Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)

I have mixed feelings about this Bill. Any measure that would assist in any way the struggling small and medium enterprise sector must be welcomed and any measure that focuses on enterprises that may lack collateral or that have a track record in that regard, new businesses and so on and can afford them some support in terms of credit would be helpful. For that reason I support the Bill, not that I am enthusiastic about it but because if a single extra cent can get to the struggling small and medium business sector, which is on its knees, and help even one extra business create a few jobs and get some economic activity going in an economy that is being decimated, one could not possibly oppose it.

While we support this Bill because it might give some assistance to a few businesses, at best it is piddling in the wind, so to speak, and at worst it is more mollycoddling of the banks which caused the crisis and were responsible for small and medium enterprises being devastated, and half the towns in the country looking like ghost towns. The way things are going it will not be long before tumbleweed is rolling down the high street of towns and villages throughout the country. When tumbleweed is rolling down O'Connell Street and Dublin city centre has become a ghost town, the penny might drop with this Government that we need serious, radical measures to stimulate economic activity, get people back to work and support small and medium enterprises. This Bill is far from that radical measure and it will do nothing to stanch the massive haemorrhaging of jobs in the domestic economy and the massacre taking place of small and medium enterprises where those enterprises are going out of business day after day, week after week and month after month as a result of the activities of the banks which crashed our economy and the austerity this Government continues to impose at the diktat of the troika. It is now proposing to sign us up to even more austerity with this insane fiscal treaty which will further devastate the very small and medium enterprises this Bill purports to want to support.

The premise of the Bill is that by providing the banks with a guarantee because they are not lending, we may encourage them to lend. Although we will welcome the Bill if the banks lend money to struggling small and medium sized enterprises, why do we have to incentivise and guarantee the banks given that we finance them? They would be on the floor but for the decision to shovel €70 billion into them. Despite this, we still do not control their policies, nor can we make decisions on who they lend to, whether they invest in the economy and whether they support the small and medium enterprise sector. It is unbelievable that, having given the banks €70 billion, we must now provide them with guarantees to persuade them to give money to small and medium enterprise. Given that we financed them, why do we not bloody force them to give money to small and medium enterprises? Why do they remain a law unto themselves? One could not make up this.

The same position obtains across Europe. Almost €1 trillion has been given to banks across Europe in the past two or three months, yet this money is sitting in the banks while the European economy contracts under the impact of austerity. Small and medium enterprises all over Europe are starting to go to the wall and are being crushed while the money we provided is sitting in the banks. We still are not telling them what to do, even though they would have collapsed but for the money we shovelled into them. Perhaps the Minister will explain the bizarre logic of shovelling money into the banks, praying they will reinvest it in the economy and providing them with a guarantee, because I do not get it.

This is a win-win scenario for the banks. If a bank provides a loan to a small and medium enterprise which is then successful, as I hope it would be, the bank makes a profit on the loan it has provided and the State gets nothing. If, however, the business which secured the loan goes belly up, the State covers the bank's losses. If citizens must take the risk of a possible failure of the business, logic dictates that we should also benefit if it is successful. The Government's approach is a mini-version of the madness evident in the blanket bank guarantee provided by the previous Government under Brian Cowen. It offers another win-win scenario to the banks which knew at the time of the guarantee that they would make a fortune if their speculation worked out, but that Muggins, in other words, members of the public, would pick up the tab if their speculation failed. As it transpired, it failed and the banks' losses were covered.

Rather than introduce a piddling measure worth €19 million which will have an infinitesimal effect on a domestic economy that is being massacred, why not do the job properly by nationalising the banks and forcing them to provide credit to small and medium enterprise? The banks are not the only problem in these circumstances. While I do not have any time for bankers, there is a certain logic to their position of refusing to lend. If the owner of a small or medium enterprise visits his bank manager seeking a loan to sustain and develop a business, it is hardly surprising that a banker, who can see the collapse in demand in the economy and knows austerity will be imposed for the next three, four, five or six years under a fiscal treaty that will slash incomes, cut social welfare payments and depress spending power in the economy, will not be convinced the business has a sustainable future. Aware that nobody is spending money, the bank manager will choose not to give out loans.

If we are serious about promoting the interests of small and medium sized enterprises, the other side of the equation must be to stimulate demand in the economy. This will require abandoning the austerity madness that is directed at low and middle income earners. Demand on the high street is depressed because people no longer have money to spend as a consequence of Government decisions to cut social welfare payments, including rent allowance, lone parent's payments and child benefit, and slap on to incomes the universal social charge and other levies. The shops in which people used to spend are going out of business.

We also have cuts to public services. The biggest employer in the centre of Dún Laoghaire, which is turning into a ghost town, is the hospital, a public service employing some 600 or 700 people. If the Government continues to cut health budgets, nurses' pay and the number of people in the health service, the hospital in Dún Laoghaire will have fewer staff on lower pay spending less in the local economy. If, God forbid, it is closed down as a result of further cutbacks in the years ahead, what will be the effect on the small and medium enterprise sector in the town? One could ask the same question about any town or village in the country. The decline in spending power caused by cutting the incomes of public sector workers is depressing small and medium enterprises in the private sector. Playing off the public and private sectors is utterly futile and stupid because they depend on one other. Investment in public services and improving the incomes of ordinary workers will stimulate demand in the economy and promote the interests of small and medium sized enterprises.

I do not have time to discuss in detail the issue of cartels other than to note that promoting the interests of small and medium enterprise requires measures to break up cartels such as CRH, which is engaged in price fixing activities in the concrete sector that are driving small and medium enterprises out of business. The Government should also address issues such as rates, parking charges and other costs that are crippling small and medium enterprise.

While we welcome the Bill, it is nothing more than a gesture given that the domestic economy is being slaughtered by austerity. It is madness to propose to continue austerity for another decade by signing up to the fiscal treaty madness. The Bill is piddling in the wind.

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