Noel O'Flynn (Cork North Central, Fianna Fail)

I speak tonight as one of the thousands of small and medium-size enterprises who need a voice in this Chamber. I also speak for the people who have mortgages and personal loans but who, because of this downturn in the economy and because they may have lost their jobs, need our help in dealing with the financial institutions. I speak tonight not only as a Deputy but as a businessman with a small business who started business on 1 April 1985, 25 years ago. The date is April fool's day and people said I was mad to begin on that date but I was not mad because it worked out well. It was in the middle of a recession and over the years my business has managed to do as well as possible.

We are still in business but the past two years have been difficult for any business in the SME sector. The motor industry business is down between 30% and 60% in many places with many closures and loss of jobs. Small and medium-sized enterprises need finance and working capital. We need confidence in business to trade, to purchase, to support credit and to trade in a safe environment. The difference in 1985 was that the banks were not broke and had money to lend but there was a world-wide recession. This confidence has not been evident in the country in the past two years, due to the lack of capital from the financial and banking systems.

I welcome the Government's decision today that AIB and Bank of Ireland will make €3 billion each available to the SME sector to kick-start economic activity. This will be monitored by an independent body with an appeals process to allow those unable to obtain finance to appeal that decision. No one is asking the banks to fund or lend to businesses which are not sustainable or profitable but we ask for fair play. Banks lend money, it is their business, their trade. They make money from this activity. Businesses make goods and supply goods and services, that is their business. They make money to reinvest and that is the nature of their business. The banks were recklessly lending money. Now they need our help but they have not been lending money. They are reducing overdrafts for business and personal accounts and putting pressure on people to pay their outstanding balances, driving some people to depression and even worse. They are putting sound, profitable businesses at risk by starving them of working capital. These businesses did not contribute to the banking crisis and to breaking the banks.

Those in the banks who loaned recklessly for land and buildings must now be removed from our banking systems. The Minister has started the job and he should finish it. Loans, charges and account costs must not be prohibitive by means of indirect charges and increases. Stealth charges have been introduced and charges imposed on direct debits. I could go on all night about this issue. If we do not monitor and challenge the banks and ensure the capital they are receiving and the bonds they will cash for the loans going to NAMA are used for productive lending to the business and personal borrowers, they will go back to their old ways of banking. They must be forced to concentrate on lending to get this economy back on its feet.

The bank guarantee is worth €1 billion to the Exchequer this year. The taxpayer must know that this money will be available this year. We must ensure that when AIB and Bank of Ireland shares are sold in years to come, the State will make a profit. Unfortunately, I agree with the Opposition. The fate of Anglo Irish Bank, EBS and Irish Nationwide, will cost the State money. The alternative is liquidation which would cost the State more. The investigations in the banking sector must be concluded and the Oireachtas investigation must start. Those responsible for wrong-doing must be brought to justice and punished.

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