business and corporate customers. A total of 19 new local markets are headed with an individual leader responsible for AIB's overall engagement with customers in that region. The bank will organise around customers at a local level, eliminating duplication and unnecessary complexities in the system. This new structure provides customers with a one-stop-shop form of service and brings more local autonomy when it comes to decision making, including lending. It is designed to be more tailored to each customer's needs and will allow far more agility of service and will enable the AIB to move working capital faster and more efficiently through the economy.

Nobody is more aware than Oireachtas Members of the rapid changes in how people are managing their finances, both business and personal customers. Customers set the pace today and banks are required to respond. Customers expect a personal professional service, whether it is over-the-counter or through technology. Digital and technological usage provides convenience, personal security and competition that allows choice. The trend across Ireland, Britain and western Europe is a seismic move towards digital. For example, 76% of all AIB's personal loan applications are now done through the digital channels. Some 95% of customer transactions are automated. Nobody should imagine that this activity is conducted only by a younger generation of customers. The use of digital channels by older age groups is growing consistently also, regardless of geographical location. In line with European norms, banking online and through remote channels has been embraced across the country. Almost 50% of customers in rural counties are now using digital banking of one kind or another. At least 43% of the 500,000 banking transactions conducted daily are outside of normal banking hours and are executed over online and mobile channels.

We are keenly aware that the one thing that will differentiate banks such as AIB into the future is the quality customer service, whether it is in-branch, online or on mobile. That is the one constant that remains in spite of all other developments. We are aware that we must maintain the correct balance between providing our customers with a trusted personal one to one service and an accessible and reliable digital or mobile service. Last year AIB opened three new branches, one in Little Island in Cork, Carrickmines in Dublin and Grand Canal Dock near the city centre in Dublin. This year we opened the only in-store banking outlet in the Republic of Ireland through the SuperValu in Lucan. This new outlet adds to the growing number of flexible banking options available to our customers to use where and at a time of their choosing. Any company claiming to deliver market leading service must go to the customer. AIB is increasing its mobile sales force, trained staff who travel to meet customers where and when it suits their needs. In addition to the core opening hours, by the end of the year, AIB will be operating 20 bank lobbies across the country, providing a wide range of services, seven days a week from 8 a.m. until 9 p.m. Where there is a lack of physical bank branches, AIB operates community banks in rural areas of Cork, Kerry, Clare, Limerick, Tipperary, Mayo, Galway and Donegal. There were 40,000 over-the-counter transactions at these banks since the start of 2016.

In addition, students now have exclusive on-campus services in 13 universities and colleges, including in Waterford, Sligo, Dublin and Galway.

We mentioned AIB's partnership with An Post earlier and the banking services that are available in all An Post offices. This year alone, almost 4 million transactions will be processed in An Post for 400,000 customers, reflecting the flexibility, easy proximity and security that the post office service offers to bank customers. Personal customers can use any outlet of An Post to complete cash withdrawals. They can also lodge cash to their AIB accounts. AIB credit card bills and payments can be completed in post offices. Business customers can also avail of a large range of banking services at any post office, including cash lodgements and credit card bill payments to an AIB credit card.

With small to medium enterprise providing thousands of jobs across the country, AIB support for the SME sector is reflected in our strong lending activity. For the first three quarters of 2016, AIB has seen an 11% increase in the value of new money loan approvals and a 5% increase in the number of loan applications approved. The bank has committed to providing customers with a decision within 48 hours of their credit application up to €30,000. Since its launch in September 2014, 28,000 applications have been approved under the scheme. AIB has developed a sectoral approach to its business, analysing key components of the Irish economic landscape and building up specialised teams to provide expert opinion, guidance and advice to customers in those sectors, whether they are retail, hospitality, health, transport, technology, hospitality or farming. This strategy of building sectoral capability has been very effective, giving the bank a strong sense of awareness of customer needs. For example, the bank's agri team now includes 12 specialist advisers with front-line experience of farmers' needs and opportunities who can respond rapidly and pragmatically to issues such as flooding, price volatility and poor crop yields.

In response to the flooding crisis of last year, AIB opened an emergency flood response line for small businesses and farming customers and proactively contacted customers whose business finances might have been impacted by adverse weather. We offered customers a moratorium on loan repayments in order to free up cashflow for their businesses at that critical time. Following the full drawdown of our first €500 million agriloan fund, AIB launched a second €500 million agriloan fund at the end of 2015 to support the continued development of Ireland's farming sector. Recently, AIB has been engaged with the Department of Agriculture, Food and the Marine and the Strategic Banking Corporation of Ireland, SBCI, on the low-cost agri cashflow support loan scheme announced in the budget. AIB has a history of partnership with SBCI in helping small businesses and farmers to grow their businesses, creating employment and supporting the economy through reduced price loans. Since the launch of AIB's €400 million SBCI loan fund in 2015, which is available at 4.5%, a discount of 2% off our standard business rate, AIB has approved more than €5 million of credit each week to businesses and farmers. The average loan drawdown last year in this fund was €28,500 but loans drawn down ranged in size from €1,000 to €1 million. AIB relationship managers are continuing to proactively engage with dairy farming customers who may be experiencing cashflow pressures and the bank's agri adviser team has participated in numerous seminars, farm talks and workshops to support customers.

AIB is the largest bank seed fund investor in Ireland also and it is supporting businesses through the country irrespective of location. In Skibbereen, for example, the bank is the strategic partner of Ludgate, the first rural digital hub, providing 1,000 mb of broadband, 80 hot desks, co-working space for all small businesses and 24-7 access. Meanwhile, a strategic partner of the PorterShed in Galway, AIB is funding a shared workspace for entrepreneurs, start-ups, accelerators and incubators for the western seaboard. We have had a really positive response to the AIB Start-up Academy, which is a programme of supports for start-up business owners. This includes a range of summits, boot camps and a mentoring programme designed to inspire, support and nurture SMEs in critical initial phases of getting their businesses off the ground.

AIB Group has the largest share of the mortgage market, with our latest mortgage lending figures showing a 15% increase on last year's numbers. We approve eight out of ten applications and we have consistently been one of the cheapest in the marketplace. We have reduced our variable rates for both new and existing customers four times in the last two years, totalling a 1% reduction. Meanwhile, though impaired loans are dropping significantly as the economy recovers, there has been an €18 billion reduction in impaired loans to €11 billion since December 2013. The bank continues its case-by-case restructuring of personal and business customers in financial difficulty. Implementing sustainable solutions for customers takes time but progress is clearly being made and the bank continues to see a continued reduction in impaired loans. This remains a critical priority for the banking industry in general.

Regardless of our customers' locations, a new set of challenges has come unexpectedly from the Brexit vote. AIB is very conscious of the short-term negative effect of a weakened sterling. We continue to work with customers whose businesses are now experiencing cashflow challenges due to currency fluctuations. Brexit has also brought market uncertainty and volatility. As a bank we are acutely aware of the anxieties that many of our customers are facing, be they farmers in the west of Ireland or shop owners in the midlands. Some are under pressure and while we cannot predict the shape of the post-Brexit change we can, as a profitable and sustainable bank, assure the committee we will support our customers and jobs and continue to provide credit to businesses, which are the backbone of the Irish economy and the heart of communities. AIB is actively advising our customers to plan strategically on the impact of Brexit on their business. We are holding Brexit information events this month in Sligo, Limerick, Clare and Drogheda and there are more planned for the new year.

At the outset, we mentioned the degree to which the bank is involved in the community. Nowhere is this more highly illustrated than in our sponsorship of GAA club hurling, football and camogie. The bank's relationship with the GAA spans more than 25 years and that support reaches into every one of our 2,000 clubs that engage in the championship, with many parishes and communities benefitting. In 2015, the bank extended its GAA sponsorship to include the all-Ireland football championship also.

AIB once again thanks the committee for the opportunity to explain the level of support and commitment we have to our customers, their families and the local community. This relationship lies at the very core of our business. Having returned to sustainable profitability and having begun repaying capital to the State, the bank is robustly positioned to continue that support no matter where our customers live or work. We are now happy to take questions.

Gabhaim buíochas leis an bhfinné as an gcur i láthair. I call on Bank of Ireland to address the committee.

Mr. Liam McLoughlin

We thank the Joint Committee on Arts, Heritage, Regional, Rural and Gaeltacht Affairs for the invitation to attend this morning and to contribute on the topic of maintaining an effective service and presence in rural communities. To assist the committee, we have submitted a short presentation in advance and my remarks this morning will follow the layout of that presentation.

The Bank of Ireland Group provides a broad range of banking and other financial services. These services include current account and deposit services, overdrafts, term loans, mortgages, business and corporate lending, asset financing, leasing and instalment credit, invoice discounting, foreign exchange facilities, interest and exchange rate hedge instruments, life assurance, pension and protection products. There are a number of ways in which Bank of Ireland services the needs of our customers in communities. We do this through lending, for example, to support customers to own homes and grow their businesses. We do this by providing services via our extensive retail bank branch network and by giving customers access to 24-7, a form of banking service which they increasingly demand.

Bank of Ireland is the largest lender to the Irish economy. In the first half of 2016, we advanced new and increased lending of €3.5 billion to Irish businesses and consumers serving approximately 1.7 million personal and 183,000 business customers in Ireland. We are Ireland's number one business bank providing 50% of new lending to SMEs and the agricultural sector. Through these lending activities, Bank of Ireland is an active part of the life of every community in the country. We maintain a highly visible and highly active involvement in communities the length and breadth of the country. Our branch network is a core component of this involvement and of the service we provide to other communities. While some institutions have significantly reduced their branch network or withdrawn from the market entirely, we have maintained our strong, countrywide presence with no rural bank closures in the past five years. We continue to invest in our network. Today Bank of Ireland has the largest retail branch network of any bank in Ireland with 250 branches nationwide. This is a very significant branch footprint and one which gives us an unparalleled presence in communities in all parts of the country.

Over-the-counter business and personal transactions make up only 4% of total transactions with customers and more than seven in ten of our customers are now active online. Therefore, as well as offering Ireland's largest retail branch network, we augment our branch presence by approximately 1,770 self-service devices nationwide for our customers, as well as working with 440,000 customers who actually use mobile devices for their banking needs. It is also important to state that we view our branch network as being about more than banking transactions. Our branch network is increasingly a focus for our support for local communities, for start-up companies, entrepreneurs, innovators and for local community groups.

Bank of Ireland has a very active enterprise development programme primarily delivered through our 250 strong branch network. Twice a year, in May and November, Bank of Ireland organises national enterprise week. During these weeks, a range of activities focused on supporting SMEs in start-ups takes place. Most of these events take place in local branches where small businesses are invited to showcase their business to advertise their products and services and to meet new and existing customers. We also offer small businesses the opportunities to access credit clinics and participate in relevant information sessions.

During national enterprise week in May 2016, Bank of Ireland hosted 750 events countrywide with approximately 2,900 businesses taking part. All events were free and were open to business and the public. Our next enterprise week starts next Friday.

In addition, in this year alone Bank of Ireland will host up to 100 enterprise town events nationwide, investing more than €1 million in the programme. Enterprise towns take place over two days and see local business communities, along with sports, social and charitable organisations, hosting a major community event that is open to the public. This event allows each town to showcase all it has to offer, supporting the local economy, connecting businesses and raising the visibility of what is happening in the towns and villages and potential opportunities for business development. In the weeks up to Christmas Bank of Ireland enterprise towns are scheduled to take place in Carndonagh, Askeaton, Midleton, Tullow, Claremorris, New Ross, Swords, Smithfield, Headford, Carrigaline, Trim, Montrose, Balbriggan, Rathcoole, Skibbereen, Bagenalstown, Loughrea, Listowel, Castlecomer, Kilmacud, Malahide, Ballybay, Charleville, Mountmellick, Castlerea, Ballymahon, Kildare and Newcastle West.

The support of innovation and entrepreneurship is also an important component of the work of local branches. Since 2015, Bank of Ireland has pioneered the development of spaces within branches which support start-up companies and entrepreneurs. These spaces, referred to as workbenches, offer working and meeting places for entrepreneurs free of charge. The bank now offers workbench space in a number of branches in Dublin, Cork and Galway with a further workbench to open next Friday in Limerick. So far, more than 500 start-up companies have used a Bank of Ireland workbench to help get their business up and running.

A significant component of our offering to local communities is the work we do with customers and members of the public to support them in the use of new technology, be that computers, Internet or the use of smartphones. Bank of Ireland has a team of advisers, called digital arrows, whose role is to bring digital training, support and knowledge to community groups and customers across Ireland. The arrows engage with active retirement groups, transition year students, business customers, farmers and community groups, holding events in local hotels, community halls and libraries, and offer practical guidance on how to use new technology in a range of ways, from communicating with relatives abroad, shopping online to using digital channels for banking. Bank of Ireland now has a digital arrow on each of its 250 branches nationwide and nearly 3,000 sessions have been held with senior customers so far this year, including many sessions in nursing homes and with active retirement groups.

Bank of Ireland recognises that it is a service provider to people of every age. Just as we support customers to gain fluency and proficiency in the use of technology, we also must understand the needs and expectations of younger people in society. We support creative sponsorships in the fashion world with Junk Kouture, in the technology space with CoderDojo and with BizWorld we teach children how to run a business and to provide product to market. These sponsorships are impactful to local communities, allowing young people to express themselves creatively and to gain new skills. Our branch footprint is utilised to support these sponsorships and the community engagement they facilitate.

Finally, as set out in slide 13, there is the broader work of our colleagues in both central offices and our branch network. Bank of Ireland's corporate social responsibility programme aims to have a positive impact on every community in which we operate. The bank's charitable giving scheme, Give Together, has raised over €25.5 million since its inception in 2007, supporting over 1,500 charities across Ireland.

In conclusion, my presentation has set out a number of elements of the service and presence offering from Bank of Ireland nationwide. This offering includes our position as largest lender to the Irish economy, the most extensive retail branch network in Ireland and the support for enterprise and innovation that takes place across the network. This also includes the engagement the bank has with local communities through our corporate social responsibility, CSR, programme, our youth sponsorships which support the integrated development of young people and our engagements which support digital skills development among our customers and the wider public.

Míle buíochas as an gcur í láthair. I invite Mr. David Matthews of the Irish League of Credit Unions to address the committee.

Mr. David Matthews

I thank the committee for the invitation to address it on behalf of the Irish League of Credit Unions. I am the head of the monitoring department in the league. I am accompanied by my colleague, Mr. John Knox, a business analyst from our research and development department.

The league represents almost 400 credit unions and over 3 million members across the island of Ireland, North and South. We have approximately 300 credit unions in the South and 100 in the North. Our credit unions have assets of almost €15 billion. Credit unions are self-help financial co-operatives owned and run by their members. Our aim is to help members who group together under a common bond, such as their place of employment or their local community, to pool their savings and to get access to credit.

This morning we are concerned with rural communities. In the context of an erosion of key services and functions away from rural communities and towards bigger centres of population, the localised credit union model remains not merely relevant but an essential support for the future. It is an essential support for local communities in an age when we increasingly see the globalisation of financial institutions and the deployment of technology almost as a barrier rather than an enabler between local people and the decision makers who make such extraordinarily important financial judgment calls that affect people's lives. In many communities, especially rural communities, the credit union is not just a local source of credit and other financial services, it is the only physically present, face-to-face interaction available for those accessing those services.

The credit union model is locally based and democratic. The decision makers one needs to know and meet are physically present in one's community and, indeed, are from that community. Credit unions are adapting to changing circumstances. We are challenged by macro economic circumstances which mean that, increasingly, the return available for our members' savings is limited and certainly far less than it would have been heretofore. The policy platform of the league is set out in our six strategic steps. It has been circulated to the committee. The platform is intended both to meet emerging needs and to strengthen the credit union model. Three of the proposals, those dealing with micro lending, SME and agri lending and lending for social housing, are set out more fully in our submission to the joint committee.

Late last year a personal micro credit, PMC, pilot initiative was launched in 30 credit unions across the country, branded as the "It Makes Sense" loan. Its aim was to prove that credit unions could offer a loan product that matched the convenience and ease of moneylenders' offerings while addressing the exorbitant interest rates charged by those offerings, yet was within prudential lending guidelines of the Central Bank. The pilot was an undoubted success and the scheme is now being rolled out to as many credit unions as possible. Already, over 80 credit unions are offering these loans, with more to come on board in the coming months. It is intended to circulate details of the scheme to all Oireachtas Members, along with an up-to-date list of the credit unions that offer it, in coming weeks.

On lending for social housing, the league's proposal is in response to Government policy set out in its social housing strategy to 2020. The report of the Joint Committee on Housing, Planning, Community and Local Government supported the initiative as a priority action. The programme for a partnership Government reflected positively on the initiative. While numerous meetings have taken place, to date no substantive progress has been made and this is a matter of considerable frustration for the league and for credit unions.

Turning to lending to SMEs and agri lending, traditionally credit union lending was for personal purposes such as home improvements, cars, educational needs, family events and so forth. The lending types that our proposal seeks to address include loans for vans, tools, workshops, farm buildings, tractors, machinery and livestock. We understand that these loans are different and more complex due to the cyclical and seasonal factors that affect cashflow. This must be appreciated by all stakeholders, including the Central Bank when it is framing regulation for credit unions. It is essential to consider our proposal within its context of ensuring that all applications for loans are expertly assessed so the lending decisions are prudent and members' savings are fully protected.

The Irish League of Credit Unions is providing leadership in responding to community need and Government policy. We now look to the Oireachtas and the Government to deliver on commitments made to credit unions before the election. In particular, we look to the joint committee for practical help in ensuring delivery on commitments made in the programme for partnership Government. Credit unions are not just based in communities, they are rooted in them. On behalf of hundreds of urban and rural communities, the challenge is not just to protect the status quo. The bigger opportunity is to strengthen and develop a credit union model that delivers much more in the future, something credit unions are more than capable of doing. I thank the members for listening.

I invite Mr. John Daly of An Post to make his presentation.

Mr. John Daly

An Post thanks the committee for the invitation to attend the meeting today to speak on this important matter. I am the retail operations director and I am accompanied by Mr. Liam O'Sullivan, who is our mails operation director. We apologise on behalf of our new chief executive, Mr. David McRedmond, who could not attend due to a long-standing commitment.

Our appearance here is timely given the change in Government responsibilities for the national post office network, now under the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs. It is also a time of continuing global trends, impacting all postal administrations worldwide, of increasing significant technical substitution and e-commerce. This is impacting greatly on both the mails and retail businesses of An Post, as it is on all our fellow postal administrations.

Over recent years, we have had a number of interactions with the transport and communications committee, and much of what is said here is similar to what was said at those committee meetings. An Post maintains a greater service and presence in urban and rural communities than all other commercial or Government bodies. Through our mails network, with 7,620 collection and delivery staff, we deliver 2.5 million mail items every day to 2.1 million homes and businesses. We deliver mail to all households every working day, often the only interaction some customers have with another person. In recent years we have invested heavily in both our mails and post office networks. In 2015, for example, 43 of our post offices were upgraded and 23 new locations and 14 new post office contracts were awarded in various parts of the country. In 17 areas, local mail services were relocated to a purpose-built or purpose-fitted delivery service unit, providing top-quality modern customer and operational facilities, including ample safe parking and van loading facilities, cost-efficient lighting and heating and customer post office box and IT facilities.

The size of the post office network continues to be crucial for our commercial agenda. Its very scale allows us to service our customers' needs throughout the country. This scale is also a major factor in our retaining and winning more business. The reach of our network has attracted business as diverse as bill payment and banking services for major organisations to provision of social welfare payments, savings, foreign exchange and retail products such as Postmobile and gift vouchers. Using geodirectory data, we can see that 99% of addresses in the country are within 10 km of a post office and 93% within 5 km in rural areas. Our contract with the Department of Social Protection specifies that outlets must be available within 3 km of 95% of customers in an urban area and 15 km in a rural area. The post office network comfortably exceeds these requirements.

The post office network is the largest retail network in Ireland. We handle circa 120 million transactions annually, with some 1.7 million customer visits to post offices each week. We have 1,131 offices nationwide, 51 of which are operated directly by An Post, the remainder being run by independent retailers, that is, postmasters as contractors. Postmasters are paid based on the business they perform. We run this network in a business environment that is tough for all participants. All our business lines operate in a very difficult marketplace with many competitors and, critically, are increasingly open to electronic substitution.

It might be useful if I highlight some changes between the present day and the last date on which I presented to an Oireachtas committee in March 2014. This should clearly illustrate the business context in which we now operate. The mails business has continued to decline in this period, due in the main to the global trend of electronic substitution. This can be seen in actions by our major customers, such as the utilities and financial institutions, which now seek to reduce their use of the postal system through electronic statements and discounts to customers. Since March 2014, we have seen a decline of more than 11% in core mail usage. Since the peak of mail, reached in 2007, we have seen a 38% decline. We have seen growth in online shopping, which has to some extent increased the levels of our parcels business. This is a growth area we intend to pursue, but it must be noted that this business is very price competitive.

In March 2014, we had 750,000 weekly Department of Social Protection, DSP, customers. This has now fallen to 625,000, a decline of 17%. This was caused, first, by a decline of 30% in the number of jobseeker payments as people, thankfully, gained employment. We saw a reduction of 5% in pension payments due to the very low number of new pensioners choosing the post office option for their payments. Similarly, we saw child benefit payments decline by 16%. In the same period we have seen our bill payment business decline by 20% due to the loss of some key corporate customers plus a general decline in utility bill payments as customers choose to pay by direct debit for convenience but also to get discounted utility bills. We have seen good growth in some traditional as well as new business streams introduced in recent years. Our State savings business continues to grow, with now in excess of €20 billion of customer savings, and we have significant plans to enhance these services over the coming years. We have seen increases in our banking services with AIB and we added Ulster Bank as a customer in 2015. The foreign exchange business has been a big success since being introduced in 2011, and we continue to see good growth each year. We have both a foreign exchange cash and card business. Our One4all gift vouchers and Postmobile businesses have also seen good growth.

We continue to look for new business activities, and I am pleased to advise the committee that we will introduce a new payment account in the first quarter of next year. This will have all the features of a normal bank account, apart from a chequebook and overdraft facility. We have also introduced a court fines payment business and we will shortly add the national lottery service to all post offices nationwide. We have introduced many new mail service initiatives in recent years. Many of these are in the area of online shopping, with such initiatives as our DeliveryBox product and our AddressPal service. This service enables customers to purchase products at reduced postage cost from UK websites and is proving very popular, with now more than 38,000 registered users. In the coming weeks, we will also launch Post Logistics, a freight service which will enable SMEs throughout Ireland to access European markets readily.

Overall, though, the reduction in the core mails, DSP and bill payment business has meant that business levels at post offices have reduced by 11% since 2014, and this level of decline is expected to continue. While the new forward-thinking business activities are very welcome and necessary, they do not make up for the reductions in the core business streams. I also highlight that Government business continues to be the dominant activity in post offices, making up 62% of the income earned. No company could sustain this level of business and income reductions without making the necessary changes and cost reductions.

A large cost to An Post is the post office network. The fact remains that we continue to have very many unsustainable post offices, where the income earned from customer activity does not match the cost of operating the offices. Along with all costs from the company, this has to be addressed. The company has not to date had any policy of closing post offices, only examining an office if the postmaster chooses to retire or resign or, unfortunately, in some cases is deceased. The committee may be aware that in the event that we consider the closure of a post office, we undertake a consultation process whereby we invite submissions from local interested parties on the need to retain a post office in the locality. The submissions received to date range from no submissions at all to significant levels of interest. We evaluate the submissions received and reach a final decision on whether to re-advertise the post office contract or close the office. Since March 2014, we have closed 16 offices, which is 1.4% of the network in numbers but 0.2% in business terms. This is in the context of the 11% reduction in business previously outlined.

The committee will also be aware that we have been involved in the post office network development group, an exercise with Mr. Bobby Kerr looking at the post office network of the future. We expect Mr. Kerr to make his final recommendations in the coming weeks, which will include proposals on segmentation of the post office network and some protection proposals for rural post offices. His recommendations will be dependent on Government support for the rural post offices if they are to survive into the future. An Post is also part of the post office hubs working group led by the Minister of State, Deputy Michael Ring. This group is examining what other services, in a social and Government context, could be provided in post offices. The company is supportive of both these initiatives.

Much of the network was developed at a time when Ireland was a very different place and, like so many organisations, it has not been immune to the huge social and economic changes in the country. The company supports initiatives on supporting rural communities but is of the view that this is an issue for Government and local communities themselves rather than commercial entities such as An Post. Our extensive range of services can continue to be provided in rural communities, as long as a sustainable business model can be found. Over the years, local communities have changed significantly the manner in which they do their business. Increasing numbers of citizens choose to do their business online or through bank accounts or mobile phones.

They also pass many local shops to do their shopping at large shopping centres and towns. As illustrated earlier, they do less and less business at their local post office. This is also impacting on many of the shops that happen to be co-located with our post offices. All rural retail units are experiencing significantly reduced footfall numbers due to the actions of the people in the community.

We will continue to investigate the provision of more products and services using our leading post-office-counter technology. We also believe we have a big part to play in increasing the level of financial inclusiveness in urban and rural areas. The introduction of our own payment account will be a first step in that area. Many of those without bank accounts currently use the post office as their preferred location for the management of their finances. This includes collecting their Department of Social Protection entitlements; paying their bills, many on a part-payment basis; saving through the post office savings bank for important family events such as first holy communions, Christmas etc.; topping up their phones; buying gift vouchers as presents; getting foreign exchange requirements when travelling abroad; and using our postal money order, sterling draft and Western Union services if they want to send money either nationally or abroad. Many people are still worried about bank charges and direct debits, and by using our services many citizens manage their money efficiently in a cost-effective manner.

We continually look at our service standards and the standard of our post offices. I am sure many members have seen significant improvements in many offices in recent years. We undertake mystery shopping on a monthly basis at 300 of our busiest offices, which is done on our behalf by an internationally recognised organisation in this field. In recent years we have seen an increase in the scores given for customer service. This is further evidence of the strength of the post office network and the level of trust and satisfaction our customers place in us.

We welcome the huge level of good will towards the post office network and are heartened by the level of support for the post office network in Dáil debates. We particularly welcome the Government's support, illustrated by the establishment of the Bobby Kerr and Minister of State, Deputy Ring, initiatives.

We are very aware of the challenges facing communities and businesses in rural areas. We recognise that difficult decisions that impact on local communities have to be taken at times. We believe that a national policy for rural communities needs to be developed. This might result in extended services including post offices services being available at fewer locations. We are ready, as always, to work with Government, postmasters, our customers and business partners to generate extra business for our post offices and to identify a financially sustainable model to ensure the success of the national post office network. We have submitted some slides showing the key activities in our mail and post office business.

Mr. Ned O'Hara

We represent the postmasters who provide the post office service, referred to by the representative of An Post. Some 1,100 of the post offices are run by postmasters who are independent contractors. The post office network is a national asset that is owned by the people and is a key resource to address many of the challenges faced by rural areas. It can also provide good value for the Government and taxpayer in doing so.

The network can offer expanded State and financial services, and innovative social and community services. We thank AIB, which is one of the financial services that uses the post office to transact business for the 400,000 customers the AIB representative mentioned. We enjoy the trust and good will of the people we serve. The people we serve want their local post office to stay open. We collected 500,000 signatures last year and handed them in to Government. A recent poll indicated that 82% of people wanted the Government to do more business through the post office.

An Post referred to the level of decline in transactions. This affects the post office network which is facing a financial crisis. The current annual income of postmasters, which includes all the costs they incur to provide the service - rent, rates, employee costs etc. - is forecast to drop by a cumulative €35 million over the next five years. The Government, as the biggest customer and owner of the network, needs to make decisions now to invest and secure the future of the network by implementing a transition plan. Postmasters meet the public every day and they tell us they want us. We live in a democracy. We expect the Government to listen to the people and implement what they want.

The post office network needs important Government decisions now. I will use the word "now" several times during the presentation because the problems facing post offices have been well aired. The network, which is owned by the people, is part of the fundamental economic and social fabric of the country. The current changes happening in the country are damaging communities which feel their views have been ignored by successive Governments. We feel this was reflected in the result of the last general election.

Rural communities, in particular, want support to help stop the negative multiplier effect on their communities as different services are withdrawn from their localities. There is a gradual withdrawal of services, including Garda stations and banks, resulting in fewer jobs. If people can afford to, they leave. People have to travel further for services. The post office then closes. There is a negative knock-on with reduced footfall, the local shops and pubs closing, young people becoming more disillusioned, more people leaving and we are in a never-ending downward spiral.

The communities we serve recognise that post offices currently serve as a magnet in retaining footfall in towns and villages and in some cases in attracting footfall. When the services of post offices are withdrawn, there is less incentive to visit or stay in that town and village and other businesses suffer. The State, as the owner of the post office network, has a major role to play in addressing and redressing the issues faced by these communities. Communities can, and do, experience significant barriers in accessing State services. The post office network currently provides sensitive and secure services, and is well positioned to address gaps in the provision of State services and to be developed into a network of community hubs.

The report into the post office network by Bobby Kerr and the business development group identified community participation and safety, health services, transport services, financial services, social enterprise services and Government information services which could and should be provided through the post office network.

We believe the post office can become the "State-on-your-doorstep" for the communities that have difficulty in accessing State services. All Government payments should be made through post offices, including those related to the Department of Social Protection, motor tax, Health Service Executive, CAO, third level fees, fines and licences. We have done research in typical towns with a population of about 800 people and no Garda station and no bank. People in those towns have told us that we should be in a position to supply and complete all Government forms. They should be qualified to verify people's identities and become peace commissioners, for example. We can operate a standard An Post bank account. We can do counter transactions for all the commercial banks. We currently do them for AIB. We take lodgements for Ulster Bank. We currently do not do anything for the other banks.

We can become a venue for remote health checks in the future and, obviously, immediately for smaller health checks. We can become prescription drop-off points. We can provide transport information. We can book transport. We can pool cars and provide meeting points.

Our survey indicated that people felt the need for ICT training. Everybody has a PC at home; they do not necessarily know how to use it. It can be done locally. We can provide broadband access. We can provide citizens and tourist information.

All these services will require Government investment - both current and capital. We believe the level of investment required will provide good value for the people and for the taxpayer, but decisions need to be taken now. All the issues involved have been considered at length by the post office business development group set up by the then Minister, Alex White. Bobby Kerr was appointed in December 2014. The report was published in January of this year. Two working groups were set up. One, chaired by Bobby Kerr, had its initial meeting on 4 February. The second, chaired by the Minister of State, Deputy Ring, had its initial meeting on 27 July. There has been no concrete action from either group to date. We have talked about it and identified this, that and the other but there is no plan to do anything.

As this talking continues, the situation continues to deteriorate. The search for an ideal solution is never-ending; there never will be an ideal solution. We want to plan for what has been identified. Enough research has been done. We want a five-year plan to be renewed annually, and we need that plan identified and implemented now.

Post offices are at breaking point because of the reduction in transaction levels and the collapse of the network is imminent. Once the post offices are gone they are gone. Individual postmasters are contractors; they are under intense pressure to maintain the post offices. Some of them do it because the business has been in the family for years. However, they need urgent decisions regarding the increase in costs they are facing. They have increased rent, increased staff costs and other increased costs. Postmasters are currently subsidising An Post, the Government or the communities they serve in providing the services because they are doing it out of their own pockets.

Post offices are ideally placed to provide a significant contribution in the context of the challenges faced by rural Ireland and can provide good value in doing so. The following is required from Government: appropriate investment to protect the network; a comprehensive five-year plan; and additional State services to be sanctioned. The State owns the post offices and we cannot provide services unless it sanctions them. Additional financial services could be provided. New social and community services must be tested and delivered, particularly in rural areas. We ask the committee to request that the Ministers for Communications, Climate Change and Natural Resources and Arts, Heritage, Regional, Rural and Gaeltacht Affairs, and the Minister of State, Deputy Ring, act immediately to ensure that the Government takes the necessary decisions now.

The submissions have been very interesting and there is a common theme. All the organisations, the banks, credit unions and An Post, have one branch network. They are telling us also that there is a huge transfer to digital operations and, therefore, that manual transactions are decreasing by the day. Interpersonal relationships with small businesses are decreasing. That is the daily experience of those of us who live in rural Ireland. We are quite adept at using the Internet. In four or five years' time, please God, we will all have a gigabit of broadband in our houses, we all hope to have fibre and very powerful 4G and 5G and whatever. The transfer is taking place across all age groups. The idea that only the young use these mobile phones is not true. Every age group is using them, booking holidays online and so on.

Do the witnesses think it is sustainable to keep the branch networks they own? In the event that it is not, and that they will get more and more digital transfers, have any of them considered moving back-office functions away from the major cities, where there is congestion, where it may take people two hours to get to work – it takes an hour and a half to travel four miles in this city, as I know only too well – to rural communities where they can get highly qualified and motivated staff? The companies that do have rural locations for back-office work find that they are very successful. Will there be compensation because that is the growing business? When we ring a telecommunications or computer company we might wind up talking to anybody anywhere in the world. Why not rural Ireland, or towns in rural Ireland? I do not believe in denying the truth that the days when people had to go to a bank to do simple transactions are over. I have to confess that in the past 30 years I have stood in the branch of the bank that I deal with on two occasions. I do everything else some other way, such as by post or e-mail. Increasingly, this is becoming the way that people are doing business.

An Post has the added reality that every business in the country is trying to get people to go to variable debits and electronic receipt of the invoices. I do not think that is going to change. That is going to continue inexorably - how quickly we do not know. How fast can we get alternative services and how sustainable are those alternative services? In other words, are they just a short-term palliative and will that be taken over by the digital revolution? Looked at in a hard-headed way, the witnesses seem to indicate that income will decrease even if they bring in new services.

Postmasters and postmistresses - post office owners - make the case cogently that their incomes are not substantial. They cannot sustain reduced incomes. If we want to sustain a fairly broad network, can we retain all the branches? Is the move so great that even with extra business they are only sustaining their incomes and might even be sustaining decreasing incomes? We need to be hard-headed because, as somebody involved for years in rural development, I know that wishing the past came back never worked. Creating a future where we say here are the challenges and here are new opportunities for doing things in different ways because this is where people are going, has some chance of success. There is nobody more ruthless than the customer. If the customers want to bypass the local shop and go to the big town, or to do something electronically because that is easier, they will do it. They are booking hotels and holidays, doing banking transactions and so on online. Wishing that the local community, which we are trying to sustain, is going to act differently leads to a much greater chance of failure than facing up to reality and then dealing with it. I would be particularly interested in what all the witnesses’ organisations could do to provide other employment in rural Ireland, such as back-office work. If they were to consider the latter, what would be the inhibitors involved? Would it be availability of suitable people to employ, broadband capacity, the road network or whatever? We need to know what they are and to address those issues and provide for what the witnesses think is lacking. We live in a challenging world. One witness referred to Brexit. They can add Trump this morning.

Tá cúpla ceist agamsa freisin. All the organisations are integral to the rural community and its viability. They also have to be commercially viable at some level. There is a constant tension between responsibility to the people they serve and the need to be commercially viable.

Whenever credit unions are mentioned in this House people speak well of them. Everybody wants them to do well. However, we are still in the shocking situation of having an asset-rich organisation while sectors of Irish society are crying out for the capital to make the necessary investments. For example, there is a massive housing crisis and if the money of the credit unions was invested in housing, that would improve returns for their members and resolve one of the biggest social crises in this country. That issue seems to have become stuck. Why is the Department of Finance not facilitating what I have described? Why does there seem to be a blockage within the Department on that issue. Can the credit unions give us an update on the Department of Housing, Planning, Community and Local Government and their negotiations and discussions with it? Do the credit unions feel that the regulatory system in this country does not see a place for them as fully-functioning banks?

AIB closed approximately 67 branches throughout the State in recent years. When a bank branch closes, it causes major difficulty in towns and people start to reorientate their activities towards other locations. How many AIB and Bank of Ireland branches exist with reduced services? I refer, in this regard, to those which only deal with cash on two or three days each week. Can the witnesses provide figures in respect of that matter?

Even though there are particular units in specific towns, services have been reduced. Perhaps the witnesses could detail the other services that have been reduced apart from the cash services in those banks. What activities are being used to mitigate this issue? Many people cannot access broadband and it becomes very difficult for them to fully participate in the banking system. I believe that some banking services are currently available with An Post but what is holding the banking sector back from increasing the number of services with An Post in the future? For example, deposits can be made via An Post. Is there any way that AIB and Bank of Ireland can increase the services? I acknowledge the Bank of Ireland does not have the same relationship but is there a possibility that rural communities can access banking services directly through An Post both to help the bank customers and to help the viability of An Post in the future? As for Bank of Ireland, the witnesses mentioned it has not had closures recently, but there have been some closures, for example, the recent closures in Caherdavin and Parkway in Limerick. Perhaps the witnesses could discuss those further.

I believe there is a serious crisis with An Post. I have spoken to a number of postmasters in local towns and it is becoming increasingly non-viable for their businesses to function. In an average sized Irish town, the post office is under pressure. A post office may have taken a cut of about €15,000 in income over the past number of years because the transactions are the basis of their income and those transactions are reducing. I know of one particular post office that has €90,000 annual income but two staff salaries must be paid from that. Rates, electricity, insurance and all of the other costs must also come from that. From my interaction with postmasters, and from the words of the representatives of the Irish Postmasters Union today, it seems to ring true that increasingly, the shoulders of these individuals are taking the burden of the reduction in footfall, as the witnesses have already spoken of. One of the big problems in Ireland is that we have far too few banks, believe it or not. We have two pillar banks and as a result those two banks can slice and dice the market to their particular desires. They can charge interest rates and deliver services to their particular economic desires because there is not enough competition. In Germany there are public banks with a significant, or a majority, stake in that particular economy. Why does An Post not pitch to become a bank in a full effort to deliver banking services throughout society?

I will now turn to the issue of the Irish Postmasters Union. There have been some decisions by the Government with regard to the issuing of driver licences. It must have stung postmasters around the State that a service for which they pitched ended up with a private system for delivery. An Post delivers phones currently. Is that really working for postmasters with regard to being a retailer, or at least an agent, for phone suppliers? There are many public sector organisations and people who work for public sector organisations in the State and I have never heard an organisation being as open to taking on new activities, roles and responsibilities as is An Post. I commend An Post on that approach. There seems to be an enormous flexibility among postmasters to make this system work in order that there is a viable postal service in the State.

I thank the witnesses for their attendance. I have a few questions and will start with AIB. I am a customer myself with AIB. Whether that is a conflict of interest when I ask questions I do not know. I must start on a negative with regard to AIB. I live in a peninsula in west Cork where AIB had branches in Ballydehob and in Schull, both of which have been closed. The nearest branch for many of my constituents is about 35 km or 40 km away. This was an extremely negative move by AIB. It may have been somewhat forgivable to close one branch but to close two was a fatal blow to our community. Since then people have been moving into the bigger towns to do their banking and this has had a knock-on effect for businesses locally and these communities have suffered shop closures. AIB is providing a travelling bank but it is not acceptable to try and do business on different days. Most people do not register as to what day it is open and go in to the car park and it is not there or whatever. It is a big loss and it was a huge blow. It is a heavy criticism of AIB that it would have such poor insight into the knock-on effect the branch closures would have on the local community. We talk about the survival of local businesses but how can they survive if they do not have a bank to do any business? I address this criticism also towards the Bank of Ireland, as it does not have a presence on that peninsula either. I must stand up for the constituents who elected me. Closure of branches continues to be a huge issue and I would like to see if AIB or Bank of Ireland are going to address this situation, not in that particular peninsula but in many more communities where they are closing banks. Is the travelling bank our future? If it is then it is a bleak future because a person cannot do proper business in a travelling bank.

That being said, it is a difficult time and maybe the witnesses could elaborate further on how they are helping farmers through the current cashflow crisis being experienced by many farmers. There have been massive issues with grain, as well as massive losses in the dairy and suckler sectors. These three sectors are coming under massive pressure this year, more so than previous years. I would love to know how the banking sector is addressing it. Discussions with farmers are hugely important but how are problems being addressed on the ground? The same goes for businesses in rural Ireland. They are still finding it difficult to survive. We say there is recovery. There may be recovery in bigger cities but it is not feeding its way back into our rural towns. I would like to know how the banks are delivering for those businesses and individuals who try to start up businesses. To be fair, AIB did speak about its backing for the Skibbereen Ludgate project. There is an excellent manager in Skibbereen so it is easy to know why a project like that is working. There was a big digital weekend in the Ludgate Hub in Skibbereen recently, so continued work there would be very much welcomed.

We speak about electronic transactions and these can lead to a lot of frustration among our older people and sometimes it is forgotten that they are not able to use the computer or the smart phone. Sometimes when one goes to a bank branch now the customer is advised to press buttons, and many older people find it very difficult. I would appreciate if the witnesses could take that into consideration.

With regard to An Post and the Irish Postmasters Union, the Minister of State, Deputy Ring, has appeared before this committee. While he is a man who would fight for the people of rural Ireland and has done so for many years, I am worried about some of his comments about introducing travelling post offices. That would be an absolute disaster, such as the one we are living in. I see that as a backdoor system towards closing post offices. Any proper-minded Deputy would be totally opposed to that measure. I do not know if there is a group coming up with these proposals for the saving of post offices but if that is its first proposal, I know the direction in which it is steering. Am I correct in saying there is talk of plans for post offices being 15 km apart? If that is where we are going, then we are going down a very bad road. We talk about being able to deliver driver licences and car tax but this talk has been going on for many years but with no movement whatsoever. That is the area where post offices need to be moving into and not talking about travelling post offices. Many people who are social welfare recipients are receiving letters telling them they can have their benefit paid electronically. That is damaging towards the post office network and has serious implications. Credit unions have been delivering for their local communities.

We are lucky to have one in our peninsula, which has fairly reasonable rates. I ask all the institutions represented to look at their local farming and business communities because they continue to struggle. It is a difficult time in rural Ireland for farmers, publicans and shop owners. If we begin to remove services, close banks and introduce mobile post offices, we will go down a very dangerous and slippery slope in rural Ireland, which is the issue we are discussing today.

When a post office runs into a problem and is closed for whatever reason, why must it take an eternity before it reopens? Why can a decision not be made quite quickly, whatever the issue at the post office may be, positive or negative? Why must we wait for months before a post office opens in the community? It takes business from the community and gives little opportunity to a new start-up to keep the business there.

I thank all of the groups for their detailed presentations which have been very insightful. The contraction of the recession, the impact it had on the banking sector and the knock-on impact on society in general means there will be a change with regard to the banks, but the biggest issue I can see, particularly in rural Ireland with smaller bank branches, is the loss of power of the local bank manager. Will the representatives from AIB and Bank of Ireland touch on how this has happened? The mistakes made by the banking sector, no more than other mistakes in policy throughout the country, were made at a very high level, in national headquarters and beyond, where the people involved could not see some of the risks being taken in overall financing. I do not believe the problems of the recession were the fault of the local bank managers.

I was a farmer before I came to this job, and this point is also with regard to small businesses and community groups. Local bank managers had local knowledge, knew everybody locally and had respect. They also had the power to make decisions about lending. When a farmer or small business owner came in to talk about a tough time, the bank manager who dealt with them may have had a relationship with them for ten years. A local bank manager had the ability to take a punt on something that might look dodgy on paper to a manager making a decision in Dublin. This seems to be gone. Bank managers in the regions are very much administrators more than bank managers and have lost this power. Even if I am wrong, the perception is not wrong because it is how my constituents and the public perceive it. Why do the representatives from the banks believe this has happened? Do they agree with me? Do they believe the banks have lost the local knowledge? Local managers must now push a request up the line, and the person making the final decision is so far removed from the loan request or loan extension request and the local knowledge that they are not best placed to make the decision. The witnesses spoke about an evolving system but do they see any change back to what was? I take the points on board about the big move to online, and we are probably moving away from more human contact and interface, but we will never lose it completely, especially when it comes to small business. If we address this issue we will address many of the problems for banking and beyond.

What are the impediments to credit unions and the post office network working more closely together, particularly for the post office network? To me they are a perfect fit. In my local village the credit union only opens for a couple of hours on Friday evenings, when it does not always suit to get there. We have a massive asset in the post office network, which is open and looking for footfall. I know contact has been made, but I believe more synergy could be there. I am disappointed more has not been made of this potential. Will the witnesses outline the impediments? From a policy perspective, are there any moves we can make to assist them in working more closely together? From a distance, I can see the mutual benefits but perhaps I am missing something big.

The credit union to which I referred, which only opens on Friday evenings, has amalgamated with other credit unions. I received a crash course in the credit union sector as a baptism of fire when I was a new Deputy for Kildare South when problems arose with the Newbridge branch, which I know was not part of the Irish League of Credit Unions. At that time there was a lot of criticism about the registrar of the day referring to a hub and spoke system, and the idea of every credit union having its own entity not being viable in the future. I now see my local credit union amalgamating with larger credit unions. Is the hub and spoke model playing out? Is it the right thing to do? What are the challenges to it? No more than my point on the banks, we do not want to lose local knowledge but I accept we must have proper governance and not everybody is suitably qualified to be a director of a credit union. I ask the witnesses for their comments on this.

I thank Mr. Daly from An Post for his presentation. When he spoke about his role in the post office network development group and Bobby Kerr's group, what recommendations has he brought to the development group? Has he come up with his own ideas on how to support the post office network? How does he propose to try to solve the post office network's problems which are quite evident? Earlier I spoke about perception, and there is a perception that An Post takes the post office network for granted and that it could do more. I believe the network needs to develop services away from An Post in order that it is not totally dependent on it because this could lead to complacency. I would like to hear any recommendations he has brought as an individual. I accept the points on new business which he outlined, such as the court fines process and foreign exchange. These will bring increased footfall and perhaps this is the answer to my question. Does Mr. Daly understand the concern in the post office network? Is he working proactively with it? He began by stating the scale of the network is a great asset and I acknowledge this.

It is great to have the Irish Postmasters Union before the committee. I completely agree it is a national asset and a remarkable starting point. If an entrepreneur came in with this model and was asked to make it work, that person would get very excited about the possibilities. He or she would also see many challenges. Its greatest strength is the scale of the network it has throughout the country. I welcome the work of Bobby Kerr's committee and the hub initiative of the Minister of State, Deputy Ring. The committee would not be doing the union's representatives any favours today if we told them they were all great and we will fight against people who want social welfare transactions to go online. One of the responsibilities of the committee is the improved provision of broadband throughout the country, and Deputy Ó Cuív touched on this earlier. The committee is working very hard to make sure we get better access to broadband throughout the country. I tell my constituents and business people in rural south Kildare who are up in arms because they want improved provision of broadband to be careful what they wish for, because when it comes it will mean ease of access for online shopping, and all online transactions will become easier.

We have serious education work to do to let people know that if they do not use local services such as the post office network, they will lose them. The people who turn up at public meetings to attack politicians on the closure of post offices are probably the very people who have not stood in a post office for a long time. Earlier Mr. O'Hara mentioned that people voted in the election but those same people may not be using the network as much as they should. The witnesses will find no greater supporters of the network than me and other members of the committee, but the move online cannot be stopped.

I am aware of the very positive work being carried out through listening sessions. This comes back to my point on moving away from An Post and not being overly dependent on it. Several points that jumped out at me as having huge potential are the peace commissioner service and tourism. This comes back to local knowledge.

The Deputy's time has concluded.

We cannot afford to have tourist offices throughout the country, but there is local knowledge in the post offices. We could make all of the postmasters peace commissioners because they are fine upstanding members of their communities. There is much potential and I welcome the listening sessions which were carried out earlier.

I thank all of the witnesses for taking time out from their busy schedules to be here. It is very important they are all here today. I would like to tell the representatives from the banks how important it is for them to support people in the community, whether families, business people or people in the farming community and to continue giving out loans.

People are not looking for enormous loans from the banks in the current economic climate but when they - young couples, farmers or business people - seek funding, I ask that the banks ensure that their applications are looked upon sympathetically and that they try to help them.

I thank the credit unions for being very credible and for doing a great deal for their members. The credit unions are probably sick of being praised but they deserve it. I would like to publicly compliment them on their work.

I wish to devote the remainder of my time to posing questions regarding our post office network. I want to declare a vested interest in that I am a postmaster. What is An Post's financial strategy for the next five years? Is it operating a sustainable model? Will rural post offices be closed? Will there be reductions in incomes for existing post offices, thereby making them unviable? Have the representatives found that the Government has implemented any changes to date far in light of the promises made in A Programme for a Partnership Government, particularly the commitment to community banking, which can be found on page 48 of the document? Does the post office network development group foresee post office closures such as those as predicted in the Grant Thornton report of 2014? How many contract post offices have had their incomes reduced since 2014 and, in particular, this year? Can that be broken down year by year for the period 2014 to 2016? That is a very important question. After rents, rates and insurance costs are taken into account, are some rural and urban post office staff being paid at or below the national minimum wage? The relevant post offices in this regard will not be closed by An Post or the Government, they will simply cease to operate because of a lack of funding.

What is the strategy to replace the income from Government through the social welfare contract, which currently stands at €75 million? Are there specific plans and figures for contracts with Government to replace that money, without which the rural network would obviously collapse? With regard to when the new social welfare contract will be up for renewal, has the post office network development group ensured - by means of its current report - that there will be both a social and economic element to the contract, which might help to regenerate and sustain all communities, urban and rural? Will the group make a recommendation in its final report in respect of the introduction of community banking - something that was promised in the programme for Government - along the lines of the New Zealand or Sparkasse models? New Zealand has a population of 4 million and Kiwibank now has an income of over €100 million and 860,000 customers. This means that almost one in four people in New Zealand uses the services of Kiwibank. Are we to continue to support the commercial banking sector, which, unfortunately, vanished from disadvantaged rural areas and thereby helped to bring about the destruction of small communities?

The Government talks about the new e-payment bank account but it is not a full banking service and will only have a minor impact on the incomes of individual post offices. Will there be a significant financial shortfall that will threaten the sustainability of the current 1,100 post offices if it is implemented?

Regarding mail consolidation, local post offices sorted mail in the past to be delivered by postmen and postwomen in rural areas but that element was removed and replaced by mail being sorted at larger central locations. Has this process been a financial success? What has been the financial effect of this on the incomes of local post offices? Will the removal of this service accelerate the closure of more post offices, as predicted in the Grant Thornton report? What will be the predicted size of the network in three years' time? There are currently approximately 1,100 post offices. How many post offices does the post office network development group envisage being in operation in 2019?

Has the Irish Postmasters Union, IPU, done everything possible to protect the income and viability of its members or is it more interested in negotiating redundancy-style packages rather than trying to secure the viability of our post offices? Has the rural membership lost faith in the IPU? As I am addressing the IPU, I would like to say - because I am entitled to do so - that I am very disappointed, considering my work rate in supporting post offices over the years, that senior members of the union have been very critical of me, both personally and publicly, in a very vehement way. All I can see as being the cause of that is the fact that I was doing what its members are paid to do, namely, stand up for rural post offices. While they were talking about redundancy packages, I was talking about keeping post offices open. That is why, both publicly and privately, senior people in the IPU have criticised me, said bad things about me-----

We have hit the five minute mark.

-----and about the work I have been doing. I would like the representatives of the IPU to address that matter here publicly and to say why they have been critical of my work.

We have that question. I call Deputy Cannon.

I thank all the representatives for taking the time to come here to make presentations to us this morning. I will respond with a quick overview of those presentations. I would say to the representatives from two banks, which, quite rightly, are described as our pillar banks, that we are approaching the end of what has been an exceptionally difficult period economically for the country. I come from rural east Galway and I deal predominantly with small and medium-sized enterprises, SMEs, and assist them as best I can with whatever advice and support I can give. A number of these enterprises are still exiting that very difficult economic process. One could argue that if they have survived the past eight to ten years, the future is probably quite bright for them. However, many would have some significant legacy debt overhanging their businesses. I ask the two banks to be as considerate and as supportive as possible when dealing with those SMEs because they are, in the main, family-owned businesses that have been in existence for generations. They very much form part of the economic fabric of our towns and villages. They deserve whatever support they can get because of the commitment they have made to working hard to sustain their businesses and keep the overall economic vibrancy of their towns and villages alive. They have come through an exceptionally difficult period. With a little of support, leniency and breathing space, I am confident that a large number of them can survive and thrive into the future. If that policy could become part of the mechanism for dealing with those SMEs that are still struggling, it would add considerably to our national effort to ensure that the recovery extends to every single town and village throughout the country.

I thank the representatives of the credit unions for their presentation. I compliment them on the exceptional success of the personal micro-credit scheme. It is a wonderful example of the State and the credit unions collaborating to support people who find themselves in an exceptionally difficult economic environment and who would normally resort to moneylenders that charge punitive interest rates and end up having difficult relationships with the latter. The credit unions stepped in and found a mechanism to support people who need very small amounts of money at particular times of the year. It is an exceptional success and I congratulate the representatives on it. I hope the remaining credit unions throughout the country that have yet to embrace this opportunity will do so as quickly as possible.

Turning to the representatives of An Post and the IPU, I reiterate what Deputy Ó Cuív said. I will not repeat it because he was on the button in terms of what is happening in an increasingly digital world. It is exceptionally important that the IPU, An Post, the State and the Government work together and acknowledge that we are living in an exceptionally changing world. I come from a very small rural community. I was raised in the middle of a bog in east Galway in a place called Attymon. We had two post offices and now we have one. I cannot recall the last time I set foot in that post office. I have had no need to do so. There is a wonderful postmaster there doing great work, but I do not need to be there for the majority of the 52 weeks of the year, and neither do my neighbours. The question is should we continue to pursue an outdated model of engagement that is no longer necessary for the vast majority of people, including individuals like my mother who is 75 years of age and who uses her iPad, on a daily basis, to do her banking, check her balances, pay bills and check the price of a train ticket? She does all her engagement with her bank and with various organs of the State on her iPad. She is not unusual in doing that. People might describe her as such but she is not. A rapid change is happening within rural Ireland and, as we move to the point where we will hopefully have excellent broadband coverage in the near future, the speed of that change will increase even more.

The union and An Post should acknowledge the change that is happening and look for opportunities within it. Pursuing an outdated model of engagement that is no longer relevant to customers who are voting with their feet in not visiting post offices is a futile exercise and a waste of time and energy. They should focus on the strengths of post offices to see what opportunities are available in offering services where personal face-to-face engagement is required. However, they should not insist on sustaining or promoting an outdated model of business engagement that is simply no longer relevant to the vast majority of people.

I, too, welcome the delegates from the banks, the credit unions and An Post. All of these facilities are important in the part of the world from which we come - rural Ireland. Since the recession people no longer know their bank managers or bank officials in the way they used to know them. I am sorry to say I agree with Deputy Martin Heydon that power seems to have been taken from the local bank manager. That appears to be the case in dealing with loan applications. It is a shame because bank managers had good engagement with their customers. They knew with whom they were dealing. When someone came in to apply for a loan, they knew his or her background and were well aware of to whom they would be giving a loan, but power appears to have been taken from them and it is others up along the line who do not know the customers who are dealing with them. That is a retrograde step.

There was a young fellow on a farm at home who wished to build a house for himself, for which he wanted a loan of €100,000. One of the two banks represented here would not give him a loan of €100,000, but it was prepared to give him a loan of €180,000. The problem was, based on his income, he would not be considered for a loan of that amount. The young man in question knew what he was doing. He was able to build enough in which he could live - the kitchen, a bedroom and a bathroom. He would build as much as was needed to tide him over, to which he would add as the years went by. He had brothers and cousins, as well as others, all of whom were willing to help him build the house. However, whoever was making the decision on the loan application decided that the house would have to be completed in order that if it was not being paid for, there would be a more saleable asset to dispose of. The person who made the decision did not know who it was he or she was dealing with.

I disagree with the representatives that most people are happy with the arrangements made in banks nowadays. Many elderly persons cannot manage the technology used. Some such as Deputy Ciarán Cannon's mother can, which is fine, but not everyone can. For that reason, they seem to be locked out of banks. They cannot go there in the way they used to and are not getting the service they were used to.

I appreciate very much the work of the credit unions. I make no apology for saying many families would be hungry - their tables would be short of food - were it not for the credit unions which do wonderful work, or at least they do in my neck of the woods. We are proud and glad of their involvement in rural communities especially.

There is a lot of talk about post offices. If the local post office is lost, it will go a long way towards the parish or village losing its identity. The creamery has closed, as have many local shops, while rural pubs are under severe pressure. The local post office is the last place that ensures the retention of the identity of a village or parish. I am worried that local post offices do not have the full backing of An Post. Like my brother, I, too, am worried that some elements within An Post are hell-bent on redundancies and closing down more post offices. Perhaps they might be doing a little more business, but they have asked to provide extra services such as the making of social welfare payments. They received a commitment from the Minister for Social Protection, Deputy Leo Varadkar, in that regard, but it does not seem to be happening all of the time.

As the Deputy has gone over time, I ask him to conclude.

Let me have just a few more seconds. I am sure there are other services that could be offered. For instance, I cannot understand why the Government put a system in place covering all of County Kerry under which a person has to drive from Caherciveen, Valentia Island, Ardgroom, Eyeries and Lauragh to Tralee to renew a driving licence. It is ridiculous. Post offices could have operated the service without any bother.

I have to stop the Deputy because we are two minutes-----

I have to ask the representatives of the banks a question I missed. There was an assurance given by the banks that they would offer low interest loans to a certain number of farmers in the new year. I ask that the scheme be extended to beef farmers and that there be no limit on the number of people who will qualify under it. Farming has reached a critical point. All sectors are under severe stress.

The representatives of AIB have ten minutes in which to answer all of the questions put to them.

Mr. Robert Mulhall

I thank members for their comments and questions which I have grouped into five key areas. I will start with the sustainability of the branch network.

The first point is there has been a lot of discussion about the intervention of digital services and what they mean for all businesses, not just banking. Our view in AIB is that digital services remove friction from banking. They make service provision much easier and provide greater accessibility, which is good news for the customer. However, it is still a service industry in which people meet people. That is where business is done. Therefore, the role of the branch network and, specifically, the role of the branch is changing and will continue to change into providing a far more advisory service, a place where commerce is executed. It is also worth noting that this is not just about bricks and mortar. We have a mobile workforce on the ground which is made up of agri, SME and asset finance advisers, etc. We are bringing the bank to the customer. We are very focused on ensuring we reach out to the customer in a meaningful way because that is absolutely in the interests of both the customer and the bank in order to ensure a free flow of credit and commerce within the business.

I stress, as I did in my opening statement, the substitution effects. I have mentioned our investment in digital services, as well as in An Post. The provision of services through An Post is a key aspect of our strategy. Someone highlighted the fact that, post the crisis, AIB had to close a number of branches. That was regrettable. However, we were conscious at the time that we wanted to ensure we would not leave our customers abandoned in service provision. We were focused, therefore, on the strategic partnership with An Post to provide services in a meaningful way.

There were questions about service provision. I will ask my colleague, Mr. O'Callaghan, who deals with local markets to talk about about future expansion.

The second issue on which I will focus is power and discretion in driving and the empowerment of local staff. In our opening statement I mentioned that we had changed the way we configured from a local markets perspective.

We now have 19 local markets across the island of Ireland. We are very focused on ensuring each accountable executive running those local markets is empowered to make decisions. We have returned some responsibility for credit decision-making back to branch managers. In circumstances in which branch managers do not have that discretion, and decisions have to be made by credit units, we have pushed the staff of the credit unit out into the regions. We are taking a decentralisation approach in that regard.

I take Deputy Heydon's point that if this message is not coming across, we need to do a better job of making sure our customers understand it. We see this issue as something that differentiates us from our competitors and that should be harnessed into the future. As part of our approach to ensuring there is autonomy of local markets, we have deliberately aligned our local market structure to the county structure of Ireland to ensure there is a feeling of community. We want people to feel that AIB is sticking with the community. Our sponsorship of GAA events is part of this.

I agree with the point that was made about back-office functions. It makes absolute economic sense to look at the migration of more and more services out of environments where labour and infrastructure costs, such as office rents, are high. We have some pedigree in that regard. There are over 400 staff working at our main contact centre, which operates out of Naas, where we have been for quite some time. It is quite a large local employer. We are continuing to look at how we can migrate other services that we do not have to operate from a centre in Dublin. We are looking at how we might set up a centre in Limerick to handle complaints and resolve issues on a national basis. We are conscious that driving in this direction works for our business model as well.

I agree that AIB needs to support business. As I outlined in the opening statement, we have seen an 11% increase in new money provided into the SME sector this year. We have partnered with the Strategic Banking Corporation of Ireland to ensure the pricing of that credit is appropriate to the business provision and the needs of our customers. We are very focused on the agricultural sector. It is our primary sector in Ireland. We recognise the role it plays in the overall indigenous economy.

I think our credentials with regard to supporting customers who are in difficulty and at times of difficulty, such as the flooding events I mentioned earlier, allow us to say we are very focused on providing such support. The world is not perfect. We will continue to evolve and to work with our customers on delivery. I will ask my colleague, Mr. O'Callaghan, to speak about the issues of service provision, our relationship with An Post and the expansion of services through our branches.

Mr. Denis O'Callaghan

Members of the committee asked how the bank's relationship with An Post and the post office network might evolve into the future. The first thing to say is that AIB has been in partnership with An Post for 13 years. I would say it is a long, strong and productive partnership, certainly from our point of view. As we regularly survey our customers to learn more about the experience they have with the 1,100 branches in the An Post network, we know that they enjoy really good experiences. I want to thank An Post and the Irish Postmasters Union for that because it is very important for our customers to get a happy service that they value.

As we said earlier, we know that 15,000 of our customers visit post offices across the island of Ireland every day. We estimate that they will undertake 4 million transactions this year, which is very significant. All AIB personal and business customers in every community can visit any one of the 1,100 post offices to lodge or withdraw cash or use their cards. It is quite an extensive service. We are in regular dialogue with An Post. I think we have a good relationship. We are very happy to continue discussions with An Post about how we can further enhance that service in the period ahead.

Members of the committee have expressed concern that banks are reducing the services they offer in their branches. There was a suggestion that different branches offer different types of services. I assure the committee that all of AIB's branches open at least five days a week, from Monday to Friday. Indeed, some of them open seven days a week. All of our branches, including small rural branches and urban branches, offer the full range of service in areas like personal lending, SME lending, deposits, investments and foreign exchange. I know the question of when customers can avail of over-the-counter services is a sensitive one. While we have self-service facilities in all our branches, every customer in every branch has the option of having a face-to-face interaction with an AIB person in respect of any transaction. I refer, for example, to over-the-counter transactions involving cash, cheques, coins or foreign exchange. We are very committed to that. We are saying, in a nutshell, that the full range of AIB services is available to our customers in every one of our 205 branches.

I invite Mr. McLoughlin to respond on behalf of Bank of Ireland.

Mr. Liam McLoughlin

I will answer the questions in the order the Deputies asked them. Deputy Ó Cuív asked us about our commitment to back-office locations in rural Ireland. The Bank of Ireland employs 600 staff at its customer care centre in Kilkenny. We have maintained a network of 250 branches. For the past five years, our strategy has been to maintain our presence in communities to support our customers in those communities. We require our branches to be commercially viable. We have closed no rural branches over the past five years. We have merged some city centre branches, but we have not closed any rural branches.

The value of the support provided by the professionally trained workforce in our branches does not just lie in transaction banking; it also lies in the lending activity provided in support of SMEs, personal customers and agri-customers. I have mentioned that we provided lending of €6.9 billion into the Irish economy in 2015. That is a lot of loans to a lot of sectors and customers. We provided €3.5 billion in the first six months of 2016. The main task of our staff is to facilitate such lending, rather than to engage in transaction banking.

A number of members of the committee asked about transactions. We now see 96% of transactions being done by customers self-serving over digital channels and that number is increasing each year. The quantum of over-the-counter cash transactions in branches now accounts for 4% of our total transactions and that number is decreasing. In the last 12 months, we have seen a 20% reduction in the quantum of cheques being processed, lodged and issued by customers. Those numbers are coming down.

We were also asked about engagement with An Post. As Deputy Cannon suggested, we are seeing that activity reducing and reducing. That is being done. We have kept our 250 branches open. It has not made sense to us, from a commercial point of view, to spread that load to another institution like An Post. We expect the extent of this activity to decrease. We envisage that there will be much more activity around lending capability into communities.

The Chairman mentioned the provision of services. We provide a full service in our 250 branches. As I have mentioned, the volume of over-the-counter transactions is reducing. We are seeing less activity. Rather than reducing cash services, we are installing external lodgement ATM devices in all machines in all branches, starting with our smaller branches. This means that rather than giving six hours of service a day between 10 a.m. and 4 p.m., we can provide a 24-7 service. People can lodge and withdraw money 24 hours a day, every day of the week. Rather than reducing hours, we have made this extended facility, which offers extended opening hours, available in rural branches.

As part of our policy of supporting digital banking, we are experimenting with Wi-Fi in some of our branches to see whether we can support the challenge of implementing the broadband that is needed, particularly in the west of Ireland.

The Chairman mentioned a couple of branches. We have done no rural closures. We impose an obligation on the branches to be commercially viable. This is why lending is so important to us. We have done some city centre mergers. The Chairman mentioned the Caherdavin branch, which has not been closed. Bank of Ireland employs 27 staff in the Caherdavin community in Limerick. We have changed some of the cash services but, as I have said, we have provided extended alternatives that are in place for longer hours.

I will explain the reason we closed the branch at Parkway in Limerick city. We opened a new branch 1.7 km down the road. We moved the service down the road. We have another branch close to the Parkway Shopping Centre at the gates of the University of Limerick, as well as a branch at Roxboro Shopping Centre. Within the space of 3 km we had three branches. We have the most extensive branch network in the broader Limerick area, as well as 250 branches throughout the country. We are committed to communities and to our branch network. However, the branches must be commercially feasible.

Deputy Michael Collins asked about supporting farmers. We have a €1 billion agriculture fund for the farming community. This is supported and led by 14 mobile agriculture development managers. They work to support the farming community. The scheme has an agri-flex arrangement that operates in times of distress for farmers. For example, if commodity prices go down or if there are challenges in tillage or dairy, then we can give payment holidays to farmers or they can accelerate payments at times when cashflow is up. A flexible arrangement is in place and the feedback is positive. Our presence is strong but it is really a question of mobility for advisers. The idea is to engage with customers and to walk the farm with the farmer and to visit small and medium-sized enterprises. These are the places to be rather than in bricks and mortar. We have kept our commitment in this regard.

Deputy Heydon referred to loss of power on the part of the local branch manager. For many years, even before the crisis, the arrangement in the bank has been that the local branch manager or credit staff make the recommendation on a loan. The application goes to the centre for underwriting. That was the case prior to 2008 and it remains the case today. The key recommendation or decision is with the local staff and local branch manager. These are the people who engage with other staff. There is an appeals process if a loan is turned down, but a loan is generally turned down for either reasons of sustainability or affordability on the part of the customer. The branch manager and the regional office have an appeals process if people are unhappy with the decision. The bank has been consistent in this regard.

This is a regulated environment and we must ensure consistency of practice throughout the country. I referred to the numbers for lending in 2015. The figure was €6.9 billion for last year and €3.5 billion for the first six months of this year. This is demonstrable evidence of a strong commitment to lending in the economy. Deputy Michael Healy-Rae referred to loans as well. The volumes of loans are significant. The total figure of €6.9 billion represents a significant amount of new and increased lending to the economy.

Deputy Cannon referred to the legacy or overhang from the banks. We are cognisant of the need for new and increased lending and for Irish banks to support small and medium-sized enterprises and family-owned enterprises. We take that seriously.

The role of the bank branch is very much around a lending commitment and development exercises as well. I referred to national enterprise week, an event that takes place twice a year. The next event will be held next week. People are welcome to attend and it is open to the public. This is about supporting local small and medium-sized enterprises, including agri-businesses and other small businesses. We have the €1 billion agri-fund, a €300 million nursing home fund and a €20 million flood fund. That was used when the floods happened in January of last year. We are committed to that. I think I have covered most of the questions but if I have not, I would be glad to pick up on any points again. Mr. Farrell may wish to add a comment.

Mr. Pat Farrell

I will briefly mention two things. The hospitality sector is extraordinarily important for all rural constituencies. We held a major conference on business in this sector in recent days. We have lent over €110 million throughout the country to the sector already in the year-to-date.

Another point cuts to the heart of the discussion today. This relates to our support for enterprise towns. We have made a significant investment in recent years in a concept called "enterprise towns". We decided that if we wanted to benefit from economic recovery, we could not be bystanders. We decided that we had to stimulate economic activity and support local communities. As part of the first run, some 50 enterprise towns were designated. This year, we plan to run 100 enterprise town events throughout the country in all constituencies. In the Chairman's constituency, events will be run in Ashbourne, Navan, Kells and Trim. Events will be held throughout all constituencies. There will also be events in Kildare, Westmeath and Kerry. In several towns in the constituencies in these counties, we will run extensive programmes of support and networking activities for the small businesses and enterprises in those areas. They represent the anchor of rural communities. We have spent €1 million this year alone in cash to support the initiative. A total of 600 of our staff are indirectly and directly involved in driving the programme. We are seriously committed to it and it is something we have expanded rapidly since its inception some years ago. We are continuing to invest in this project.

We have provided space in our branch infrastructure for start-up and workbench activities. We invite people from start-up companies. They represent the future in terms of generating the next generation of jobs. They can use the Wi-Fi facilities and the workbench, space and support services and meeting rooms. These provide the entrepreneurs with a safe-haven environment to get their business up and running during the fragile early stage when they are trying to get things moving. There is major investment in this area and extensive connectivity with our small business customers.

I call on the Irish League of Credit Unions representative.

Mr. David Matthews

I thank members for their questions and comments. I will deal with Deputy Ó Cuív's question first. It is probably not as relevant to credit unions because they are local anyway. Since they are not branches of a larger entity, they have a local presence and they intend to keep that local presence. Where there is consolidation, it is generally around a county town in such a way that employment will be maintained locally rather than coming in to one of the larger cities. From that point of view our position is clear.

Deputy Heydon asked a question about smaller credit unions. A big debate is ongoing in credit unions about feasibility, what makes a feasible credit union and whether it relates to a particular size of assets - in other words, whether the ideal size is a €20 million, €50 million or €100 million credit union.

From the point of view of the league, feasibility is about far more than finance and assets. Obviously, financial aspects arise and they tend to relate to loans, loan growth and managing the cost base. However, equally important is the ability to provide the local services that are needed by credit union members and not necessarily on a for-profit basis because credit unions are not-for-profit organisations after all. The third pillar is the ability to govern the credit union in question, to have good governance structures within the credit union and to be able to maintain these in future. If a credit union can answer those three questions in the affirmative, then it should be an option for that credit union to stay as a stand-alone entity rather than consider the merger option. Having said that, where credit unions merge, generally the objective is to keep the local services and to keep what has become a branch. In other words, the objective is to keep open what was a credit union and what has become a branch, where possible, and sometimes to improve the services on offer as well. That is our standpoint on the matter.

Reference was made to the Central Bank view on credit unions. The Central Bank has said consistently that it wants to see a strong well-governed credit union movement that should represent a feasible alternative in the financial services market in Ireland. We have to take the Central Bank at its word in this regard. The Central Bank instituted a strengthened regulatory framework for credit unions in recent years - I am using Central Bank terminology. There has been considerable restructuring of the credit union movement. To be fair to the Central Bank, as these new scenarios are being embedded in the credit union movement, we are beginning to see more leeway from the bank. The bank is allowing credit unions to do a little more now, especially in the area of payments, mortgages and personal micro-credit. The Central Bank is a major stakeholder along with the credit unions and others in this regard. The bank had to revisit its standards and rules to allow these changes to proceed.

We are beginning to see more activity and more leeway from the Central Bank. By nature, the regulator will be slow to make changes and to change its mind. Credit unions must continue to show the Central Bank that we can reach the standards required. Moreover, we must keep the pressure on the regulator to make the changes we want to see. My colleague, Mr. Knox, will discuss the departmental role.

Mr. John Knox

The Chairman raised the issue of social housing and the status of our social housing proposal. The Irish League of Credit Unions proposal on social housing and on credit unions providing funding for social housing is a direct response to the Government social housing strategy 2020, which was published in November 2014.

The strategy stated that in light of the unprecedented crisis in social housing, there was a need for private funding to be sourced to help alleviate the social housing crisis as quickly as possible. It specifically mentioned sourcing private funding from the credit union movement. Our proposals launched in October 2015 were a direct response to that call from Government. In terms of the engagement with the Department of Finance and the then Department of the environment, there was a large amount of activity between the launch of the strategy and our proposal response. We received a lot of assistance in the preparation of our proposal from the officials of the Department of the environment in particular. We hope that the Government will implement what is its own social housing strategy which mentions, and is reiterated again in the programme for a partnership Government, that it will investigate using money from the credit union movement to help alleviate the social housing crisis.

There is a road block in that the fund that is to be set up by Government must be off balance sheet. We understand that is where the difficulty currently lies. To satisfy the EUROSTAT requirements, the Government must raise private funding in this way and not have it included on the Government balance sheet, because that is not allowed. In that regard, we were very happy with and appreciative of the Minister, Deputy Coveney's attendance at a recent meeting with the credit unions in Cork in which he outlined that there are moves in that regard and that there has been engagement between the Department of Housing, Planning, Community and Local Government, etc., with EUROSTAT on that issue. We hope that roadblock will be lifted.

In parallel to that, when that preferred option, from our point of view, was not progressing as quickly as we would have liked, we also made proposals for developing a private fund that would indirectly lend to the approved housing bodies, which would then build the social houses. All of that is outlined in the document that has kindly been circulated to the committee on our behalf. In that regard, we continue to engage with the Irish Council for Social Housing and the equivalent representative body for the approved housing bodies. We are engaging with them and with some of the larger housing bodies on how a fund could be developed for credit unions to invest in that would then be loaned to the housing bodies. That is where we are at with that.

As the Cathaoirleach correctly outlined, the driving force is that credit unions have a large amount of surplus funds from the holding of members' savings. As they are not all on loan at the moment, there is a large amount held in investments in the main pillar banks and in Government bonds. What the credit union movement would like to see is more of that money being used in a social and productive fashion, in keeping with our ethos. Of course, the knock-on benefit for credit unions would be a slightly higher return on those funds.

I call An Post to reply to the questions put to it.

Mr. John Daly

I will reply to the questions in the order in which they were asked. Some of them are obviously linked, such as on the sustainability of the network. I might take those questions at the end.

Deputy Ó Cuív asked a question about back office functions. We do not actually have that many back office functions in the cities any more. However, we have more people in rural areas than any other organisation, such as the postpersons, the postmasters and their staff. We have companies in Athlone and Kilrush that we deliberately set up outside of Dublin. Post Insurance is based in Athlone and BillPost is based in Kilrush. We do not have that much to outsource from cities any more.

The Chairman asked about postmasters' income. I think he referenced a decline of €15,000. That is very much at the extreme end of the scale. There is a small number of postmasters who have seen reductions of that magnitude. What I would say is that they saw increases of that magnitude a number of years ago, so they have come back to where they had been. Postmasters' income has not moved in any way in line with the decline of business. In fact, the average postmaster now is still being paid 15% more than in 2008. We are on average 2% down from when postmasters' income reached a peak in 2010. We do recognise that postmasters' income is down, but it is not in line with the decline in income. As I mentioned earlier, our mail activity has dropped 38%, Department of Social Protection transactions have dropped 20% and BillPay has dropped 20% since the peak. Postmasters income, albeit declining, is not declining by anything of that magnitude.

This might also answer Deputy Healy Rae's questions. If we look at what has happened in 2016, some 13% of postmasters have seen an increase in pay. Another 23% have seen their remuneration stay the same, but two thirds have seen a reduction. That reduction is in the magnitude of 5%. It is nowhere in line with the reduction in business, although it is obviously a significant issue for the future.

The Chairman asked why we have not pitched to become a full bank. We tried that and set up Postbank in partnership with Fortis just before the banking crisis. Unfortunately, as part of the banking crisis, that collapsed. Our strategy now is to grow our financial services. As I said in my address, we have a very significant financial services business. Our State savings business makes up 17% of the country's savings. We have over 30% of foreign exchange business. We have a very high percentage of the bill payment business, Western Union, etc. We already have an awful lot of financial services that a bank would provide and we intend to grow them. As I said in my address, we intend to bring out a payment account in the first quarter of next year. That, in effect, will bring us into the current account market. We are also in the process of actively looking at loan products for individuals and SMEs. We intend to grow our financial services business over the next couple of years without the need to be a full service bank, which brings enormous costs and enormous obligations upon an organisation in terms of capital, resources, training and all of that. While not pitching to be a bank, we are a very significant player in the financial services industry and we intend to grow in that space.

Deputy Collins mentioned travelling post offices and the 15 km distance. They are just parts of what is being looked at by the group under the Minister of State, Deputy Michael Ring. They are not proposals by any means at this stage. They are very significant in the UK, which has a lot of travelling post offices. The UK is probably the closest comparison of the post office network in Ireland in terms of its size, rural spread, etc. The UK has found that rural post offices do work there. It is merely one of a number of initiatives being looked at by the group under the Minister of State, Deputy Michael Ring.

Deputy Collins also asked why it takes an eternity to sort out some post office contracts. There has been a very small number of those cases. I could count on one hand the number of examples over the past number of years that have taken a long time to sort out. They are down to legal and investigation issues and I am obviously not going to go into that in this forum.

Deputies Heydon and Healy Rae talked about the network. At this point, I might answer a number of questions on the sustainability of the network. Deputies Ó Cuív and Cannon probably outlined better than I ever could the problems of the post office network. It is about customer choice. Anybody who thinks we can force pensioners to come to the post office to collect their pensions is living in fantasy land. We are seeing a big decline in pensioners choosing the post office. We are seeing a big decline in child benefit customers choosing the post office. We hope that the introduction of our payment account might address that somewhat, in that some people might choose to use our bank account rather than one of our competitors. The fact of the matter is that business is seriously in decline. I mentioned Department of Social Protection welfare payments, BillPay, etc. We have to address that.

The network at the moment consists of 1,131 post offices. More than 700 of them are unsustainable in terms of their cost to An Post to operate. The bigger offices subsidise that to some degree. However, even in the bigger offices in urban areas, we are seeing reductions in income. They are becoming less sustainable, although we believe they will continue to be sustainable because they have a significant footfall to serve. We are working with the Government on the whole issue of rural post offices through the group under Mr. Bobby Kerr and the group under the Minister of State, Deputy Michael Ring. I believe that rural post offices can only be dealt with in the context of what is happening in rural Ireland in its entirety. The post office is only one part of it. There are Government services, banking services and credit unions services along with post office services. It has to be looked at in the round.

Nationally, we need to devise a structure that means we can have sustainable rural communities providing services. This does not necessarily mean we will have the same number of outlets as today. We could envisage a scenario in which we would have fewer locations providing many more services, whether they be Government or banking services etc. We are working very closely with the Minister of State, Deputy Michael Ring, on it. An Post is a commercial company. As I said in my address, no commercial company could deal with the business declines we are having to deal with. We have a new CEO and a new chairman and we will be revising the strategy during the coming months. It will have to take on board the issue of unsustainable post offices and we will work with the Government to do so.

Deputy Martin Heydon asked what we had done in the Bobby Kerr group and what we recommended. We have done much work in examining the network as to where the business and the population is. We will recommend a segmented approach whereby more services will be offered by the bigger offices, and we will seek to improve the look and feel of the bigger offices and the services available. However, the smaller offices must be dealt with as part of an overall Government strategy. Person to person business is in decline and nothing we can do will stop it. We have invested much in new services. Deputy Ciarán Cannon mentioned an outmoded model and asked what we have done to introduce new products. We have brought many more people into the post office during recent years for our new services such as our foreign exchange, gift voucher and post mobile business. These services are bringing people into the post office who were not there before. We are investing in new channels, given that we do not believe the physical post office channel can be the only channel for post office services in the future. We have introduced mail services for business people in some of our delivery service units. We have introduced more online services. We are doing all we can to introduce new services, however the magnitude of the business that has been lost is so extreme that there are no business levels out there to replace it.

There were comments on Government services such as driving licences, motor tax and the DSP contract when it expires in 2019. These are all issues for the Government. We are fully open for business and we want to do business. Although we tendered for the driving licence business, it was decided not to give it to us. We are ready to do motor tax and we could do it in the morning. It will come out of the Bobby Kerr group.

Mr. Liam O'Sullivan

Deputy Éamon Ó Cuív commented on what work can be brought back by the various parties here and put back into rural Ireland. Apart from the post offices, we have approximately 7,500 staff engaged in mail activities and outside the major urban areas of Dublin, Cork, Limerick, Galway and Waterford - I had better not leave any out - and we have several thousand people embedded in rural Ireland. In the next couple of weeks, An Post will launch an export freight service, which will be available equally throughout the island. We have particularly identified small and medium enterprises in rural areas which have found it difficult to access export markets in the UK and, most particularly, in Europe. While this is not creating new jobs in An Post, we are launching this new business to assist other businesses in rural areas to grow their businesses through export and it should encourage other businesses to locate in rural areas, given that they can access a European network via An Post.

Mr. John Daly

I want to reiterate that while we are committed to providing services in rural areas and we believe it is very important, we have to find a sustainable business model for it to continue.

Mr. Ned O'Hara

A number of questions were raised about services, including the Postmobile service. We welcome this new service which brings transactions to us. There were teething problems, which we addressed directly with An Post. We see it as a revenue line. Postmasters cannot decide what to sell. An Post or the Government decide. While we would and could feel we would offer different services, we are not in a position to do it. We are dependent on our masters to provide us with opportunities to earn money. The amount of money that can be made through motor tax and driving licences has been well publicised. An Post referred to our commercial mandate. We see the commercial mandate as in conflict with the social and community service An Post offices can provide and, to some extent, it can damage it. If An Post chooses to publicise its online billing, it damages postmasters' transactions. We are paid by transactions. There is a time lag in when we are paid. In 2016, some postmasters were paid for transactions they did in 2014. If a new transaction comes on in 2016, a postmaster will not be paid for it until 2018. It is slightly disingenuous. I do not want to get into a match. We are timelagged. The forecast for our transactions is that they will decrease during the next four or five years.

Deputies Ciarán Cannon and Martin Heydon referred to broadband and the opportunities and threats or challenges coming from technology. We recognise it more than anyone else. We are the people directly faced by them. Being involved in a five-year planning process allows us to address some of them. As part of the Bobby Kerr group, the first presentation we received on broadband was about everybody in the State having broadband by 2019. This has now been changed to 2023. This is 2016. We want a five year plan that takes us up to 2021. There are opportunities in those five years whereby people could use post offices to avail of broadband services in post offices. There are commercial opportunities with An Post's commercial mandate. We want this. While we recognise the challenges, we want an ongoing plan to address them. We do not know whether there will be a post office in 50 years time. We know it will be there in five years time and we need to plan for it, and it is a rolling plan.

Deputy Michael Healy-Rae has left. He asked us about our involvement in the post office network renewal board. We are in there because our members decided we should be. We want the plan for our future and represent the interests of all our members, urban and rural. We have done our own research on what people want. People tell us. We have brought those to the Bobby Kerr group. We are responsible for some of the issues regarding the Minister of State, Deputy Michael Ring. Deputy Heydon referred to listening sessions. We conducted listening sessions in Ballymore Eustace, Fethard-on-Sea, Newbliss and other towns. We are listening to people and proposing what they are telling us they want. I am not sure what Deputy Michael Healy-Rae referred to. I am not aware of any criticism anybody in the Irish Postmasters Union has ever made of him.

Deputy Robert Troy has asked that he might be able to ask some questions.

Thank you for your leniency in letting me in, given that I am not a member of the committee. I appreciate it. I am a practising postmaster. Maybe I am not practising, given that I am here three days a week. I am a postmaster and I have a particular interest in the sustainability of the post office network. I was interested in what Mr. Daly said regarding comparing the incomes of postmasters and how they have decreased by an average of only 2% during recent years. When he was comparing it, it was not what might be described as a high income, given that every postmaster must provide an office for commercial activity and an office for mails. Accommodation, light and heat charges have increased significantly during recent years and commercial rates have increased significantly. It is not what would be called a very sizable salary. I am not saying this on my own behalf but for many of the postmasters I have been in contact with.

I am surprised that we are only at 17% of State savings, considering the turbulent times we have gone through economically during recent years. An Post would have been perceived as having a very reputable brand, along with the Irish League of Credit Unions, with no offence to our banking friends, during recent years. I would have imagined this percentage would have been higher.

A number of post offices have been identified that will possibly never be sustainable, regardless of the level of new business generated. Will Mr. Daly quantify the number of rural post offices that will be unsustainable in the future?

My next question is addressed to the Irish League of Credit Unions, ILCU. The ILCU responded to the then call for submission on measures to address the housing crisis. The ILCU has in the region of €10 billion on deposits that it can invest. Has any progress been made in the two years since the ILCU made its submission on the housing crisis? The housing crisis has got worse. I am not interested in hearing about talks but have there been concrete proposals on how this money, that can be used to alleviate a serious social problem, will be used?

The Irish Postmasters Union has been doing a great deal of good work in the past number of years in promoting the significant role the post office network plays in a sustainable, vibrant rural community. In many rural communities there are no banks or credit unions outside of large provincial towns. In many of the villages, the final service that remains is the post office. I have grave concerns that when the post office service is gone from rural towns, such as the village I come from and many other villages across the county, we will no longer have rural communities. They are the glue keeping rural communities together.

In terms of the input to the Bobby Kerr report and previous reports, do the representatives from the Irish Postmasters Union feel any sense of urgency by Government to put in place a plan for a five year term to sustain the offices that are sustainable for five years? Given that responsibility has been spread across three different Ministers are we still procrastinating on the services and supports we can put in place to support the network?

I ask the relevant representative organisations to address these questions in a succinct fashion because we have other groups who are waiting to give evidence.

Mr. John Daly

In terms of State savings, at the end of 2007 we had 6% of national savings. We have grown savings from 6% at the end of 2007 to 17% and this is based on Central Bank reports. As Deputy Troy stated this is down to confidence and trust in An Post, the post office network and in the State savings products. In terms of the number of post offices that are sustainable, I mentioned in my address that we have an obligation under the Department of Social Protection, DSP, contract, our largest contract for a particular geographical coverage. We could do that with 600 post offices, so that would leave circa 530 offices, which would not be needed to satisfy our largest contract. Every one of them would be unsustainable. Within the figure of 600 post offices, there are also circa another 200 offices which lose money for us, but which we require to satisfy our DSP obligation.

I do not recall saying that a postmaster's income was at a high income level, what I was reiterating were the changes over the number of years. I recognise that postmasters have costs but they have to recognise that the business is in decline and even for the business that we are retaining, it is highly competitive. Every time a bill payment contract comes up with a major utility, there is pressure on An Post to reduce the price. The price that we charge is under significant pressure. We are a commercial entity and we must make commercial decisions.

Mr. Ned O'Hara

I will deal with the Deputy's last question on the sense of urgency first. In the course of the presentation I said that all the issues of the post office have been aired over and over again for the past number of years. The question of motor tax has been around for 20 years. There is no sense of urgency. They have been discussing it but our fear going into that process is that it would be a talking shop. We sat down on 4 February 2016 with An Post and the Bobby Kerr group and of last week, on 4 November, we have not made any significant progress. The only serious financial proposals put on the table are by us.

Mr. Sean Martin

It has been acknowledged by all parties that the post office is a State asset, run by An Post but overseen by this Government. In our understanding, past and present, the Government is undermining the network by encouraging our customer to transact their business through the bank. We have examples of numerous letter, and I can show members five, six, seven letters issued by this and the past Government which have encouraged people to use the banks over the post office network. If that continues, the post office network collapses because as Mr. Daly has said, most of the income that is earned by the post office network to deliver the service of social welfare is fundamental to underpinning the network. If one takes the foundations out from the post office network, which is the Department of Social Protection and continues to encourage the clients to get the money lodged to a bank account, the onus is on the Government to ensure that does not happen. If that continues to happen, the post office network will not survive. Our intention is to be able to deliver a Government service. We have said, and we continue to say that we can be the State at your doorstep. People have said there is no requirement for face to face service any more. I think there is and we believe there is a requirement for face to face contact, particularly in regard to Government services. More and more people request the help of the TD to fill out forms and access services. I think that can be done by the post office network in a cost-effective way, and in a way that every community needs and survives because of it.

Mr. John Knox

Let me clarify the timeline. The Government published their social housing strategy in 2014 and we published our response to its request for funding from credit unions a year later in October 2015. It is not exactly two years but it is a year in which no substantive progress has been made. We mentioned that in our opening address. In the first year from November 2014 to October 2015, there was very good engagement with the relevant Departments and that helped greatly in preparing our proposal. The frustration that was referenced in our opening address comes from the lack of progress since October 2015. We have had numerous meetings and the barrier at this stage seems to be mainly around the fund being on or off balance sheet and there is no solution to that yet. No decision has been made in that regard as yet. That is where our frustration stems from. We are still awaiting a fund that we can invest in. It looks difficult for the Government to create any type of fund without it being off balance sheet. We appreciate and understand that. Likewise we welcome the Minister for Housing, Planning, Community and Local Government, Deputy Coveney meeting the credit unions in Cork, stating that housing is a priority of the Government and we really hope to see that being acted upon and moved along as speedily as possible. We mentioned the lack of progress on that front. We would like to create our own fund but the difficulty around that remains that the Central Bank would have to approve credit unions to be allowed to invest in that fund or in any other fund in regard to social housing. As it currently stands the Central Bank prescribes a list of investments that credit unions can invest in but that list does not allow for investment in social housing. We would need to change the Central Bank regulations as well.

One of the key issues is that commercial viability is very important, but social responsibility is also very important. For a functioning society we need to ensure that people can have face to face interactions. If we rule out face to face interactions with each other, it will not be a society that anybody wants. There has been some frightening information put out in front of us but it is very important that the message from this committee that goes out to the public is that it is the intention of this committee to build viable and strong vibrant economies regionally and in rural areas.

While there have been certain trends over the last number of years in these aspects, everybody will agree it is our objective to fight those trends and reverse some of them if possible.

I thank the witnesses for coming here today and giving this information. The content of their information will be part of our report. Gabhaim míle buíochas le na finnéithe as teacht inniu. We will probably meet the witnesses again in the lifetime of this Dáil and Seanad. We will suspend to give them a few minutes to leave.

We will suspend for five minutes but I ask members to make sure they return. We have only two other groups coming to the next session. These groups are also very important in the communities we serve. They are the Convenience Stores and Newsagents Association and Retail Excellence Ireland. I propose we come back here at exactly 11.55 a.m. Is that agreed? Agreed.

Sitting suspended at 11.50 a.m. and resumed at 12 noon.

We will now discuss the topic of what it takes to sustain a viable rural community with representatives of the Convenience Stores and Newsagents Association and Retail Excellence Ireland. Ba mhaith liom míle fáilte a chur roimh na finnéithe agus iad tagtha isteach chun é seo a phlé. I welcome the following witnesses representing the Convenience Stores and Newsagents Association: Mr. Vincent Jennings, CEO, Mr. Noel Kelly, national president, and Ms Claire-Ann Martyn, national vice president. I also welcome Mr. David Fitzsimons, chief executive of Retail Excellence Ireland.

Before we start, I draw the attention of witnesses to the fact that, by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of the evidence they are to give this committee. However, if a witness is directed by the committee to cease giving evidence in relation to a particular matter and the witness continues to so do, the witness is entitled thereafter only to a qualified privilege in respect of his or her evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. I advise the witnesses that the openings statements and any other documents they have submitted to the committee may be published on the committee website after this meeting.

Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House or an official by name in such a way as to make him or her identifiable.

We will continue our consideration of stream 3 of our project, maintaining an effective service and presence in rural communities. What we have been doing as a committee over the past number of months has been engaging with as many organisations as possible who have a stakeholding or engagement with rural communities around the country in an effort to see whether we can make sure that Government does the necessary things to make these rural communities viable.

I invite Retail Excellence Ireland to address the committee first.

Mr. David Fitzsimons

I thank the Chairman and the committee members for the invitation. Retail Excellence Ireland is a not-for-profit organisation. We are Ireland's largest retail representative body. We have about 1,700 company members that operate over 10,000 stores nationwide. We have offices in Ennis, County Clare, and in Dublin. I will be brief because I know the committee is running behind time.

In 2002, we conducted the largest piece of research ever conducted in the State into what drives town centres and what engages citizens to come and use their towns and villages. We found that six matters were of extreme importance. The first thing we found was that the key driver is proximity. I know that sounds pretty obvious but I am concerned that there may be many towns and villages whose plans of revival are based on getting tourists to come from Wales, for example, when a town or village should really be built for the people of the local area. If a great job is done for them, visitors will follow.

The second most important thing for a town's viability is the daytime offer. That involves retail, the local post office, the bank and perhaps a town crèche or library. If the offer is not fit for purpose, people will not come. In the Irish State today, far too much is made of car parking charges. That ranked sixth in importance. To be frank, there are some towns in the country in which if one actually paid people to park, they still would not come. The offer obviously has to be appropriate. Otherwise, everything else is meaningless.

The third most important issue was the evening economy, which is of great importance to many towns. The fourth most important issue was accessibility, which involves driving or getting in to the town the same way in the same amount of time each and every time. It is especially pertinent to women with children. The fifth most important issue was the public realm, beautification and such like. The sixth most important issue was car parking charges. Those are the fundamentals for us in terms of town revival.

Having done that research, we decided to become active. We are a not-for-profit organisation, but we invited the top 100 populated towns in the country to apply to work with us. Two were chosen, Limerick and Carlow. Carlow did not work for two key reasons. One reason was that they refused to define the inner core, that is, where the town centre was. We found that the shopping centre owner out the road and others obviously believed that they were a part of the town centre. As a result, our intervention was scattergun and did not work. Any retail investment we brought to the town was arguably invited to the shopping centre rather than the town centre.

In Limerick, we had a far different outcome. The county council CEO and economic development director were great. We did three things. One was to improve the offer. We went out and sold Limerick to retail and hospitality investors. More than 40 new stores opened up in an 18-month period. The second thing we did was to improve the public realm. The county council put money into Cruises Street. Money is also going into O'Connell Street. It is simple beautification and it does not need hundreds of thousands of euro spent on it. The beautification of the public realm can simply be three buildings either side of each other in a street being painted, the planting of trees, good signage or awnings put over front doors. The third thing we are working on at the moment is citizen engagement. It involves reminding the people of Limerick and the wider conurbation that it is their place and that there are lots of great things to come and do.

We are active in about 30 towns today, trying to advise and assist local stakeholder groups and town teams on how to be better. We have a very positive relationship with county councils. As the Chairman of the committee knows, Navan was selected on Saturday evening as Ireland's friendliest place as part of our awards programme. We are trying to get local authorities to nominate towns and to get behind businesses to be the best, drive service standards and engage customers.

How does one revive a town? The first thing I would advise is to establish a town team. The team needs to involve all stakeholders, young and old, including the Tidy Towns group, the chamber of commerce and more. It has to be inclusive. The second thing I would advise is to define the inner core. Start at the centre and work outwards. Define the centre, whether it is from Jack's pub to the pharmacy on the corner to the bank or whatever. That is where all the effort must be focused on. The third thing I would advise is to do everything possible to improve the offer. Big towns might be able to appeal to retailers to come and set up, but small towns can easily do stuff like hosting a mini-English market, which appeals to local artists and producers to come and trade with the people. English markets rules should apply, which means it would be rate controlled and rent controlled. It would offer a safe place for these people to come and do business.

The level of insurance is a massive problem for us. One cannot have a viable business, or have a business at all nowadays, if one does not have insurance in light of the position with regard to litigation. The cost of insurance is going through the roof once again and it is very important the committee makes observations on that.

Committee members will be aware, given the representations they receive, of the difficulties with crime in rural Ireland. There are gangs involved in crime and we have noted five different styles of gang. We find one issue in particular very frustrating. As an association, we would have no difficulty involving ourselves in assisting our members and others in making people aware of the presence of gangs in an area, through a neighbourhood watch-type approach. We find it very upsetting that the Data Protection Commissioner is refusing to allow the use of images of people who are known to have - and in many cases are actually convicted of having - taken part in various offences, which means we do not have the ability to provide that information to our members. In many instances, members are more than half an hour from gardaí so this would be a preventative measure.

We have also asked the committee to consider requesting from the Departments of the Taoiseach and Jobs, Enterprise and Innovation that there should be a counterweight argument with regard to Brexit and cross-Border shopping. This is not necessarily to stop individuals going across the Border but to show, on the debit side, the cost to people societally and in terms of the real cost of travelling across the Border. Once again, unfortunately, paper in the media does not refuse ink and this is becoming an issue once again. We believe people should be made aware of the difficulties that follow from cross-Border shopping.

The submission mentions that there is to be a rural charter, which is important, and there is a promise that there will be a health check for legislation as it affects rural areas. I am of the view that it should be further defined to ensure that there is a health check for small and medium enterprises in particular and showing how they are affected by legislation. Unfortunately, too many items of legislation have come out of this House which work on the basis of a one-size-fits-all approach. As small retailers, we have been caught with significant compliance costs and significant unforeseen consequences due to legislation. We are not Hewlett Packard yet we have the same obligations to comply with certain parts of legislation. Surely there must be a way to modify or allow for these things for small businesses.

It is most important that retail and representative bodies are allowed the right to negotiate. It is perfectly obvious why competition law came into place and we have no difficulty with that because we live and breathe by competition. However, the tables have turned much too far and we are now precluded from negotiating in any fashion whatsoever. Our Australian retail counterparts have protection in that they are allowed to negotiate. Even this week, new Australian legislation allows for protection from unfair contracts to be extended to small businesses. These are the important matters.

In terms of what we would like the committee to do, a number of matters are pertinent today, one of them being the Public Health (Alcohol) Bill. I think it very important that the committee sees that there is an enormous distinction between, on one hand, our members, who are, if not struggling retailers, then small retailers who are the cornerstone of the community and who know their customers, and, on the other, those who take their direction from Germany, the UK or elsewhere, otherwise known as the multiples. They are the ones who have caused the difficulties in respect of the sale of alcohol. As far as we are concerned, the Government can go after them by all means and perhaps use a threshold by way of overall turnover or size. However, it should not come after the small guy because we are not the problem.

Gabhaim míle buíochas as an gcur i láthair sin freisin. One of the major challenges to retail at the moment is the billions of euro migrating to the Internet annually. The problem for the country on the back of this is that €3 out of every €4 is being spent outside the jurisdiction, so it is being lost to the State. It seems to me that one of the projects the LEOs and the local authorities should be nailing down is in regard to ensuring that the real retail space that exists in towns and villages throughout the country is quickly put up onto a virtual retail space. In other words, towns such as Athboy, Oldcastle and Ballivor would have a virtual space on the Internet and each of the retailers that function in the area would be given help, direction and support in starting to use e-commerce or, at the very least, some level of access to marketing tools on the Internet. If many of these businesses do not migrate to that sphere, they will encounter massive difficulties in the future.

We had a discussion on this not long ago. It is a King Canute-type fight against the Internet at one level but what Mr. Fitzsimons said is also important, namely, that people need human interaction as well and there will be an important space for that in the future. Mr. Fitzsimons might tell us how many town teams are in place or being developed throughout the country.

The enterprise agencies in the State have had an attitude towards retail which has been that they will give soft supports but they will not provide other types of supports. Displacement has been an issue for them in that regard. As a result of the fact that there is such a level of migration to Internet sales, is it time for the enterprise agencies to look at giving more solid and stronger supports - such as financial, investment or grant supports - to retailers, particularly in rural areas, so they can function? Obviously, those supports would be based on the viability of the businesses in question after they are provided and would not represent an effort to keep them alive in circumstances where they are not sustainable.

Will Mr. Jennings indicate whether there has been any change with regard to retail organisations, such as the Convenience Stores and Newsagents Association, negotiating with suppliers in a collective fashion which defends their members' rights or is it still the case that local retailers are forced to deal individually with very large suppliers and, therefore, have very little negotiating power?

Mr. Jennings said that the Convenience Stores and Newsagents Association has 1,500 members. What kind of employee levels are there within that and how big is the specific sector? There has been much discussion about Brexit and we had Enterprise Ireland before the committee recently. When its representatives told us it was dealing with Brexit, I asked how many people were working on it and I was told that there are two. We often hear that supports are being given to businesses that are suffering with regard to Brexit. The entire Border region is a major rural area and it is the one most under threat with regard to people doing their retail shopping in the North. Do the witnesses know of practical examples of supports the types of businesses to which I refer have actually received to date in that space?

When the witnesses talk about getting retailers to use vacant spaces, are they referring to a vacant site tax or what type of mechanism is suggested? Has any consideration been given to the idea of a progressive rates base for businesses in order that businesses in rural spaces would have a rates base which takes into consideration their levels of profitability? This might help further their sustainability into the future.

I thank the representatives for their detailed presentations. I will begin with the presentation from Retail Excellence Ireland.

I am very conscious of the point about defining the core area. In the year and a half I spent in Kildare County Council, the first thing we learned about planning was that any good planning should be sequential from the town centre out. Compared with Newbridge, Naas was always the retail town. However, a large multiple development on the edge of the town saw perfectly viable businesses in the heart of the town close and go out, given that there was more footfall out in the large shopping centre. In Newbridge, the Whitewater shopping centre was developed in the heart of the town, and Newbridge is a more thriving retail town. Local businesses beside Whitewater are benefitting from increased footfall. Regarding planning laws, could Mr. Fitzsimons comment on how Lidl and Aldi stores, which can provide free parking, seem to be given a run-through by local authorities and the impact it is having in our towns and villages?

I was surprised Mr. Fitzsimons put such importance on the beautification element. I completely agree and welcome the fact that he sees it as an important element. Our local authority recently came forward with a shop front initiative. Although some towns did not buy into it, in Athy the €50,000 for painting a shop front was snapped up in no time and it has already had a very visible effect on the main street. Last Thursday night I was at a Tidy Towns community action awards ceremony in Kilcullen, a relatively small town. More than 100 people attended and it was standing room only. There was an award for the best business shop front, the local GAA club got something and there was a Tidy Town award for the best estate. It was all integrated and there was a very strong sense among the people in the town of the need to support local businesses, given that they support the people. Mr. Fitzsimons used the phrase "use it or lose it" regarding planning. As we said to An Post, the Irish Postmasters Union and the Irish League of Credit Unions earlier, we must continue to drive a message to our citizens that if they do not use their local post offices, shops, convenience stores and newsagents, they will lose them. Online shopping is a major challenge.

Mr. Fitzsimons mentioned getting expertise in and learning from the UK. Many regional towns in the UK were decimated and their town centres died. Are we trying to avoid the mistakes of the UK or are there examples of towns that have got it right over there and lessons that can be learned from a planning perspective? While I do not disagree with the point that local authority skills are poor, we cannot bypass the local authorities. I would be interested in any views on how we can improve it and work with the local authorities, given that they are an integral part and they are all over the country. It is key.

Mr. Jennings and Mr. Kelly are very welcome. I will take two points from the presentation we received earlier. The Minister of State at the Department of Finance, Deputy Eoghan Murphy, is undertaking a review of the motor insurance industry. There has been a public consultation process and it is feeding into the Minister for Finance, Deputy Noonan. In recent discussions with him, he told me it was the starting point. Insurance is a key issue for members of the Convenience Stores and Newsagents Association, as it is for all businesses. We hope the lessons we learn from the motor insurance problems will feed into the exact same problems we have in the insurance sector across all areas. The rows about whether blame falls on the legal profession or on the insurance companies for settling too early reflect the same problems and will cross over. I look forward to having a process early in the new year whereby the Convenience Stores and Newsagents Association members can feed into a similar review.

I take on board the points about the Data Protection Commissioner. Shoplifting is cruel. Constituents of mine have contacted me about their frustration in respect of their convenience store where the weekly and daily losses to shoplifting are significant. Maybe the committee should write to the Data Protection Commissioner about it and highlight a specific recommendation that has been put to us here today and ask whether more can be done to enable retailers, given the investments they make in CCTV.

Regarding the Public Health (Alcohol) Bill and structural separation, I have been contacted by the vast majority of shop owners in my constituency and I have sympathy for the concerns they raised. Some of the larger multiples have mounted a very good campaign and they have used some of the smaller shops to make the argument. The people who contacted me are very solid people whose judgment I respect and who are very concerned about it. However, I found some of the arguments they were making would not necessarily affect their stores, given that they are on the smaller scale. Although there will be some element of shuttering or using curtains, their stores are not necessarily big enough to require a separate room. I can understand the challenge from the shoplifting and extra staff perspective. Could Mr. Jennings and Mr. Kelly outline exactly how the structural separation would impact on their members' stores? What proportion of their trade is alcohol sales? How significant a proportion is it?

I thank the witnesses for their attendance. They opened up and discussed many interesting points. I come from a rural constituency in west Cork. Earlier, I spoke about the banks. We have lost two of our banks, which resulted in a major shop in our town closing within a year. This shows the knock-on effect it has. It has a severe effect on the town. People are shopping in the bigger towns, which may be 40 km from where they live, and the local town is losing out. Other shops are struggling for survival. These issues are not taken into account when somebody makes a very quick decision about closing something without looking at the further implications.

During the drafting of the programme for Government we discussed town revival programmes a lot, especially the rural resettlement programme. If we brought people into our towns it would make the towns and shops busier. Rural resettlement could include living over a shop. Many shops have nobody living over them. My town, Schull, is popular during the summer. During the winter, a town that could house 250 people might not have 20 people living in it. The effects of that are very evident to me. Recently, I went into the hotel there and asked if I could have tea and a scone in the morning. They told me they did not have anybody cooking because they had nobody staying the night before. How will they survive? The hotel industry is very important given that it has a knock-on effect on local businesses.

In west Cork, Bandon and Skibbereen were severely hit by flooding, which decimated businesses. A motion on insurance is to come before the Dáil in the next week or so. Insurance companies have lost the run of themselves and nobody seems to be able to control them, discuss issues with them or see where we can turn the issue around. Some businesses are contacting me and, probably, other Deputies. They are getting astronomical insurance bills, and if they have been flooded, they cannot get insured again, even if major flood prevention works are carried out in their towns preventing flooding and millions of euro have been spent. They are a law unto themselves. The committee needs to bring the insurance companies before it to discuss it and help protect businesses.

"Use it or lose it" is a great idea. If local authorities around the country could apply this, it would bring a lot of life into local towns. I made the point on local radio a few months ago. I attended a meeting in Macroom, outside my constituency, and on the way home at around midnight or 1 a.m. I went through many of the towns I represent. They were like ghost villages. The only difference between them and the western films we used to watch long ago was that there was no straw blowing through the village. It is an unfortunate fact. To try to turn it around is very difficult. This committee is trying to help.

I am involved in a community alert group and I see CCTV cameras as a big plus in preventing crime, especially in businesses. I am astonished that one cannot pass the information on to one's peers. Sometimes, one wonders who is favouring whom. People need to protect their businesses. As Deputies, maybe we need to ensure legislation is brought forward to change that. Another crisis is facing retailers, namely, the Public Health (Alcohol) Bill. I would love to know who was the author of the Bill. Maybe they can argue a point with the big stores such as Tesco. They might be able to do something, however, the small, local stores are being asked to bring in new laws under the Bill.

It is not workable and it will not work. We could see major job losses because of it. I will oppose it completely. I have been in contact with the Rural Alliance group to make sure that we are all in support of small businesses and small shopkeepers. When it comes to the sale of alcohol, they know best and they control it best. The smaller storekeeper knows better than most to make sure that areas where alcohol is displayed are manned and watched carefully so that the wrong people do not buy alcohol. The Government can bring forward plenty of other provisions in the alcohol Bill if it wants to turn this around and make it look workable, but it should not attack the small stores. I will support small business and small shopkeepers. We should be able to give them any help we can.

I thank all the witnesses for taking the time to appear before the committee, present to us and offer us a very fascinating insight into some of the ideas they have for sustaining and reviving our rural towns and villages through their commercial activity. I have a somewhat vested interest in this regard. I own a small rural business. I am a small rural retailer. I sell alcohol in a pub which is the only one in my town. In fact, I am the only retailer in the village in which I live. I am very much on the front line in facing up to some of the challenges the witnesses face.

I will pursue a few lines of questioning that might give me a greater insight into the challenges the witnesses face and then examine how we can best support them. Mr. Fitzsimons referred to the issue of commercial rates. How difficult an environment does that continue to be for retailers in our towns and villages? Galway County Council last year was considering a mechanism - I think it is in place now but I could be wrong - whereby it identified 40 vacant premises in Ballinasloe and 35 in Tuam and incentivised new businesses to come into the towns and trade from those vacant premises on the basis that in their first year of trading they would not have any rates liability, in the second year they would have a 50% liability, in the third year they would have a 75% liability; and, finally, they would have a full rates liability in the fourth year. This seems to have been very well received. It is a kind of scaffolding structure to make these businesses viable during the most difficult period of their trading, namely, the very beginning of their trading life.

The towns I know best are those close to my home: Portumna, Gort, Athenry, Loughrea and Tuam. They are all market towns with populations of roughly 4,000 to 6,000, have very large rural hinterlands and rely hugely on those rural hinterlands to survive. One or two of the more, I would argue, visionary council engineers have suggested to many retailers in these towns to consider seriously a full pedestrianisation option, à la Grafton Street or Henry Street, and create a necklace of high-quality car parking facilities on the periphery not of the town, but the town core. Some of these towns might already have such car parking facilities in place. They would require shoppers to walk no more than 200 metres or 300 metres to what one would describe as the town core. Mr. Fitzsimons spoke about beautification and making our town centres more attractive. I may be completely wrong, but it is my opinion that in the case of the shopper who wants a pleasant experience of visiting his or her local town and wants that experience in the town core, if he or she goes to Dundrum Town Centre, as mentioned by others here, he or she is in an enclosed building, there are beautiful benches and it is a pleasant place to be. People can park there, shop till they drop and walk out four or five hours later. Could an attempt be made to replicate somehow that ambiance and that environment in our town centres? I am not suggesting putting roofs over them, even though one engineer suggested that for a street in Tuam a number of years ago, but rather making them simply more pleasant places to be so that people and their children can walk freely across the streets and back again, from the butcher to the newsagent to the draper, knowing they are in a perfectly safe environment. The fear of retailers, many of whom I have spoken to about this, is the simple feeling that people will not make the 200 metres or 300 metres journey from their car to the town core and that if the cars are not driving right by their premises, it somehow disadvantages them in terms of access. I am not so sure this is the case.

Have either of the witnesses' organisations considered this as a policy? Do they agree we should pursue it? If we were to do so, is there some way the State could support such an endeavour? If one goes to towns in France, Spain or Italy on a Saturday afternoon, one will see they are in the main pedestrianised, not because they are somehow formally so, but because they seem to be self-pedestrianised. There are markets and there seems to be a vibrant community life in the town centres because in the main there are no cars there. The cars seem to park on the peripheries of these smaller towns. Have the witnesses considered this? What are their opinions on it?

The Chairman spoke very well about the issue of digital and both the challenge and the opportunity it presents for retailers. I have a 20 year old son. I cannot remember the last time he bought a stitch of clothing in any shop within 20 miles of where we live. He was looking for a pair of hurling boots at the beginning of the hurling season. He asked me if he could buy a pair of hurling boots. I told him of course he could. He bought them sitting on the sofa at home, and they arrived in our letter box the following morning from Newry. There is a shop that sells hurling boots four miles away from where we live. He had no interest whatsoever in getting into a car, driving to that shop and spending his time in the town centre. For him, it was all about the choice and the convenience of being able to buy whatever boots he wanted from the comfort of the sofa, sitting in front of the television. He shops and watches television at the same time, and that is a phenomenon with which we must somehow engage and use to our advantage. The Chairman is right in his idea.

A gentleman from a rural town came to me about six months ago with what was a very rudimentary town commercial website, that is, a kind of Shopify for towns. There would be an overall place - say, Loughrea, Athenry, Tuam or Portumna - one could go to on an app on one's phone; one could then subdivide into different categories - food, drapery, whatever it might be - and each retailer in the town could plug into the app and place its own shopfront on it. I do not think individual retailers have the time, expertise or resources at the moment to start setting up individual online businesses as McElhinneys has done. McElhinneys is a pretty rare case, and I applaud it for what it does. There are others, such as Calvey's, a little butchers in Achill, in a tiny village on the coast of Ireland. Its owner sells wonderful lamb all over the world from the back of his shop. He has developed his brand, and it is an extraordinary business and perhaps an example to others. Could we develop the idea of a kind of online town marketplace which individual retailers could plug into and begin to access customers such as my son? My son has no interest in local shops whatsoever. He is 20 years old, he will be 30 before long, and all of a sudden his activity will become the norm nationally. We must face this challenge.

Some of my colleagues spoke about the alcohol Bill. Deputy Heydon has asked the question already. How much of a negative impact do the witnesses feel the obligation on them, if it arises, to remove alcohol in their premises completely from public eyes and public display will have on their business? How much of their current turnover is reliant solely on alcohol? How much of their remaining turnover is driven by the footfall generated by people who want to buy maybe a bottle of wine on a Friday evening or a few cans of cider on a Saturday? How impactful do the witnesses reckon it will be on their business if we oblige every retailer, from the most massive multinationals down to the tiniest corner shop, to remove alcohol completely from public display? I am interested in the witnesses' views on that.

Mr. David Fitzsimons

I thank the members for their questions. I will commence with the Chairman's. Our digital statistics are pretty depressing. Of everything bought online in Ireland, 70% comes in from international jurisdictions. Deputy Cannon referred to online purchases his son makes. I will say it again. Irish consumers this year will buy €12 billion worth of goods online, but €560 billion worth of goods will be bought across Europe. There must be an opportunity there. McElhinneys may be a one-off, but I am sure we can find 20 such businesses. McElhinneys is probably the best thing in Ballybofey town as it provides 190 jobs. I will say it again. We are prohibited from benefitting from Enterprise Ireland support. McElhinneys applied and was told it was a retailer and should go away.

A Minister of State who was involved in jobs suggested he would go up and open the premises and he was told to go away. This is the rural affairs committee; it is appalling that a small indigenous Irish retail business in rural Ireland is not supported, yet an international company can put a brass plaque up in the IFSC, employ one person and get ridiculous levels of support. Something has to be done.

Virtual towns might be a good idea but going online is not for everyone. Some of my members say the only people who make money online are Google and the consultants. We do not want to lose many people lots of money.

How many town teams exist is a very difficult question. There are three business improvement districts in Ireland, which are legal structures to manage towns. I do not know how many town teams exist. I am involved in three in Clare. I will be in Wexford tonight with its town team. I estimate there are about 50 or 60. The difficulty with town teams and volunteers, which Deputy Troy will tell the committee following his merited efforts in Mullingar, is that voluntarism only lasts for so long. There might be a huge meeting of stakeholders and a town plan but it runs out of passion and energy after time. There is a necessity for local authority support. We did well in Limerick with 40 new stores because the county CEO, Conn Murray, appointed a town co-ordinator, a young guy who ran around the city and told everyone what was going on and got everyone behind the plan.

Brexit is a serious issue. We were promised a Brexit-proofed budget but from a retail perspective, we did not see that. We have to be careful about how we comment because we do not want to accelerate the problem but there is significant activity going up North. Online, retailers are reporting a 500%, 600% or 700% increase in demand. We are facing a crisis. We would have loved a reduction of the 23% VAT that was introduced as a financial emergency. It is now time for another financial emergency to reduce it back. We are price non-competitive. There is little we can do as retailers. We would also like to see a revision of the employer PRSI for low-paid workers from 8.5% to 4.25% because those jobs are vulnerable.

The final question was on the vacant site tax. We recommend the immediate compulsory purchase of any building of a particular size within the inner core that is not being used by the property owner. There should be a compulsory purchase order at discount by the local authority and it should be put to good use. It could be split into smaller units and we could go off and get Penneys, or whichever is the brand of the day, to open up. Having these vacant and derelict sites in the middle of towns is not good enough.

Deputy Heydon asked about Kildare. There were many bad planning decisions made over time. One in Naas was extremely bad - it involved an out-of-town big box retailer who invested less than 5% of its turnover in staff while the guys down the town invested over 15% of their turnover in staff. The Minister of the day cut the ribbon on that premises but I knew, as people in the town did, that there was a net jobs loss to the town that day. We need to apply the sequential test which means telling that brand and others that they have to go into the town, split up the offer and put the food, alcohol or fashion into a smaller box. The sequential test must apply. It is hard to compete with out-of-town free parking and all that kind of stuff.

There was a question on beautification. The biggest property developer in the world said at a conference recently in New York that all his money and that of his peers is going into urban renewal. I thought that was great. He said he is building a beautiful civic place that has seating and waterfalls and is architecturally beautiful. If a commercial offer is built around that, people will come. This is not just about commerce. It is about having a place that people can gather, dwell and communicate. The future of retail is human-to-human, where people can talk to people. In the context of pedestrianisation, which Deputy Cannon raised, and some of the issues the Chairman raised, the future is in rethinking towns and having a town centre that is beautiful where people can congregate and breathe. A commercial offering and car parking should be built around that. We need to rethink towns commercially because the future is young people going online. Potentially towns will become places where evening economies are way more important in terms of hospitality and all that kind of stuff. It will be a bit like continental Europe which has huge protections for SME retailers. In France, the local Carrefour cannot sell tobacco, bread and lots of other things. That would protect all these small indigenous businesses in the town centre.

Deputy Cannon asked about rates. One of the worst things ever to happen in rates in Ireland was the revaluation of places in towns and villages. The revaluation rethought how rates work and it linked rates to rent in local authority areas. The higher rent payers paid more rates but who are the higher rent payers? They are the businesses in town centres. The rates of the secondary and tertiary business parks, the local printer's way out the road and the hotels, went way down. If we are serious about towns, there is something wrong if we go and double the rates in town centres.

What Deputy Cannon said about the rates incentive is brilliant. It is illegal so it is not actually a rates incentive; it is a grant equivalent of fixtures and fittings. It is a great idea which we have promoted in about 30 or 40 different places. It has worked in Ennis, where I live. Our economic development director went out with a booklet to talk to retailers about the rates break that was announced. The most important thing is that it should only apply to retail mixed uses, which we need. We have enough coffee, bookmakers, and charity shops. What are we missing? The Deputy's 20-year-old son will tell him what we are missing. We are missing Tiger, Nando's, Pandora, H&M, and all the go-to brands. If we can get them into our towns of a certain size, young people will come in and enjoy it.

Will Mr. Jennings and his team respond to that?

Mr. Vincent Jennings

The committee asked a direct question on Brexit and the other members would like to come in here. Was there any practical support after the Brexit vote? The answer is that there was none.

Mr. Kelly will respond first.

Mr. Noel Kelly

I applaud the work of this committee and the undoubted good intentions and well-meaning of all the members. As the CEO has already mentioned, I am a newsagent. My shop is in Monasterevin in County Kildare. I will initially address one of the Chairman's questions on employment. I can throw out the statistic that there are 35,000 people employed in retail in Ireland.

Mr. Vincent Jennings

That is within our sector.

Mr. Noel Kelly

Within our sector. I can tell the Chairman about the practical experience in my shop. We have four full-time staff and seven part-time staff, which is a total of 11 people. I have made representations to Deputy Heydon about this on occasion. People are inclined to dismiss part-time staff but our part-time staff are secondary school and third level students. When they have been with us for a couple of weeks, I bring them in and sit them down. They are very happy to have some extra pocket money, are less of a drain on their parents and are able to contribute. What I always say is the biggest attribute of working in Kelly's newsagents is they will learn how to work. This is not something they will learn in secondary school or even in third level. They will be taking instruction from supervisors and when they have been with us for a couple of years, they may be working with one other member of staff who is junior to them. They will be handling significant amounts of money. They will be dealing with members of the public, 95% of whom are the salt of the earth, but they will also be dealing with people whose circumstances at home mean they are hard to deal with. These are all things that will stand them in good stead, whether they become a nurse, a bank official, a teacher or whatever. That is the true essence of employment in a small retailer.

I will ask Ms Martyn to address the question on structural separation because it affects her directly.

As I am president and it is a burning issue for many of our members, I am fully up to date with its implications. Three of the committee members mentioned it, so Ms Martyn will deal with it.

The Convenience Stores and Newsagents Association, CSNA, represents a broad group of retailers. We represent urban, city, small and large stores. Deputy Cannon and Deputy Danny Healy-Rae would be aware that symbol groups, such as SuperValu, Centra, Spar or the like, are not actual multiples. The stores are mainly family-owned stores that avail of a central purchasing and advertising policy. These are all people who come under the committee's umbrella, particularly the rural element. As I said in my opening remarks, the committee is very favourably disposed towards small retailers. Deputy Cannon mentioned car parks, which is very good. The members referred to rates. From 2007 or 2008 private business people were supporting the local authorities with rates. This year Kildare County Council introduced its first increase for a couple of years. We do not avail of any grants. We are self-sufficient, industrious and provide employment. All we ask from the Government is that it does not put obstacles in our way or increase the amount of red tape and regulation we must deal with. We do not have the backroom office staff to deal with all of these matters, unlike the bigger enterprises.

The Chairman asked what grants we would need. If he and his committee could roll back some of the impositions of Government, we would be very grateful. As I said, we are industrious, self-reliant entrepreneurs. That is all we require from the committee. I thank the members for their time.

Ms Claire-Ann Martyn

I thank the committee for the opportunity to attend the meeting today. I am from Mountrath, County Laois. The members probably know the town because they will have travelled to Limerick from Dublin. It has been bypassed now so we probably do not see any of the members there anymore, but they are welcome to visit at any time. I will talk about the structural separation for alcohol, but all of the issues raised in terms of rates, town degradation, parking and so forth have affected Mountrath in a big way. The town is now left with probably six or seven functioning businesses, where previously it was very progressive. The town was a bottleneck because there was so much traffic and so many lorries travelling through it. I am talking about rural degeneration. I was born and reared in that town. My parents had a business there since 1950 and reared six children there. There were many families on the street. We all walked to the local school. I returned to take over the business and work in Mountrath. I have three children and they are the only children who walk to school from a street that previously sent 20 or 30 children to school. This is where we see the demise of the local community. I am not telling the members something they do not know, as they know all of this. I applaud what the committee is doing. We will do what we can to help the committee to examine where we can improve the situation.

However, I will discuss structural separation today. Deputies Collins, Cannon and Heydon asked about this. I have a Centra food market. I am not one of the big multiples. I pay my bills and buy my stock. Probably 2% of my sales would be alcohol. As a retailer, a mother and a member of CSNA, I applaud what the Government is doing to try to change the thinking about alcohol, especially the abuse of alcohol. We are 100% behind changing attitudes to alcohol in Ireland, particularly because I have children and a retail outlet. I see what can happen. However, we strongly oppose section 20. Deputy Cannon might not be 100% opposed to that section-----

As a publican I despair at the idea that if one can somehow make it more difficult to buy alcohol in retail settings, it will rejuvenate the rural pub. It will not. That is a fallacy and I do not support it at all.

Ms Claire-Ann Martyn

Mountrath had approximately 20 pubs when I first returned home. It now has four. We have lost the pub. We have lost the small corner shops apart from the three that remain now. I do not expect that removing section 20 will mean I will have more alcohol sales. I probably will not and I am quite happy with what I have. However, in response to Deputy Heydon, I am concerned about how it will affect us. It will affect me because of the mix I have to offer to the consumer. Somebody referred to the rural base. I draw all of my customers from the rural base. Basically, I have two bases - rural and social welfare. That is the nature of the business in my town. The mix is that when the guy who is working in the timber business up in the wood is going home from work, he calls to my shop. He wants four cans, a loaf of bread, milk, cheese or whatever it is for the sandwiches the following day. He is working all day. If he calls to my store and he wants four cans, he must either be escorted behind a barrier or it must be opened up to give him the cans. He is not going to bother with that experience for shopping. He will say, "This is it". He will probably call to my store between 7 p.m. and 9 p.m. but I have lost the mix that he will purchase. It will mean that not only am I not selling the alcohol, I am also not selling the other products so I do not need another young person to do the 7 p.m. to 9 p.m. shift. I cannot afford to pay them if I am not selling the product. That is what would concern me.

There is a second issue with the mix. Let us say Deputy Cannon is on his way home from work. His wife rings and says, "Ciarán, so-and-so rang and they are calling over tonight. Will you pop into Centra and get me two pizzas and a bottle of wine?" Deputy Cannon calls in to do that. He must ask for a bottle of red wine. He cannot go down the aisle and choose it. There is a theatre attached to buying wine. A person browses and says, "Well, I had that Italian before and I did not like it." Instead of that the person will be asked to pull across a curtain and say, "I will take that one." That will remove the pleasant shopping experience which was referred to, in a different context, as walking around in nice floral squares. This is the shopping experience when one goes into the Centra in Mountrath, so that would concern me.

I have another concern. I have space in my store. My contemporaries, Bosco and Gerard, have stores. They have two drops of alcohol in their stores. There is no way they can cordon that off, so it will be curtains and screens. That will prove unworkable for the retailer. I am also concerned about the costs involved. The health and safety issues for somebody who is working behind a closed area in terms of personal injury, slips and falls will increase my insurance costs. That will become untenable for people, so they will not sell alcohol. Subsequently, they will not be able to survive in terms of the mix.

In 2009, the Responsible Retailers of Alcohol in Ireland, RRAI, voluntary code of practice was introduced. All of us who signed up to that have been proven to be responsible retailers of alcohol. That is what I consider myself to be. I am deeply rooted in the community and I know who should not be sold alcohol. I know that on the day of the leaving certificate results, one increases the age to 21. I know the young people.

We do not serve to the kids who are coming in. We do not serve it before 10 o'clock. We have bought into that responsible code of practice. Asking us to put it behind closed doors almost makes it seem as if it is something we should not be selling. It is still a commodity. I appreciate that the committee is under pressure for time. That is where I am coming from.

Gabhaim buíochas leis na finnéithe as sin. I appreciate the witnesses' presentations. One of the key elements of the presentations was that they were full of solutions, which is great because that is the whole purpose of this process. All the information the witnesses have given in their testimony today will be included in our document which we hope to have completed by the end of the year and to have submitted to Government. We thank the witnesses for coming along today.

The joint committee adjourned at 1.10 p.m. until 10 a.m. on Tuesday, 22 November 2016.