Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

People Before Profit fully supports the objective of the Bill, which is to try to protect and support employment in the SME sector. We are fully aware that small businesses are responsible for more than 1 million jobs. It is absolutely right that the Government takes the necessary measures to protect and sustain the jobs in that sector. While supporting the objective, we have a number of concerns about the approach being taken in the Bill and in the part it plays in the overall July stimulus measures, which we understand the Minister is planning. In some ways it repeats the mistakes of the past pursued by the Minister of State and his coalition partners Fianna Fáil in trying to deal with economic crises. Even more so, there has been a failure in the Government's overall approach to register just how the world has changed as a result of Covid-19, the challenges it poses and the need for an absolutely radical shift in the way we run our society and to try to construct a sustainable economy in the post-Covid-19 era.

What do I mean by that? First, there is a sort of narrative, which I would call an ideology, that pervades the Government's approach in this Bill, and more broadly in the stimulus. It has really pervaded the Government's approach for the last decade. It is the view that the core of the economy is private enterprise. In the last few months we have learnt that quite literally our health is our wealth, but I do not know if the Minister of State has learnt this. It is not just a nice idea. We have suddenly learnt that this is a fact: our health is our wealth. When a pandemic as vicious and as virulent as Covid-19 arrives and public health is threatened in a fundamental way, and when this public health emergency threatens to overwhelm the ability of our under-resourced health system to cope, then the entire economy shuts down. All of the SMEs pretty much shut down and quite a lot, if not most, of big business shuts down. The economy shuts down. It is essential: our health is our wealth. If we cannot deal with the ongoing threat of Covid-19, all of these other measures are a waste of time. I do not believe that this understanding has penetrated the heads of the two major parties. They just imagine that if we nurse the system back to roughly where it was and hope that Covid-19 goes away then everything will be okay. This is a fundamental mistake. There is a failure to recognise this to the level of having systems in place necessary to cope with Covid-19 in the form of a health service that can deal with surges, an education system that has to function but which does not have the capacity, and a childcare system that has to function in order for the rest of the economy to operate. These are absolute preconditions for the rest of the economy to function. If they do not function then forget all the stimulus to SMEs, which would be irrelevant. If we do not have an education system that is capable of operating, if we do not have a health system that is capable of dealing with surges, and if we do not have childcare that can allow parents to go to work then forget the rest. This understanding has not permeated what will come out from the July stimulus. There is no radical programme to recruit the 5,000 healthcare workers we need. This is not just a health prerequisite, it is also an economic stimulus. It is a sustainable one because, Covid or no Covid, we need those healthcare workers. Those jobs will sustain the economy and sustain the ability of our health service to underpin our entire society and economy. Exactly the same point can be made for our chronically understaffed education system and our chronically under-resourced and fragmented national childcare system. I say this first as a key point.

My second point concerns the Bill itself. As I said earlier, of course we need to support the small and medium enterprises. Extending credit to them is probably, for some at least, important to do. Yes, we should do it. As other speakers have said, however, it is telling that the previous scheme, which this expands in the light of Covid-19, is questionable in its success and effectiveness with regard to its take-up. It is highly debatable whether the SMEs that really need the help will take on debts from banks that are, let us face it, not the most helpful people in the world to SMEs or to anybody else. This is the bit that really gets me about not learning lessons. Yes we need to extend supports and credit to the SMEs and it is right the State takes on the responsibility for doing it.

The mechanism through which one plans to do this is by privatising the profits, if it succeeds, and socialising the costs or the debts if it fails. Where have we heard this before? The proposal is that if the banks lend a lot and if it works, they will profit from it. We will get a tiny 0.25% premium but the profits will flow to the banks. However, if it goes belly up, because the Government has not done the other things it needed to do in terms of the health service, education and dealing with Covid, and there are a load of the defaults, the people pay the bill. It is a win-win for the banks. When we need to deal with a big economic problem, we come up with a proposal that is a win-win situation for the banks. They cannot lose. Where did we hear that before? How did that work out the last time around? Not very well.

The banks will be the arbiters of who gets loans, if the SMEs even want credit from them which, as we said, is debatable. Why on earth would the Government not cut out the middleman in this situation? I do not understand it if we are going to pay the bill. The potential for massive defaults is very real if the pandemic continues to impact and we are forced back into further lockdowns. Why on earth would we go through the middleman of the banks and tell them they can have the profits if everything goes well but we will pick up the bill if it goes really badly? That is just madness.

It will also be more expensive in interest terms, plus the premium, to go through the banks rather than for the State to do it directly itself. I do not see how that can be the case. The State can borrow money cheaper. It can, by the way, have a more hands-on and human approach to support businesses as opposed to banks which have an utterly inhuman approach. That is generally how most SMEs to which I talk see the banks. They do not see them as helpful or particularly human or looking at the specifics of their business. They see them instead as utterly ruthless.

One argument the Government will come back with is that we cannot interfere with the commercial approach of the banks. That would be completely wrong for the Government to do. Instead, the Government will argue that we have to let the banks operate on a sound commercial basis except if the banks lose. Then all the sound commercial stuff goes out the window and we will underwrite them. That is the way it works for the banks. It is one law for the banks and another for the SMEs and everybody else with whom the banks deal. The only people who do not have to operate on a sound commercial basis, because they will be underwritten by the State, in other words, the people, are the banks. That is not an approach I favour.

I do not want to stop any flow of credit which might be beneficial to SMEs in this dire situation. However, I have to seriously question whether this is effective and sensible as the way to do that. It is not about the objective of doing it but the way of doing it. It is about making it effective to actually help the SMEs. It is about ensuring that if the State, the people, takes the risk and if the enterprise goes well, then the benefits will flow back to the people, not to the shareholders of the banks. The latter is what the Government's proposal is offering.

On the double standards involved, this is part of the wider stimulus package. This is a scheme which the banks will love but which is of questionable value to SMEs. If the leaks are to be believed, the Government is going to increase the possibility that this scheme will fail by cutting the income of those who have lost their jobs through no fault of their own as a result of the pandemic. If it is true that the Government is going to cut the pandemic payment from €350 to €300, how will this help the high street and SMEs. I do not see how it will. It is counterintuitive, unless I am missing something, that the Government is planning to cut the income of the hundreds of thousands of people who have lost their jobs through no fault of their own, as well as further tapering the wage subsidy scheme. This will mean they will have less money in their pockets which, in turn, will mean they will be spending less money in SMEs. How is that sensible?

The only people who are being nicely insulated from any of the problems and risks are the banks. Where did we hear that story before? These are the banks we bailed out to a far bigger tune the last time around but still do not pay any taxes and are making hundreds of millions of euro in profits. The Government, however, wants to make sure they do not have to take any risks. It makes a joke even of capitalism, not that I am a fan of capitalism. This is capitalism with no risk for capitalists. In the enterprise economy, the pioneers of enterprise do not take risks because the chumps representing the people will underwrite the risk for them and make sure that we pay. That does not seem very sensible.

Our alternative is to nationalise the banks. They would not be here without the bailout we have given them. They have not treated the mortgage holders very well and are not treating the SMEs very well. We are underwriting their losses anyway. We cannot trust them to lend to the people who really need it but we are actually enabling them. Why on earth would we not be running them and dictating their priorities? Why can we not ensure that if they do profit, that those very profits come back to the people? Some 30 or 40 years ago, even in capitalist countries, that would not have been seen as a completely radical idea. Apparently, it is off the charts now. We will learn eventually about the folly of socialism for the banks and capitalism for the people. However, we continue to go round the hamster wheel of making the same mistake over and over again.

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