Mary Upton (Dublin South Central, Labour)

I welcome the opportunity to speak on this motion relating to the difficulties being experienced by small and medium enterprises. I believe the difficulties being faced by these enterprises are a serious threat to the economy as a whole because these industries are the backbone of our economy. These enterprises are in every town and village in the country and provide a host of expertise and services that underpin our economy. They employ approximately 800,000 people in a host of areas such as the service industries, manufacturing and technology. As well as being the purveyors of generations of local knowledge and expertise they also hold the creative and dynamic energies that will allow us to capitalise on new areas of enterprise as well as our existing areas of speciality.

Like Deputy Broughan, I am painfully aware of the plethora of small industries, retail outlets and services, etc., that have closed down in my constituency. Apart from every other factor, there is a feeling that derelict areas are developing around us because of that, never mind the unfortunate consequences there are for the owners of these small industries.

One area of speciality we excel in is tourism which I want to address in particular. We have a tourism product that is renowned across the world. With offerings such as our rich cultural heritage and our outstanding natural beauty, we compete and thrive in the global tourism marketplace. Our tourism industry is a real indigenous success story and is often overlooked as the importance of the tourism industry is often underappreciated. Each petrol station and cafe in a rural town or village is a contributor to and beneficiary of the tourism industry. This under-appreciation stems partly from the integrated nature of the sector with tourist spending in the local economy not readily identifiable as tourist revenue. However, the importance of tourism should not be underestimated. In 2009 it contributed €5.2 billion in revenue with over €1.2 billion benefiting the Exchequer in taxation. In 2008, tourism accounted for 4% of GDP.

As in so many sectors of our economy, the past two years have been extremely difficult for the tourism industry. We have seen dramatic falls in visitor numbers from traditional markets such as the UK and continental Europe as well as a drop-off in the long haul market such as from the US. The industry has reacted well by refocusing on its core strengths and innovating to adapt to the rapidly changing and increasingly competitive global tourism market. This change takes time and support if it is to succeed but the problems of lack of access to credit to sustain seasonal businesses, as well as credit to allow businesses to develop their product, is a real threat to the industry.

In order to continue to develop our tourist industry it is vital that budding tourism small and medium enterprises are able to access the start up and development funding required to produce technological and innovative products and services which can enhance the tourism product in Ireland and be exported to other countries. As we have been told on many occasions, credit is the lifeblood of the economy but the fact that we are having this discussion now is a clear indication that attempts to free up credit are simply not working. We have figures showing that over 1,100 businesses have been declared insolvent so far this year. These figures are as alarming as the headline figures for unemployment in the economy.

Credit must be unfrozen by banks owned by the State and covered by the State guarantee. What is the point of virtually nationalising AIB and being the largest shareholder in Bank of Ireland if we cannot use them to pump credit into the economy to support businesses and jobs? The Labour Party has already set out a strategy for the creation of a strategic investment bank to improve the ability of SMEs to access credit. This approach would bypass the main banks which seem too shell-shocked by their fall from grace to be able to do what we need them to do to save our economy.

The Labour Party is steadfast in its belief that to protect these indigenous businesses and to help them survive and eventually grow is the surest way of ensuring we are competitive in the growth industries of the smart economy. The tourism industry is a very good example of an industry that traverses both traditional skills and state-of-the-art technology. Our visitors want to savour the traditional Ireland with a modern twist and they need the best and most modern technologies to access the traditional through I-pods, the Internet, broadband and so on. The developers of the technology such as is found in the Digital Hub in Thomas Street, for example, are co-dependent with traditional services and facilities. Each needs credit facilities to set up, stay in business and create employment. We cannot allow any further haemorrhage in these industries because the knock-on effect will be felt across the community. Therefore, credit must be freed up to allow the industries to recover and grow.

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