Mattie McGrath (Tipperary South, Independent) | Oireachtas source

As a small businessman of 32 years and sole trader who transferred to a company a year ago, I too welcome the opportunity to contribute to this debate. I am also involved in a number of companies limited by guarantee, which are a different animal altogether.

I welcome the efforts being made in this area. I heard the contributions made by the Minister and main spokespersons. This legislation deals with issues such as over-view, examinations and so on, all of which are necessary. I was shocked to hear that the Bill comprises 15 Parts and 1,300 pages and that a copy of it costs €109, which is an enormous amount of money for any businessman, director or member of the public. The cost is excessive and the Bill is too lengthy. Very few directors would have time to read its 1,300 pages. One could read a novel by the late Maeve Binchy or even Deputy Shane Ross's book on the bankers quicker. I do not seek to promote any book above another.

Bureaucracy is creating huge difficulties for businesses. We have been constantly told over the past 15 to 20 years, or even longer, that this level of bureaucracy is required under EU regulation.

I have found on inquiring about the position in other EU member states that while EU regulations might be introduced here, we tend to add a number of statutory instruments to them. We have a great knack for making the position cumbersome and more difficult. The banking crisis, which is a huge problem, came about because of a lack of regulation. The regulations that were in place were not enforced, and previous regulators and others were well paid but did not do their job; rather, they allowed people to run amok. I hope some effort will be made under the legislation to address this issue but I do not have huge faith in that being achieved due to the lack of due process for anyone on foot of the banking scandal and the collapse of our economy. Those senior people and some big business people who flouted the law with impunity are still laughing all the way to the bank. Ordinary people - especially, in this case, ordinary workers, as Deputy Halligan said, and those with SMEs - are carrying the can and feeling the full brunt of the law. I expect every businessman, whether he be a sole trader or the owner of a company, to obey the rules, act responsibly at all times, pay his taxes, ensure health and safety considerations are up to date and provide for the safety of his employees in the workplace.

The Minister, who meets representatives of companies every day of the week, will know that we have suffered from over-regulation and over-emphasis by entities such as NERA, and it has gone over the top. As with everything else, rules were needed; 1913 was the year of the Lock-out with the trade unions, and they were badly needed and fought to be recognised, but, ironically, there are cases now in which the pendulum has swung too much the other way. We have a culture of over-regulation; there are too many institutions and agencies dealing with small business employers and their employees.

It took from 1958, the year I was born, to 1962 to introduce the current Act, and I appreciate that it needs to be changed, but I cannot accept the sheer volume of reading material, regulations and all that is in this legislation. However, I accept that many of the reforms in it are badly needed. The company law review group has introduced countless reports and has been working on the legislation for a long time but we, the legislators, must be conscious in dealing with the legislation in this House and in the committee that it must be workable, it must be manageable and it must do what it says on the tin. What it says on the tin is that we must have tight and stiff regulation, penalties and reporting procedures to ensure there will be no white-collar and big business tax evasion and none of what has happened previously, but we cannot expect to do that while the Competition Authority and the companies organisation are understaffed. The Minister inherited that problem but we should know what is needed by now with the amount of sheer blackguarding that went on and the number of rogue companies and businesses that went off and did not pay anybody. Senator Feargal Quinn's Construction Contracts Bill is still foundering in that efforts are still being made to bring it in to protect the many subcontractors. I raised that issue here two and half or three years ago, the morning a big company in this city went bust and left more than 600 subcontractors stranded. We must remember that a subcontractor is not an item; he or she is normally a sole trade or the owner of a small company with a number of employees, who all have families. There is a huge human cost involved. Subcontractors all have workers, as Deputy Halligan said, and responsibilities. The way that legislation has been flouted is not good enough.

The new Companies Bill has some significant reforms and I will not say that it has not. The new LTD company, as it is termed, can have a minimum of one member and up to a maximum of 149 members. I welcome that, because there are people who want to set up in business. They have great ideas and enthusiasm. Our young people have the drive, passion, qualifications and energy to create businesses and they have amazing new ideas and technologies of which we would never have thought. I salute the many entrepreneurs, whether they be sole traders, farmers, shopkeepers or hairdressers, or, on the construction side, the small builder, the sole trader or the people with trades who set up their own business and have done tremendous work. However, their businesses have been hammered and decimated in the past two or three years. They need some protection, and I welcome that part of the legislation.

For the first time, guaranteed companies will be able to avail of the audit exemption. This innovation will be of significant benefit to the sectors that tend to use the guaranteed company structure, such as companies in the voluntary sector - I am involved in many of those - voluntary sector charities and residential management companies, while at the same time recognising the particular circumstances applying to guaranteed companies in allowing a single member to object. That is very important as there must be provision for one member to object.

This Bill is long overdue. Previous speakers have been complimentary about the people in the company law review group for the hard work they have done. That is great and I am delighted about that, and I know they engaged in public consultation, but we have to make it easier to do business. In terms of the figures available, we rank 15th in the world for ease of doing business. I would not have thought that was the case. If we are 15th in the world, that is wonderful, but I do not believe it is the case. Deputy Coffey, who is in the Chair, might not like to hear the figure I have seen quoted by his former employer, which is that we are 95th in terms of access to electricity and power. That was not the fault of Deputy Coffey or his colleagues. They were the people on the ground who were doing their best, but again, bureaucracy and monopolies came into play, and that is never good.

Up to 90% of businesses are in the small and medium enterprise, SME, sector and they rely hugely on the goodwill of their families, their staff and many of the agencies with which they deal. All of them have been hit with the tsunami of the banking crisis. Many of them did not get into huge debt and had limited overdrafts. They had built up those overdrafts and worked hard to get recognition from the bank manager and bank personnel who knew them to secure those facilities but, unfortunately, that all counts for naught now, as they cannot avail of any type of credit. Many of them who have overdrafts get phone calls on a daily or weekly basis asking them to come into the bank for a chat. When they go in they find out that their overdraft, which they had built up over the years because of their good record with the bank, is the problem. They paid back all the loans they got but they are now being asked to halve the money they got from the bank or the bank will have to take it from them or offer them a term loan instead. People have little choice in that regard because all the negotiation is being done in one direction. They come out of the bank with a term loan under their belt, so to speak.

To add insult to injury, I believe the banks are accumulating all arrangements in such cases and presenting them to the Minister who is present and the Minister for Finance and his officials as new lending. It is a farce. It is a con job. I know that, and the Minister and everybody else knows it. That is unfair. Deputy Coffey would know about that. Deputy Fleming knows there is a huge crisis in agriculture that is not recognised by Government or anybody. It arose because of inclement weather, with a bad summer, a long winter and a very difficult spring. I was surprised and delighted to hear the Minister's ministerial colleague, Deputy Coveney, say that the banks were ready and waiting for farmers to go in to them, but that is not true. Even if they take off the Wellingtons and wear their best suits to go in to the banks they will not get past the counter. They will be told they have no credit rating because they cannot sell their stock; the stock they currently have are unfit to be sold. I do not want to digress from the Bill, but that is a symptom of what is going on in the banks. The farmers are not getting money, and where they have got money to buy meal and forage the banks are screaming at them to give it back, but they cannot give it back. I salute some of the co-operative companies - Dairygold and others - that have recognised this and the co-operatives that have looked after farmers. We are in the midst of a huge crisis that is across the board as regards finance.

I would have thought a lack of finance was the biggest problem facing people but, having listened to previous speakers and noted what was in the report published last week, I have heard that while there is a lack of finance, the ordinary people - the punter, the man in the shop, the housewife, the husband or whoever - do not have money to spend. Austerity is not working. The IMF has recognised that. The biggest problem for companies is to try to keep their doors open and pay the rates, rents and staff while their shops are empty. They will be empty if a further €300 million is taken from the public service and not from many other areas, so that we will not have to deal with the elephant in the room, which is banking. We will have to examine the monopolies in our country. I might mention CRH, which is a huge monopoly. I meet those in companies that are being put out of business on a daily basis. The Competition Authority is toothless, or else it has gone to the dentist and got all its teeth pulled and has only bad dentures, because it is toothless and ineffective.

It does not have the staff, the wherewithal or the power to tackle big business which is crucifying small to medium-sized businesses. There is a huge cartel in that industry which needs to be blown asunder because there is too much appalling misery in small companies, by which I mean those employing up to 100 people, and sole traders. There is a monopoly in this and other areas of the economy, which I am sure the Minister sees every day of the week when he meets business people. We must get around this and have to be able to support small businesses.

The winding-up process costs €10,000, which is a lot of money. Small businesses, sole traders, farmers and subcontractors have to be protected. I do not know where they will find solace in this Bill, although it has still to be debated on Committee Stage. I do not know how they will read and understand it or how changes can be made that will suit them. The legal costs of examinerships are prohibitive for companies. In many cases. however, examinerships have worked. Some have failed, but they are a half-way house. More must be done in the Bill to curtail the newest industry in the country - receivership, which is an abomination. I do not see any change in this document to the Supreme Court ruling that a company director cannot stand in court without having a barrister or solicitor. People cannot afford solicitors and barristers who do not come cheap. They must, if they are able, be allowed to represent themselves in court. They will speak under oath and should be entitled to do so. That is a big shortcoming of this legislation. I hope to submit amendments on that issue because this is wrong. There has been an outrageous explosion of smash and grab receiverships. Some of the big companies involved in receiverships are the ones that did the accounts some years ago for the companies in receivership. It would make one dizzy. We are on a spinning top, spinning around. The Minister knows who and what I am talking about.

Is there anything in this document to deal with sheriffs? It is an outdated title, but they are stalking the land at a ferocious pace. There does not seem to be any clarity or proper legislation for them. Are they legal at all? Most of the documents they bring when they come to people's homes which they cannot enter without permission are not even stamped. I have tried to find out for myself, but will the Minister check if sheriffs operate legally? I salute the county coroner in Tipperary. Some time ago a sheriff visited a small business man in his shop at 1 p.m. to demand money with menaces and at 2 p.m. a customer found the man dead in the shop. At the inquest the county coroner for Tipperary and Laois described it as State terrorism. That is what it was. There is State terrorism up and down the country. Sheriffs and agents are making agreements with people, writing them down, signing them and tearing them up next day. There is no good will. This issue must be dealt with. We cannot deal with ordinary people and make them pay if we cannot deal with State terrorism. That State terrorism has increased and grown legs and ordinary people, including company directors, managers, sole traders, farmers and others, are living in fear and dread of the people concerned who think they are mighty and right all of the time. If companies are not allowed to challenge them in court without legal representation, they will go nowhere.

I do not see anything in the Bill to tackle that problem or empower the Competition Authority and other such bodies. There are only seven or eight people in the Competition Authority and very few investigating officers. All of the power is on one side, terrorising families and small businesses. Unfortunately, gardaí are accompanying sheriffs. Gardaí think everything is legal because there is a sheriff and that he or she is acting on behalf of the Revenue Commissioners, a bank or whatever else, but a lot of the documents they have are not worth the paper in the bathrooms here. They are only made up and not stamped.

Are the banks, AIB, Bank of Ireland and others, legal entities? I do not think they are. We have many banks selling their loan books and everything else to other companies. If I have a lease agreement with or a loan from the Minister, it is with him or his company, but he can sell it on to somebody else who writes menacing letters to me looking for the money. That is wrong, illegal and would not stand up anywhere. This is happening wholesale. There have been buy-outs and sell-outs of loan books and everything else. It is a complete and utter racket, almost equal to what is happening with receivers. At the rate the receivers charge per hour, they have a licence to print money. When they go into a company, they plunder it.

Examinership is a fairer system, which is why we must preserve and protect it. The examiner looks at a company with a view to saving it and keeping the workers employed. I would say 90% of receivers are out to rape businesses and they make a fortune out of it. That is totally wrong and disgusting, especially when some of the companies involved were advisers to Anglo Irish Bank, the IBRC. Now they are receivers. The workers who were in the former Anglo Irish Bank, the IBRC, to help the receivers obtain the loans back from people who should not have borrowed and did not repay the loans are expected to have goodwill, yet they are being treated with disdain, not receiving the redundancy package that was promised. It would be only a small sum of money in the overall scheme of things.

While I welcome this document, it is too long and unwieldy. We all know from attending meetings around the country as part of our job that any meeting that continues for three or four hours loses its impact. The same is true of any document that runs to 1,300 or 1,400 pages in its short version. Will it do what it is expected to do? Perhaps the Minister should read it again. He could bring it in stage by stage. It has to deal with the problems I have mentioned and if it does not, it is not worth the paper it is written on. I know it costs money to print, but if it costs the ordinary layman in the street or an ordinary employee or company director €109, that is prohibitive and will put them off. They could buy ten novels or thrillers for that price. The Minister knows what are the real problems in our society. I did not even mention the development companies which are being subsumed into the county councils which are not pro-business and never were; they are regulating agencies. The county enterprise boards are being subsumed into Enterprise Ireland. I have the height of respect for the boards, particularly the one in south Tipperary and its staff, as well as for the development companies.

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