Luke Flanagan (Roscommon-South Leitrim, Independent)

The sole purpose of the Credit Guarantee Bill 2012 is optics and making it look like the Government will do something for the economy. The Government can state this was in its programme for Government and now that it has done it, one should shut up, whatever about the detail. We are talking about €150 million, less than one sixth of €1 billion that will solve all the problems that taking billions of euro out of the economy is causing. I cannot see how this will solve the problem. For a start, how does the Government guarantee the banks will not pull back to the tune of €150 million from their current lending levels and decide they will get the State to underwrite for them? There is nothing, as far as I can see, to guarantee that will not happen.

The simple facts are that 50% of small and medium sized enterprises have had credit refused in the past year and this scheme would provide finance for only 2% to 4% of those. What about the rest? What exactly are the rest to do? When one considers that leaves up to 98% of them out, what sort of an impact will this have other than the banks pulling back on lending by €150 million and now lending it out under this scheme where they get more out of it and the Government covers their rear ends? That does not make much sense. When one looks at it in the context of what will be taken out of the economy through the fiscal compact which we say will run into tens of billions of euro by the time all of this is finished, how will €150 million make a massive difference?

In a way, looking at this and looking at all of the other stuff the Government has not done, it suggests the Government's understanding of how a business works is purely on access to credit and has nothing to do with the costs of running a business when it comes to rent. The Government claimed it would do something about upward-only rent reviews and nothing has happened. If the Government wants businesses to work, it must do more than provide them with credit, which this will not do anyway. We are told there is nothing the Government can do about upward-only rent reviews. The Government should try to say that to those who own property who try to stick by this clause. In the case of buildings owned by the Department of Agriculture, Food and the Marine, tenants are being told their rent cannot be reduced because of some rule on upward-only rent reviews. If the State were really serious about helping businesses, then surely it would take the lead in respect of this matter and reduce the cost of rents. That might make life a little easier for those to whom I refer.

Another issue which arises in the context of costs is that relating to rates. Regardless of the amount of credit advanced to businesses, as long as the situation whereby local authorities can waste money left, right and centre and not be held accountable for doing so continues to hold sway, it will never be possible to take action in respect of reducing rates. The latter are crippling businesses. When I have commented on this matter previously, Fine Gael has responded by saying it has instructed the councils it controls not to increase rates. This matter is much more complicated than that. It will take a great deal more than just telling councillors not to vote in favour of an increase in rates if we are to solve the problem that exists. There is a need to introduce accountability at local government level because this will bring about a reduction in rates.

I spoke to a member of the fire brigade yesterday in respect of how the money people pay in rates is spent. He informed me that one third of the overall cost of running the fire service relates to the money paid to the four people who are meant to be running it and who have never fought a fire in their lives. Deputies might wonder what this matter has to do with the Bill. I can inform them that what I am referring to is the type of waste of money which has a direct impact on people who are trying to run businesses. It is this waste which leads to their being obliged to pay high rates. Until this problem is solved, any moves in respect of credit will simply involve throwing good money after bad. There is absolutely and utterly no way that people in business can succeed if they are obliged to pay such high rates.

The next issue that arises is competition. Until there is real competition in this country, any steps taken to provide credit to businesses will not work. The Government had the opportunity to deal with this matter in the context of the Competition (Amendment) Bill 2011 but it did not do so. Instead, it has proceeded with a watered-down version of what is my concept of competition. There is proof that the Government is not really serious about this matter. Last week, for example, four members of the Garda Síochána were present in a bog in County Roscommon to ensure that we turf-cutters were not intent on killing everyone in the country or whatever the hell else it is we are accused of doing. There were twice as many gardaí in a bog on the Roscommon-Mayo border last week than there are to work with the Competition Authority in the context of investigating breaches of competition law.

If there is no real competition in this country, how are businesses meant to survive? If there is nothing in place to ensure there is real competition, how will such businesses survive? If there is no accountability at local government level and if rates are not reduced, how will businesses survive? If the Government does not follow through on its promise in respect of upward-only rent review and if it does not assist those who are struggling to pay rents which are completely out of kilter with what should be the case, businesses will not survive. When it comes to business, everything in this country is out of kilter. This means that when tourists come to Ireland, they are obliged to pay twice as much to stay in a hostel as they would be expected to pay at a hostel in the centre of Berlin. If a hostel needs additional credit in order to remain in operation, what is the point in providing it with such credit if everything else relating to how one runs a business has gone haywire?

In the context of the Credit Guarantee Bill, who could have a problem with €150 million being provided to businesses. It would be very easy for people to put a negative spin on matters and state that I do not want businesses to succeed. My difficulty relates to the perception that the provision of €150 million alone can solve the problem. This sum is not adequate and there is no guarantee that the banks will not abuse the scheme and try to make more money for themselves, while business people will be left with nothing.

On "Tonight with Vincent Browne" last evening, I saw a lady discussing the issue of business. Apparently, if one is a politician, one knows nothing about business. One has to be a business person to understand business. Regardless of the nature of the points politicians make about business, apparently they are all rubbish. I was previously in business. I actually sacrificed my business to become involved in politics for the greater good of people. I might return to business in the future but just because I am not involved in it now does not mean that I do not understand the concept. The same is true of anyone else in the Houses who has previously been involved in business. Just because one is not involved in business does not mean one cannot understand the Credit Guarantee Bill. I am a former businessman, I am currently involved in politics and I will most likely return to business in the future. In that context, I am in a position to state that other than indicating that additional credit will be provided there is little substance to the legislation before the House. I accept that more than the €150 million to which I refer could be provided but there are no safeguards in place to stop the banks from abusing the scheme. That is all I have to say.

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