JOINT COMMITTEE ON ENTERPRISE AND SMALL BUSINESS debate -
Wednesday, 9 Feb 2005

Retail Planning Guidelines: Ministerial Presentation.

Vice-Chairman (Deputy M. Brady)

I have received apologies from the Chairman, Deputy Cassidy, who has been hospitalised. Is it agreed to defer consideration of the minutes of the meeting of 2 February until after the discussion with the Minister? Agreed.

I welcome the Minister for the Environment, Heritage and Local Government, Deputy Roche, and his officials. The Minister has agreed to attend today's meeting to discuss the recently published retail planning guidelines. I will ask him to make his opening remarks and members may then ask questions.

Minister for the Environment, Heritage and Local Government (Deputy Roche)

I join the Vice-Chairman in sending my personal regards to the Chairman, Deputy Cassidy. I hope he has a full and rapid recovery.

I thank members for the invitation to attend this meeting in order that I might outline, for the information of the committee, the changes I recently announced in respect of the planning regime which applies to retail warehousing. On 5 January I announced that I had decided to amend the retail planning guidelines to provide that the floorspace cap on retail warehouses would no longer apply within the functional areas of the four Dublin local authorities and in the other national spatial strategy gateways. The gateway towns and cities are Athlone-Tullamore-Mullingar, Cork, Dublin, Dundalk, Galway, Letterkenny, Limerick-Shannon, Sligo and Waterford. The relaxation will only apply in areas subject to integrated area plans under the Urban Renewal Act 1998 and to durable goods. I emphasise both of these points because they have been ignored in much of the debate.

The existing cap on retail warehouses of 6,000 sq. m. gross retail floorspace will continue to apply in all other areas. The overall policy objective of the retail planning guidelines, including normal planning requirements, will continue to apply to any proposals for the development of retail warehouses in excess of 6,000 sq. m. other than in areas specified.

The changes follows a review of the floorspace cap on retail warehouses set in the retail planning guidelines, which came into effect on 1 January 2001. The guidelines prescribe a maximum floor area of 6,000 sq. m. gross retail floorspace for large-scale single retail warehouse development. The cap has been reviewed, taking account of the need to promote effective competition in this sector of retailing and of ongoing developments in retail formats — while underpinning proper planning and sustainable development.

The amendment to the guidelines will facilitate the entry of new retail operators into the Irish market. It will widen consumer choice and bring about greater competition. It will also allow Irish consumers to have access to the same choice currently enjoyed by their counterparts in every other part of Europe. It will further ensure that any such development entering the Irish market will do so on a basis which contributes to the economic and social objectives of the Government's urban renewal programme and national spatial strategy. These are objectives to which everyone subscribes.

The changes are closely focused. They are directly related to the national spatial strategy and are limited in their import. Moreover, by focusing on areas subject to integrated area plans, the change made will give planning authorities greater influence over the manner in which large-scale retail warehouses are developed, while linking their developments with the promotion of good local employment opportunities. It will also assist in ensuring an optimum planning solution which fits in with the broader regeneration objectives set out in the Urban Renewal Act. It is particularly important to emphasise the inter-relatedness contained within these changes.

I am aware of concerns expressed by various interest groups and representative organisations as regards their apprehensions over the possible impact of the revised planning guidelines. I am also aware of the strong support for the change made by the Competition Authority, for example. The retail planning guidelines were introduced to ensure that the principle of sustainable development would apply to the development of the retail sector in Ireland, while facilitating competitiveness to the benefit of the consumer. They were never intended at any stage to hinder or restrict competition.

While the retail planning guidelines overall had been operating satisfactorily, a number of concerns were expressed about the impact of the cap on retail warehouses. These included the fact that the cap did not allow for the development of some retail formats in the Irish market, thus restricting competition and the potential choice available to Irish consumers. As we know from television and other media reports, Irish consumers are very mobile, and if restricted as to their choices in this jurisdiction, will go elsewhere.

The change applies only to the sale of bulky durable goods. I do not have plans to review the existing caps which apply to supermarkets or grocery outlets. I emphasise this because to my amazement, notwithstanding that I have made the point time and time again, I still receive correspondence suggesting that this is the next step. I emphasise that I have no interest in taking that next step.

I am confident that the approach now adopted will deliver major benefits to Irish consumers in the years to come. The controlled manner in which the cap is being relaxed will ensure that retail warehouses are subject to appropriate guidelines and will avoid the potential downsides of providing such market development. The revised retail guidelines, which came into effect last week, will help ensure the ongoing sustainable development of the retail sector in Ireland over the coming years.

I have read with interest press commentary made in this city over the last 20 or so years on each and every occasion a new initiative was being taken in development. Members of the committee who care to check the records will find there were learned articles from many of the same critics in some of the national newspapers when the Tallaght town centre was opening, for example. The thrust of such coverage was that if it was allowed to occur it would be Armageddon for shopping in central Dublin. It did occur and it was not. The argument was made when Blanchardstown and Liffey Valley shopping centres were opening that central Dublin would be devastated and there would be no retail shopping left there. Both of those welcome developments took place, gave good employment and excellent consumer choice. At the same time shopping in central Dublin has not declined. Change inevitably produces reaction. The change introduced in these guidelines, specific to durable goods, is well-focused in terms of its relationships with the good planning objectives set out in the national spatial strategy.

Vice-Chairman

I thank the Minister for that information. Before allowing questions from the floor I would just like to put a few of my own. What is the likelihood, if the guidelines were not changed, of these companies perhaps locating in another part of the country? What will be the impact on the road transport network in the opinion of the Dublin Transportation Office or the National Roads Authority? People often maintain that this could be abused by local authorities and so on. How many superstores does the Minister envisage will be built in the country?

Deputy Roche

Would the Chairman like me to answer those two questions, and then perhaps deal with others?

Vice-Chairman

I would.

Deputy Roche

The first question is very interesting, although it is hypothetical. As we all know there has been a lively debate about a particular retail warehouse in this country. The island of Ireland has a critical population that is currently in excess of six million. It is ideal for this type of retail outlet. I have no doubt that the major international operator which has been in the news so frequently of late, will at some stage locate on this island in the same type of format it has used elsewhere.

The Chairman is right to ask what will be the impact. Often sight is lost in the debate of the fact that the retail guidelines apply only to the Republic. They do not apply to the entire 32 counties. If there were to be a negative impact from one of these major operators on any part of this island, it would apply whether north or south of the Border. The impact, if that happened, would be for us to bear all of the downside without enjoying any of the positives. If a major operator in retail warehousing was to locate just north of the Border, for example, it is clear that consumers would vote with their feet. It is self-evident that consumers already travelling to Scotland, Wales and England, would travel to Northern Ireland. If that happened we would lose job opportunities here. We would lose the opportunity to exercise retail choice in our own country. Irish consumers would continue to be denied choices available elsewhere on the island and, of course, we would also lose substantial revenues.

The Chairman raised the issue of traffic. I am pleased that this question was asked at the outset. Traffic is very much a matter that will relate to any proposal that comes forward. We have made specific reference in the guidelines to the capacity of the road network to carry the traffic generated by any particular operator. I have seen some exaggerated figures which contrast with transport studies I am aware of, as regards the likely impacts. The issue of traffic will have to be adjudicated in the context of the guidelines, which make specific reference to the road carrying capacity of wherever one of these large operations is to be based. We are still in the area of hypothesis, of course. There has, however, been a good deal of debate about the M50 in the Dublin area. It is difficult to enter into a debate on this because there is no planning application or anything else before us. However, in respect of the retailer that was mentioned in that case, the figures I have seen are less than half those which appeared in a recently published study that was given some publicity.

Deputy Howlin

I also welcome the Minister. I have always regarded Deputy Roche as someone who respects the business of politics and the views of politicians, both local and national. I am somewhat taken aback, therefore, at a time when this committee was specifically examining the impact not only of the retail guidelines but of the Groceries Order, in tandem, and taking broad-ranging submissions from all the key players, that a decision is announced without consultation with any of its members or the presentation of an argument to the committee in advance. If the Executive takes that attitude to Parliament in general it undermines those of us who are committed to work within the committee system, on a cross-party basis, for the exploration of good policy. The Minister indicated that his announcement on 5 January was consequent on a review. When did that review begin and who undertook it? What submissions were received and what presentations were invited on that?

Is the Minister aware that not one of the sectors that we invited to come before this committee asked for a change in the planning guidelines? The only authority that the Minister has quoted in support of the change is the Competition Authority, which has a very narrow focus and would not be particularly focused on the built environment and the sustainability of regional towns and cities.

Has the Minister read the submission of RGDATA? It totally opposed his suggestions and stated in its presentation to this committee, subsequent to the Minister's announcement, that it is concerned that the Minister does not appear to have adequately assessed the impact of these changes on a national basis on transport, sustainability, land use and urban planning. In a similar vein, the Irish Hardware and Building Materials Association has indicated that since the Minister's decision, it has asked an independent authority to assess the implications. One of its findings I find alarming is that the decision will have a particularly damaging impact on the hub towns identified in the national spatial strategy. It particularly refers to Wexford, Kilkenny, Killarney, Tralee, Westport, Castlebar, Cavan and Monaghan. Has the Minister assessed the impact on those hub towns? Can he provide the supporting evidence that no adverse impact will be had on them? This would enable the committee to conclude its own investigations. I hope that the Minister can give comfort to the committee on the very deep concerns that it has on a cross-party basis. There is a consensus among us on these matters.

Deputy Roche

The review of this was under way before I arrived in the Department. There were 71 formal submissions made, of which 48 were generally in favour of retaining the existing cap, while 19 were in favour of the cap being abolished. That is not to be unexpected. Those who perceive that they have a certain advantage in stasis naturally tend to support stasis. Consumers generally do not tend to make individual and personal submissions. In addition, there were four submissions which did not come down one way or the other.

Among those who made submissions in favour were the Competition Authority, the Construction Industry Federation and the Dublin Chamber of Commerce. The changes were welcomed by the Dublin City Businessman's Association. There were also submissions in favour of the changes from Costco, Wholesale UK, B&Q Ireland and from IKEA. Opponents included An Taisce, Retail Ireland, which is a group within IBEC, the Heaton Group, Woodie's DIY and the Dublin City Business Association. There were also individual submissions from many retail hardware outlets. Many members of the committee would have received similar submissions.

It is odd that a question on hub towns was asked. The hypothesis seems to be that if the changes were to apply to the hub towns as well to the gateway towns, then that would be a positive thing. The argument is then that we make no change at all. The argument for change is overwhelmingly in favour of giving consumers choice. Deputy Howlin takes the view that consumers should not have the choice, but I take the opposite view.

Deputy Howlin

Up to 50% of all towns in the UK have no urban shopping centres. That evidence was presented to us.

Deputy Roche

That may be the case.

Deputy Howlin

I do not think that Irish towns should be converted into ghost towns.

Deputy Morgan

Some towns already are ghost towns.

Deputy Roche

That may be the case, but we operate as an independent nation and we make our decisions here. We do not necessarily slavishly adhere to the decisions made in the UK. I am surprised that Deputy Morgan should take the view to the contrary.

Deputy Morgan

Perhaps we should occupy them.

Deputy Roche

I will leave that to the Deputy. Dr. Meehan was one of the consortium, along with Goodbody Consultants, which prepared a report for the Department in November 2000 on the impact. UK consultants also prepared the original draft. It has been suggested that some pressure was put on me in this regard. I emphasise that no pressure was put on me. I reviewed the material that was available in my Department and I was persuaded by the strong advice from senior officials that the retail guidelines, as they operated, were having an impact against the public interest. This impact was not foreseen at the time the original guidelines were brought in. The original guidelines were never intended to restrict consumer choice or competition.

Deputy Howlin

This country provides some of the widest consumer choice in Europe.

Deputy Roche

Consumers who pay over the odds in Ireland might contest that view. The Deputy and I will obviously have to differ on that. The argument is that there is a dearth of competition in Ireland. In some sectors which I am not disposed to change, there is an argument that Irish consumers suffer badly. We are producing record levels of housing in Europe, with 80,000 units built last year. It therefore cannot be a bad time to be operating in this sector of business. It is not a bad time to give Irish consumers the choice that is better enjoyed by consumers right across Europe.

The focus is very narrow. It applies only to durable goods. It is not focused on some of the other areas which have been drawn into this debate and which are not relevant to it.

The point made by Deputy Morgan regarding the situation in the UK is not directly relevant either. It was the untramelled development of certain kinds of outlets in the UK and other jurisdictions that did not exist here. The time has come to make the incremental change which will give Irish consumers the rights which they should have.

Deputy Howlin

Is it an incremental change? Is there another increment to come?

Deputy Roche

It is an incremental change. It was always envisaged that there would be reviews of the guidelines. The Deputy asked me a specific question and I am giving him a specific answer.

I have been asked whether I will make a change in the size on retail groceries. The answer is that I have not made any change. I made a specific choice to confine the change to durable goods, where there is a demonstrable demand for more choice among the public. This has been well featured in a range of media commentary since then. Irish consumers want choice.

Deputy Morgan

I have other business, so I have to excuse myself. I hope to return before this meeting concludes.

Deputy McHugh

I agree with Deputy Howlin on his disappointment that the work in which the committee has been engaged was undermined by the Minister when he made his announcement before we had completed our investigation. The committee is being neglected by the Minister. Among our concerns and priorities is to ensure small businesses survive in Ireland into the future. They contribute a great deal. I disagree with the Minister that his policy will bring competition into the market. Competition requires a level playing field, but no business in Ireland can compete with companies like IKEA. As IKEA is a specialised producer of goods at a level at which no Irish company competes, one cannot talk about competition. In the absence of a level playing field, the Minister will create a monopoly.

The Minister said the stores in question had to be located near an existing road network and identified Galway city as one of the areas in which this type of development will be permitted. I am sure the Minister has been to Galway recently and is aware of the road network into and out of the city which is completely incapable of accommodating the current level of traffic. The Minister said such stores must be served by existing or planned public transport services. We have been fighting in the west for a long time for investment in the western rail corridor which was closed many years ago. Surely the proper approach is to provide the infrastructure before proceeding with the development we are talking about. To do otherwise is to put the horse before the cart and to fail to think strategically. One must provide infrastructure before proceeding with developments like this if one is not to contribute to the chaos with which people must deal in, for example, Galway.

The Minister is establishing a bad precedent. We are altering our planning laws to accommodate foreign companies while failing to facilitate the businesses which currently exist here. Will the Minister identify what independent, expert planning and assessments were carried out before he arrived at his decision? Will he make the reports and submissions provided to his Department on the matter available to the committee? They would be very valuable in enabling us to complete our work. Were the National Roads Authority and the Dublin Transportation Office consulted on this decision? If so, were their views taken on board before the decision was made? Will the Minister make available to the committee any submission by the NRA or the transportation office?

Is the Minister aware of press reports that IKEA is willing to establish smaller scale premises in the United Kingdom to fit in with its current planning regime? If we must proceed in this regrettable direction, can we not make the same provision here? This decision will impact on Irish business.

Deputy Callanan

I thank the Minister for attending. It is important to have a proper debate on the matter. Having been on the committee for quite some time, I have concerns. Many businesses have come to the committee and told us high prices in Ireland are the result of the cost of wages, insurance and the very high cost of waste management and disposal. There is no great appetite to change the guidelines, but it is done now.

I will use my home area of west Galway as an example. We have a gateway on either side of us, one in Athlone and the other Galway, and there are four major towns in between with sizeable hardware stores. The proprietors of the stores are very concerned and feel competition from IKEA and others may put them out of business. While that is fine for the consumer for a few years, if these people go out of business there will be nothing to stop IKEA or others increasing their prices. We have not seen an appetite for this development among the public. One sees many foreign stores on our streets and the people we asked had no problem with the existing size guidelines. I am even told IKEA has decided it will build smaller stores in Britain where necessary.

While I hope the policy works out, I am seriously concerned about the points raised with me by the owners of local hardware shops inBallinasloe, Loughrea, Athenry and Tuam. I am sorry to introduce parish-pump politics, but these towns are between two gateways and this is the best way I can illustrate people's concerns. I would like to hear the Minister's views on that.

Deputy Roche

The Deputy does not need to apologise for representing his constituents.

Deputy Callanan

I do not apologise.

Deputy Roche

We all engage in that and the Deputy is right to do so vigorously as, I acknowledge, he has also done privately with me.

To address Deputy McHugh's comments, it is a first for me to be accused of neglecting a committee.

Deputy Howlin

It is the first.

Deputy Roche

I was referring to the colleague on Deputy Howlin's physical, though not political, left.

Small businesses in Ireland will survive into the future. Deputy McHugh's comment that no business in Ireland can compete with IKEA represents an astonishingly negative view. An interesting debate took place on RTE recently in which a spokesman for the British Retail Consortium discussed this very issue. While I use the example of IKEA, as Deputy McHugh mentioned the company, the changes in question were not made for any specific store or site. The spokesman said the consortium had been virulently opposed to the arrival of the flat-pack distributor on the UK market but admitted the results had been quite different to those which had been anticipated.

I disagree with Deputy McHugh on the capacity of Irish businesses to compete. There are niche markets for good quality furnishings and most people will not use flat-pack products, but will stick with the traditional furnishings with which our strength has lain.

Deputy McHugh

If most people stick with traditional furniture, there is no future for large-scale stores.

Deputy Roche

It is their tough luck if that is the case.

Deputy McHugh

With all due respect, the Minister said earlier that there was plenty evidence to suggest a significant demand existed for flat-pack products.

Deputy Roche

I am simply pointing out a certain illogicality in Deputy McHugh's attempt to have the argument both ways. While I respect his views, I choose, respectfully, to disagree with him.

The Deputy referred to the position in Galway. There is no compulsion on a planning authority in this regard. There is a specific provision, which is the reason these are tightly constrained. This is the reason, for example, I did not make the change for all towns, including hub and gateway towns. This project is tied into the national spatial strategy and is being developed in an area which has an integrated area plan and a transport infrastructure. In other words, there is no compulsion if these issues fail to arise. These issues will be debated as part and parcel of the planning process.

Both Deputies mentioned the question of IKEA and the United Kingdom. UK customers and Irish consumers who travel in great numbers to the UK are not denied the choice that exists. Recent press reports suggest the company is considering the development of smaller stores as part of its network. There is no information in this regard other than what is reported in newspapers but the company has 12 stores in the UK. They range in size from 15,200 sq. m. to 26,500 sq. m. A thirteenth store, which opens tomorrow in Edmonton, London, will be company's largest at 28,000 sq. m. Eight of the UK stores exceed 20,000 sq. m. while the other five exceed 15,000 sq. m. They are twice the size of the floor space cap applied to retail warehousing in Ireland.

It is likely that if the company develops small stores, it will be in the context of an established network. The island of Ireland contains six million consumers but the company does not have an outlet. I respect the concerns of Deputies but if the company wishes to set up in Ireland, it can do so in any part of the island. If the hypothesis of doom and gloom put forward by members and interest groups is correct, the negative impact would happen anyway and we would not have control over it. We are taking control of the situation and giving consumers choice.

I refer to the issue of independent expert advice. Sometimes it is a good idea if politicians make decisions as opposed to continuously farming them out to consultants. I have excellent people in my Department and I paid most attention to them in this regard. We discussed in-house the various alterations that could be made from no change to absolute openness. I took full advice from my officials at all times. External consultants were not engaged in this phase of the study but they were engaged earlier in the process. When the original guidelines were drafted, the consultants' focus in terms of restriction related to the grocery trade and not retail warehousing.

Patrick Lyons, in commenting on floor caps on retail warehousing, stated, "Accordingly, the cap of 6,000 sq. m. should be retained. However, given the strong rate of increase in the demand for comparison goods and the likelihood of rapid change in both the structure of the market and the size of stores, this cap should be subject to regular review". That was the advice at the time the original guidelines were being put in place.

A total of 80,000 housing units were produced last year with a similar number anticipated this year. There is demand to sustain the focused change that is being introduced. Goodbodys said the planning rationale for a restrictive approach to the development of comparison goods stores is not particularly well established and then referred to another report. The position has changed rapidly. None of us foresaw five or ten years ago the economic growth and development and the increase in housing output that has taken place.

Consumers are highly mobile and they will shop here or elsewhere. We should capture the benefits of giving consumers the choice within our economy and deal with the potential downsides as best we can through the planning process, which is what is being done. Deputy Howlin disagrees.

Deputy Howlin

The Minister is in charge of planning, not groceries and competition. Our focus in the guidelines was to sustain communities and towns. The notion of a hub in Waterford that kills off Enniscorthy, Wexford, New Ross, Kilkenny and Clonmel might be great in the short term for consumers but it is not for the communities involved.

Deputy Roche

The unforeseen negative impact of the guidelines that were introduced on consumer choice should be addressed because the constraint on consumers resulted from the guidelines on planning. That had to be changed.

Deputy Howlin

Nobody asked for that.

Deputy Roche

That is not true.

Deputy Howlin

Various groups made submissions to the committee but none asked for changes to the guidelines.

A Deputy

Absolutely no one.

Deputy Roche

Consumers are asking for change and choice every day of the week.

Sitting suspended at 11.50 a.m and resumed at 12.05 p.m.

Deputy Roche

A specific point was raised by some members of the committee concerning the movement of traffic. The best information about traffic movement available to us comes from the TRIC system. Most members know I am allergic to acronyms. TRICS, the Trip Rate Information Computer System, monitors traffic movements and operates in and out of approximately 4,000 locations in the UK. TRICS was set up and is operated by local authorities in the UK so it has significant provenance. Some members mentioned a survey referenced in the Irish media, of which I do not have a copy.

The measurements of movements in and out of different types of retail outlets by public authorities in the UK are very interesting. In the case of the Glasgow IKEA store where we have specific information, the figure is not the 30,000 movements per day figure that has been mentioned several times and given some publicity by Deputy Eamon Ryan in another committee. To be fair to him, he probably meant 30,000 in and out movements involving about 15,000 cars. The actual average daily movement figure for the IKEA store shown by the UK survey is 4,770 cars during the period of that survey. Members will agree that this is significantly below the figure recently published in another survey, the problems with which I do not know and on which I am not prepared to comment because I do not know anything about the methodology. The methodology of the trip rate survey is well established and well respected.

I also asked to have figures from other stores to determine if there was an aberrant set of figures because transport might differ from area to area. In Neasden, where there is a smaller IKEA store, the figure was 4,645 cars per day. This is a very interesting figure because it indicates that, in this type of retail outlet, the movements in and out per day and the use of car parking facilities are at a much lower rate than one would expect in a large shopping centre, for example. If one were to look at some of the large shopping centres in the greater Dublin area I imagine those figures would be achieved and surpassed per day.

The reason is quite simple. When people go to the type of retail warehouse we are talking about they are there for the day. They are not dropping in and out for 20 minutes to buy a pint of milk or whatever else. People do not use these centres every day of the week. I have never used one of these centres myself and from what I read I probably never will. Maybe I will have one experience and that may be enough for me. I am not the world's greatest attender of shopping centres.

It seems from the information that has been made available to me that the argument about gargantuan movements of traffic is simply not substantiated by the facts. That argument has coloured some of the concerns voiced here. Deputy McHugh mentioned the traffic capacity of Galway. I make the point by way of illustration and assisting in the debate. The objective evidence and data available substantially query the arguments put forward on traffic movements.

I will make one final point specifically about the store in debate in the Ballymun area. It seems those who have raised the issue and argued against Ballymun having a development have not taken the time or trouble to examine what is currently proposed for the site. It is a mixed office development. I would suggest to the committee it would be significantly less valuable in terms of the regeneration of the area because the work it would attract would be unlikely to give the kind of employment needed in that area. That is an issue of contention and opinion. We cannot know and I accept that point.

The point I would make is that a large office park or science park, as was discussed, would certainly attract traffic at the wrong time of the day because there would be people on the adjoining motorway at a time when traffic would be heaviest. From what we know of them from detailed studies, in many ways the traffic movements for this type of operation are a kind of contra-flow. First, they tend not to open until 10 a.m. or after according to their website. Second, they open until 8 p.m. The traffic distribution figures indicate that movements are certainly spread over the day in a way that would not directly bring traffic on to the motorway network at the times when it is heaviest. I have already laid emphasis on the capacity of the motorway but the reality is that the zoning there would have attracted movements on to the motorway in any event.

I make a final point about the great focus on the Ballymun site that I unashamedly desire to see developed because I believe the people there deserve a break. I genuinely believe this and I fully support the regeneration efforts out there. I might suggest that any member of this committee who has not already done so should go there to see the reality that people in the 21st century are still condemned to shopping out of the back of a 40-foot steel container. This not good enough in the Ireland of the 21st century. When we have an opportunity to do something that the regeneration project is four square behind, we should not stand in its way. I know it is not the main consideration here but it is certainly a significant subsidiary consideration.

I would also make the point to the committee that this particular site and store have been subjected to most debate. The point has been made elsewhere that people should revisit the arguments and they will see they are not supported by logic.

Senator Coghlan

I, too, welcome the Minister and his officials. Until this became an issue, I found myself very much in agreement with the Minister on planning matters and said so in the Seanad. On this issue, though, I agree with my colleagues on this committee. As has been said earlier, we are virtually unanimous on the basis of the evidence we received from all sorts of groups in our investigations which were ongoing when the Minister made the announcement. These groups included those who would be concerned with consumers, such as the Society of St. Vincent de Paul and the Combat Poverty Agency. They were unanimous that they did not want to see any changes to the retail planning guidelines.

Deputy Roche

May I make a point? The organisations the Senator has mentioned——

Senator Coghlan

They are just two of many organisations.

Deputy Roche

It is very important that we be accurate and I am not accusing Senator Coghlan of trying to be inaccurate.

Senator Coghlan

I am citing what they said here.

Deputy Roche

The Senator will see they were not talking about durable goods. To return to an earlier point about groceries, perhaps we could take that issue off the table — if you do not mind me mixing my metaphors — because it is not on the table. It is not an issue that arises in this context. If Senator Coghlan recalls the submissions by those two organisations, I think he will find that their concern would be that people in their client group cannot avail of the advantages of large retail outlets in the grocery trade, for example. They would be worried about the impact this could have on the grocery trade but I am not talking about the grocery trade.

Senator Coghlan

To the best of my recollection we were not necessarily discussing the grocery trade. We believed it was general. We will have to check the record.

Does the Minister envisage that there will be only one of these megastores in each of the integrated area plan areas or gateway towns or will there be clusters of them? The Minister referred specifically to Ballymun but no one is arguing against its regeneration. We are talking solely about the stores' size, given our population and the geographical size of the country. Does the Minister think there will be a number of them in excess of the warehouse cap in Ballymun? If so, how does he view the consequences? He has touched on it already in terms of traffic, land use and impacts on town centres. How can he or anyone justify tax designating Ballymun for such operators?

Deputy Roche

I am sorry but I do not know where the tax designation issue comes from. With respect——

Senator Coghlan

I am not being categoric about it.

Deputy Roche

I am sorry — it has actually been mentioned. I apologise to Senator Coghlan.

Senator Coghlan

I came across it somewhere.

Deputy Roche

To be fair to the Senator, it does not arise.

Senator Coghlan

How does the Minister view the position of existing operators in the hard goods area? They must feel aggrieved because they have acquired sites and have been operating within the guidelines since they were first introduced, but now the rules have changed. Does the Minister believe they should all now upscale to the larger format since that is what will be required if they are to compete as they would wish? In assessing the impact of the alterations to the guidelines before authorising them, how many of these large megastores did the Minister envisage would come to Ireland over the next five to ten years and what locations were identified? Did the Minister envisage all the gateway towns filled with them? Does the Minister believe that Costco can benefit from the relaxation of the guidelines? It was reported in the Sunday Business Post that the Minister overruled his officials in this regard, as is his right. I ask the Minister if in fact he did so.

Senator Leyden

I welcome the Minister and congratulate him on his promotion to the Cabinet which was well deserved. He has served his time as a Deputy and as a Minister of State. Will these guidelines require legislation to be brought before the Oireachtas? Has the decision concerning the guidelines been formally approved by the Cabinet? This is important as those who would question the decision might query whether the Government has made a collective decision to agree to the changes to the guidelines.

The IKEA store has been mentioned most frequently in this discussion. A recent "Prime Time" programme indicated that approximately 20,000 people travelled to an IKEA store in Wales to bring back flat packs. Did this have any impact on the Minister's recommendations concerning the changes? The Minister has also stated that there is nothing to prevent IKEA locating in Newry, Enniskillen or Derry. This would give rise to people from the Republic going there, as they did at Christmas for groceries because the prices were very competitive. I would like to hear the Minister's views on this reality.

I come from Roscommon, where Tesco recently opened a store. There were numerous objections from small grocery shops stating that its arrival would be detrimental to them but the town is flourishing as a result of the development. I stated that the other stores had "nothing to fear but fear itself" because they are just as competitive as Tesco, Dunnes, Lidl or anyone else. However, in this case the disadvantage to Roscommon is that a large store could open in Athlone or Galway which would draw traffic and customers from towns like Roscommon or Longford. Even if it wished to do so, IKEA would not be in a position to build one of its superstores in Roscommon because of geographical considerations. A town like Roscommon is not at a disadvantage vis-à-vis grocery stores because Tesco, Dunnes or similar stores can locate there.

I presume the Minister was provided with the seven questions submitted to this committee by small stores throughout the country. One manufacturer, based in Castlerea, outlined to me his fear that IKEA would not buy Irish goods, but would import everything to the State and would neither have faith in nor support Irish producers of furniture or other products. This is my major concern with that particular store. I am not particularly fond of flat packs. Most flat pack purchases are never erected because they are not an attractive prospect. There is major concern among the smaller stores which feel they will face an onslaught of competition from IKEA. I still think such companies will survive because they give excellent service to their localities by, for example, providing small builders with a delivery service and competitive prices. Nevertheless, I hope the Minister can allay some of their fears. I am delighted the Minister has undertaken not to make any changes to the Groceries Order.

It has been suggested that IKEA was prepared to operate smaller stores in the Republic, and if that is the case, there would be no need to change the planning guidelines. The Minister's approach to his role has been decisive and he has grasped this particular nettle quickly, on which he should be commended. However, it is a leap into the dark and is causing concern. Although concern was expressed regarding the issue of tax designation, this no longer arises as it ceased at the end of December 2004, unless some permission has been granted — it is a red herring.

Deputy T. Dempsey

: Most of the concerns are reflected in the fact that the obvious objective of the planning guidelines is to increase competition and get a better deal for the consumer, among others. We all agree with that. I am concerned — I do not want to deliberate for too long because this concern has been expressed earlier — that the opposite may happen, particularly if small, family-owned units in the smaller towns are swamped by huge durable goods stores. Smaller enterprises going out of business would have the opposite effect to that intended. Various interest groups would have been in contact with the Minister when he was drawing up the guidelines. Did any of their concerns strike a chord with him? The Minister intends to keep these guidelines and their operation under review. Is it too late for this committee to make a submission to the Minister that might be helpful in such a review? The guidelines are not written in stone and the Minister is quite capable of changing direction in the interests of the consumer. I suggest it is not too late for this committee to make a submission.

Vice-Chairman

Minister, may we take the remaining questions together?

Deputy Roche

: Yes. I realise there is another meeting in Buswell's Hotel.

Deputy Lynch

I will not delay the Minister. The difficulty with lifting the cap on the retail planning guidelines is the fear it engenders in other retailers who have serviced the community. I speak of smaller communities rather than the big players who, in my opinion, will not be affected to any great extent. It needs to be stated that the existing big players have been positive in their encouragement of Irish producers and have contributed to the market, as opposed to taking from it. Tesco, Dunnes Stores, Marks and Spencers and others have contributed substantially to the production side of the Irish market.

Although I accept the Minister's bona fides on Ballymun, it is not what concerns me. Cork city concerns me. As the Minister would see from any visit he might pay there, the north side of Cork city is only beginning to put its house in order in terms of retail and infrastructural development. The difficulty is that if one were to put in a major player — I think it is wrong to continually talk about IKEA, but something of that size — clearly, it would be situated outside of the city and would impinge on the more recent developments which have not yet had time to establish themselves. The infrastructure on the north side of Cork city is so poor that it ensures a major player will not concentrate there. The ring-road on the north side of Cork city is essentially a two lane primary road. As the change to the guidelines will impinge on different areas with different effects, it must be examined and carefully managed. Those who have done their job properly up to this point, rightly feel aggrieved.

Will the Minister comment on the Cork city manager's refusal to collect rubbish, resulting in the city becoming a tip? From legal opinion I have received and examining the relevant legislation, I understand he is not obliged to collect the refuse, forcing the rest of us to live in an open tip.

Deputy Morgan

Peter Hogsted, the head of IKEA in Britain, recently said:

We have spent the past year creating an IKEA store that operates on a smaller footprint. We hope we can use this new format to really start our expansion and open eight to ten stores over the next three years.

Will the Minister accept that the move to change the retail planning guidelines was premature, unjustified and unnecessary? No one objects to IKEA entering the Irish market, so long as it is on the same terms applying to those currently operating. IKEA, when prevented by planning regulations to build a store to the size it desired in Britain, was willing to downscale the project to fit planning guidelines. If that is the case there, why can it not happen here?

Has the Minister, the Taoiseach or any of his Cabinet colleagues been lobbied by developers, particularly those who own large parcels of land that could accommodate this development in the Ballymun area? The Minister claims the changes will only apply to bulky durable goods. However, as Deputy Howlin pointed out, we have often been told before that the guidelines would never change. The scariest comment for me is that these regulations will be kept under review. What assurances can I now accept to convince me that these superstores will not be opened in the groceries and other retail sectors? I look forward to some explanation in that regard.

Deputy Nolan

What research was carried out by the Department of the Environment, Heritage and Local Government prior to the recommendation going to Cabinet? Did IKEA, or people acting on its behalf, make direct representations to the Minister for the Environment, Heritage and Local Government or Cabinet colleagues on the lifting of the cap? What consultation has taken place with the local authorities in the areas where it is now possible for IKEA and its like to develop these store types?

Deputy Roche

I have already given the details of the 71 submissions, including those of IKEA, B&Q and Costco, to the committee. It was always envisaged that the guidelines would be reviewed as we are living in a dynamic society. The rate of house and population growth and development in Ireland is phenomenal. We now have vibrant consumers willing to change retailers. When submissions were sought, some groups were opposed to the proposed changes. I am surprised that Deputy Morgan is scared. He is a hard man to scare. It must have been rhetorical flourish because I cannot imagine him waking up every morning, shaking and quivering over moderate changes to the retail guidelines.

Was I lobbied by developers in the Ballymun area? The land in the Ballymun area is in public ownership. The only body that has an interest in it is the regeneration project. Regarding the point about the smaller footprint for IKEA stores, there is a large network of stores in the United Kingdom. Of the 12 stores IKEA has in the United Kingdom, the largest are 26,500 sq. m. and the smaller are 15,000 sq. m. Those smaller stores would still fall outside the guidelines as they stand. The new IKEA outlet in Edmonton in London will be its biggest store in the chain.

Our retail planning guidelines apply in part of this island. While Deputy Morgan and I regret this for various reasons, we have no control over what happens in the part of this island which is not within our administration. There are approximately 6 million consumers on the island of Ireland, making it an attractive location for this particular corporation.

Deputy Morgan

Was the Minister lobbied, irrespective of who owns the land?

Deputy Roche

The largest lobby I have received is those letters from RGDATA and the groups representing hardware stores. I have replied to all of them individually. Developers would not have been in contact with me concerning Ballymun, as the site is owned by the regeneration project.

Deputy Lynch has provoked me to trespass beyond the committee's remit today. It is not acceptable that Cork city, the European Capital of Culture, should have litter all over its streets. Significant funds have been put into the city and it has every reason to be proud of itself. I believe some of the people disposing of refuse on the streets are politically motivated as it is organised. If people had a sense of respect for their city, it would not happen. I hope all parties, including the council, will work to end this impasse. Cork has two integrated area plans — Shandon-Blackpool and the docklands. I am not sure whether either area could accommodate a development of this size because the footprint is large but both plans could be considered. It will be up to the local authority through the planning process to sanction appropriate development.

I agree with most of the Deputy's comments. He pointed out that we are cautious and concerned about change. The concerns previously about other retail outlets setting up on the island have not been generally realised. The downward spiral and Armageddon that was forecast never occurred. The fear of the unknown is the greatest concern. A number of organisations were concerned that I would increase the planning restrictions on the grocery trade and I have said several times that will not be the case.

Senator Leyden asked a number of questions. Legislation will not be required. The Cabinet was consulted extensively. Groceries are not the focus. He made a number of comments about IKEA and it is regrettable that one store has been the focus of most attention. Three transport companies import IKEA products from the UK. There is such a demand for its products in Ireland that companies will transport them here from the UK stores provided one pays the shipping charge.

The Senator said if the company operated in its traditional mode on the island but was located in Northern Ireland, we would experience all the negatives and none of the positives. This is a no brainer. Why would a state leave itself at a major competitive disadvantage? The Senator referred to life being a zero sum game and, unfortunately, a number of people in business in Ireland think life is played as a zero sum game and nobody can win without somebody else losing. A scenario is possible where everybody can win. Consumers can get a fair break and people living in Ballymun can get the break they desperately deserve and good quality domestic furniture making will not suffer. All of us agree on giving Ballymun a break but we may disagree on the means of providing that.

Senator Leyden mentioned somebody from Roscommon who was concerned that the advent of flat packing would destroy the traditional furniture industry but I hope that does not happen because there is a market for both. I referred earlier to a lengthy interview given recently by a representative of the British retail consortium who admitted that had not been the case.

Deputy Tony Dempsey was concerned that if such outlets opened in small towns, they would damage the local retail trade. That is why the focus is on gateway towns and why I did not throw the retail guidelines wide open. I want whatever happens in this regard to be focused. Critical mass is needed most in planning terms and one of the major problems, which the national spatial strategy proposes to address, is the unfortunate reality that there is so much focus on the greater Dublin area and the east coast and little focus elsewhere. That is why, for example, a gateway city such as Galway has the right to make decisions in this regard. I regard that as empowerment of a community to take charge of its own plans and not a State imposition.

The Deputy also asked about a review. It was stated from the outset that these guidelines would always be subject to review. I would be less than honest if I suggested that having succeeded in obtaining Cabinet agreement in the first week of 2005, that it will be reviewed in the first week of March 2005. I am good but I am not that persuasive.

Deputy N. O’Keeffe

I am sorry I am late but I had to attend another committee meeting. The Minister is well aware of my views on this issue. I have no objection to a retailer setting up in Ireland but our guidelines should not be amended to accommodate a company which does not have a presence. Perhaps indigenous companies would have liked the guidelines changed.

It is fine to trot out population statistics but there is no comparison. A total of 6 million people reside on the island of Ireland, which is divided, whereas the population of the UK is 59 million, with 18 million living in the greater London area. Furniture, haberdashery and household goods businesses in Ireland will be subject to the hoover effect. This effect has been seen in IDA Ireland policy over the years.

I do not agree Ballymun will be regenerated through the opening of IKEA. Ballymun needs sustainable jobs, not retail jobs. A few weeks ago, representatives of the Society of St. Vincent de Paul and Cross Care stated they were not happy with the large multiples when they appeared before the committee. They will reach a stage where they will exploit the people most in need.

The retail sector is fragmented in Ireland. The main streets of many towns will become residential areas. Much noise was made about the regeneration of the north inner city in Dublin following the Gregory deal with a former leader of my party. Many of our towns are dying. I have visited IKEA stores in Paris and Madrid. I will never forget the confusion in the Paris store, although there was little trade taking place. Will this massive operator be allowed choke up our capital city? I invite committee members to visit an IKEA store in a European capital, although the one in Paris creates most activity.

According to newspaper reports following a freedom of information request, it emerged the Minister's officials were opposed to the introduction of such retail development in Ireland. He is aware of my views because the Fianna Fáil parliamentary party has discussed the issue twice. I do not worry about which company comes. For example, the new shopping centres in Dundrum in Dublin and Mahon in Cork are model developments but they were built within the planning guidelines. Why smother existing retailers with this new development?

Deputy Roche

I fully accept the Deputy's reason for being late but it is a pity he could not make it until the last minute because I have answered all the questions he has asked. It is a great pity he could not be present when I dealt with the statistics. The Deputy will be aware of how small operators in the agriculture industry are concerned about large units in that industry and deprivation.

Deputy Morgan

There is no point in farmers threatening to come in. That is irrelevant.

Deputy N. O’Keeffe

If the Minister has a problem with big farmers, he should state that.

Deputy Roche

The Deputy has arrived an hour and a half into our deliberations and I ask him to afford me the same opportunity I afforded him to answer the assertions he made. First, he said we should not change our guidelines to suit any foreign industry. We have not done so and he knows that as he has been told so several times. However, he insists on making the assertion.

Deputy N. O’Keeffe

I said no such thing.

Deputy Roche

We have changed our guidelines because it is the appropriate thing to do. Had the Deputy been here for the past hour and a half he would know this and if he cares to read the transcript, he will have the details as to why the change was made.

The second assertion the Deputy made was that this would have an impact on the grocery trade. I have already responded to questions asked in this regard by several of the other members of the committee.

Deputy N. O’Keeffe

I never mentioned groceries.

Deputy Roche

The Deputy did and I wrote it down. To reiterate the point, this does not affect the grocery trade. The Deputy mentioned the Society of St. Vincent de Paul and Cross Care, organisations who sent delegations to the committee a few weeks ago. We discussed that issue at some length while the Deputy was not here.

He also stated that the development would choke up the centre of the country. We discussed the transport issue at some length, in particular the published data available on transport movements, particularly car movement in and out. Incidentally, I discussed this issue with the Deputy previously. He mentioned it was discussed at a Fianna Fáil parliamentary party meeting, but whether the Deputy was there and heard, I do not know.

Each of the issues the Deputy has raised is an assertion, none of which is supported by fact. I reject the assertion that the change in the guidelines was made to suit somebody rather than logic. I have asked the Deputy previously how he can possibly justify the continual denial of the type of retail outfit the Irish consumers want and need.

I realise other committee members want to get on with the job in hand. However, I have the duty of dealing with baseless assertions. I have answered all the points raised somewhat belatedly by Deputy Ned O'Keeffe and I answered them long before he came into the room.

Deputy N. O’Keeffe

I do not have the same control of the English language as the Minister, but I wish to point out that I arrived late because I had to attend a meeting of the Joint Committee on the Environment and Local Government and could not get here any sooner.

Deputy Morgan

I asked the Minister for an assurance that the regulations would be kept under review as many of us are concerned they will be extended further. We had assurances from his predecessors that the retail guidelines would not be extended, but they have been. What can the Minister say to convince us that this is not an open door or will not be in a few months time? The Minister skipped over that.

Deputy Roche

The Deputy does me an injustice because I did not skip over it. I pointed out how specific are the guidelines and that they are focused specifically on the gateway towns and the integrated area plans, IAPs. I also pointed out that there is specific reference to traffic movements and that they are still required to operate within general planning rules. These are severe constraints.

Deputy Morgan

For now.

Deputy Roche

I am the Minister for now. I also pointed out that the guidelines apply only to durable goods.

Deputy Morgan

For now.

Deputy Roche

We all live for now.

Deputy Morgan

No, we do not live for now and that is the problem. We must have sustainable planning.

Deputy Roche

I cannot foresee what will happen five or ten years down the line. All I can tell the Deputy is that these changes are focused, specific and limiting. They do not provide a basis for the kind of Armageddon scenario that some people suggest they do. They are focused, pro-consumer and the best way to move forward.

Senator Coghlan

Will the Minister tell us whether he ignored or overruled the guidelines?

Deputy Roche

I am sorry I forgot to reply to that question which was asked by Deputy Ned O'Keeffe also. The question has drawn my attention to a comment in an article that appeared in the Sunday Business Post which referred to the advice I got. I read that article and comment with some interest because the article was a little on both sides. I took the advice from the senior officials in my Department. It should be noted that the document referred to was one of a series of documents produced in the Department. I suggest that the Minister takes on board all of the advice available to him and does not necessarily abdicate his right to act as an individual. The most senior officials in my Department recommended the changes that I have made.

Deputy McHugh

Was it the most junior officials who were against it?

Deputy Roche

I do not know where they stand in terms of their ranking within the Department.

Vice-Chairman

We should conclude unless the Minister wants us to continue for another half an hour.

Deputy Roche

I will stay for as long as the Chairman wishes. I would like to answer Deputy McHugh's question.

Vice-Chairman

Most of the questions have been answered.

Deputy Roche

To be fair, that one was not.

Deputy N. O’Keeffe

How many departmental officials differed from the Minister's opinion?

Deputy Roche

They were junior to the people who supported my opinion.

Deputy N. O’Keeffe

How many were there then?

Deputy Roche

I do not know.

Deputy N. O’Keeffe

Were they principal officers, assistant secretaries or Secretaries General?

Deputy Morgan

The former Minister for the Environment, Heritage and Local Government, Deputy Cullen, ignored some of the advice he was given on e-voting.

Deputy Roche

The Deputy is right, Ministers do not always take the advice made available to them. There was no advice made available to me that I should go against the change. Junior officials expressed some views. If the Deputies read the quotations fully, they will see they are far from unequivocal.

Deputy N. O’Keeffe

Will the Minister tell us what status those officials had? Were they principal officers or what?

Deputy Roche

I do not know.

Deputy N. O’Keeffe

Will the Minister ascertain the position for me?

Deputy Roche

I will if the Deputy is interested. I can put in an FOI request and provide the names and their seniority within the Department. There is no problem about that because there is nothing but openness on this side.

Vice-Chairman

The Deputy and Senator can have a private discussion later on this matter.

Deputy Roche

I will be guided by the Chair. I am trying to answer every question. Deputy McHugh asked the pertinent question whether there were some people who took a different view. There were some people in the Department who took a different view, in the same way that councillors or officials would take a different view on any planning issue. However, in the end somebody must make a decision.

Deputy McHugh

Unfortunately, in that particular regard.

Deputy Roche

Absolutely. The Deputy would be the first to agree with me that sometimes when planners put forward a view, it should not be accepted.

Vice-Chairman

I thank the Minister and his officials for participating in this informative meeting.

Deputy Roche

Thank you, Chairman.

The joint committee went into private session at 12.59 p.m. and adjourned at 1.02 p.m. sine die.