Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

Deputy Tóibín makes a general point and says that he does not like EU oversight. We are interdependent and we have agreed that in certain areas of policy, because of that interdependence, we share information and accept recommendations at a general level and seek to implement them. This is a process from which we gain as well as it involving our being under scrutiny. I have no problem with scrutiny either from Oireachtas or from the EU. The EU adds value. It is able to look across other countries. From a micro-examination of what we are doing, it sees trends and patterns, and that is helpful. Before the Government came into office, and particularly before Joan Burton came to the Department of Social Protection, the OECD had said for many years that we did not have sufficient labour market activation within our welfare system. It said that we had separated labour market activation from the payment system, which was inappropriate, and that other countries which were successful in this area had joined them together. She has joined them together. It is as a result of international engagement that that has been seen as a correct way to go. I welcome this process. As in all these matters, there is some pressure from member states. That is part of the arrangement that we have signed up to and it is helpful.

I accept that problems continue to be faced by SMEs in accessing finance. Progress is being made in some areas. The latest Red C survey on access to finance shows that refusal rates for SMEs have come down from 30% to 19%, so there has been a significant improvement in the ability of small and medium enterprises to have applications for finance accepted by the banking system, but, like Deputy Tóibín, I would like to see the amount of new lending to SMEs growing. It is pretty much static at the €2 billion per year. With a number of sectors now growing, we expect to see more growth in funding to SMEs. That is certainly a major subject in my engagement with the banks. We are also putting other, non-bank sources into the marketplace to try to complement that funding. No matter how effective we are, the long-term business of banks has to be in funding SMEs. That is their only future in Ireland. They need to learn those skills and develop the engagement level with their client base to understand their needs.

The Central Bank monitors regularly how banks deal with SMEs that are in distress. It has set targets for the banks, and the banks have engaged in that process. Considerable progress has been made on distressed SMEs reaching restructuring agreements with the banking system. I accept that the banks, despite having cut back on their own staff and costs, are seeking to move to break-even and profit positions. In the long-term, we need a banking system that is able to wash its face. That has resulted in pressure on costs. We are clearly in a bind between our ambition to have an efficient banking system that can survive on its own two feet - with the taxpayer, who has put in a lot of money to support it, having the prospect of getting that back - and the fair handling of customers. We continue to try to get that balance right by having codes of practice in place.

To my knowledge, the issue of tax has not come up in this process. The process has looked at the established areas of engagement between the Troika and us. As members of the committee know, those have not involved tax policy. The engagement is around the areas where we made undertakings in relation to reform agendas. It is a continuation of that reform agenda.

Deputy Tóibín raised the wider issue of how one builds competitive advantage. I would say from my experience that this is a war for talent; skills is the key. We achieve competitive advantage through the quality of the skills base that we grow and the appropriateness of those skills. I have worked with the Minister for Education and Skills, Deputy Ruairi Quinn to double - and we are now stepping up our ambition - the number of ICT graduates. That is why we have put in place the springboard to develop those skills bases. It is why we are looking at big data as the next wave where a big skills edge can be gained for countries which are early movers. It is about looking at clusters and sectors where we can get early-mover advantage. There is range of things that one needs to develop, but skills are often the top of the agenda - there are others of course. There are many areas where we can seek to develop our competitive advantage. The meat and drink of the Action Plan for Jobs is seeking to identify and build out those sectors over time by gradual policy changes and innovations.

In this regard research and development, which is the area covered by the Minister of State, Deputy Sherlock, is crucial.

In broad terms, while it does not deal with tax, it deals with fiscal consolidation. One of the recommendations is to support fiscal consolidation. It states consideration should be given to raising revenues through broadening the tax base but I do not think that is what the Deputy was referring to. He was referring to corporate tax.