Dáil debates
Wednesday, 19 January 2011
Priority Questions
Small Business Sector
3:00 pm
John Perry (Sligo-North Leitrim, Fine Gael)
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Question 59: To ask the Minister for Enterprise; Trade and Innovation if he has satisfied himself with the level of support for micro, small and start up businesses in relation to job retention and job creation; if support for incubation centres are adequate to help start ups; and if he will make a statement on the matter. [2911/11]
Conor Lenihan (Dublin South West, Fianna Fail)
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Support for micro-enterprise, small businesses and new start-ups is provided by my Department through the county and city enterprise boards and Enterprise Ireland.
I have made a capital allocation of €15 million available to the CEBs in 2011. The CEBs will prioritise and manage these funds in a targeted manner in order to maximise entrepreneurial development at local level.
Enterprise Ireland operates a range of entrepreneurship programmes that provide participants with the business skills, contacts, mentoring and support to potentially transform their innovative ideas or technologies into exporting businesses. Funding of over €213 million is available to Enterprise Ireland this year from my Department's Vote to support companies, including through research and development grants and collaboration with third level institutions.
Under the auspices of Enterprise Ireland, the Government has also invested significantly in the broader environment for business start-ups, including investment in incubators, seed and venture funds, angel networks and mentors.
Enterprise Ireland also provides support to community enterprise centres, CECs, and business innovation centres, BICs. These centres provide a range of facilities that enable entrepreneurs to establish new businesses, provide employment and grow their businesses locally.
There are currently 21 Enterprise Ireland supported campus incubation facilities and six specialist bio-incubation facilities in operation in Ireland. Approximately 240 new companies are based in these centres, employing in the region of 1,000 people. In addition, there are approximately 5,000 people employed in community enterprise centres throughout the country.
In regard to the availability of credit for small businesses, the Deputy will be aware that the Government has secured a commitment from the main lenders, AIB and Bank of Ireland, to make available at least €12 billion in total for new or increased credit facilities to SMEs over 2010 and 2011.
The National Recovery Plan 2011-2014 sets out further actions which will be taken to improve supports for all businesses. These include: measures to cut costs to business in the areas of energy, waste, professional fees and property; the extension of the 15 day prompt payment rule beyond central Government Departments to the wider public sector; investigating the potential for using vacant or under-utilised property as incubation centres; and there is also a commitment to review the business expansion scheme.
My priority is to ensure that both the business environment in Ireland and the assistance available from the enterprise agencies continue to be supportive of enterprise and encourage growth in all areas of the economy.
John Perry (Sligo-North Leitrim, Fine Gael)
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I thank the Minister for a comprehensive reply. With regard to the €15 million for 34 boards, when the staff costs are taken from that the net benefit to small companies is minimal.
The Minister gave a comprehensive reply and I have several supplementary questions but on the funding aspect, will the Minister agree that a tremendous opportunity was missed to access EIF finance in these challenging times? Will the Minister not agree that the enterprise network had major consultation with the EIF and that money was available? Is it not a damning indictment of the Government that the only EIF approved micro-finance institution in the country is First-Step? Despite what the Minister of State said about John Threthowan and with regard to the banks, funding is not available. Is it not a fact that many loans that have been approved by CEBs with local credit unions have been rejected by mainstream banks? That is a fact.
Conor Lenihan (Dublin South West, Fianna Fail)
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It is disappointing that we have not had a bigger draw-down in this area but the banks and Enterprise Ireland are working collaboratively to encourage their own systems of understanding of each other's work to ensure that can be achieved. A new scheme was announced by my senior colleague, the Minister, Deputy Batt O'Keeffe, with regard to an exchange programme between Enterprise Ireland and the banks.
We must be clear, in terms of credit flow in Ireland, that because of the boom years and the dependence on property based lending as opposed to lending based on cash flow businesses or real businesses, as other people might describe them, there was a major loss of expertise and analysis within banks to lend to real businesses. Part and parcel of the initiative of Enterprise Ireland, and this Department and my senior colleague, has been to try to encourage much more movement in this area. There is a vibrant exchange programme now in terms of the banks placing personnel in Enterprise Ireland and vice versa and from my own constituency experience, I have had to intervene to a certain extent with local companies where major misunderstandings had developed in terms of banks lending to companies and not realising the viability of such companies, even in these terrible times of recession. There is a learning curve to be gone through by everyone involved in this area.
John Perry (Sligo-North Leitrim, Fine Gael)
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I do not believe the story about the banks because it is not happening. Despite what the Minister of State might say and the guarantees, and I met John Threthowan last week, the money is not getting through. I refer to the EIF finance that is available in Europe. Is it not a fact that money is available and that the Minister of State's Department did not respond to the CE boards with regard to the availability of funds, namely, between €5,000 and €25,000 for small companies, that can be accessed? That is not happening. Can the Minister explain the reason the Government did not have proactive discussions with the EIF in Europe where cash products and loan guarantees are available? Those funds are available in Europe and this Government has done nothing to access that fund. The Minister should forget about the banks. The banks are not doing the business. That is the question.
Conor Lenihan (Dublin South West, Fianna Fail)
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If I might correct the Deputy, it seems that the order of the day for everybody is to simply say the banks are not lending.
John Perry (Sligo-North Leitrim, Fine Gael)
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I am talking about the EIF.
Conor Lenihan (Dublin South West, Fianna Fail)
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The evidence, such as we have it, from all of the sources available to the Department, particularly the work of John Threthowan, is that there is and has been-----
John Perry (Sligo-North Leitrim, Fine Gael)
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I am asking about the EIF.
Conor Lenihan (Dublin South West, Fianna Fail)
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-----an increase in the amount of lending to small enterprises here in the past year.
John Perry (Sligo-North Leitrim, Fine Gael)
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The Minister is side tracking. They are not getting through.
Conor Lenihan (Dublin South West, Fianna Fail)
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It is not a side track. If the Deputy believes that lending to small business is a side track, I do not know if he is-----
John Perry (Sligo-North Leitrim, Fine Gael)
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Can the Minister answer the question on the European Investment Fund-----
Brendan Howlin (Wexford, Labour)
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Allow the Minister of State to reply.
John Perry (Sligo-North Leitrim, Fine Gael)
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-----that is available, cash guaranteed, with the credit guarantee for small companies? The Department has not-----
Brendan Howlin (Wexford, Labour)
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The Deputy has put his question. The Deputy will not ignore the Chair.
John Perry (Sligo-North Leitrim, Fine Gael)
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He will not answer the question.
Conor Lenihan (Dublin South West, Fianna Fail)
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With respect, I did in my last reply to the Deputy.
John Perry (Sligo-North Leitrim, Fine Gael)
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You did not answer the question.
Conor Lenihan (Dublin South West, Fianna Fail)
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I did. I said Enterprise Ireland and the banks-----
John Perry (Sligo-North Leitrim, Fine Gael)
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I am talking about EIF finance that is available for small companies.
Brendan Howlin (Wexford, Labour)
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Please do not shout down Members.
Conor Lenihan (Dublin South West, Fianna Fail)
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I am trying to answer the question.
John Perry (Sligo-North Leitrim, Fine Gael)
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Viable companies are closing down while we hear all this waffle.
Brendan Howlin (Wexford, Labour)
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Allow the Minister to answer the question.
John Perry (Sligo-North Leitrim, Fine Gael)
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He did not answer the question he was asked.
Conor Lenihan (Dublin South West, Fianna Fail)
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I did. The last time-----
John Perry (Sligo-North Leitrim, Fine Gael)
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Tell me about the EIF please.
Brendan Howlin (Wexford, Labour)
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I ask the Minister to take a seat for a moment. If he would allow me to chair the proceeding and if Senator Perry would allow, in a calm fashion-----
John Perry (Sligo-North Leitrim, Fine Gael)
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He is annoying me.
John Perry (Sligo-North Leitrim, Fine Gael)
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We have heard it all before.
Brendan Howlin (Wexford, Labour)
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-----and I will allow the Minister to reply calmly.
Kieran O'Donnell (Limerick East, Fine Gael)
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You might encourage the Minister to answer the question.
John Perry (Sligo-North Leitrim, Fine Gael)
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EIF funding. That was the question.
Brendan Howlin (Wexford, Labour)
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Yes. Unfortunately, the Chair has no control over the answer given.
Batt O'Keeffe (Cork North West, Fianna Fail)
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The Deputy is getting excited.
Conor Lenihan (Dublin South West, Fianna Fail)
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It is great to see the Deputy getting excited.
Brendan Howlin (Wexford, Labour)
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The Minister of State, I have no doubt, will now address the question raised.
Kieran O'Donnell (Limerick East, Fine Gael)
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His original thoughts.
Conor Lenihan (Dublin South West, Fianna Fail)
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As I said in my earlier reply, Enterprise Ireland, the banks-----
Conor Lenihan (Dublin South West, Fianna Fail)
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-----and the Department are working towards drawing down more assistance and funding from the EIF through the schemes. That is work in progress.
On the Deputy's wider assertion that credit is not getting through to small and medium-sized enterprises, that is not borne out by the facts in the credit reports we receive from the Central Bank and from the office headed by John Threthowan, which we set up deliberately to police and patrol the commitments made by the banks. It would not be wrong if occasionally a member of the Opposition's spokesmen's group such as Deputy Perry would acknowledge the fact that €12 billion is available now from both AIB and Bank of Ireland for this year and next year to extend to small and medium enterprises. It would be helpful also if Deputies in this House would advertise that fact locally.
John Perry (Sligo-North Leitrim, Fine Gael)
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The Minister should make an application and see if he gets it. It is not available.
Conor Lenihan (Dublin South West, Fianna Fail)
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I have acknowledged-----
John Perry (Sligo-North Leitrim, Fine Gael)
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Have you spoken to a businessman-----
Conor Lenihan (Dublin South West, Fianna Fail)
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In fairness, I have acknowledged the difficulties.
Brendan Howlin (Wexford, Labour)
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Very good. I ask the Minister to take a seat.
John Perry (Sligo-North Leitrim, Fine Gael)
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EIF finance is separate to the bank funding. It is a separate application. It has nothing to do with banks.
Brendan Howlin (Wexford, Labour)
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Deputy Perry, please do not ignore the Chair.
John Perry (Sligo-North Leitrim, Fine Gael)
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It is incorrect information.
Brendan Howlin (Wexford, Labour)
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Do not ignore the Chair, and do not try to shout down the Chair.