Arthur Morgan (Louth, Sinn Fein)

I endorse the concept of the Labour Party motion, and I will address the Sinn Féin amendment in detail in a few moments, after addressing the general issue of this evening's debate.

There is no doubt the banks are playing no role in funding SMEs and creating a flow of credit to businesses. I am sure other Members of the House are no different from me in that they are receiving representation after representation, in stories and anecdotes, about the difficulties faced by small businesses - in many cases, two or four person operations - in staying afloat. When we consider the mainstream banks we find they are constipated with corruption in the higher echelons of the senior executives, which is most unfortunate. Even when talking to the clerks and tellers who deal with the public, one finds they are embarrassed about what has been going on. I hope the public can distinguish between these two sets of people when considering what has happened in the banks. The people at the coalface cannot take abuse from the public, as was happening not too long ago.

It is critical that we find a mechanism for ensuring that businesses receive funding. Jobs are being lost and we must establish something quickly. I am not convinced for one moment that the Government's measures, token as they are, will do anything to prevent the haemorrhaging of these jobs. I was at an ISME conference in 2008 at which speaker after speaker described the near impossibility of obtaining funding. This was two years ago, and the situation certainly has not improved in all this time. What this demonstrates is that all through the period of the economic and banking crisis, the Government has sat there and recapitalised the banks without dealing with the core issue. The banks simply do not have finance to hand out.

I spoke to a constituent this morning - a person with a small manufacturing business - who had proposed to increase his workforce from the current eight to 16, but is enduring a nightmare in trying to obtain funding from the banks. Even though they accept that his business is viable and his profitability is solid - although, like everyone else's, it is down - they are still making it almost impossible for him to obtain money. Is it any wonder this is the case, when we consider that the banks have lost their capacity to evaluate customers coming in? The Government has authorised Enterprise Ireland officials to go into the banks and sit with their staff, because they have some skills in this regard from evaluating companies for grant purposes. They have experience in evaluating the viability of businesses and it was a good move on the part of the Government to send those officials to give the staff the benefit of their experience.

Let us think about this for a moment. Enterprise Ireland, a State agency, is sending in people to train bankers in banking. It beggars belief that we have come to this. A State agency which technically has nothing whatsoever to do with banking is sending in officials to try to retrain bankers in the core fundamentals of their work. This says much about the position we are in as a country. It is most unfortunate.

I agree with about 90% of the Labour Party motion. However, I do not think it is necessary for us to start from scratch to build a new strategic investment bank - bricks, mortar and all - and to acquire the whole business. The State has put considerable amounts of money into Allied Irish Banks up to this point and it is clear further recapitalisation will be required. It would be much simpler to nationalise the bank - it is almost there anyway. We should put it out of its misery and bring it over the threshold. AIB has a large infrastructure, with at least one branch in every medium-sized town in Ireland and two in many of the bigger towns, and very good coverage in the cities. It would be considerably more cost-effective to utilise that resource, given that we are to own it shortly anyhow - we virtually own it at the moment. It would represent a rescue of a bank that is on the brink and that everybody knows is in pain. If it were an animal one would do the decent thing and put it down. That would be a better approach. However, I entirely agree with the principle of the Labour Party motion.

My party has been saying for 20 years now that we need a State bank. If we had had a State bank in the past 20 years - particularly in the past four or five years - we would not be in the mess we are now, or at least not to the same extent, in terms of the banking system or the economy. One would expect, and we could ensure, that a State bank would not participate in the messing in which the other banks were engaged. There would be a standard of decency there. There would not be any need to retrain bankers in the basic fundamentals of banking, and they would have been able to conduct their business honestly and fairly. Of course, had there been a State bank it would have been criticised from on high for not performing efficiently, because it would not have been able to keep up with the Fingletons and the Fitzpatricks. However, there is no doubt they would have been able to run a steady ship through all of it. We had an example of this in the past in the form of the Industrial Credit Corporation, ICC.

Deputy Gilmore's opening this evening stated that the issue was that of jobs. This is something for which we in Sinn Féin have been preaching for a considerable time. Jobs are the bottom line. We need to get people back to work and to create a stream of income to the Exchequer in the form of taxes. We must give confidence to local economies - to people who run corner shops or garage industries such as engineering. The way the banks are structured currently and their lending policies do not provide confidence. Until now they simply have not had money to give, but that was their own fault because they were not coming clean with the figures. We learned at every turn that the situation was worse than they had been telling us. The result is that engineers and other educated young people - people in whom the State and its taxpayers have invested considerably - are heading for the planes and boats. It is unacceptable that we are sending people abroad when there is really no need for it.

I would appreciate if the Minister could address one issue. I agree with previous speakers that there is no evidence the Government is on top of the jobs situation. It has not found the corresponding piece in the jigsaw puzzle of the economic crisis. A policy must be introduced and adequately funded to stimulate job creation and to get people back to work. There are any amount of infrastructural projects out there. The Minister of State, coming from Mayo, will be more than aware of the infrastructural deficits, not just along the western seaboard but across the State.

The Government has been operating on the public private partnership method of funding major infrastructure for some time now. Yet examination after examination has demonstrated that it is an extremely expensive way to fund infrastructure.

None of us wants the National Pensions Reserve Fund to be depleted but we would like some of its funds to be used to stimulate jobs and give a boost to the Irish economy which would have the knock-on effect I described earlier. The PPP approach is a crazy Thatcherite system that could only be supported by the likes of the Progressive Democrats, which clearly remains influential given that the Government continues to pursue this approach. Of course, many people who possess that party's mentality-----

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