Gerald Nash (Louth, Labour) | Oireachtas source

I am pleased to speak on this solutions oriented motion on behalf of the Labour Party. The Labour Party is a party that uniquely values and understands the issue of work, the question of work, the dignity of work, and the value of work that contributes to our society. We cannot have the kind of decent work that we strive to have if we do not understand how business works and if we do not try to create the conditions in which viable businesses thrive. This is the essence of social democracy: good jobs in a regulated market economy that works.

We accept that there are many good and viable businesses that are struggling to survive at present. We meet those business owners every day. The reasons for their vulnerability are many and complex. The conditions and the costs of simply being in business have escalated and are escalating. This is causing real anxiety for business owners, the people who - in our experience - are the very last to get paid. Since 2017 or 2018 we have not had what one might call normal trading periods or a horizon that might be viewed by SMEs with great confidence. There was the threat of a bad Brexit, we had the pandemic and there is war in Europe and the consequences of that. The response by the State and the supports provided to enterprise to meet the employment and business challenges faced by this polycrisis were unprecedented.

Those supports worked and we got through that but I fear that with the winding down of supports and when the tide goes out, many businesses will be exposed and in danger. I put it to the Minister of State that they will be exposed due to still high energy costs. Businesses are vulnerable and unable to invest because of the high cost of borrowing as a result of still very high interest rates, limited competition in retail banking and limited access to alternative forms of finance. The insurance sector is still charging high premiums despite Government reforms. Businesses are worried about higher labour costs as workers understandably seek higher wages, partly as a result of Government failures on housing supply and rent control, expensive services, the high cost of childcare, and the cost of living.

This motion proposes many sensible ways in which the Government can support the indigenous enterprise sector. I have had the privilege of being a Minister of State at the Department of Enterprise, Trade and Employment for two short years. We brought in a range of measures, new initiatives and legislation to help improve the environment for new businesses, to help them work and to create new jobs. We did this at the time with a reforming zeal that made us adamant that every single job is valuable and every business deserved a chance. We need a renewed target and focus at the heart of Government. We did this because while our foreign direct investment sector is the part of the economy that gets the headlines, as do our internationally high performing Enterprise Ireland client companies, the unsung heroes are the people in small-town Ireland and in our cities who are responsible for 1.2 million jobs, which is close to 70% of our entire labour force. We set up the successful local enterprise office network, Microfinance Ireland, new credit guarantee schemes and codes of practice to get SMEs paid on time. We also set up the retail forum now chaired by the Minister of State, Deputy Richmond, recognising that retail is the single biggest private sector employer, as well as introducing online trading vouchers to get businesses online; placing a real focus on high-potential startups and a renewed and unprecedented focus at the time on the economic potential of cultural enterprises and the design sector. The list goes on. At present, there is an anxiety about additional costs being imposed on businesses that are just emerging from a difficult time, albeit a time when they could rely on very generous State supports.

We in the Labour Party have been calling for moves to a living wage, moves to bring employer PRSI up to EU norms, an auto-enrolment pension scheme and other important delayed initiatives to bring us up to basic European social standards. We make no apologies for that. Most business owners understand the need for these initiatives. The Minister will understand, however, that businesses find it difficult that this is happening all at once. It need not have been like this. This is the point. These are measures that could have been introduced between 2016 and 2020 on a progressive and planned basis but the then Government, backed by the Minister of State's party, chose not to. In failing to do all of this then, the Government quite frankly has made a rod for its own back.

The motion is correct that we need a fresh and renewed focus on the SME sector and on locally traded businesses that need to be minded. What does that mean in practice? I am attracted to the idea contained in the motion of a standing group, or a task force as it is described, on small and medium enterprises. While a task force suggests it is a short-term measure, I believe there should be a standing group at the heart of Government addressing these issues given the prominence and importance of the SME sector. The sustainability of the SME sector cannot be addressed by piecemeal and short-term cuts to the VAT rates, for example, and time-limited and expensive subsidies that do not deal with the fundamentals and are of questionable efficacy anyway. I believe that a group as described in the motion should be set up, however.

When we in the Labour Party engage with local restaurant owners up and down the country in our constituencies and when we get down to the roots of the challenges they face it is not in the end ever about VAT. When it is stripped down, it is about energy costs, labour supply, commercial rates, high commercial rents, high costs of insurance and insurance claims and a lack of affordable finance. To take first things first, if the right decisions are made, these are areas the Government can help to regulate, manage and control. In recent months, for example, we called for an extension to and more flexibility in the warehoused tax debt.

The Minister for Finance has delivered on that. The Labour Party has argued cogently that the Government took the wrong approach on energy costs. The low take-up of the temporary business energy support scheme, TBESS, proves that.

We have called on the Government to do something practical to address labour supply in a tight labour market such as reviewing the stamp 2 permission to enable those who are currently allowed to work 20 hours a work to take on more hours, thereby automatically introducing more labour supply into a tight market. I also urge the Government to keep our permits system under regular review and make it more responsive to proven and identifiable labour market needs. Another action would be to process international protection applications more efficiently and consider allowing applicants to work sooner than the system currently allows.

The Government should have the courage to carry out a full and comprehensive review of, and initiate a change of approach to, the whole principle of what is a Victorian commercial rates system. It is an inequitable system for bricks-and-mortar businesses, which have to carry an unfair share of the cost of local services. Last week, Irish Small and Medium Employers, ISME, proposed that the 1% training levy be suspended for a time. Given that the training fund is in surplus, that proposal could be considered for implementation on a short-term basis to give some relief. More than ten years after their establishment, it would be timely to review the remit of the local enterprise offices, LEOs, as well as that of Enterprise Ireland. Alternatively, we might examine the prospect of creating a new agency to focus in a targeted way on the prospects of medium-scale businesses in Ireland and how we can scale them up and make them more productive.

All of these measures, taken together, could have a real impact for SMEs. While we have some issues with aspects of the motion that has been brought forward, we support its broad thrust and what it is trying to achieve.

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