John Perry (Sligo-North Leitrim, Fine Gael)

When it comes to credit control they are hard to beat.

We must ensure we have an outlet for entrepreneurial initiative. It is about the marketability of ideas and the chance to turn them into commercial products. Ensuring entrepreneurs are confident about going into business and creating jobs is an essential element of government. Ensuring Ireland is strongly perceived as a good place to do business is essential to generating this confidence. We are committed to making Ireland the best small country in the world in which to do business by 2016. The Taoiseach is very committed to this and we are reducing the regulatory burden on business and cutting down the red tape, which is very important. Access to credit is also important as is the recognition of employers.

The Government has a legitimate and important role in improving the financial environment for small and medium enterprises. Carefully designed legislative intervention such as this can help the market function better and gives certainty to businesses and confidence to consumers. The legislation will inspire confidence among small and medium enterprises in the banks' ability to provide an improved service to them as customers, including those who were previously discouraged from borrowing. The Taoiseach has held the banks to account. He has met the two pillar banks and I believe a simplified application form has been created. Where someone has been refused credit the code of conduct means an internal review can be done and Mr. Trethowan's office has overturned 50% of the appeals it has received. I strongly recommend people avail of this service. I also encourage people to make applications and if they are refused not to be intimidated and to appeal it to Mr. Trethowan's office. It has been frequently acknowledged that in the recent past a cohort of discouraged borrowers assumed they would be turned down and therefore did not apply for credit. These are the people we want to encourage to make applications. The introduction of a guarantee scheme may help to support this group to pursue business opportunities again.

The majority of our enterprise sector comprises small business. Now more than ever we need ambitious and energetic business owners, entrepreneurs and managers who can play a real part in driving a positive uplift in the economy. Senator White said a former Minister stated if 50,000 companies created one extra job each at little or no cost to the State it would have a huge impact. It would be a huge win-win for the Government. We can encourage people and give them ten reasons to create a job and this is what the Government wants to do. All too often the risk takers and innovators remain unseen and the hard work and entrepreneurial skills of these individuals lie at the heart of the success of our small and medium enterprises. All of these companies have financing needs during the various stages of business development.

A point was made about encouraging people on welfare to start a business. There is no reason unemployed people who have an innovative idea should not be supported. It is about having a simplified business plan that will stack up. Obviously the banks will not give money to something that will fail and the risk is twice as high in recessionary times. I believe simplified mentoring support and the role of the county enterprise boards will be important. The Government plans to roll out one-stop shops for businesses and I have no doubt this will be part of the facilitation. People will have the opportunity to work with banks and mentors. Mentoring has been very successful with companies in the past and it will be needed now more than ever. We have many successful business people who are determined to give something back and mentor a company at no charge. I appeal to these people to do so.

Along with starting up, other stages of business development at which financial needs arise are managing working capital, investing in new products and services, the commercialisation of knowledge, marketing strategies, innovation, research and development and expanding output. It is essential that the financial system supports the needs of our small and medium enterprises through the stages. Many businesses have contacted me about the problems caused by the difficulties in accessing credit. Increased risk aversion among banks has made it significantly more difficult for smaller companies to obtain finance in recent years compared to before the crisis. However, it is not all about obtaining money; it is about having a plan of action and sitting down with one's mentor and accountant to work on the management accounts and the monthly accounts which will show the profit and loss.

People have a responsibility to go through a simplified but effective application for lending. It is about engaging with the banks, which have indicated to me they are prepared to nominate a commercial liaison member of staff who would know the business. The banks are also considering visiting customers at their business which is also very important. Herein lies the mismatch between the needs of a productive business and the bank finance available. Banks are trying to reduce risk but business lending, particularly to small and medium enterprises, is risky. Entrepreneurship is risky but, as is said, no problem, no business. There are always problems in business but Irish people have been very successful in the past when difficulties have arisen. The suite of services, including the roll-out of the one-stop shops later this year, recognises the critical role of small and medium enterprises in the Irish economy and the Government is committed to it. The Minister, Deputy Bruton, and all of the team in the Department is working in every way we can on legislation with regard to procurement, reducing the amount of red tape, access to credit and engaging with the banks. Senator Landy is correct that it is very important to engage with the banks and we will discuss with them how best to arrange it.