Wednesday, 2 October 2013
County Enterprise Boards (Dissolution) Bill 2013: Second Stage
I welcome the Minister of State, Deputy John Perry. In the current economic climate, this is possibly one of the most important debates we will have. We are all well aware that the great challenge which faces us currently is how to create and sustain businesses and create employment. We are particularly lucky in the Seanad to have Senators like Senators Mary White, Mary Ann O'Brien and Feargal Quinn because they have demonstrated their entrepreneurial skills, have been at the coalface and know the challenges and the opportunities. For that reason, one is inclined to listen very closely to them.
Senator Cáit Keane gave us a very interesting Latin lesson on Leo the lion. I suppose it prompts the observation that one hopes Leo will have more teeth than roar, which will be very important. I will come to that in the context of seed capital in a moment. I was glad the Minister of State acknowledged the work of the county and city enterprise boards. It is quite evident that they have been very successful in creating jobs. If one changes from one system to another, one needs to be fairly sure one has a workable model. One of the strengths of the enterprise boards was that they drew on the expertise in the area. Like the three Senators I mentioned, that will be a vital ingredient.
I would not, in any way, denigrate the local authorities because we all know how successful they are in their own realm but we must ensure the new process is not just a second thought within the local authority and that it is able to work closely with the expertise which was, in the past, available on a voluntary basis.
There is nothing sadder than for enterprising young people, putting whatever limited money they have into a little business, whether a restaurant, a craftwork, a shop or whatever, and simply because very often we have too much bureaucracy and because they do not have that initial capital to get them to a point where they become competitive and capable of marketing to see it close in a matter of 12 months. I see it in my own town of Cashel and elsewhere. One can only imagine what it must be like if one was enthusiastic, excited and prepared to use initiative and innovation only to find it all falls. That creates extra negativity in the community. Expertise is a vital part of it. People must be able to identify what is a good project, where the market is and be very clear on branding. All of those issues do not go away.
I am reminded of the two young Collison brothers. I do not know if Members have been following their story but they won the Young Scientist of the Year. It seems they could not find an Irish company to engage with them so an American company did so for $3 million or $4 million and also took the two young brothers to America. I read in the newspaper during the week that they were offered $800 million for their project which they refused because they said they had €40 million in the bank and that they did not need the $800 million straightaway. These two young people are not even 30 years of age. I am not blaming anybody in Ireland but one must ask how the American company saw the potential and what agency should have seen it in Ireland, in particular in a national context which that would have been. In a local context, there is even a greater danger that we will miss the potential. That is why we must be very sure the effort we are making now is almost success-proof. The disillusionment which follows the closure of the little shop I mentioned can be absolutely heartbreaking.
What happens if something like this, which replaces the enterprise boards, fails or is not seen to deliver? I am not blaming Government because we have heard it said so often that it is not the job of government to create jobs but to create the environment in which to create jobs. At the same time, this is one of the steps towards helping businesses. I did not know the statistic until the Minister of State gave it today but 98.5% of all firms are small enterprises. That is a huge figure. They are also responsible for 650,000 jobs. What we are saying here is that the small firms are the lifeblood in that area of the economy and that is why we must tread very warily and cautiously but that does not mean we should not be enterprising and innovative. I would be the last person to suggest that.
Did the structure draw on a model anywhere else? In other words, are we starting from a greenfield-type situation or did another model exist? If a model existed and if we saw how it operated and succeeded, that would be very important.
In the future, small businesses, even businesses employing four or five people, will be exceptionally important. We should refocus on indigenous crafts and those types of businesses. Is it not particularly interesting when one sees a firm coming up with new food products drawing on traditional methods and indicating why it is wholesome, etc.? That is something we should bear in mind as well as the person who works in wrought iron. All of those things create jobs. Small towns will not get big industries in the future. Indeed, if they get big industries and if they close or go to eastern Europe, a terrible vacuum is left.
Will the Minister of State keep an eye on the bureaucracy? The last thing a young person wants is excessive and unnecessary bureaucracy. That does not mean one automatically says someone has a good project but people must be encouraged. Our job is to provide them with information, give them case studies and be available to them. I think Senator Cáit Keane made the point about knowing where to go. One needs to know where the office is and to whom to go. I am a little concerned that because the local authority will have a central role in the LEO concept and because it is caught up in rates, motor taxation, recreation and so on, it will not be evident that one is coming into an opportune place. That is my biggest fear. I can see that there is much detail in the legislation but I hope this will not be hidden in a back office in a county building.
We have said enough about the banks in the past but there is something radically wrong in a state which has put billions into the banks that it is still not clear whether seed capital is available to small businesses.
We are told by the banks that is the case but we must examine that more closely, and this model in particular will require that understanding and co-operation from the banks. We are either out of recession and are on the way up or we are not. I like to believe we are out of recession and on the way up but if we are on the way up, the partnership of the banks is required. The old days of saying "No", ignoring people and putting unnecessary pressure on them are gone. I am not suggesting the banks should automatically give money to people, nor am I suggesting they should not run their business properly but there are steps before that where the banks could have assisted. In the old days, so to speak, if one went into a bank one sat down and had a chat with the person involved. One had to tell them what one had for breakfast and so on but the point is that they were seen to be supportive. This model will require that, and Senator Feargal Quinn put his finger on it when he said that cash has to be an ingredient of this model from wherever it comes.
I wish the Minister well with the model and I am delighted with this debate in the Seanad. It has proved once again that we have people in the Seanad who can discuss these matters as practitioners, and what we must be at the moment is practical.