Gavan Reilly's Portfolio writings, ramblings, mumblings

Budget 2010: Publicans foresee bleak 2010 for ‘keeping High Street alive’

PUBLICANS in Kilkenny have welcomed the moves to cut excise duty on alcohol proposed in last week’s Budget, but believe that cuts in social welfare and pay for public servants mean tough times ahead for high street traders.

Pat Crotty, a former Fine Gael member of Kilkenny Borough Council and proprietor of Paris Texas Café and Bar on High Street in the city, reacted with mixed emotions the various measures outlined in the Budget delivered by Minister for Finance, Brian Lenihan, last week.

“I suppose if you accept the initial premise of needing to save €4bn, then they did it, I would have problems with the way they did it,” said Crotty, a former chairperson of the Borough Council. “But if you take €4bn out of the economy, the disposable end of it simply won’t be there next year. It’s not just publicans – every retailer who depends on people coming in their door to spend money, simply won’t have it.”

Crotty welcomed the Government’s move to cut 12c of duty from the price of a pint, commenting that “anything that is a help has to be welcomed… If it gives people a sense that they can get value, it might give them the confidence to come out and enjoy themselves the odd time.”

However, he expressed disappointment that the Budget did not deal with what he called the “disparity” of operating costs incurred by pubs when compared to rival off-licences.

“The difference to me is that the cost of the licence [to sell alcohol] I pay to the Government is based on my turnover – whereas the off-licence pays a flat fee, while they’re the ones making the higher turnover. It’s an extraordinarily unfair advantage.

“None of us have a problem obeying the law,” Crotty added. “It’s an unfair advantage that we can’t fix, and the Government have to, but they simply don’t have the mind to do it.”

Asked if there were other measures he felt the Budget could have taken to rescue the economy, Crotty affirmed the need for the Government to encourage great footfall on the streets every day.

“One thing I see missing from the Budget is a stimulus. There are two levels of stimulus – one for the customer and one for business – but there’s been nothing extraordinary done to cause people to have confidence.

“If the Minister had brought VAT down by six per cent to 15, to compete with the UK, people might have seen value and thought they could afford to shop in the local town or city, and build confidence. I know a six per cent cut would have cost €6bn, but we’re at the point of diminishing returns. The small cut will be a boost for December, but I hate to think how the situation might look at the end of January or February.”

Crotty also argued the need for the Government to stimulate the borrowing power of small businesses. “I would have liked to see the Government do what’s being done in other countries, where it acts as a part-guarantor for new business. It’s a no-brainer. It’s done in other countries and is accepted as a way to stimulate business growth. If banks are prudent, in terms of who they give loans to, there’s no risk and it costs nothing. The Government would then be a beneficiary of the growth that would be caused.”

Crotty concluded by conceding that no matter what measures may have been proposed in the budget, cutting €4bn from the public purse would inevitably impact on the retail and hospitality sectors. The former councillor painted a bleak picture for local business: “A lot of people in Kilkenny are in the public service and will lose money. Many more are in receipt of social welfare, and they too will lose money. Money taken out of circulation means less coming in the door.

“If there’s less money in pockets, it means there’s less in the shops, which means a bleak 2010 in terms of keeping the High Street alive.”