Niall Collins (Limerick, Fianna Fail) | Oireachtas source

I am grateful for the opportunity to speak on this important issue. It is fair to say that for some time the Government has not sponsored a genuine debate in this House on the plight of the SME sector. It is fitting that my colleagues, Deputy Dara Calleary and Deputy Michael McGrath, have taken this opportunity to articulate the many problems being faced by SME companies and employers.

It has been rightly pointed out that this is a commitment in the programme for Government. For a change, we are not holding the Minister to account for doing a U-turn or breaking a promise. Instead we are asking him to live up to what is in the programme for Government. We must acknowledge at the outset that there is a problem. Any SME will confirm that there is a severe shortage of credit lines. If companies do not have credit facilities, they do not have blood flowing through their commercial veins and so their businesses will die. That must be the starting point.

The consequences of less credit include less turnover, less choice for customers, less competition and less employment. In addition, there will be less business in our cities, towns and villages. We are seeing many SMEs dying on their feet, so to speak, with businesses closing down, particularly in city centres. In my city of Limerick, the business core has been hollowed out. Similarly, many towns and villages have been hollowed out as businesses have closed.

The banking landscape has changed with the pull out of Danske Bank, ACC, Halifax and PostBank, as well as Anglo Irish Bank, Irish Nationwide and EBS.

We must be grateful for Ulster Bank's commitment to the Irish economy and the recently announced expansion of KBC. I welcome the opening of its regional headquarters in O'Connell Street in Limerick, which was badly needed.

It is worrying that the two pillar banks comprise almost 70% of the market. This means we do not have competition or choice. We all know the consequences of a lack of competition and choice, namely, higher fees, higher interest rates and higher bank charges, all of which put pressure on SMEs and erode confidence. We all also know that the pyramid and structure upon which business is built is credit and confidence. Confidence in the marketplace is as important as credit. Our SMEs account for 90% of our active enterprise and up to 70% of employment throughout the country. This puts into context the reason SMEs need to move further up this Government's list of priorities. Sadly, from the feedback which I and other Members from all sides of the House are receiving, they do not rank as a priority.

It was worrying to read in this morning's Irish Independentthat up to one quarter of our credit unions may be severely restricted and are on what has been termed "a watch list". We all know what happened in regard to Newbridge credit union. It is very worrying that up to one quarter of our total stock of credit unions have a problem.

Another issue is the serious impact the black economy is having on the SME sector. Retail Ireland says that up to €900 million per annum, almost €1 billion, is the cost and impact of the black economy on our SME sector. The SME sector is struggling owing to a lack of credit and must also compete with operators in the black economy. This issue must be addressed by Government as soon as possible.

Another area under the direct supervision of the Minister of State, Deputy O'Dowd, is the roll-out of Irish Water. Particularly disturbing for businesses is spiralling water charges under the watch of local authorities. It is reprehensible that local authorities are not accountable to this House through the Committee of Public Accounts. The Government needs to look at issues such as charges on business by local authorities in terms of commercial rates and water charges and, on the other hand, waste within our local authorities, which are not scrutinised by this House. The establishment of Irish Water will be a significant cost factor for business. The Government does not propose to amend the Freedom of Information Act to include Irish Water which will take over the water infrastructure and heap significant charges onto business, which is a disgrace. Business and the public are entitled to expect openness and transparency in terms of the charging structure and the roll-up of costs in respect of Irish Water, how contracts were awarded and so on but this information will not be available to Members of this House or members of the public under the Freedom of Information Act.

The Government also needs to review utility charges for businesses, which have spiralled over the past number of years. There is a need for significant promotion of alternative sources of energy, including wind, solar and wave energy. The Shannon estuary in the mid-west where I live could be used to provide wave energy. Many reports on this issue have been published but remain on shelves. The industrial and commercial energy demands of the mid-west could be sourced from wave energy. The Government needs to ensure access to credit and to think outside the box in terms of alleviating pressures and costs on the SME sector.

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