Bernard Durkan (Kildare North, Fine Gael)

I am pleased to speak on this particularly important legislation. It is important because it represents a positive intervention at a critical juncture. Every intervention from here on must be positive in encouraging the economy to move in the right direction. We are not living in a bubble or in isolation. John Donne's comment that no man is an island was never more true. We cannot isolate ourselves from being affected by the outside world, the European economy and the global economy. We can make a positive contribution. Contrary to what Deputy Boyd Barrett said, this may be small in the context of what is required at the present time but it is a step in the right direction. That is what we need because we need to generate enthusiasm, interest, stability and confidence. Confidence cannot be quantified and nothing encourages the economy like confidence.

There is a major flaw in the economic thesis of Deputy Boyd Barrett. In the 1970s, we did what he proposes as the resolution for our economy. I am not making a political point about what happened in 1977; it is there for all to see. There was regeneration of consumer spending and footfall and it broke the country. We have not yet repaid it. I do not understand why people still go on with that kind of nonsense. Everyone who was around at the time, reads the newspapers or knows recent history knows that one cannot inflate the economy as suggested by Deputy Boyd Barrett. It does not work. We must generate enthusiasm and confidence from the ground up. We must use the private sector to invest money. Deputy Boyd Barrett defeated the purpose of his argument by saying the banks are afraid to lend because of the risk. Where else do we go?

This Bill will not solve our economic problems but it is one of a series of strategic measures that will ultimately lead to regeneration of growth and restoration of economic stability. Today's newspaper makes the point that this is the most difficult time in history since the Great Depression. I am amazed economists did not come up with that before now. They have been looking at this for the past four or five years and have now realised that it is comparable to the Great Depression. Did we not know that all the time? What happened that means people did not recognise it? In the Great Depression, a series of positive interventions were made by the United States Government over a ten-year period. None of them was sufficient to regenerate the massive growth required for recovery but all made a contribution towards it. The cynics will say the war was the cause of the recovery but that is not the case because the war was a massive cost in terms of money and people's lives. That is a signal to us that we should not go in that direction.

Deputy Boyd Barrett also mentioned the misery of the huge number of people unemployed. We have been here before. In the 1980s we had 17% and 18% unemployment but we got out of it eventually. At the same time, we had interest rates of 17% and 18% and it looked impossible. One or two Members exploit the misery factor, which is hugely depressing to people who are unemployed and those who have difficulty keeping businesses afloat, creating new business and employing people.

A number of people mentioned the issues that hit small businesses in towns and villages. Parking is one example. People complain to us that if they come in to shop, they have no place to park because of all the regulations that have built up over the years. If they park and stay two minutes over their time, they are clamped and towed away. They do not go back. At local authority level, there is a need to consider this matter in a more sympathetic fashion and to try to work out how, in our present circumstances, we encourage people into towns and villages to encourage footfall, which is important.

The lack of credit is applicable everywhere because of the difficulties in which the banks find themselves. I do not agree with the previous speaker, who said we should order the banks to lend. The reason the banks are in their current situation is because they do not have money to lend. The same applies to European and world banks. I cannot understand how someone at Government level can turn a key and money will pour out of the banks, making us all happy. That does not stand up and it has never worked. It does not happen and it only makes a bad situation worse. Where do we go from there? We need to encourage the banks to be more positive in lending to accommodate job-creating enterprises and to retain those in existence. It is self-defeating if banks do not allow sufficient credit to enable businesses to remain afloat or to enable people to set up new businesses. It will fall to someone else to look after that part of the market. It does not require major change in the amount of credit but in the amount of encouragement from the lending institutions to those in a position to provide employment through small businesses.

Upward only rent reviews have been rightly criticised. It is an appalling concept. The Opposition has criticised the Government parties for saying, before the election, that upward only rent reviews would be abolished. Now, it transpires they cannot be abolished. My view on the matter is that it is the upward-only rent clauses themselves which are unconstitutional. I cannot understand how they were ever permitted, because to allow such a practice to be pursued on a large scale can only serve to undermine the entire retail sector in any country, and to a far greater extent in a smaller country. We all understand why people would wish to retain an advantage to which they are long accustomed. The reality, however, is that this arrangement is having a huge negative impact on small businesses and must be addressed. It may be the case that somebody in a position to take action on this matter has a notion that if we simply hold our breath for a few years, property prices will return to former levels and we will be back on the hobby horse. That is not going to happen and any inclination to operate on that assumption will leave us in an even worse situation than we are currently facing.

I have spoken to the Minister about the issue of foreign workers who no longer qualify for work permits. My theory is that these are often people who, as students, were engaged on a part-time basis by a particular employer who invested in their training over several years. Such people have remained with the same employer during their entire educational career and are now an important asset to the small enterprises that wish to retain them. I understand that such workers are competing with local people who are available for employment or training, but the fact remains that where small businesses have invested in a particular employee - in some cases training him or her for up to seven years - that person may well become fundamental to the operation of the enterprise for the next three or four years. There is a balance to be struck here. Perhaps an arrangement could be made that in such cases, where the foreign person's work permit is being renewed, a suitable local person who is available for work would be taken on as a trainee. I ask the Minister to examine the potential benefits of such a scheme in terms of job creation and all that goes with it.

Any small business owner or owner of a small farm will report that many lending institutions have either withdrawn or significantly reduced overdraft facilities or demanded that credit be taken in the form of a term loan rather than an overdraft. This is an old trick familiar to anybody who has been in business for a substantial length of time. Overdrafts are much more flexible and useful than term loans, providing a more regulated flow of funding and greater stability for borrowers and, on a larger scale, for the economy. In addition, it should not simply follow as a matter of course in any economic downturn that lending institutions which gave a business owner access to a credit line of €100,000 in the good times should reduce it by 50% or more. That will be of no benefit to the borrower or the economy and ultimately of no benefit to the lending institution itself.

I welcome this Bill as one of a range of measures that are required to be taken in this area. It represents a positive contribution at a difficult but crucial juncture in our economic history and I look forward to more of the same from the Minister and his Cabinet colleagues. In the situation in which we find ourselves, it is incumbent on every Department, every Minister and Minister of State, and every Member of this House, in whatever way he or she can, to encourage development, growth and employment creation. If we think and act positively and commit to putting our shoulder to the wheel, we can achieve an outcome that is much more dramatic and achieved much sooner than we might expect.

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