Willie Penrose (Longford-Westmeath, Labour)

We in the Labour Party are delighted to be in a position to support this Bill which has been brought forward by Deputy Leo Varadkar on behalf of Fine Gael. We compliment him and his colleagues on the Bill.

The aim of the small claims court procedure is to provide an inexpensive, fast and easy method for consumers to resolve disputes, without the need to go into significant legal complexities. The small claims court also avoids the jargon-laden atmosphere involved in having legal people as part of the process. It is a lawyer-free zone and is a mediation service that avoids the adversarial aspects of matters and enables parties to reach a compromise without resort to litigation. It also avoids the significant costs associated with that. Therefore, the small claims court system is very important, particularly for small businesses that wish to recover small amounts. The extension of jurisdiction of the court to cover amounts up to €3,000 is sensible. The previous limit was set some time ago.

I agree the amount should be examined. We do not want to throw out the baby with the bathwater. When something works well, we should try to ensure it is refined and does not expand into something that will overrun the current system that works so efficiently and effectively. If this Bill is enacted, the system will need additional resources, because it is difficult to see how a District Court clerk would be in a position to facilitate all of the likely or potential claims that might be encompassed by the legislation.

Small businesses are very important in the context of our economy. Therefore, we must pay them particular attention and focus on their needs in order to ensure their survival. The Labour Party has put forward a number of proposals in this regard, particularly on the issue of prompt payments. I am glad the Minister of State, Deputy Calleary, has focused on that and has suggested reducing the time period for payments to within 15 days.

Another area of importance is access to public contracts for SMEs. They have lost out in this area. Deputy Calleary was right to refer to the Irish Print & Packaging Forum. It was a scandal the people in the situation in question were deprived of participation. A significant number of jobs were lost as a result.

Many small businesses that employ between six and eight people find the going very difficult. Some of their difficulties may be caused not just as a result of the current situation but because they may have got into arrears with the Revenue Commissioners. Contact should be made with the chairperson of the Revenue Commissioners in this regard. I know the Revenue Commissioners have always extended the hand of friendship and empathy, as long as people do not deny they owe moneys such as PAYE, PRSI and VAT. However, where a sum such as €25,000 is owed, the Revenue Commissioners should set in place an arrangement or scheme for the discharge of that payment. The heavy hand should not come down and force businesses to close.

I know of a business that owes such a sum and believes it should be given the opportunity to pay a certain sum a month rather than close it down. If such a business is closed down, we will have a further six people out of work, draining €20,000 a year, the equivalent of €120,000 net from the Exchequer. It would be better to allow such businesses continue in operation. The man who owns that business told me that at one time he was receiving between 16 and 18 inquiries a week, but now he is lucky if he gets ten a month and he is competing with a far bigger pool. However, he is trying to keep the business operating.

The Revenue is lenient when people come forward and I am aware it is independent in its function. However, it is important the Minister ensures that small businesses are given the opportunity to survive and are not closed down. Closing them down just passes the problem further down the line with the result that the Exchequer and, ultimately, the people must pay more. It is important that this is considered. As they say in my part of the country, a bit of a loaf is better than no bread. It is better for Revenue to keep getting small payments to discharge the bill and to keep a business up and running. This is very important.

The Minister of State is well aware that we did a tour of the commuter belts where we found that small businesses are very important. There are approximately 250,000 small businesses throughout the State creating 750,000 jobs. However, people seem to have forgotten that we are losing 4,000 retail jobs a month. One of the reasons for this is the increase in VAT. I, along with Deputies Morgan and Varadkar did a tour to the North where we saw the impact of this. The extent of the differential is 6.5%, which makes it virtually impossible for our businesses to compete. I acknowledge VAT here increased by only 0.5%, but this had a psychological impact, particularly when Britain reduced its VAT rate by 2%. Therefore, there is a difference of 2.5% in net terms on 6.5%.

The VAT increase was a foolish move. I know money was needed. I am not a fool and am aware the Government is trying to improve the situation and get money into the Exchequer. However, the impact of the change is that we have had an outflow of money from the Exchequer. Jobs are being lost as a result. Between 4,000 to 4,500 retail jobs are being lost every month. These are not the highest paying jobs in the country, but they are jobs that sustain rural communities and enable people to live in these areas. It is important that whatever the Government does, it considers the situation in a business-friendly way. It must business-proof the impact of every decision it makes from now on.

Many businesses that are members of the Small Firms Association or ISME have had varied experiences in their dealings with the banks. I want to lay the situation on the line for the banks. They have been bailed out with billions of euro of taxpayers' money that has gone to recapitalise them. Ordinary people wonder where this money has gone. They wonder whether the banks are looking after the interests of their shareholders first or trying to make up for their irresponsible lending. At a time when they should be lending support to existing and new businesses, they are not willing to do so. All the signs are, notwithstanding their assurances to the contrary, that they are unwilling to lend to businesses. It seems they are hoarding the capital in order to deal with the crisis caused by their irresponsible lending.

The money given to the banks is not filtering down to small businesses that are crucial to the economic well-being of the country, particularly businesses in rural Ireland. Many entrepreneurs and innovators throughout the country have been stymied and cannot get businesses up an running. The Labour Party suggests that the Anglo Irish Bank should be used for this purpose. It is a national bank and we own it. Let it invest some of the money in small businesses and let it start to do something. We must ensure the money filters down to the people in need. There was a €30 billion fund, but the Minister of State mentioned that approximately €300 million was available. We need more than that to get small businesses off the ground. Appropriate and worthwhile start-up grants should be made available to unemployed people who wish to start up new businesses. The county enterprise boards do not meet this need. I acknowledge the Minister of State's expertise in the area of grants.

We need to go back to the old system of trying to help people. What is wrong with diverting social welfare money into this area? A person with an idea for a business should have his or her grant topped up with a social welfare payment. That payment would then subsidise a job. No one wants to be unemployed. It is soul destroying. We no longer have the safety valve of emigration. People used emigrate to England or Australia and, sadly, never come back. Now we do not even have that safety valve.

Approximately €700 million is allocated to the national development plan. Some 40,000 children are languishing in prefabricated classrooms. The Department of Education and Science takes years to even approve a new school, much less build one. Why not prioritise school buildings? Thousands of workers could be employed on these projects. Contractors are vying to compete and would submit cheaper tenders. Schools could be built cheaply in the current climate. The Government can put billions of euro into banks. Why not put one billion into prioritising projects which are essential to the well-being of the country? I have no doubt the economy will recover and the sooner it does the better. It is in the national interest that it does. It is important that educational infrastructure be put in place to promote a quicker economic recovery.

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