Simon Coveney (Cork South Central, Fine Gael)

I commend the Labour Party for tabling this excellent motion.

Protecting jobs is the key issue facing the Government. Up to 10,000 people a month are losing their jobs while next year 100,000 people will lose employment. Job protection and job creation must be central to all the Government's decision-making, outside the provision of front line services. Small businesses are the main driver of our economy. Across the country, up to 1.2 million people have jobs in businesses employing less than 50 which when combined come to 56% of the entire workforce.

Many of these businesses are facing a lethal cocktail of plummeting consumer confidence and less public spending, less business-to-business spending, below-cost selling to generate cash flow and a credit famine from banks on overdraft facilities and lending. While short-term cash flow for otherwise healthy businesses is a problem, they cannot get cash or credit from their banks to carry them through a lean period. In recent weeks more than half of small businesses have been refused access to finance or an extension of existing credit lines. Of the 46% which were successful, nearly 40% could not meet the stringent conditions attached by their banks to secure funds. Most of these businesses have been in existence for ten to 20 years or more.

Last night I spoke to a retailer from a medium-sized clothes shop in a normally busy shopping centre, who explained in desperation that his operating overdraft facility had been cut by his bank from €70,000 to €7,000. These are impossible trading conditions in which to survive. The sad truth is that many businesses cannot and will not survive for much longer if conditions do not change.

The Government has a responsibility to act. As is becoming commonplace in the face of crisis, the Government commends itself for past actions no longer relevant to current challenges while the Opposition brings forward new ideas and initiatives to meet these challenges. While the Government still bleats on about how successful its bank guarantee scheme has been in saving the banking sector, the problems needing solutions have moved on.

Capitalisation of banks, from appropriate sources, and a change of approach from banks towards releasing funds to small businesses in need of capital are required immediately. This motion calls for definitive action from Government in a way that makes sense.

However, further measures can be taken at local level to assist small businesses. This evening I call on all local authorities, which have not yet agreed budgets, to freeze all commercial rates for next year.

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