John Perry (Sligo-North Leitrim, Fine Gael)

I am delighted to be here again. I note there is to be a three-hour debate this afternoon on jobs ideas, which will be an important debate. I discussed earlier with the Leader the importance of ensuring the advisory group, which is the group that advises Government on actions for business, receives a copy of the transcripts of that debate and is given an opportunity to respond. Some great ideas were put forward during last week's debate, as I am sure will be the case today.

I thank all Senators who contributed to the debate today and last week on the report of the advisory group for small business, The Voice of Small Business – A Plan for Action. I appreciate the quality of the interventions and acknowledge that many Members spoke from personal experience of running successful businesses and the challenges in that regard in the current economic climate. I thank Senators Mary White, Mary Ann O'Brien, Fergal Quinn, Tony Mulcahy and Jimmy Harte for their business insights. Many useful points were made by all Senators. Government must listen to and take on board the many good ideas put forward by Members of this House.

All Senators who contributed welcomed the setting up of the advisory group and the dialogue structures that have been put in place. It is important that there is dialogue with people who have first-hand knowledge of operating a business. The Government cannot create jobs but it can create the environment within which employers can retain and create new jobs. I welcome publication of the group's first report, in respect of which I thank Senators for their respective contributions, which have been noted by the Department and will be brought to the attention of the advisory group who will listen in to this afternoon's debate on jobs ideas. I thank Senators for their support of the work of the advisory group. Small business is the backbone of this economy. Access to credit is the lifeblood of business. People who run their own companies know only too well the difficulties currently being experienced in this regard.

Many Senators spoke of the no-problem-no business concept. Business is about problems and dealing with them. The taxpayer has invested heavily in the banking sector and the banking sector is now duty bound to invest in companies that can create jobs. This does not appear to be happening. Senators also acknowledged the importance of the small business sector to the future well-being of our economy and local communities throughout the country. Some Senators outlined examples of where small businesses can make a real difference to local employment, thereby helping to build local confidence and self-belief. Management of local enterprise and artisan companies was mentioned. It is important, in the context of regeneration of town centres, that the advantages of the stand-alone shop versus the multiple is taken into account. It would be a real tragedy if, as is the case in the UK, all our town centres were closed down. Planners must ensure this does not happen. The message of building confidence and self-belief must be highlighted and encouraged at every opportunity.

Practically all Senators who contributed to the debate over the two sessions referred specifically to access to credit as thekey issue facing small businesses at the current time. I referred last week in my remarks to the Seanad, to the various initiatives taken by my colleague, the Minister for Finance, Deputy Noonan, to restructure and recapitalise the banking system, which is the Government's principal response to making the banks once again fit for purpose and in a position to make credit available to viable businesses. The loan guarantee scheme and micro-finance funds are additional Government responses to supplement normal bank lending and to provide additional lending where specific measures are warranted. However, this will not substitute for banks doing their job. The banks have been well capitalised. My colleague, the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, is working to implement these two initiatives. The pillar banks operate in an arms length capacity in relation to their operational issues. It is a matter for the respective individual boards and management to determine and implement operational policy in their organisations. Given AIB is in State ownership and the Government's stake in Bank of Ireland, it is important that these banks meet their obligations.

Senator Clune highlighted the fact that when businesses are applying for credit they must have credible business plans. As a businessman, I fully agree with this as I know the importance of being able to show the reasons for requiring credit and one's capacity to repay any loans from ongoing cash flow. This is all about confidence in the economy. A series of meetings are to be held with Mr. John Moran, head of banking, to discuss the issues pertaining to companies experiencing huge difficulties in terms of accessing funding. Mr. John Trethowan, of the Credit Review Office, has commented on this issue in his quarterly reports. Some €3.5 billion has been invested in the two pillars and they must meet their obligations.

Allied Irish Banks and Bank of Ireland, working with Mr. John Trethowan, have developed standard credit application forms so that customers can clearly see what information is required in support of an application. This will ensure customers who wish to shop around between banks are not faced with different sets of information requests. The application form has been standardised and simplified. Where appropriate, small businesses can seek assistance from Government agencies, including Enterprise Ireland and the county enterprise boards to ensure that their business plans are as developed as possible. It is important that viable small businesses refused credit are not afraid to use the banks' internal appeals systems and that if this route proves unsuccessful, they consider seeking the assistance of the credit review office. There is no question of the banks taking a negative view of customers who follow these procedures. The more people who use these procedures, the better picture we will have in terms of the banks' performance in meeting the needs of viable businesses.

Small businesses also have statutory rights under the code of practice on SME lending, which is overseen by the Financial Regulator. I highlighted last week that both pillar banks have given commitments to sanction lending over the period 2011 to 2013 as follows: at least €3 billion in 2011; €3.5 billion in 2012 and €4 billion in 2013. It is important the banks deliver on this and do not, as suggested by some Senators, engage in reinventing or recapitalising existing loans. The banks must engage in new lending rather than in reconfiguration of existing loans. Senators Mulcahy, Comiskey, Ó Murchú, van Turnhout and Keane raised the issue of access to credit from banks. That is very important. The Government will monitor lending patterns to ensure banks honour commitments. Furthermore, the Taoiseach, the Minister for Finance, Deputy Noonan, and the Minister for Public Expenditure and Reform, Deputy Howlin, will meet representatives of the banks to ensure the €3.5 billion from both banks - or €7 billion in total - will be lent to small companies. We must see this benchmarked independently with Mr. Trethowan. The Government will monitor the issue and I will return to the House to provide an update on the matter.

This House will consider recommendations for business this afternoon and the Government is in listening mode. The small business advice group will take on board recommendations from the Seanad. I spoke to the Minister, Deputy Bruton, this morning, and we are anxious to respond to that debate as all the contributions from today and last week are very important. People do not want lip service and there should be a meaningful benefit for small companies. The backbone of this economy is made up of 200,000 small companies employing 655,000 people. We should never lose site of an employer and the wonderful initiatives such people take, in partnership with good staff, despite risk.

As part of this monitoring process, we are also holding a series of regional meetings around the country in the coming weeks, with the banking section of the Department of Finance, to discuss access to bank credit with key local stakeholders. I will be on that roadshow with Mr. John Moran from the Department. It is important that when these meetings are advertised we get people to clearly debate the issues. We will get small firms associations and representative bodies to attend as well. These meetings will explore the findings of the latest Mazars survey on credit demand published by the Department of Finance late last year and look at the actions being taken by the Government to improve access to credit for SMEs.

Yesterday's report from Enterprise Ireland indicated the highest export level ever in this country and that can lift the mood of the domestic economy. There is much pessimism out there, even within some media outlets, and some of the companies and small businesses I have seen would lift the confidence of employers and the domestic economy. It is amazing how jobs can be created, and people must be optimistic for the future. Considering the successes of some extraordinary companies in Ireland, which I have seen at first hand, I am encouraged about the capability and competence of business people. They know how to deal with recessions and can manage the crisis.

The meetings will allow both our Departments to hear at first hand the views and experiences of local business representative groups, local bank representatives and State agencies on access to bank lending. I very much look forward to fruitful and constructive exchanges at these meetings. It is important that these meetings compliment the information provided by the Mazars survey and ensure that ongoing and future Government policies on credit to SMEs are based on as much information as possible and be implemented as soon as possible.

The Mazars survey has shown that 36% of SMEs surveyed requested bank credit in the period April to September 2011, and when applications pending were excluded, 70% of those requests were approved. With the 64% of SMEs which did not request bank credit in this period,80% did not need credit or had sufficient internal reserves and 7% believed the banks were not lending. Access to the Mazars report is available through the Department of Finance website. It is important to study it as it runs contrary to what one may hear from those in business. We intend to have those meetings around the regions to discuss the findings of the report.

Senators John Kelly, Quinn, Mullen, Reilly and Harte highlighted the issue of red tape and administrative burdens being placed on small business. We want to keep processes simple and issues such as the numbers of licences required to sell food, burdens placed on employers in the area of employment law and wage rates, rents and local authority rates costs have been raised. These are important, and we must consider the number of inspectors that come to a company, and regulation. Senator O'Brien mentioned Fingal, where rates have been reduced, and some local authority regions have tried their best not to increase them. The cost of doing business by Government agencies must be reduced. Initiatives are being taken by the Minister, Deputy Bruton, with regard to wage setting arrangements under EROs and REAs, which are addressing labour market costs and flexibilities. I welcome the support for this. The job was difficult because the arrangements have been in place since 1946, and Sunday is very much part of the working week now. Any employer must take those changes into account when managing staff.

Local authority structures and reforms have been highlighted and are also being advanced by my colleague, the Minister for the Environment, Community and Local Government, Deputy Hogan, in consultation with his ministerial colleague, Deputy Bruton. We will work on management within local authorities, volumetric water charges, refuse charges and other costs from local government on small companies. These can be prohibitive and there may not be a return from local government. We must encourage enterprise and small companies to retain staff. It is far simpler to encourage employers to create a job than make somebody redundant.

In my capacity as chairman of the high level group on business regulation, I am working across Departments with a view to reducing burdens on business. Progress has already been made in a number of areas, including in my own Department, where we already have cut the administrative burden it places on business by 22%. My Department has measured administrative burdens arising in three key areas of regulation, namely, company law, employment law and health and safety law, which amounted to some €831 million per annum in costs for business, which is outrageous. The Government's target is to reduce these burdens by 25%, and this dictates that €208 million must be cut from these costs for business. At this stage, €187 million of this €208 million target has already been reached. We are also working across seven Departments and the Revenue Commissioners in reducing administrative burdens for business, and this work is to be completed by mid 2012.

I am personally taking an initiative to convene "simplification workshops" in all the major areas of regulation affecting business. These workshops will be arranged shortly around the country, and I would encourage business people to attend them and help us to identify the most practical ideas for reducing measured red tape costs. The advisory group's report also makes recommendations in this area and they will be progressed in consultation with the high level group on business regulation. This is about cutting regulatory and administrative burden on companies. We are anxious to get the report from Senators on today's debate and how they feel the regulatory burden can be eased.

I also referred last week to the initiative to extend the 15-day prompt payments initiative beyond central Governments to the wider public sector in respect of all valid invoices received from 1 July 2011. This is further assisting the cash flow of many small businesses. Business can follow the lead of Government and do more in paying suppliers on time. I will be discussing with relevant stakeholders the introduction of a voluntary code of practice for businesses to improve payment performance. There is an opportunity for businesses, especially bigger businesses, to respond favourably to such an initiative and contribute to the stability of smaller businesses.

Senator Cummins mentioned the management of cash flow and it is important to consider other methods of funding, such as crowd financing. The issue of enterprise boards was raised and there will be an announcement shortly regarding a single point of contact in every county for anybody establishing a company. There will be a reconfiguration of enterprise boards and a new initiative with local government. There will be a one-stop shop for doing business, involving a reconfiguration of services to eliminate duplication.

The matter of procurement was raised, particularly with regard to the €15 billion of State contracts. We had a meeting yesterday with the Minister of State, Deputy Hayes, on procurement contracts for Irish companies. We are considering a procedure that will allow small companies to access this critical area. Senator Darragh O'Brien raised the matter of credit and I advised him to send me details of the company to which he referred. He also referred to the fact that the Fingal County manager had reduced rates by 60% and this is a model we will look at. He emphasised the role of enterprise boards, mentoring and support for small companies, which are important issues. Senator Darragh O'Brien was also in agreement on wage rates and the back to work scheme, which is very important. He made a point about the roll-over of commercial loans. Regarding banking and giving facilities to businesses, the message is very clear that this is about jobs and supporting viable companies. The banks have a critical role to play.

Senator Harte made a point about the CSO figures released yesterday, which I have seen. Managing our way out of the crisis is very important and mentoring ideas are important. Senator Coghlan referred to monitoring banking and enterprise boards. We are dealing with this. Senator Hayden referred to unsecured creditors, which is an important point in respect of non-preferential creditors and the importance of just-in-time learning. Mentoring companies, Plato Ireland and the ICT sector have great potential. Dealing with the construction sector is also critically important.

Senator O'Donovan referred to the loan guarantee scheme, which we must examine from the viewpoint of rents and rates. Senator Sheahan referred to county enterprise boards, artisan products and trade. It is important that we deal with that and rates and valuations are equally important. Rates have a major effect on companies. Senator Sheahan's point concerned banking. Senator Daly used the example of the difficulties Government imposes on the development of companies, the potential of Valentia Ireland and the disincentive to create tourism potential.

Getting enterprise boards working with local authorities and the recognition of small enterprise companies is very important. I have tried to give due recognition to the points made over the two sessions. If I failed to mention any Senator by name, I ask Members to accept my apologies. I listened carefully to what has been said and I will give due consideration to the points made. Small businesses are not just a vital part of our economy, they play a vital role in our society and in our local communities. I refer to community regeneration and community enterprise, which we must tap into, and community economic development, which was very successful in past recessions. It is amazing how one can get the regeneration of the community through community economic development companies. We must look at this effective model once again. It is about bringing the lifeblood into the empowerment of communities and the empowerment of business people who can give of their time in mentoring, which is very successful.

The BIC Network is having what will be a very successful event in Cork in the coming weeks where 21 successful business people mentor start-up companies. Many successful people have retired from companies and they can give of their time. As Minister of State with responsibility for small business, I intend to continue to ensure that the business environment supports them. Our future economic prospects depend on sustaining a strong entrepreneurial spirit, even in the face of unprecedented economic challenges. The Government is focused on ensuring small businesses are supported in every way to develop their businesses, increase exports, create jobs and rebuild the economy.

I thank every Senator for participating in this debate. It is important to buy-in to this document. Many reports were published in the past and it is very important that we empathise with business people. We must recognise them, understand them, display concern and respect and this Government will give service to smaller companies that are the backbone of the economy. They are run by the people who create up to five jobs. If 25% of the 200,000 small companies created just one job, we would have 50,000 jobs at little or no cost to the State. It is important to lift the mood of the economy and encourage people who have entrepreneurial ideas. They should be encouraged and supported and the micro-finance fund will strongly support the commercialisation of knowledge through third level colleges. This represents a major business opportunity.

I thank the Cathaoirleach for setting aside time over two days in this very important discussion. I look forward to coming back to this Chamber to discuss further reports.