Paddy Burke (Fine Gael)

I welcome the Minister of State and the opportunity to say a few words on this debate. Like Senator Phelan, I see merit in both the motion and the amendment. I do not have any great problem with either because I support aspects of both. On the issue of credit unions, the credit union in my area, in Castlebar, is very well run and I compliment it on the work it is doing in the Castlebar area and the service it is providing to the community. All I hear about it is good.

The Minister of State said in his speech:

The recapitalised banks have also agreed to engage in a clearing group chaired by a Government representative and including representation from business interests and State agencies. The purpose of this group will be to identify specific patterns of events or cases where the flow of credit to viable businesses appears to be blocked and to seek to identify credit supply solutions.

I have raised this issue before. I find it hard to believe what the Minister said because if it is a good business there should not be any great problem with the financial institutions. The one thing the banks will be looking for from now on is viable businesses and there will be no great need for a clearing group. How will the clearing group work? If finance is refused, the issue goes back to the clearing group, but where does it go from there? Does it make a recommendation to the bank or another financial institution, or will the Government give funding to viable businesses? It is the bank's business to lend money and it must have a certain amount of discretion with regard to giving and refusing loans. Thus, I question the concept of the clearing group.

Credit unions have provided a great service over the years. I know from small shopkeepers and business people that were it not for credit unions in particular, they would never have got off the ground. In many cases they raised money from the credit union so they could go to the banks and show they had funds in place for their business plans. However, I urge the Minister to ensure that county enterprise boards are also properly funded, because they are not currently. As we have seen, many county enterprise boards are doing great work and in every county the enterprise board is producing 50, 60, 70 or 80 jobs year-on-year. In my county, the enterprise board created 60 or 70 jobs last year with a budget of €500,000. Does this mean if it had another €500,000 it could have created another 50 to 60 jobs? We are creating many jobs with little money. This is an area that should be properly financed. It is one of the most important areas for small businesses. We are talking this evening about small businesses, many of which cannot get funding and must start with credit unions. In some cases they are refused by banks and must go back to clearing groups.

In the area of small business, the county enterprise board and the credit union are essential. They can work hand-in-hand with the banks, which are to make available a package of €100 million in seed and venture capital for small and medium-sized businesses. This is an issue that should be considered in more detail. I have great respect for the county enterprise board in Mayo, which is doing a wonderful job. If it was better funded it would create more jobs. In the past ten years, which were the best in the history of the State, a mere ten jobs were created in County Mayo by Enterprise Ireland, whereas the county enterprise board is generating 60 or 70 jobs annually with little funding. That is an area that should be examined.

I am saddened by what has happened in some credit unions which attempted to enter the commercial lending market despite having no experience of this area. The local credit union in Castlebar does a great job and has developed a solid base in the community.