Dáil Éireann Debate, Thursday - 2 December 2010
3 Deputy John Perry asked the Minister for Enterprise, Trade and Innovation the additional supports for micro and small enterprises contained in the Government’s four year national recovery plan; the progress made in implementing commitments made at the Small Firms Association annual conference; and if he will make a statement on the matter. [45799/10]
View answerThere are a range of actions included in the national recovery plan aimed at improving Ireland's cost competitiveness and removing barriers to employment. These particular actions are not aimed at firms of any particular size, in any particular sector or particular ownership. They are aimed at improving the overall business environment in this country so that all firms can survive and grow, including Irish SMEs and entrepreneurs.
Specific actions have been included to stimulate growth, in particular in labour intensive sectors including agrifood, tourism and retail. I would like to highlight a number of actions of particular benefit to SMEs. The 15 day prompt payment rule will be extended beyond Departments to the wider public sector in order to assist the cash-flow of SMEs.
In order to encourage small business development, the potential for providing access to vacant or under-utilised public property for entrepreneurs or business start-ups to use as incubation centres will be investigated. The business expansion scheme will, subject to European Commission approval, be overhauled and improved into a new and better-focused business investments targeting employment scheme, BITES. The aim of the review is to make it less administratively complex for business. In addition, capital investment for the enterprise agencies has been prioritised with €2.2 billion being allocated to support indigenous firms, win foreign direct investment and support research, development and innovation.
The Deputy's question also refers to commitments I made at the Small Firms Association annual conference. I spoke about a number of issues at the conference. I gave an assurance that measures to further reduce costs to business would feature alongside our policies to reduce the deficit and drive public sector reform. My commitment is reflected in the content of the national recovery plan.
I am ensuring changes that deliver real benefits to business are made. The Companies Registration Office e-filing and e-signature facility has already delivered €29 million savings for companies and has the potential to offer further savings. In addition, the new guidelines from the ODCE on company headed paper will save companies more than €13.5 million in costs. My officials are working with their colleagues in the Department of Finance, the credit review office, Enterprise Ireland and Forfás to address access to credit issues for viable SMEs. A working group has been established to look at a number of possible actions including options for a loan guarantee scheme. The group is due to meet again shortly. I am also finalising proposals for the restructuring of the county and city enterprise boards and intend to bring these to Government shortly.
The Minister has failed to deliver on the commitment on the loan guarantee scheme in September. In light of the fact that many jobs are being lost in small companies while job retention and job creation is at risk, in light of the State ownership of the financial institutions within the State, has the Minister failed to deliver credit to small companies that are closing down as a result of the lack of cash from banks, regardless of the banking guarantee scheme the Minister claimed in September would be introduced?
It is a fair question and I am happy to pinpoint the recapitalisation of the banks. Part and parcel of the recapitalisation was a commitment that Bank of Ireland and AIB would provide €12 billion over a two-year period from 2010 to 2011. That fund was put in place. The Ministers of State and I conducted a roadshow because we wanted to point out that the banks were not dealing with SMEs in an equitable or logical fashion. After the roadshow, we met senior and middle management in the banks and impressed upon them the need to ensure this was put in place. We also charged Mr. John Trethowan with measuring the performance of the banks to see if they were giving out loans. Interestingly, two weeks ago Mr. Trethowan produced his second report. He said he was now satisfied there was a significant level of credit made available to the sector. I do not walk away from the idea that we may need a type of loan guarantee. We have considered particular sectors, such as the ICT and export sectors, that may require assistance. Mr. Trethowan agreed with us and Department of Finance officials indicated there may be a case for a limited guarantee. This may amount to 4% of the totality of credit available to SMEs. We are working on this and we expect a further meeting with Mr. Trethowan over the next two weeks. Over the past number of weeks, with the national recovery plan and the budget, it was not possible to arrange a meeting but it is our intention to have further meetings with him to make progress on this.
I have regard for the Minister's intention for small businesses. Regarding the commitment of the banks and the €12 billion fund, is it not the case that the banks do not have the money in light of the revelations of the past number of weeks? While they talk the talk and they may go on the roadshow, this concerns putting money into viable businesses that can retain jobs. The banks issue many caveats on loans. I know the Minister's motivation with regard to enterprise boards and his plans for rationalisation and change, which I welcome. Being in business, I know the difficulties for so many people who depend on suppliers to bankroll overdrafts. Overdrafts are being withdrawn. I got feedback from the roadshow but on the ground, it is not happening.
I note the point made by Deputy Perry about the banks and the information they provide about the level of loans to SMEs. Mr. Trethowan is an experienced banker and a former chief executive who knows banking business. The banks make quarterly returns to Mr. Trethowan. I can only depend on the intelligence of this man, who I met with on several occasions and with whom I am absolutely impressed in respect of integrity and professionalism. I am satisfied when he says matters have improved over the past six months. What applied six months ago no longer applies. There are businesses that overextended, became involved in development and purchased property. They have a cash flow problem and the reins have tightened in terms of credit. That will make a difference to businesses but he is satisfied viable businesses can have recourse to credit. The number of complaints to our offices reflects the fact that there is a significant improvement.
