Peadar Tóibín (Meath West, Sinn Fein) | Oireachtas source

One of the great failures of this Government concerns credit to small business and the debt distress that exists among thousands of small business owners. It is a fact that, in creating two pillar banks, the Government created an oligopoly. It should be no surprise that those pillar banks display oligopolistic behaviour. In other words, they have great supplier power while customers right through the State have very weak purchaser power. That is the nature of the market. Sometimes it is hard for governments to do things, but one thing they can do is structure the market. A very simple way of breaking down that oligopolistic power would be for the Government to allow the credit union system to function properly as regards SMEs.

From what I can see, the credit union sector is being held back and run down instead of being strengthened.

We launched a detailed public banking system document based on the public banking system that exists in Germany. This would allow for more suppliers in the market and reduce the powers of the two pillar banks, which I believe would change the behaviour of the two pillar banks enormously. We see the behaviour of those banks as they withdraw from small towns and stop the credit flow to small businesses. This is why the Government has had to create the whole ecosystem of funding models, none of which, unfortunately, has worked satisfactorily. That is not by accident, given there were certain constraints that prevented them from acting properly.

Across the State many small businesses are either at the edge of a debt cliff or seriously hampered from development because of excess debt. During the week a small but well-known business, McElhinneys of Athboy, County Meath, was in court with Bank of Ireland in regard to a major debt. Receivers moved into the company's building last week, which led to altercations in which people were injured. Allegations have been made and people have gone to the Garda, which is in the middle of this process.

I have stated from the start of all of this, five years ago, that the Minister should have Enterprise Ireland create a small department of individuals who would go into small businesses that are in debt distress and help them to function. They should identify what element of the business is functional and separate it from its toxic debt, so the business and jobs could be saved. The Minister of State will know of another business in Meath, Spicer's, which was on the go since the 1830s. It survived famines and wars but did not survive this credit crunch.

I want the Minister to consider ways of improving the credit guarantees but also to make sure that the whole banking market is increased in size and is moved towards perfect competition and away from oligopoly.

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