Vol. 497 No. 7
6 Mr. Perry asked the Tánaiste and Minister for Enterprise, Trade and Employment the plans, if any, she has to make a submission to the recently appointed planners for the superstore study; and if she will make a statement on the matter. [26099/98]
My Department is represented on the steering committee which was established by the Department of the Environment and Local Government to oversee the examination of all of the planning issues arising in relation to large-scale retail development. The principal tasks remaining for the committee are to liaise with the consultants, monitor progress and ensure the study and draft planning guidelines are presented to it within the agreed deadline.
In these circumstances it was not necessary for my Department to make a submission to the committee. My Department's representation is keeping me informed of progress, particularly in so far as my Department's interests are concerned.
I am disappointed to hear that news.
The Minister should have a major input into this. It is critical that the Department should address all the issues relating to large-scale retail development, to identify in particular the amount and location of supermarket development, including proposed development in excess of 2,000 square metres. Is the Minister aware, for instance, that Tesco in the UK is getting £22 per square foot and that here it is £11 per square foot, which shows the huge capacity that is here? There is planned investment of £100 million by Tesco here. Is the Minister aware that below-cost selling, which was banned under the 1987 directive which prevented "hello money" being operated, could be introduced as a trade-off for the reduction in planning size? Tesco has stated that it will take only three years to bring its Irish supply chain into line with the UK model, and the UK model is certainly worth studying. The Minister should have a major input into this study because it has serious implications for the creation of jobs. She should identify in particular the areas for job creation. There is a huge risk of jobs being lost. In the context of a related question, own brand labelling, the Minister has a huge role. I would ask her to look at this in a more serious manner.
The Deputy misunderstands. My Department is represented on the steering committee which assessed the various consultancies that made a submission to carry out the study under the terms of reference which essentially have to do with planning. On foot of the recommendations planning guidelines will be introduced if necessary.
My responsibilities in this area clearly relate to employment, to competition and to the rights of consumers. The Minister of State, Deputy Kitt, and I have responsibility for consumer protection, for employment and for competition. These are the issues that concern me. Matters to do with planning regulations clearly are the responsibility of a different Minister. However, under the existing legislation the Minister for the Environment and Local Government does have the power to restrict the scale and development of superstores or shopping facilities of this kind. That is what he has done pending the outcome of this consultancy. When the consultancy report is available it will be referred to the steering committee. At that point I intend to make known my views about the matters that concern me.
However, the terms of reference relate to planning, environmental issues, traffic and the viability of centres from the point of view of towns and urban renewal. These issues come within the transport and physical planning responsibilities of the Department of the Environment and Local Government. Clearly, planning laws cannot be used to deal with consumer or competition issues. If and when those issues arise, they must be dealt with through appropriate legislation either in the context of competition law or consumers' rights. However, the planning legislation can be used to restrict largescale developments that have huge environmental, planning, transport and car parking implications. Deputy Perry is aware of these implications.
There are different interests involved. In some places people want more choice and more branded products while in others they want to maintain the status quo of the local shop. We must try to resolve those issues without interfering with competition or the rights of consumers. The most effective way to do that is to await the recommendations on planning and if they have implications for competition, consumers or employment, it will be my responsibility at that stage to take whatever action is necessary.
Does the Minister honestly expect Members to believe she is so unaware of the implications of what the planning group is examining that she does not believe her Department should have an input at this stage, before any decisions are made about planning? Her Department is responsible for enterprise, trade and employment. If this committee makes a decision about planning regulations, it might be too late for an input from her Department.
Will the Minister assure the House that she will tell her representative on this committee to take a more hands on and proactive approach? If the decision on planning is made, there will not be an opportunity to do anything about the wider implications of superstores. The horse will already have bolted. Is the Minister not aware that her Department made the decision to allow Tesco, the first of the superstore companies to locate in Ireland, to trade here? Is she aware that there are still many complaints about the fact that Irish jobs will be lost, Irish products are being removed from the shelves and that Tesco is not living up to the commitments it gave under EU regulations when it first arrived in Ireland? The Minister must assure me that she has not lost the run of herself and forgotten what her Department is supposed to be doing.
I am aware that the then Minister, Deputy Richard Bruton, approved the Tesco takeover of Quinnsworth.
That is the Department.
Not the Department, the Minister. The Minister made the decision. Officials do not make these decisions. Their powers are vested——
Do not disown it now.
I am not disowning it. However, the Minister, not the Department, made the decision. He made the decision on the basis of the considerations I mentioned earlier.
My Department is involved in the steering group but this is a consultancy of experts in planning, transport and roads. My Department does not have such expertise. The experts will carry out the study and will report to the steering committee on which my Department is represented. After that it will be a matter for political decision. The consultants will not make decisions; they will make recommendations.
It is an international consultancy with widespread experience abroad and it has been asked to carry out a study within seven terms of reference. The next meeting between the steering committee and the consultants will take place on 15 December. When the study is completed it will be discussed by the steering committee. I will be involved at that stage because of my particular responsibility. However, planning, transport and car parks are not the responsibility of my Department and we do not have expertise in that area.
While I sympathise with some of my colleagues' comments, I am glad the Minister will have direct involvement. A number of recent surveys compared prices in retail multiple stores in Britain with those in countries such as France and Belgium. The prices in France and Belgium were a great deal lower than British prices while in the United States they were even lower. Retail prices in this country appear to be similar to those in Britain which, in many cases, appear to indicate outrageous profiteering.
From a competition point of view, is it constitutional to deem that stores can only be, for example, 3,000 square metres? Is there not an onus on the Minister to consider competition and to ensure there is the maximum degree of competition? When the current supermarkets developed about 30 years ago, they wiped out many local shops but there was movement on prices. It is the Minister's responsibility to consider the retail pricing system from a competitive point of view and particularly to ensure that Irish consumers get the best possible deal and are not ripped off.
Clearly, we wish to ensure that Irish consumers get a wide choice of high quality products at competitive prices. The intense competition in the supermarket sector in the Republic has helped to keep inflation down.
This issue is not so simple that it can be dealt with by restricting it to floor area. Floor area is one of the elements being discussed in the context of trying to define how one can tax passive income. One of the suggestions made by many people is to define it in terms of floor area. That would encompass retail banks and other such institutions which nobody intended should benefit from 12.5 per cent tax. Clearly they must benefit, because it is a standard rate, unless we can define passive income in these terms.
However, there are enormous difficulties in taking that route. Does it, for example, relate only to floor area that is available to the public or where shopping occurs? Does it include warehousing where goods are stored or cafeterias or other such facilities? Can one have a slight gap between the clothing or hardware sections and the supermarket section? There are huge difficulties in defining this according to floor area.
Every reasonable person wants competition and choice. However, we do not want extremely large superstores which simply put others out of business or destroy the fabric of some of our medium sized or small towns. One of the main issues is how to balance competition and consumer rights with the socio-economic issues that arise. When the consultants examine it from a planning, transport, environmental and urban renewal point of view, it might be useful to refer the matter to a committee of this House. The issues are extremely complex.
Deputy Perry has one perspective while others have a different one. Some of the larger units in this city, such as Blanchardstown, Quarryvale, The Square in Tallaght and Cornelscourt, are among the busiest and most popular with consumers. It is not always easy to balance the various conflicts in this area. The Minister for the Environment and Local Government's decision to take the planning route is appropriate. When Deputy Dempsey made his decision there were about 20 applications for large superstore developments throughout the country. It would have been premature for the local authorities to have made decisions on them before the implications could be discussed.
Is the Minister aware that the local authorities in Cork are objecting to each other with regard to superstore development? Did she say she does not favour superstores or did I hear her correctly? Has her Department carried out any studies on retail capacity, long-term consumer interest or the impact on long-term competitiveness of proposed superstore development?
Such a study would be useful. If one accepted the British definition of superstores, only one store would be necessary for our entire population. Some of these stores have a population catchment of up to five million people. Clearly, I am not in favour of only one, two or three such stores around the country. However, I am in favour of choice, variety, keeping inflation down and balancing the factors I mentioned earlier in the most realistic way possible.
It probably would be a good idea to carry out such a study. A study of the retail sector was carried out in the past and it might be a good idea to update it, in the context of the developments that are now occurring.
Will the Minister agree it is important to estimate the amount of retail development needed in Ireland during the next ten years? Tesco's projected turnover for next year is £1.73 billion. Given that £11 per square foot equals 25 per cent of the retail market, if it was increased to £16.50 per square foot this would mean an increase of up to 36 per cent of the Irish retail market. The amount of floor space is adequate to serve and provide choice, variety and competitiveness as it stands.
To be fair, my predecessor negotiated a deal with Tesco on behalf of Irish suppliers which it has implemented and we have been able to build on it. Some Irish suppliers have got into the wider international Tesco chain. Sometimes one loses in one area and gains in another. One of the terms of reference of the consultancy study will be what is needed from a planning, environmental and urban renewal point of view. The best way to proceed is to await the outcome of that consultancy review and, following publication, to have consultations on its recommendations with all interested parties, including Deputy Perry.
