Richard Bruton (Dublin North Central, Fine Gael)

I congratulate Deputy Perry for putting down this motion. It is very timely in this enormous crisis. The problem is that we have a Government that is trying to steer this economy by looking out the back window and it continually misses every obstacle on the road ahead.

I recall what we were told when this banking crisis started - this was going to be the cheapest banking solution of all time; that Anglo Irish Bank, at worst, would cost us €4 billion; it was a going concern. Those calculations were totally beside the point. Anglo Irish Bank could cost us ten times what the Government estimated. We were told only a few months ago that the size of the deficit was manageable at €7.5 billion. Three months later, it is now double that according to the ESRI. How can there be credibility in the recital the Minister gives? It is like whistling past the graveyard. The Minister is reciting the same things the Government is doing, and has been doing for years, which are producing no results but he expects the House to believe they will suddenly transform the situation.

There is no urgency whatsoever on the Government side of the House about the jobs crisis. Consider the PRSI concession, which was the big idea in last year's budget. This was to encourage employers to take people off the dole. It was first announced in December but did not emerge until the middle of this year. What has been achieved with regard to the 10,000 promised jobs? Not even 1,000 have been achieved. The Government is not even 10% of the way with the flagship of its employment strategy in last year's budget.

The same applies to its credit strategy. It is in tatters, and the sooner it wakes up to that reality, the better. It is not driving credit through the banks and there was no hope that it ever would. The banks are in a situation where they must do one thing, shrink their loan books relative to their deposits. We all know they must do that. What does that mean? It means they are closing down lending at every opportunity. They are making it harder to get credit. They are not in a position to take a punt on a bright start-up idea that might create a job for an individual and some jobs for his neighbours. They are not in that space; it is not what they are doing. They are trying to survive and shrink their loan books. The Government thought, foolishly, that NAMA acquiring their impaired loan books would change that. It was not going to change it. The Government thought some recapitalisation to fill the hole created by appalling losses would change it, but it was not going to change it.

I recall telling the House 18 months ago that we needed a national recovery bank that would provide credit to small businesses to help them through this crisis, because the banks would not help them. The Minister's backbench colleagues, to a man, talked about fantasy banks and said it would never happen. They told us to believe them and that the Government had a cheap banking strategy that would save everyone and provide a wall of cash. When will they wake up, smell the coffee and realise that the banking strategy is not addressing the credit problem?

It was amazing to see the Minister, Deputy Batt O'Keeffe, when he first went into the Department of Enterprise, Trade and Innovation. There was an air of reality as he walked in the door of the Department. He said he could see that bank credit was not getting through. Now, however, he has become totally institutionalised. He now believes the Government rhetoric that its banking solution is solving everything and that all we need is a man sitting in an office somewhere processing 20 complaints and everything in the garden is rosy. Deputy Batt O'Keeffe's first instinct was correct but he has been sucked into the maw of the thinking in that Department that it has everything right.

Consider even the notion of the Minister of State coming to the House to talk about the €3 million for the county enterprise boards. He and I know that at the start of this quarter 40% of county enterprise boards were turning away people with good business ideas. The Government produced this €3 million because there was such a wall of applications which could not be dealt with by the county enterprise boards. They were turning away people who had viable business projects. The banks had closed their doors to them and now the Government is closing the door on them through the county enterprise boards. Even with this decision on the €3 million, the Government has cut the budget by 10% when every county enterprise board will confirm that the demand has rapidly increased. It has increased by 20% according to the Public Sector Times, quoting the chairman of the Donegal County Enterprise Board. The same is true in Dublin and every other county. Out of desperation people are anxious to set up businesses and need a leg up, but the Government has closed even that down. The Government made a mealy-mouthed announcement that it will provide €3 million but the money can only be used for the applications on hand. The scheme closes in December and the Minister of State does not know where it will go from there. That is not a solution to this crisis.

Deputy Perry has come up with a solution that has worked elsewhere. The default level when a similar scheme was applied in Chile was 1.5%. The banks paid a premium to get the cover, the state lost nothing and it has triggered credit to viable businesses. Surely the Minister of State can see the logic in that. The scheme has worked elsewhere because it is tightly targeted. It is not about running loose with public money; this is tightly targeted. The Government needs to think again and back what Deputy Perry has offered.

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