Catherine Murphy (Kildare North, Independent) | Oireachtas source

I also welcome this Bill and commend Deputy Donnelly on his work. Obviously, a lot of work has gone into it. The Bill is timely. In fact, I suspect that Deputy Donnelly would say that if it had been published 12 months ago, it would have been even more timely. The focus of it is absolutely right.

Rightly, there is a lot of focus on job creation. I would acknowledge that some of the new jobs have become obvious in my constituency and the sense of good feeling that is created when there is hope for people. Job retention is just as important. When one considers the amount of money that goes in, even from the State side in unemployment payments, retraining the unemployed and paying redundancies, and the knock-on effects when a small business fails where other business may well end up being lost as well, not to mention that often suppliers are not paid, one can see that job retention needs to be looked at in a holistic way. It involves much more than the small business. There is a knock-on effect.

The present law governing examinerships was written some years ago and reforms have not been easily forthcoming. I note that the consolidated Companies Bill 2012 is wending its way through the Dáil and is at Committee Stage, but that Bill does not represent the kind of radical reform needed in this area. The Companies Bill 2012 is almost like a copy of the Golden Pages. It is a huge piece of legislation. It was started some years ago - up to ten years ago in the case of some aspects. Some of its provisions are of the era prior to the current one, and much has changed since then. We can all expect many amendments to that Bill. Examinership was quite rare prior to the crash. Today, because of the wider economic problems, it is much more likely.

This Bill focuses on small to medium-sized companies. These are quite large, when one considers that they employ up to 50 people. The Bill is targeted at such companies that find themselves in difficulty getting credit - for instance, because of lower demand and costs - and that perhaps took on developments during the boom and are trying to service them.

The Bill seeks to tackle the power imbalance that currently exists in Irish law in the area of examinership. That is critical. The banks retain significant power in the process. That is something that Deputy Donnelly has identified as needing better regulation and I hope that will be taken on board. The Bill seeks to put in place a clear process outside the courts system, but not without recourse to the courts, which avoids hefty legal costs and endless litigation and represents a good chance for creditors to collect on their debts ultimately.

At present, the strong have the power and they are the ones who are surviving. It is the small indigenous companies that are the ones that are going to be in most difficulty. It is interesting that we look at solutions such as mediation in family law. Whereas that was unheard of 15 years ago, it is now seen as a valuable process. This demonstrates that one can operate differently.

It is not only a matter of the constant visits to the courts and the cost. There is a human cost of having this hanging over people, which means they cannot invest their energies, time and expertise in what they should be focusing on - namely, the business. Many in the small business sector who have got into difficulty will tell of the weeks and months they have not slept with worry. There is a human cost that we must factor into this.

The examinership process would provide a bit of breathing space for small to medium-sized firms and would help to ensure the survival of more businesses that are in trouble. There are safeguards in the legislation, and rightly so. Banks, as I said, have been extraordinarily powerful in determining whether businesses live or die, calling in loans and collateral far too early. That may net some return for the banks, many of which are foreign banks which were happy to cut their losses and go, but the wider effect on the economy of firm closures must be taken into consideration. We all can accept that this is in the banks' interest too, and in our interest, because we need to have banks that are functioning.

This Bill tackles the problem of requiring banks to keep lending where there is a reasonable chance of a firm returning to profitability. That has been outlined well by Deputy Donnelly in a practical way. Similarly, the Bill tackles the issue of landlords moving to evict companies from leased premises by allowing for a set formula to be applied where a landlord would receive market rent plus 7% provided the lease has not been terminated. Obviously, there is a focus here on upward-only rent reviews. One can see where the big companies have been able to do that, where they have gone into examinership and been able to renegotiate and one sees the jobs coming back. We need to see that model expanded to the small to medium-sized sector.

The measures contained in the Bill are forward-thinking. I strongly urge the Government not to oppose it. Even if it is a question of taking aspects of it and including them in the Bill that is under way, that would be a positive step.

We all know of small businesses that were encouraged to develop when there was plenty of money. They were almost made to feel stupid if they did not expand by building an extension onto the side of their premises or whatever. It is the same banks that are putting the same businesses under pressure to deliver within unrealistic timeframes. As I said, there is a knock-on effect if workers are made redundant in that they must be retrained, whereas if small firms survive, there is the possibility of ramping up when the economy improves and their position improves.

We need to take a holistic approach. If one travels the country, one will notice in every village all the "To let" and "For sale" signs, the loss of passive security on the main streets, the loss of commercial rates and the dereliction. It is not a pretty sight.

Many of these small or medium-sized businesses will not survive. However, if more of them survive there will be a return to local authorities by way of commercial rates. There is also a range of other areas in which advantages will accrue.

I welcome the Bill and hope the Minister will find a way of accepting its main provisions. I also hope that the Government will decide not to oppose it.

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