Joe McHugh (Donegal North East, Fine Gael)

I welcome the Minister for Finance, Deputy Lenihan, to the House. I welcome the opportunity to speak on the motion and I wish to discuss one aspect in which we may move forward. Those of us on this side of the House are proactive. We provide ideas and we fulfil our national obligation in doing so. As far as banking is concerned, we are in an era which is totally unscripted. All manuals can be burned and all principles have been undermined. The underlying principle for banking and credit extension to small businesses was that the banks had a monopoly on wisdom. There has been intellectual snobbery whereby it was assumed the man in the swivel chair knew more than the man in the wooden chair. The notion that the businessman would approach his local bank manager with his cap in his hand seeking a loan or an extension to an overdraft was a matter of course. Recession 2009 offers us a chance to change this notion.

I welcome the proposals from Deputy Richard Bruton seeking a fresh start, which is where we must look for the answers. It offers us a chance to replace the existing model with a very different one. The tragic collapse of the economy and the banking system demonstrates that the long-standing guiding principle does not work. The thinking which landed us in this mess will not get us out of it. We must engage at two levels. We must engage with those in the financial sector and with those under pressure who are concerned at what will happen next week, rather than next month or in six months time.

There is talk of Ireland reaching out to Europe. The thinking within the financial institutions at present is that a plan should be in place. At present there is no such plan. We must have a plan to anticipate what will occur. Events are changing rapidly in the financial sector. In the small and medium sized enterprise, SME, sector there is frustration because of the lack of credit flowing. There was an advertisement two weeks ago in broadsheet newspapers from a bank, indicating it wished to get credit moving again, to lend money to SMEs and to issue mortgages. However, this is still not taking place because of a vacuum between the banking and SME sectors. We must reshape the current model and the way in which we bank. It is not a question of the man in the swivel chair holding a monopoly on wisdom and the man on the wooden chair with a business idea. There is a vacuum in that interface. This is where the Government has an opportunity. The Minister is aware of enterprise boards throughout the length and breadth of the country and different agencies which can be utilised in the interface between businesses and the banking sector. We are at a crossroads in terms of the way in which to get things moving.

My clinics are attended by young and old people. They are attended by people who wish to continue with their business but who still cannot access credit. There must be change in this regard. Those in the SME sector will drive us out of the recession and will create jobs at local level. People from my constituency contact me on a daily basis with business ideas. However, the Minister for Finance and the Governments of the past ten years have stifled and crippled small business through red tape and bureaucracy. We must work to improve matters on a cross-departmental level.

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