One week on from the Government's decision to remove the statutory limit on the size of superstores selling durable goods in certain designated areas and the controversy shows no sign of abating.
Writing in this newspaper today, Mr Jim Goulding, the Secretary General of the Irish Hardware and Building Materials Association, argues trenchantly that the change is unnecessary and may have damaging consequences.
The walls of the Cabinet office could be papered with a succession of expert reports advocating the introduction of competition as a non-inflationary way to sustain economic growth by improving efficiency and market performance. In spite of that, progress in breaking down anti-competitive barriers has been painfully slow in the face of powerful commercial and professional interests. The Government's decision should be welcomed as a positive, if limited, development.
The Minister for the Environment, Mr Roche has opted for a legislative half-loaf, rather than no bread at all. Influential bodies campaigned strenuously against any lifting of the 6,000 square metre cap. So, to counter much of the opposition, Mr Roche excluded the sale of food from his proposals and limited them to warehouses selling durable goods in gateway cities identified by the National Spatial Strategy. The giant Swedish furniture company, IKEA, we were told, would locate in Northern Ireland if not accommodated in Dublin.
Four years ago, the OECD urged the Government to embark on widespread regulatory reform in order to improve competitiveness and raise real incomes. It suggested an end to the ban on below-cost-selling in the grocery trade; advocated a programme of deregulation across the public and private sectors; and urged change in the professions. Moving from labour as a source of growth to a more productive use of resources was, the OECD said, the real challenge. It proposed the Government should embark on the deep structural reforms. The overall response, so far, has been inadequate.
The decision to provide for an IKEA superstore in Dublin by 2006 was relatively easy for the Government, given the established trend of Irish customers going to Britain to buy this type of furniture. And its loss to Northern Ireland might have become a subliminal election issue. Still, it is a step in the right direction and Mr Roche should be commended for it. The Minister should now prepare to open up competition in other areas of the retail trade while being careful to ensure that such measures do not, in the long term, actually result in there being less competition.