Damien English (Meath West, Fine Gael)
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Question 4: To ask the Tánaiste and Minister for Enterprise, Trade and Employment her views, following a recent publication by Irish Small and Medium Enterprise which stated that some 54% of its members surveyed were refused extensions to overdrafts, term loans and stocking loans in recent weeks, on credit availability to businesses here; if she has had communications with the banking sector regarding the ease of flow of credit to specifically, the small and medium enterprise sector; the proposals in place or being prepared to ensure that SMEs are able to access credit in order to continue trading; if principles have been agreed to, within the banking sector on the issue of lending to SMEs; if she is satisfied that sufficient action has been taken by her to assist SMEs accessing credit; and if she will make a statement on the matter. [41986/08]

Mary Coughlan (Donegal South West, Fianna Fail)
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The proper functioning of the banking system is key to our ability to address the current economic crisis and to our capacity to respond to recovery in the future. The continuing availability of credit to enterprises, especially SMEs, is a central responsibility of the banking system. Ministerial responsibility for the banking system rests with my colleague, the Minister for Finance.

The Government's bank guarantee provided the Irish banks with the support they required to maintain their normal liquidity position in interbank lending and debt markets. This move was essential to allow banks to continue their normal ordinary business of providing credit in this country and contributing to the normal functioning of the economy. The availability of finance is a critical element of overall competitiveness and a key part of our national economic and financial infrastructure. Given that the Government has provided the guarantee, covered institutions in Ireland have access to the liquidity and funding necessary for this purpose.

The Government wants to see the banks meeting the legitimate financial needs of consumers and business. The onus is now on the boards and senior executives of the banks to ensure they are properly positioned to meet this expectation. The banks have confirmed that notwithstanding the challenging economic and financial environment, good projects will continue to be supported by them.

The banks' principal area of focus is on their existing customers or new business customers with good commercially sound projects. They are very conscious of what is expected of them under the guarantee in so far as business lending is concerned. I am in regular contact with my colleague, the Minister for Finance, on the issue and officials of my Department are in ongoing discussions with their counterparts in the Department of Finance concerning the impact of the lending practices of the banking sector on small businesses.

Within my area of responsibility, my Department's continuous support for indigenous companies arises through maintaining a positive business environment and through particular interventions from the State development agencies such as Enterprise Ireland, the city and county enterprise boards, CEBs, and FÁS. I have ensured that these agencies continue to be sufficiently resourced through the Estimates process and that key areas such as the science and technology allocation and micro enterprise support, through the CEBs, received additional funding for 2009.

The agencies are focused on helping Irish businesses through the current economic difficulties to develop and grow their exports, by continuing to prioritise investment in science, technology and innovation and by providing financial and non-financial supports to small businesses. The existing range of training supports will continue and appropriate re-training and support services will be available for those who have recently lost their jobs.

Additional information not given on the floor of the House.

Access to capital is also available to firms through BES and seed capital schemes, and through the venture capital initiatives promoted through Enterprise Ireland, including the Government's investment of €175 million through Enterprise Ireland. Some seven new venture funds have raised over €500 million which is available for investment in the Irish SME sector. The importance of the small business sector is clear, as is the extent of the Governments ongoing commitment to the sector.

The Minister for Finance has already acted positively to support the banking system through the introduction of the State's bank guarantee scheme. Deputies will be aware that the Taoiseach has in the last number of days signalled in this House that the Government is actively considering a range of proposals in this area and is ready to take appropriate action.

Damien English (Meath West, Fine Gael)
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I take it from that answer that the Minister has no plan to help businesses get cash. What will she do to ensure cash is available to businesses? They need overdrafts and small term loans, which are the tools of small business and no longer exist. Does the Minister realise that, and realise how serious this is, because she has not answered my question? What specifically is she proposing to do? Has she met the banks and warned them as regards the situation? Is she willing to engage in some type of State-guaranteed bank loan situation as has been mentioned by the Small Firms Association — and is being done in England — or is she prepared to do anything? We do not seem to have any action plan. I have read through the Finance Bill but it is not being addressed. The only concession there is that new businesses may defer tax, nothing else.

Small businesses have very serious problems. Will the Minister not even encourage her own State agencies to pay them more quickly? Is there not money in the European Investment Bank that may be accessed? Will the Minister not seek it because people are under serious pressure and in January there will be many unpalatable announcements unless we wake up and do something constructive in the next couple of weeks?

Mary Coughlan (Donegal South West, Fianna Fail)
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The inferences are wrong from across the House. I have——

Damien English (Meath West, Fine Gael)
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Tell me why they are wrong.

Mary Coughlan (Donegal South West, Fianna Fail)
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I have been in constant discussions and negotiation. I have met and spoken to the chief executives of the major banks, as has the Minister for Finance on my behalf. On the issue of access to the EIB, four banks from Ireland have been in discussions with it regarding access to funding specifically for enterprises.

On the issue of the proposals by the Small Firms Association, which I met last night, we have agreed that the small businesses want a forum between themselves and the banks, which is being set up.

On the issue of funding, it would be best for the banks to provide a facility in order for that to happen. That view has been expressed to the banks on my behalf by the Minister for Finance, and I, too, have advanced it to them.

I have indicated I will examine the issue of prompt payment, which is part of an answer to a question to be addressed later. My colleagues in the UK have decided to introduce a ten-day turnaround period. However, I would urge people to pay within the existing timeframe, although improvements in the feasibility of this are being examined.

There is no point in putting down an unreasonable marker that cannot be achieved. That would be foolish and retrograde. We are working towards what is feasible and what may be done to ensure that prompt payments progress as quickly as possible.

Damien English (Meath West, Fine Gael)
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Is the Minister aware that our counterparts in the UK have put a condition on the banks regarding recapitalisation, specifying that money must be made available, particularly for small businesses? Will she assure the House that if the Government decides to invest money in the banks she will insist the Minister of Finance ensures this condition also applies here? This is very serious and I want to get that through to the Minister.

A useful initiative in the UK is in the whole area of credit advice being made available to small businesses. More professionalism is being provided to give them good advice with regard to invoicing, credit management and so on. That is real action and it is needed. I realise we have mentors, enterprise bodies, training boards etc., but we need to send specific professional help into businesses to give them the advice and coaching they need to get through these tough times. That alone might encourage the banks to lend them some money.

Mary Coughlan (Donegal South West, Fianna Fail)
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I will support any initiative that will help the SMEs and I have met many of them on the specific issues they want addressed.

Damien English (Meath West, Fine Gael)
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I did not say that.

Mary Coughlan (Donegal South West, Fianna Fail)
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We did not nationalise our banking system, it must be emphasised. I reflect on the time when we did have State-owned banks and there were reasons why we decided they should not continue, on the basis that Governments did not run the banks.

Damien English (Meath West, Fine Gael)
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I did not ask about that at all.

Mary Coughlan (Donegal South West, Fianna Fail)
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The Deputy is on the mantra of the Fine Gael spokesman on this issue and making an assumption.

Damien English (Meath West, Fine Gael)
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I specifically asked what the Minister will do. I only asked if the Government intends to capitalise the banks.

Mary Coughlan (Donegal South West, Fianna Fail)
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I cannot answer that because I do not engage in speculation of that kind. We have impressed the position on the banks in the context of the bank guarantee. We have not capitalised the banks. The view is that at this time that is not necessarily where we need to be and that other initiatives are available. We are working with the banks and, as the Deputy knows, the Minister for Finance is working on these issues on a day-to-day basis, as a matter of urgency. To say that——

Damien English (Meath West, Fine Gael)
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With respect, the question I asked——

Charlie O'Connor (Dublin South West, Fianna Fail)
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I am sorry, but the time for this question has concluded. If I allow the Deputy, there will not be time for his next question. I have to do my job.

Damien English (Meath West, Fine Gael)
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It does not matter about my next question. The Minister has not answered my question, so I must ask it again.

Charlie O'Connor (Dublin South West, Fianna Fail)
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Very quickly.

Damien English (Meath West, Fine Gael)
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Is the Minister aware that the UK Government, as a condition of putting money into the banks, specifically insisted that money should be made available to business? I am only asking whether the Minister agrees with that concept. If the Minister for Finance ultimately decides that money has to be put into the banks, will the Minister urge him to have this condition inserted? I am asking her for her views in this regard.

Mary Coughlan (Donegal South West, Fianna Fail)
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One cannot have views on this issue. The situation is that we have not capitalised the banks. Therefore that question does not arise.

Damien English (Meath West, Fine Gael)
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That is not an answer to the question.

Mary Coughlan (Donegal South West, Fianna Fail)
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That was the question, and there is the Deputy's answer. The matter does not arise, as we have not capitalised the banks.

Charlie O'Connor (Dublin South West, Fianna Fail)
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The Deputy will get his chance again. I must follow the order of theday.

Damien English (Meath West, Fine Gael)
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It proves my point that they do not have any answers.

Charlie O'Connor (Dublin South West, Fianna Fail)
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I do not know what I am supposed to do in these circumstances. The Chair is not allowed to sing.