John Perry (Sligo-North Leitrim, Fine Gael)
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I thank Members all for the kind invitation to address the Chamber on the important work to which Ireland is contributing at a European level to assist SMEs across Europe to grow and develop. If I may, I would like to start by informing the Chamber of how and why the SME envoy network was established in the first place.

SMEs are the backbone of the EU economy and a key driver in the EU economic landscape. SMEs provide millions of jobs and are continuously innovative in the provision of their goods and services. Some 98% of all businesses in the EU employ fewer than 250 people. This figure can be similarly applied to Ireland. Some 85% of new jobs have been created by SMEs. This is evidence that SMEs are the force behind job creation in Europe. There are 23 million SMEs in the European Union. If each SME were to take on one extra employee, the unemployment crisis in Europe would be over.

The Commission and the member states wanted to respond to the needs of SMEs by removing barriers for start-ups and through the introduction of the Small Business Act for Europe, SBA, which includes a wide range of measures which have been developed to make life easier for small businesses. Vice President Tajani invited all member states to appoint a national SME envoy. It is thanks to the close co-operation between the Commission and the member states that we have made concrete progress in the implementation of the SBA.

In 2008, at the start of the downturn, member states, along with the Commission, agreed to adopt the SBA. Given the events over the past six years, it was a very challenging time and environment in which to implement a small business policy agenda. The SBA is a set of ten principles which aim to guide the design and implementation of policies at both EU and national level. The work is essential in order to ensure there is a level playing field for SMEs throughout the EU and to improve the administrative and legal environment that will allow these enterprises to unleash their full potential to create jobs and growth.

The policy-making process in the EU sees legislative proposals from the Commission debated both by Members of the European Parliament and by representatives of member states' Governments within the European Council. Generally, the Commission consults with interested parties on a formal and informal basis before it draws up its proposals, as was the case with the SBA. This provides an opportunity for those that may be affected by policy to make their views known at several stages in the process.

There are a number of clear difficulties involved in ensuring that SMEs are in a position to put their views across to policy makers. SMEs do not usually have the resources that large firms dedicate to influencing policy making or lobbying. It is for this reason that the Commission appointed an EU SME envoy and encourages effective and wide-ranging consultation of SMEs as one element of its principle of thinking small first.

Following a review of the SBA in 2011, the Commission asked each member state to appoint a high-ranking government official as the national SME envoy. The Government, in showing how important the role of small business is to our economy, nominated me, as Minister of State with responsibility for small business, to be that envoy. Ireland is one of the few countries in the network to nominate a Minister of State as envoy and I know, from speaking to my colleagues in the Commission, that the decision has been welcomed.

The purpose of the SME envoy is to ensure that Government bodies at all levels integrate the SBA principle into policy making, regulatory proposals and funding programmes. SME envoys are the main channel between the Commission and national policy makers for contributing towards the dialogue on SBA implementation. The SME envoy network also provides a great opportunity to learn from each other and helps in the exchange of good practices.

The SME envoy is an active interface with the SME business community, considering their specific interests and needs in EU programmes and policies. The main objective of this function is to establish a close, direct link between the Commission, SMEs and their representatives. The SME envoy network is supported in its work by the Enterprise Europe Network, which is the local entry point for SMEs looking for advice. The Enterprise Europe Network provides information and advice on EU funding opportunities or on market opportunities in the language of the SME. It also helps SMEs to find business partners in other countries and gives advice on how to overcome regulatory obstacles.

The SME envoy network ensures that SME interests and needs can be better identified at an early stage and highlighted to the relevant services, ensuring that their concerns are taken into consideration, that adequate and efficient measures are implemented, and that overall EU and national policy is more SME friendly. Particular attention is given by the SME envoy network to the craft sector, small businesses and sole traders because of their specific needs.

The basis of the work programme for the network is delivery of the ten SBA principles of interest to SMEs. These include entrepreneurship, second chance, the principle of thinking small first, responsive administration, state aid and public procurement, access to finance, the Single Market, skills and innovation, the environment, and the internationalisation of SMEs. The SBA has been instrumental in putting SMEs at the centre of EU action and SME policy is now a top priority for all member states. The Commission has given particular priority to the issues of access to finance, cutting red tape and expanding into growth markets outside the EU.

The European Commission reports annually on each member state's performance in implementing the SBA. The latest available report for Ireland was published in 2013 and relied mainly on 2012 data. The report shows that Ireland has a positive SBA profile and that we are above the EU average in eight of the ten areas concerned. We are the top performer in Europe when it comes to second chance. The report acknowledges that Ireland offers a friendly business environment, supported by an efficient administration which is responsive to business needs and that Ireland has an innovative and entrepreneurial business culture. The Commission also acknowledges that Ireland has not adopted a specific strategy for implementing the SBA and that we do this through our Action Plan for Jobs process. The report also references the Government's positive engagement with small business through the advisory group on small business and the high-level group on business regulation, both of which I chair.

In the area of entrepreneurship the report shows Ireland is at or above the EU average in seven of the nine indicators identified under this heading. These positive results cover issues such as self-employment rate, entrepreneurship rate, opportunity driven entrepreneurship, preference for self-employment, feasibility of becoming self-employed, the share of adults who think successful entrepreneurs receive a high status in society and media attention for entrepreneurship. We are behind the EU average on two issues covering entrepreneurial intention and the share of adults who agree that school education helped them to develop an entrepreneurial attitude.

As Members of this House will be aware, the Government has supported the development of the national entrepreneurship policy statement - there are published documents in the antechamber if they wish to take them. In order to help us in this work we established an Entrepreneurship Forum in May 2013, tasked with examining the current environment and policy framework and making recommendations aimed at further supporting entrepreneurship and business start-ups. The membership of the forum consisted of entrepreneurs and academics, with representatives from my Department and Enterprise Ireland. The forum considered all 74 submissions from a parallel public consultation process, as well as the outcomes of meetings with stakeholders in the development of its report. The report contains 69 recommendations and is an important contribution to our current consideration of new policies to drive entrepreneurship in Ireland. With a view to delivering a whole of government response to driving entrepreneurship, we are undertaking a cross-governmental feasibility and operational assessment to facilitate informed decision making on the recommendations made in the forum's report and their suitability for inclusion in the forthcoming national entrepreneurship policy statement. We hope to be in a position to publish the policy statement shortly.

On the issue of a second chance, the report acknowledges Ireland as being the best EU performer. This heading measures issues such as the time it takes to close a business, the cost of closing a business and the degree of support for a second chance. In all three measures we are ahead of the EU average. This area was helped by the introduction of the Personal Insolvency Act 2012 and the Civil Law (Miscellaneous Provisions) Act 2011, both of which deal with debt difficulties.

On the Think Small First measure, the report suggests Ireland performs slightly below the EU average and that at the same time the administrative burden on business regarding compliance with Government regulations is quite low, while the communication and simplification of rules and procedures are above average. However, according to the report, Ireland is below the EU average when it comes to information on licensing and permits. It should be noted that this indicator is based on the position in 2008 and I am confident this is no longer the case. In 2012 my Department launched a business regulation website - businessregulation.ie- to help start-ups through relevant legislation on setting up a business and which provides tools and guidance for start-ups.

As part of An Action Plan for Jobs 2014, we are working on developing the single portal for SME retailer licences. This portal will be a one-stop-shop integrated online system for a key sector of the economy. Ultimately, the aim is to reduce the administrative burden for retailers. It is hoped we will eventually roll it out to other sectors of the economy. The Commission and other member states are eager to hear about our experience regarding licences and I intend to provide an update on the Irish experience of the SME envoy network in Naples during the year. It will allow, where there are up to 23 licences and 15 State authorities involved, one portal where a person can access a one-stop shop for the issuing of licences.

Also, a number of Departments and agencies have attended the Taking Care of Business events which have taken place around the country. The purpose of these events, the first of which was launched by Senator Feargal Quinn in Dublin Castle, is to provide advice and support for SME operators from a number of State bodies covering different regulations that may be of interest on general SME Government supports, including financial training. The first event was held in Dublin last year and followed by events in Limerick and Galway. The latest, which I attended, was held in Cork on Tuesday, with further events planned for later in the year. One example of good engagement at these events is the National Standards Authority of Ireland. As Senators will be aware, the NSAI is continuously encouraging SMEs in developing best practice and standards. This is being undertaken to ensure our SMEs are the best in the world when it comes to standardisation which can assist in their internationalisation. This work ties in with that of the Commission and the SME envoy network on standards.

There is no need to put in place a formal policy on the Think Small First principle. Everyone is aware, across all levels of government and agencies, of the importance the Government places on job creation. We have An Action Plan for Jobs which is now our yardstick for measuring the improving environment for businesses to create and sustain the jobs people so badly need. The Government has designated 2014 as the year during which it is all about jobs. It is also important to note that every memorandum for the Government contains a competitiveness test which covers many of the issues contained in the SBA. In addition, all legislation being proposed must be subject to a regulatory impact assessment.

The report shows Ireland has again outperformed the EU average in the majority of the responsive administration indicators and that Ireland has a business friendly administration. It goes on to compliment the low cost and speed in creating a firm in Ireland and the relatively few bureaucratic hurdles to be jumped to create a business. It also acknowledges the introduction of the Companies Bill 2012 which will establish the basis for a new legal framework for companies in Ireland. The Bill will reduce red tape for small businesses and make it easier and cheaper to set up a company in Ireland.

There are two indicators identified which show Ireland performing below the EU average. These are the time it takes to transfer a property and the cost to enforce contracts. On the contracts issue, it is important to note that the Small Claims Court can now deal with business-to-business disputes up to the value of €2,000.

Overall, Ireland scores above average in the indicators for State aid and public procurement. This area also covers the issue of prompt payments and the indicator shows the average delay in payments from public authorities is well below the EU average. My Department acts as a first contact point for businesses which want information on their rights under the prompt payments legislation. If the problem lies with a public authority, my Department tries to resolve the issue with the public authority before an escalation occurs. Furthermore, my Department is involved in a public information campaign on prompt payments as a result of the directive on late payments in commercial transactions. This campaign started in December and is continuing at the one-stop shop events. I encourage anyone with any issue with prompt payments to attend future events as the officials from my Department are there to help. Alternatively, my Department can deal with their queries directly.

The report shows Ireland is below the EU average regarding the SMEs' share of the total value of public contracts awarded. However, An Action Plan for Jobs aims to address this issue by identifying 13 actions which would be relevant to SMEs in having greater access to procurement opportunities. Issues such as maintaining and updating the standard suite of tender documents to bring about a more consistent approach to procurement are being dealt with. An Action Plan for Jobs will also transpose the new EU procurement directives and then revise procurement Circular 10/10 to encourage SME access to procurement. The Office of Government Procurement will, with the Competition Authority, also provide information for SMEs on approaches to multi-party tendering from a competition and procurement perspective.

I am sure it will come as no surprise to Members of this House to learn that access to finance is the most difficult measure, not only for Ireland but for many other member states in the network also, on which to get a handle. Although some of the data measuring the indicators are based on 2011 and 2012 figures, the results show Ireland is above the EU average in five of the 11 indicators dealing with issues such as the length of time it takes to get paid, the percentage of lost payments, venture capital investment, the strength of legal rights and depth of credit information index.

The other six indicators are areas where we fall short of the EU average and include the number of rejected loans, access to public financial supports, including guarantees, willingness of banks to provide a loan, the difference in interest rates, the percentage allocation of European Union regional funds and percentage allocation of EU funds for business creation and development.

The report acknowledges the attempts made by my Department and others to address this important issue, including the introduction of the credit guarantee scheme and the establishment of Microfinance Ireland. Support is now available to locally-traded sectors, given their crucial role in job creation. The latest figures I have to hand show that the credit guarantee scheme has 84 live facilities in place with more than €11 million available. The credit guarantee scheme is increasing or maintaining almost 700 jobs. According to the latest figures to hand, the Microfinance Ireland fund shows 192 jobs increased or sustained with a total approval value of more than €3 million.

In 2014, through the Action Plan for Jobs, the Government is trying to further improve the access-to-finance environment for small business by expanding the activities and reach of the Credit Review Office, enhancing the take-up and impact of the credit guarantee scheme, improving the take-up and impact of loans from Microfinance Ireland and involving the National Pensions Reserve Fund and Enterprise Ireland in the developing investment opportunities aimed at small to medium-sized enterprises, SMEs. In addition, the Government has put in place a number of measures aimed at developing new sources of finance, together with raising awareness of the supports available among the SME community.

The Commission itself supports access to finance by using financial instruments under the competitiveness and innovation framework programme. These financial instruments include both loan guarantees and equity finance. These instruments are implemented by the European Investment Fund via financial intermediaries in the member states. The leverage effect of such instruments has shown that with €1 billion of EU money, a further €30 billion of new lending to SMEs can be leveraged. By the end of 2012, €13.2 billion in loans had been granted to more than 220,000 SMEs under the competitiveness and innovation framework programme. The same programme has also helped venture capital funds to raise more than €2 billion in venture capital. It is important to note that 99% of SMEs benefitting from competitiveness and innovation framework programme, CIP, financial instruments are either micro or small enterprises. The new competitiveness of enterprises and small and medium-sized enterprises, COSME, programme for 2014 to 2020 is the first ever specific programme for SMEs. A total of 60% of the COSME budget is earmarked for financially supporting SMEs.

Ireland performs above the EU average on indicators such as the number of Single Market directives not transposed, the number of directives overdue and the average transposition delay for overdue directives. On the skills and innovation side, Ireland ranks above the EU average on these indicators. Ireland is particularly successful at participating in EU-funded research and in selling and purchasing online. The areas for improvement include SMEs introducing product innovations, SMEs' collaboration and employees' participation rate in education and training. Again, however, it is important to note that some of these indicators are based on 2008 data. The report gives a positive welcome to the ICT skills action plan, the most recent version of which was announced by the Ministers for Education and Skills and Jobs, Enterprise and Innovation. The Commission also acknowledged the report of the research prioritisation group, as well as the Management 4 Growth programme. In addition, a number of training and mentoring opportunities have been identified for action in the Action Plan for Jobs. In particular, a pilot project has just been launched by Skillnets, which seeks to develop the financial capabilities of SMEs and assist them in accessing finance.

On environmental issues, Ireland's performance is slightly better than the EU average. Ireland's SMEs are keen to take on resource efficiency measures and offer green products or services in their own right. Irish SMEs also have a higher proportion of their turnover being generated by green products or services. The Commission acknowledges the publication of the Government's policy statement on growth and jobs in the green economy, namely, Delivering Our Green Potential. Further actions emanating from this report are being dealt with under the Action Plan for Jobs 2014, including one that aims to develop an Internet resource signposting the range of supports available to Irish enterprises to help them to reduce energy, materials usage, water and waste and to develop new and innovative green products and services. This action should help to address the one indicator in this heading where Ireland came in below the EU average. This indicator provided details of the number of SMEs that have benefitted from public support measures for their resource efficiency actions.

The European Commission has claimed that Ireland is slightly ahead of the EU average on internationalisation issues. We are ahead on issues such as the number of documents required to import, the time required to export and the number of documents required to export. On the negative side, it costs slightly more to export from Ireland and the time taken to import is slightly above the EU average. In addition, the cost required to export also is slightly above the EU average. I am sure this is partly due to a cost competitiveness issue, in part because of the additional cost arising from the necessity to use sea and air to import and export goods.

Access to markets continues to be a key element of the Small Business Act for Europe, SBA, either within the EU or outside its borders. The Commission has strengthened its contacts with strategic partners on SME policy including the US, China and Russia. Such co-operation led to the memorandum of understanding on co-operation throughout the world between our business support organisations on the ground, the Enterprise Europe Network and the US international trade administration. The Commission has also established intellectual property rights, IPR, helpdesks, including in China, to help industry but particularly to protect SME innovation. Numerous missions for growth have been organised by Commission Vice-President Tajani, combining high-level political meetings with business matchmaking and participation of EU SMEs in commercial fairs and conferences.

The most recent meeting of the SME envoy took place on 10 March in Munich. Issues that were discussed at this meeting included access to finance, with the discussion focusing on equity finance as an alternative to bank lending, helping SMEs to access EU framework programmes and implementation of the banking union. As for burden reduction, more exemption and lighter requirements for SMEs were discussed, as were decreasing the burden on microenterprises, the exchange of best practices and focusing on compliance costs. In respect of entrepreneurship, further actions on transfer of business and second chance are needed. There is a need to promote entrepreneurship and innovation to increase productivity and create jobs. As for access to markets, there is scope for further action in the energy markets and further actions required to help SMEs tap into global business opportunities should be continued. In addition, new priorities were suggested such as skills, qualifications, education and training and promoting growth, as well as scaling up in terms of employment.

I believe the work of the SME envoy network and the implementation of the SBA are delivering for Ireland and for Europe. I also wish to mention that the European Commission has started the discussion on the future of the SBA among the SME envoys. In my opinion, the informal nature of the SME envoy network works well and this should continue. The network should also continue to feed into the work of the informal Competitiveness Council but above all, it is important that one continues to think small first. It is clear from both the SME envoys and the Competitiveness Council that tie four priority areas of the SBA, namely, access to finance, access to markets, reducing administrative burden and entrepreneurship, will remain the basis of the future SBA. I acknowledge the work done to date by the SME envoy network in the important area of access to finance. Indeed this was high on the priority of the SME envoys' work from the outset and in 2013 in particular, with the publication of SME envoys' paper and discussion, Where next for the SME Access to Finance landscape? The Commission also hosted a seminar in Dublin during Ireland's Presidency last year, which presented the EU financial instruments to which SMEs have access from 2014 to 2020 under the COSME programme, as well as the Horizon 2020 and the European Structural Investment, ESI, funds. In showing the importance Ireland places on SMEs, during its Presidency of the Council last year, the Government held an informal Council meeting dealing with access to finance and the internationalisation of SMEs. The Council discussed the use of venture capital in global trading companies and the internationalisation of SMEs and the opportunities for EU enterprises in global markets, along with discussing how cities and regions are drivers of entrepreneurship and innovation.

On the issue of access to markets and internationalisation, I acknowledge the work of the enterprise Europe network, EEN. The EEN is a valuable network for providing information to SMEs on doing international business. The promotion of clustering initiatives to help SMEs to internationalise and integrate into global value chains is an opportunity of which Ireland should take full advantage. I acknowledge the work and co-operation of my fellow SME envoys throughout the SME envoy network and, in particular, the work of the EU SME envoy, Daniel Calleja Crespo, with whom I have a close professional relationship, and his colleagues in the European Commission. However, as I have noted, we need to do more because neither the Government nor the European Commission have all the answers on how best to assist SMEs in growing and sustaining their businesses. While the vast majority of the measures contained in the Action Plan for Jobs impact on SMEs, we would welcome Senators' thoughts on how we can better support our SMEs in accessing the supports they need to grow their business and ultimately create more jobs for our people.

Mary White (Fianna Fail)
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It is a pleasure to welcome the Minister of State back to the House. I congratulate the Government on lowering the level of unemployment to 11.8%. It is a tremendous achievement and it proves that the Government's focus on unemployment has had a significant impact. However, more than 250,000 people remain unemployed. In his message for Lent the revolutionary pope, Pope Francis, warned that unjust social conditions like unemployment can lead to financial ruin and even suicide and that depriving people of the dignity of work, education and health care is a serious threat to their quality of life. He also noted that two of the most urgent problems facing the Catholic Church are youth unemployment and the treatment of the elderly. His key message was that it is unjust to deprive young people of jobs or to mistreat older people.

I commend the Minister of State on his passion for this issue. I am sure he is familiar with the Fianna Fáil policy paper on promoting women entrepreneurs in Ireland and fresh thinking on employment solutions, of which I am the author. The policy paper makes ten recommendations. I thank the Government for accepting my recommendation in regard to maternity leave. It is not possible for a woman entrepreneur to take 28 weeks leave from her business. For health and safety reasons a new mother is required to take six weeks' leave but I have proposed that a woman who has taken those six weeks should have the choice of allowing her partner to share her maternity leave. Legislation to give effect to my proposal has passed Second and Committee Stages in this House and the Minister of State at the Department of Health, Deputy Kathleen Lynch, is now preparing it for Report Stage in the autumn. I commend the Leader on his drive to secure this legislation.

The policy paper also recommends that a national office be established within Enterprise Ireland to promote women entrepreneurs, with the objective of raising the start-up rate of women entrepreneurs. Nearly twice as many men as women start up businesses in Ireland. We will not be utilising half of the intellectual power and creativity of the women of Ireland if we do not get them to start up as many businesses as men. As the Minister of State knows better than anybody, new business start-ups are the most effective way of creating employment.

Since I wrote the paper last year, Ms Julie Sinnamon has been appointed as CEO of Enterprise Ireland. My husband, Padraic White, is very proud that he offered her a job when in Enterprise Ireland when she started out as a young person. I compliment Ms Jean O'Sullivan, who is in charge of dealing with women entrepreneurs. She is also outstanding. We now have a big team in Enterprise Ireland to encourage more women to start up businesses. That is the only way to take people out of what the Pope has described as the injustice of people being unemployed and the potential for financial ruin. Connie Doody and I started Lir Chocolates in 1986, during the last recession. The company is currently owned by a long established German company and I remain involved as a board member. In a competition between 200 companies over who could produce the best Easter eggs in the UK and Ireland, Lir Chocolates won first and second prizes, as well as four other prizes.

John Perry (Sligo-North Leitrim, Fine Gael)
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Well done.

Mary White (Fianna Fail)
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The creativity is unbelievable and Connie and I worked together to get it started.

Another recommendation in the policy paper is that Enterprise Ireland and Bord Bia should advise women against going solo. Making Lir Chocolates a success was incredibly demanding. We had to go through steel walls every day but because there were two of us we were mentally able to sustain each other. My role in the company was to create employment during the last recession. When we started out in the 1980s the unemployment rate was 17%.

John Perry (Sligo-North Leitrim, Fine Gael)
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It was some achievement.

Mary White (Fianna Fail)
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I thank the Minister of State. Connie and I had complementary skills. The recommendation in regard to getting women to work with other people is based on our experience. It is a lonely station if one is working alone but when we had challenging problems we were able to talk them over.

Attitudes have improved since I was growing up, when an entrepreneur was regarded as the last career people should hope for. Permanent, pensionable and safe jobs as teachers, civil servants or nurses were preferred. The policy paper recommends that we should encourage people in middle management or at the midpoint of their careers in the public sector to go into the private sector. The Clerk of the Seanad, Ms Deirdre Lane, would, for example, make a brilliant entrepreneur given all the experience she has gained from running the Seanad. We should encourage more people to take that risk.

I was lucky when I was in secondary school that we had very good industries, one of which was Irish Ropes.

The threat was that if one did not do well in one's leaving certificate, one would end up in the office of Irish Ropes.

It is really important that we introduce entrepreneurial learning, which is a Fianna Fáil recommendation, through the primary and secondary school system, so that we develop a real entrepreneurial culture. I have no doubt we have changed but we still have a long way to go to get people to consider becoming self-employed and, in doing so, giving people jobs. Some 250,000 people still do not have a job and one in four young people does not have a job. The more people who start up businesses, the better for the future.

As I have said many times in the House, I saw with my own eyes the transformation in a young person who got and held on to a job. The person began to walk straight, was self-confident and was smiling. Not only was the person getting paid but the person had social interaction everyday as a result of meeting people instead of being at home lying in bed or watching television. One man whose son had not been able to get a job for years told me he would go to mass every morning to pray that his son would be able to hold on to the job, although in later years, he went on to get a very big job in An Post. He got experience on the ground.

I compliment the Minister of State who I know is very genuine about this and I thank him for being the envoy to the network.

Michael D'Arcy (Fine Gael)
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I welcome the Minister of State. Is he the Irish envoy?

John Perry (Sligo-North Leitrim, Fine Gael)
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Yes.

Michael D'Arcy (Fine Gael)
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I do not think that was clarified. We must put where we are currently into context. I think Senator White mentioned that unemployment is at 11.8%. Much progress has been made from where we were two years ago when it was more than 15%. In the first quarter of this year, the deficit has been reduced by €1.4 billion since this time last year, which is an incredible achievement. There has been a tax take increase year on year of €633 million. The two really important headings of income tax and VAT are both up.

That said, the really important aspect for small and medium-sized enterprises is that the public is able to purchase what those enterprises sell or create. It is crucial, when the opportunity arises, that the Government takes it in order to give something back. Taxes, which are all at the maximum level, including VAT, PRSI, which I consider a tax, USC and income tax, should be reduced so the public has more money in its pocket and can purchase the products small and medium-sized enterprises create.

I will focus on two aspects on which the Minister of State did not touch. One is the benefit of examinership, which is important. In the first quarter of 2014, 410 jobs were saved due to the benefit of examinership. It is as important to hold on to the jobs we have as it is to create new jobs. Yesterday on the Order of business, I mentioned the 654 jobs in Elverys. Elverys was in examinership but as a result of a management buy-out, those jobs will be retained under certain terms and conditions. It is important we create jobs but it is also important we do not lose jobs and take our eye off the ball.

I wish to touch on funding by the banks. We are all dissatisfied with how the banks have been funding small and medium-sized enterprises. It is important we start to move towards the model in other jurisdictions, in particular outside the EU - the US provides the best model - where non-bank funding is made available to companies, whether through an equity stake or another method in which non-bank funding can be put into an economic structure so that the small and medium-sized enterprises have an avenue in which to get funding. It is something we are not good at but I know we are trying to improve on it. I compliment the Department of Finance on its SME credit and funding newsletter, of which there have been three. They contain a lot of information but when one speaks to small and medium-sized enterprises, they do not know about the information available on non-bank funding.

Another issue which has not had the focus required in terms of small and medium-sized enterprises, is rates. Rates are having a detrimental impact on small businesses. This was not an issue in the past when these businesses were more profitable and they were able to pay their rates. Now the margins for many small businesses are being squeezed and they have great difficulty paying rates, which are not profit-driven. I accept they cannot be profit-driven because rates are also being paid by some of the very large companies. I am told that in County Wexford, the largest ratepayer is Tesco. I am not here to advocate that Tesco in Wexford gets a break of any nature in what it is paying, or any other Tesco for that matter. What I am saying is that smaller businesses employing one to five staff are badly in need of something original and inventive in regard to rates. It is a criticism in that I am pointing out that we have not looked at this issue in an original and inventive way, which we should do.

I am reading Roy Jenkins's biography of Churchill. When Churchill became Chancellor of the Exchequer, he got rid of all rates within six months. The rates structure in place dates back to the 19th century and is based on the square footage of a business and the valuation of same. It is out of date at this stage. As I said, I am not trying to give companies such as Intel, for example, that has spent €5 billion in the past number of years, which is really huge expenditure, a tax break. It is about giving the guy in the corner shop whose margin is tight and profits are down an opportunity for a tax break of some nature, and rates are a tax.

The last calculation I saw was that the rate collection via the local authorities was in the region of €1 billion. I do not have the staff to analyse the really large businesses, such as Apple, Google, Intel, Tesco and Dunnes Stores, and how much is paid by such businesses. However, those very large employers have the capacity to pay more but, through their very efficient tax lawyers, they are paying less than they should. I posed the question as to whether doing the analysis based on corporation tax should be reviewed. The answer I got back was that it would not be reviewed, which I accept. However, this is a method by which those very large employers could pay more. The additional amount they pay should be given to the smaller ratepayers. It is something at which we should look in an original and inventive way as these businesses are stretched. I refer to those small shops which have a post office, a small deli counter and a little bit of hardware, which are very badly stretched.

I cannot emphasise enough that this rebalancing could protect jobs in every one of those businesses the way the jobs in Elverys were protected and additional jobs could be created. We have not taken the opportunity to do this. Will the Minister of State conduct that analysis for the House? I do not know how many hundreds of millions of euro are paid by large employers. He said that 2% of all employment is provided by companies with more than 250 staff. How much is paid by them? If we are intent on protecting SMEs, which encompass post offices, small corner shops and so on, we need to do something on rates because, to date, nothing has been done.

Feargal Quinn (Independent)
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I welcome the Minister of State and I am delighted he is here again. I am also delighted with the steps he has taken and to hear about what is going on. It was also interesting to hear Senator Mary White's story and experiences, particularly with Lir Chocolates.

I fear that the envoy network will become a talking shop. I was president of EuroCommerce, which represents the retail, wholesale and distribution trade, for three years and a member for six years. One of the rules I introduced was that at each board meeting we would take a break and every member had to come up with three initiatives that had been introduced in their country during the previous year. The Minister of State might make a similar proposal at the next envoy meeting whereby each representative would come up with ten initiatives they have been taken in the previous five years that have helped SMEs to thrive. On that basis, 28 countries with ten ideas would mean 280 ideas would be put forward. If we picked half a dozen or a dozen of them, perhaps we could do something with them. That would be of great benefit.

I was impressed by the proposal for a single portal for SME retail licences. I had been talking about having one procedure on one sheet of paper or better still on the Internet to set up a business. I would love the Minister of State to respond to this tangible idea to help create business. According to the World Bank's cost of doing business report, in 2014, it takes four procedures and as long as ten days to start a business in Ireland. I acknowledge the Minister of State is doing his best to change that. I visited Panama five or six years ago where a target of only seven hours to start a new business had been set. I do not know whether the target was reached but Singapore and New Zealand are doing well in this regard. Four procedures and ten days is too long to set up a business and it is a disincentive to doing so. If the process is made simpler, quicker and easier, more people will set up a business, whether they succeed or fail. It takes one procedure and half a day to set up a business at a cost of €100 in New Zealand. That should be our target. It should be possible to set up a business in Ireland with one procedure in one day at a low cost.

The four procedures to set up a company here are: first, the founder of a company swears before a Commissioner of Oaths; second, file necessary materials with the Companies Registration Office; third, get a company seal; and, fourth, register for corporation tax, social insurance, PAYE, PRSI and VAT with the Revenue. These procedures could be dealt with on one sheet of paper in one location for a maximum once-off fee of, say, €50. If that was one of the Minister of State's ten suggestions at the envoy meeting, many other countries would jump at it. This would make it very easy for a person to set up a business and to give it a try. New Zealand has done it and we can do it as well. Let us at least set a target of 2016 to do this. Would the Minister of State be willing to set such a target?

The World Bank report highlighted that Ireland still has a problem when it comes to Sunday payments. Business owners say this is a massive barrier to them taking on employees or expanding. The Government has taken steps in this direction. Will it ever be tackled to the extent of solving the problem?

Another issue is encouraging SMEs to use technology, particularly crowdfunding. This has been recognised as a problem at EU level with many SMEs scared to go down that route. I recall visiting what looked like a little shop in Estonia and upstairs the business owner had loads of people working on the Internet who were trading around Europe. We would be able to do something in this regard if those barriers were reduced.

Businesses can benefit from cloud-based communications services such as Voice over Internet Protocol, VOIP, calls to ensure good co-operation with clients and suppliers at home and abroad. At the same time, such technology would reduce costs for a huge range of small businesses. How can small businesses be made aware of such opportunities? The Minister of State should adopt more best practice from Europe regarding such technology and push it here through tax breaks and so on. We should use the resources available in the SME envoy network.

Access to credit is a crucial issue. Banks need to be analysed much more closely to make suer they give credit to viable businesses. I am not sure if enough is being done to monitor whether loans are getting to the right SMEs. I applaud the Government for setting up several microfinance schemes but for one reason or another, there has not been a large take-up and we must do something about that. Much more needs to be done to make SMEs aware of such credit. We need to encourage them to look beyond banks and consider crowdfunding. Linked Finance is a great example. I am involved in the company and, therefore, I declare my interest in it. Businesses have to prove to customers and supporters online that they are worthy of credit. It is interesting to observe how this works. Unfortunately, many SMEs are not aware of the amazing credit opportunities available through Linked Finance. It provides simple and straightforward access to finance. If a butcher decides to build a new cold room at a cost of €20,000, he can let it be known through the company. It, in turn, lets people know that he is interested in doing this. They offer him loans and he is able to negotiate an interest rate with them. These loans are usually €100. If 200 people advance a loan of €100, they feel like they have ownership of the shop, even though they do not, and they will give the butcher business as well. There are win-win scenarios to be found in this area. Crowdfunding provides simple, straightforward access to finance, which is not being used nearly enough. It could be used much more in many different ways.

Britain is introducing a scheme to remove barriers. The proposal is that the government makes a pledge to remove a piece of legislation for every piece of legislation it introduces that affects business.

I would like to raise a specific example I have raised before. The United Kingdom introduced a system called the "one-in, one-out" system, whereby if the Government introduced one measure that affected businesses, it had to remove another. Our system is such that the burden of red tape grows every time we suggest new legislation. I am as guilty as anybody else in this regard. Every time one introduces new legislation, one should look back at old Acts and remove an unnecessary measure, thus reducing the burden. That is another step that could take place.

The Minister of State's heart is in the right place and he is doing the right thing. The envoy and network comprise a great idea and I am delighted the Minister of State is part of it.

John Gilroy (Labour)
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The Minister of State is very welcome to the Chamber. I read the address on stability through good governance that he delivered to the OSCE Economic and Environmental Forum some time ago and I was very impressed by it. Most of the points made were very good. The importance of good governance cannot be overstated. While we have made good strides in this area recently, we still have some way to go. Perhaps that is a conversation for another day.

I want to clarify a point Senator Mary White made. She said one in four young people in Ireland is unemployed. That is not quite true. Some 60% of people are in employment, which means one in four, or 10%, of the remaining 40% is a young unemployed person. It is very important that the message go out that it is not true that one in four people under the age of 25 is unemployed.

As the European Union becomes more important, there is a greater need for non-governmental organisations to have their voices heard. It is often felt there is a disconnect between the EU institutions and national populations. We hear this when canvassing for the European Parliament elections. The SME envoy — the Minister of State is our national envoy — represents a good idea and it will help address the problem for certain sections of the community. We should seek to extend the envoy role into other areas. It certainly offers great potential. A channel of communication between the SME sector and the Commission is vital. It is vital that our SMEs exploit the opportunity the envoy mechanism affords to them. Traditionally, Irish Governments, groups and organisations have been very good at taking advantage of opportunities afforded to them by the European Union but, as Senator Feargal Quinn stated, not all SMEs may be aware of the initiative. Perhaps we could do a little more to promote it.

We need to embrace the initiative and encourage participation. I cannot overstate the importance of the initiative for the SME sector. The most important means of making it work involves ensuring everyone in the sector embraces it. The promotion of SMEs' interests in this area is the key to success.

There are a couple points I wish to speak about today. The importance of the SME sector is demonstrated by the fact that over 50% of the wealth created in Ireland is created by it. The criterion associated with the envoy stipulates the employment of under 250 people. By that definition, seven out of every ten workers in Ireland are employed in the SME sector. The sector has a central role to play in our economic recovery but there are significant challenges. A report produced by ISME only yesterday states retail sales for last month were down by 1.5%, which is very disappointing. It is hardly surprising because when we drive down the high streets of any of our towns or villages we see the number of shops that have closed. This is real evidence of the destruction wrought by the downturn.

Cashflow is one of the main problems facing the SME sector. I was talking to an ISME representative in recent days in preparation for this debate and was informed that the organisation estimates the rate of refusal to lend to the SME sector is 54%. This is sometimes described as constructive refusal and it has a camouflaging effect in the same way as constructive dismissal does. Thus, the prospective borrower is blamed rather than the banks. The Central Bank of Ireland reports that the banks' lending targets are being met so there seems to be a real disconnect between what those involved in business are saying and what the Central Bank is saying. Perhaps the Minister of State could comment on this.

Professor Morgan Kelly, the economist, spoke rather gloomily recently about the level of debt being carried by the SME sector. He estimates that property-related debt amounts to approximately €30 billion, and that 60% of this might not be performing as well as it could be. This is a very substantial percentage. A resolution is very much required. The banks are taking a piecemeal approach to this and would prefer to do deals with individual SMEs rather than take a strategic view and proceed on that basis.

Senator D'Arcy made a very good point on the saving of 450 jobs in Elverys by using the examinership process. For SMEs employing fewer than 250 people, this process is very expensive. It might not be the most appropriate.

I am glad to say it was at the instigation of the Minister of State that we introduced the Companies (Miscellaneous Provisions) Bill 2013. It has been said it offers examinership-lite and represents a much more cost-effective resolution than might otherwise obtain. Perhaps that is one of the routes SMEs could usefully go down in regard to this matter.

If Professor Morgan Kelly's figures and prognosis are correct they present a vista which, if not appalling, is not far from it. Could we have the Minister of State's view on this? We will certainly require the assistance of the European Union again in this matter. The voices of the SME sector can be heard through the envoy system and network, and they will play a very important role. We must listen to the views of those in the sector and take them on board.

While I have much more to say, I will leave it at that for the time being. I look forward to hearing the Minister of State's views on some of the points I have raised.

Paschal Mooney (Fianna Fail)
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I welcome the Minister of the State and wish him well on his appointment as SME envoy. On going through the list of appointments across the SME envoy network, I found it rather interesting that Ireland, by way of its having appointed Minister of State, Deputy Perry, is the only state, with the exception of Malta, to have appointed an individual from a business background. All the other appointees are civil servants attached to their relevant Ministries. That is not a good start, to put it bluntly. With all due respect to the permanent governments in the various countries, if one does not have a business background or experience of running a business in the hope people will spend money in it so it can continue to pay its bills and staff and remain in operation, one is at a significant loss when trying to frame solutions or proposals that will help SMEs. As the Minister of State pointed out, more than 90% of businesses across Europe have fewer than 250 employees. It is appalling that member states have seen fit to stay within the political establishment in making appointments. In that regard, I applaud the appointment of Minister of State by the Government as he comes from a strong business background and has a full understanding of the importance of the SME sector.

The other reason I am linking it is because in this country we do not have a strong entrepreneurial culture. However, I am pleased to note that the report of the entrepreneurship forum entitled, Entrepreneurship in Ireland: Strengthening the Startup Community, published in early January, contains several recommendations which I am confident the Minister of State will take on board. The ones I wish to single out include those under the heading of "Innovative 'Can-Do' Culture" in section two. I will single out three of ten points which caught my attention. First, "success is not begrudged and failure is not denigrated". If there is any failing in the Irish psyche it is begrudgery. An old story is told about the difference between the American attitude to entrepreneurship and the Irish attitude. In America, when a person drives by in a big car, the immediate reaction of observers is to ask how can they get a car like that. The Irish reaction is to question where did the person get the money to buy that car. That is the difference and that is what is meant by begrudgery. The sooner that begrudgery is eliminated from the Irish psyche, the better for small business enterprises and for this economy in general.

Another aspect is that "the media plays its part in highlighting the importance of entrepreneurial endeavours". I propose that begrudgery reigns supreme across much of the Irish media, that when somebody gets into trouble in a business context, the first reaction is to hound him or her, rather than to analyse the contribution made by that person to the local, regional or national economy. Again, the difference in America is stark where one is not deemed to be a success unless one has had two or three business failures. In this country a business failure is regarded as showing inadequacy. I commend the Government on its proposals to ensure that those who are declared bankrupt will not be prevented from standing for the Dáil or Seanad elections in the future. God knows, we need more, not less, business acumen and business expertise in these Houses. If that initiative results in those who have gone through the fire of redundancies and of bankruptcy still wishing to make a contribution to the Irish nation, then they are to be applauded rather than denigrated.

John Gilroy (Labour)
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Hear, hear.

Paschal Mooney (Fianna Fail)
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The third is that "immigrant entrepreneurs are encouraged to come to the country". It has been proven down through the centuries that wherever shifts in population occur and people have moved to a country, those who have come as immigrants to Ireland have a strong entrepreneurial spirit. They are rarely or never a liability on the State because they come here to work and to thrive. If they thrive and prosper - usually in small businesses and possibly self-employed - then the country benefits.

I refer to Senator White's remarks about the education system and to the same report. I was struck by the report's statement - about which the Minister of State will have a view - that a lack of specific entrepreneurship education modules in teacher education programmes creates challenges because most teachers lack the experience to deliver these specialised programmes. In the view of the report's authors, teachers as well as students should receive some entrepreneurship education. They further state that there is an immediate need to introduce modules, courses, boot camps, hackathons and start-up weekends at primary and secondary school level. In my opinion these are very worthy and commendable proposals and I will be interested to hear any comments from the Minister of State.

I have very little time and I thank the Cathaoirleach for his indulgence. In the context of access to credit it remains the responsibility of the banking system to provide credit to businesses. That point should not be lost. Senator Gilroy referred to Morgan Kelly and I had intended doing same but he has covered that aspect in his contribution. Morgan Kelly has made a very serious commentary about the level of debt in the SME sector and what the Central Bank is doing about it. It is a warning shot and a wake-up call. In fairness to the Government the reaction of the Minister for Finance, Deputy Noonan, shows he has taken on board Professor Kelly's views in this regard. Perhaps the Minister of State, Deputy Perry, will comment. I wish him well in his very important role and one for which he is eminently suited. He has shown in the conduct of his Ministry how he is succeeding against all the odds in a very difficult economic environment, both nationally and internationally. He is highlighting these important issues about the need to create jobs, to sustain the economy and most important, as he and I come from the same neck of the woods, sustaining local communities.

Michael Mullins (Fine Gael)
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I welcome the Minister of State, Deputy Perry, to the House and I welcome the creation of the SME envoy network and his nomination as our envoy. I agree with Senator Mooney that the Minister of State is a very appropriate person to be appointed to that position. He has many years of experience in business and has seen and experienced the many difficulties that business people encounter. As Senator Mooney said it is regrettable that other countries have not seen fit to have nominated a person with a business background. The Minister of State's contribution shows that he is passionate about supporting our SMEs and leveraging their potential to significantly reduce the unemployment figures. We would not have been aware that there are 23 million SMEs in Europe and the creation of one job by all these companies would eliminate the massive unemployment problem across Europe.

The increase in the numbers at work here is very welcome but we have a long way to go. The figures published yesterday show cause for significant hope because in 21 consecutive months there has been a drop in the number of people who are unemployed. However, there is a long way to go. As other speakers said, it will be the small indigenous businesses that will crack the unemployment problem. We must do everything possible to support those small businesses.

I refer to the many innovative initiatives. The creation of the entrepreneurship forum is a very welcome development as is the document which we received this morning and it makes some very interesting reading and makes important recommendations. It was interesting to hear Senator Quinn speaking about a proposal that if at the next meeting all 28 countries could come up with ten good ideas. We need people to come forward with good ideas about how the situation for small businesses can be improved.

Senator D'Arcy hit the nail on the head when he spoke about the very significant costs which are crippling small businesses, in particular, the commercial rates issue and local authority costs generally. This issue needs to be addressed and some innovative solutions found as to how we can decouple the charging of rates to small businesses versus large multinationals. We need to level the playing pitch. For example, in my town a number of major multiples have located on the edge of the town and sucked the whole life out of the centre. Small businesses are trying to compete in streets with paid parking while the large supermarkets can offer free parking in a one-stop location. The situation is inequitable and the playing pitch needs to be made level.

Like Senator D'Arcy I welcome the hints from the Government that we will see some level of reductions in people's taxes so that they have more money to spend in the local economy. The only thing that will kick start activity in the local economy is to have more people in the shops with more money in their pockets to spend on goods and services.

One issue that must be examined is the competition from those who operate in the black economy, which is causing serious difficulty. It is very difficult for legitimate operators running tight ships on low margins to compete with those providing much the same service from the backs of their houses and not paying VAT. They can undercut legitimate operators and, in some cases, draw social welfare. One way of getting around this problem is by every legitimate business providing a service for a customer having identification on the premises to show that it is legitimate, compliant and registered. It would set out that people were operating legitimately. We must also do something to encourage those operating in the black market to come into the legitimate economy, register, pay taxes and compete on a level playing field.

It is surprising that, with all of the technology available, many businesses are not fully aware of what is available through financial and information support. I welcome the indication from the Government that we will soon have a portal that businesses will be able to access to obtain information.

I strongly support the recommendation made in the report of the entrepreneurship forum to promote entrepreneurship at an early stage through the education system. We must teach entrepreneurship at school. I recently attended a fine competition among local schools in my town. Second level students at Garbally College and Ardscoil Mhuire in Ballinasloe came forward with fantastic ideas for potential start-up businesses and new products. The level of interest and expertise young people are beginning to demonstrate must be nurtured. They must be encouraged at an early stage to think about being able to create a job for themselves or jobs for two or three others. There are wonderful ideas and young people have the potential to grow small businesses. We must equip teachers in second level schools to give priority to the subjects of business and entrepreneurship.

Martin Conway (Fine Gael)
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I welcome the Minister of State and his appointment as an SME envoy, which is most appropriate given his wide and diverse experience in business and government for the past three years, during which we have seen a significant turnaround in the fortunes of businesses. However, it is a drop in the ocean and what we need to see are the ripple effects across the country in urban and rural areas. There are SMEs in every parish and we need to ensure an equal spread of opportunities and their facilitation by the Government in rural Ireland, as well as in urban areas.

I note from the speech of the Minister of State that 98% of companies in Europe employ fewer than 250 people. It is fantastic to have thousands of jobs in Intel, Facebook and Google which are extremely welcome and very important, but what will sustain and develop the economy on a long-term basis are the people creating 20, 30 or 50 jobs. There are vast opportunities because of brand Ireland. This is seen as a keen, environmentally friendly country, including from a tourism perspective, and our brands are unique and strong. Brands like Ryanair and Guinness add enormously to the economy. In sport the GAA adds enormously to our offering to those who come here.

I would like to see a significant reduction in the red tape associated with businesses. If someone has a restaurant in the west, in Galway or Clare, a suite of requirements must be complied with to satisfy environmental health regulations, whereas a similar restaurant in the south of Spain or France does not appear to have to meet the same requirements in terms of toilet facilities and the HACCP. Sometimes, common sense needs to prevail, as opposed to convoluted red tape, although I do not see too many people being poisoned because of poor food quality. It does not happen on the Continent to the extent that it used to. Common sense must, therefore, prevail and red tape must be significantly reduced.

We have seen the reform of local government in Waterford, where the city and county councils were joined to become one local authority. There has been a significant reduction in rates as a result of the amalgamation. This must continue to be the case and it percolate throughout the country. Where town councils are being eliminated, reductions in the numbers of councillors, directors of services and senior managers must result in a reduction in rates which SMEs constantly describe as crippling. A lady is opening a restaurant in Ennis and her rent is €500 a week, while her rates bill is €200 a week, which is bizarre. A significant job of work needs to be done in that regard.

The Taoiseach said Ireland should be the best place in the world in which to set up a small business. We should be world-class. There is no reason this should not be the case, given that we have the ability, the skills set, the talent and entrepreneurial flair required. Senator Paschal Mooney made interesting points on how we needed to drive entrepreneurial spirit within schools and universities. Compared to where we were five years ago, we are showing much more confidence. The position of envoy will help to ensure joined-up thinking within Europe. If each of the 23 million SMEs could create one job, it would solve the unemployment problem in Europe. I wish the Minister of State well. He is the right man for the job and the results achieved are already tangible. We will continue to see significant benefits.

David Cullinane (Sinn Fein)
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I welcome the Minister of State and the opportunity to participate in the debate on the SME sector and the SME envoy network.

I was part of a delegation last January from the Oireachtas Joint Committee on Jobs, Enterprise and Innovation. Six of us travelled to Brussels to meet officials and several Commissioners. We met one of the top officials who is heading up policy development for the SME sector. He was very complimentary of steps this Government has taken to help SMEs, although obviously much more could be done.

In 2007 the European Commission launched the Small Business Act, SBA, which the Council of Ministers adopted in 2008. This applies to all companies with staff of 250 or fewer. The Commission states that the Act “aims to improve the overall approach to entrepreneurship, permanently anchor the 'Think Small First' principle in policy making from regulation to public service, and to promote SMEs' growth by helping them tackle the remaining problems which hamper their development”. We all agree with, and aspire to, that approach and want to see action on it.

The SBA was reviewed in early 2011 and arising from this it was agreed that each member state would appoint an SME envoy working group which would work with the Commission and the EU representatives of the SME sector and the SBA advisory group. The priority areas for the SBA following the review were making smart regulation a reality for European SMEs; paying specific attention to SMEs’ financing needs; taking a broad-based approach to enhancing market access for SMEs; helping SMEs to contribute to a resource-efficient economy; and promoting entrepreneurship, job creation and inclusive growth.

I want to dwell on key areas where SMEs need more help and Government policy needs to improve. We have discussed legacy debt over recent months since Morgan Kelly gave a talk on its potential impact on the economy. My party has called on the Government to direct a section of Enterprise Ireland to provide a service for SMEs before they fall off the debt cliff. Enterprise Ireland should help these businesses to allow them separate the toxic element of their debt, normally property assets, from the functioning and profitable sections of their business. Just as people in mortgage distress need their loans restructured, SMEs need their debt to be re-balanced or put on hold. As long as the debt is a noose around the neck of an SME it is difficult for that business to expand and take on new people. If this does not happen with some urgency viable businesses will continue to drown in legacy property debt, they will haemorrhage jobs and there will be a significant brake on growth. These toxic elements resemble mortgage distress cases in that the debt needs to be restructured, written down, or parked, until the businesses can deal with it. Uncertainty about resolution is damaging recovery.

The State needs to actively promote the growing needs of crowd funding. The Oireachtas Joint Committee on Jobs, Enterprise and Innovation examined this by inviting experts in the field to give their view. In the sector’s short existence it has reduced the time it takes small enterprise to get loans and provide finance at a competitive rate. Several crowd-fund providers have engaged in the Irish market and a State-funding partnership with one or more of these would help accelerate the sector’s growth. The development must, however, be monitored. Crowd funding is innovative and exciting but unregulated. We know that lack of regulation is a problem.

Other important issues include access to credit and opening up public procurement. SMEs want big State contracts broken down, if possible, into small contracts that would enable them to tender for the work. Much has been done to support SMEs but upward-only rents remain a problem, which we have debated several times in the form of Bills proposed by Senator Quinn that were not supported. I will support any and all measures to support the SME sector because that is where the majority of jobs are now and will be created. It is very important for our economy. We should lend any support we can to help entrepreneurship and foster creativity, to make sure that if people have a viable business idea they get all the support they need to make that happen.

John Perry (Sligo-North Leitrim, Fine Gael)
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I welcome this very interesting debate. I welcome Senator White's comments on my Department’s support for entrepreneurship. The entrepreneurship forum report to which she alluded is a very good document, which contains many elements we can implement in the one-stop shop for business that will go live in mid-April. They are cost-effective but will provide support. The report represents the views of entrepreneurs in Ireland after wide consultation. It is important that it is not shelved but that we act on it. We have also to overcome many barriers to grow and develop the ideas to create enterprises.

Senator White’s point about women in business is very important too. She referred to the success of Julie Sinnamon and Jean O’Sullivan in Enterprise Ireland and mentioned Bord Bia. Her own success is a good example. I was recently at a big event at Enterprise Ireland where there was a strong emphasis on women in business. Enterprise Ireland’s sponsorship of entrepreneurship in second level schools is very successful. We are hoping to upskill and develop that further. Senator White’s points are very well made and she speaks with knowledge of business. We are considering the talent of women in business through Enterprise Ireland and Bord Bia.

In response to Senator Michael D’Arcy, the advisory group I chair is working on priority taxation issues, which my Department will submit for budget 2015. There is consultation on that now and the budget is being compiled to encourage enterprise. Budget 2014 focused on SMEs and entrepreneurship and I hope this focus will continue. My Department is working on new banking finance and the action plan for jobs refers to several initiatives. We wish to continue to work with all relevant stakeholders and the Department of Finance to ensure opportunities in areas such as crowd-funding are available to SMEs in Ireland.

Rates are an important point for SMEs. The Department of the Environment, Community and Local Government is conducting an overview of policy on them. We have had discussions with the Department to explain the need for change, the fact that valuations date back to 1998 and the pressures this puts on small business. The advisory group I chair has worked in this area and I will continue to liaise with the Department of the Environment, Heritage and Local Government. There will be new local enterprise offices, LEOs, and the amalgamation of county and town councils will give the county manager much more discretion when councillors are appointed in June. If rates were dropped by 1% there could be a derogation given on vacant units. That power of devolved government will be very relevant in Sligo and Leitrim where the councillors will decide with the new CEO of the county that they can consider a derogation to encourage occupation of vacant units. We are very conscious of the importance of encouraging the revitalisation of town and village centres.

Senator Michael D'Arcy made the point relating to confidence and credit, and there is the issue of confidence to spend in a local community. The point about examinership was very well made and the best example has been what happened with Elvery's this week. With regard to funding for small and medium enterprises, there are simplified loan applications. We met representatives of Bank of Ireland, AIB and Ulster Bank on Monday morning, and the simplified application form is applicable to the pillar banks. Many people make a discretionary inquiry but they would be better off making a formal application. The Credit Review Office has overturned every second loan refusal directed to the office. I attended an event in Cork yesterday which had the Credit Review Office and up to 24 State agencies affecting business present. Any loan application from €1,000 to €3 million can be reviewed, so people should go through the procedures. The banks have indicated they are open for business so we encourage people to work in the area.

Senator Quinn commented that the small and medium enterprise, SME, network could become a talking shop. The SME envoy, Mr. Daniel Calleja, is driven by the agenda of SMEs, and the issue has been to the forefront for the EU Presidency for a number of years. There are 23 million SMEs across Europe and this network delivers on the formulation of ideas and sharing of best practice. The best practice across 28 member states is invaluable, and when priority issues are identified, the network can request the issues to be progressed to formal Council meetings. It is an important point.

I note the Senator's comments regarding company formations. Ireland performs very well in this regard but there is always scope for progress, and I am very happy to bring up the point again. The Senator indicated that there could be a simplification of procedures for the Companies Registration Office. There are 159 different licences across the economy but we will establish a single licensing portal for retail trades. There are 15 agencies and 24 licences for operating a supermarket or hotel. A process will go to public tender through EU offices and we hope to roll it out after that. We will consider the point about the Companies Registration Office.

I agree with the Senator's comments about ensuring small and medium enterprises maximise opportunities in areas such as crowd funding or cloud computing. We are very active in this area and the Action Plan for Jobs and Departments are supporting and promoting initiatives for SMEs in Ireland. The Senator has raised an important issue regarding the reduction of the administrative burden for business. There is also the matter of apprenticeships and training young people for business.

Senator Gilroy mentioned the disconnect between institutions and I agree with the assessment of the success of the SME envoy network. He mentioned that the SME sector in Ireland is worth over €90 billion and that banks refuse up to 54% of applications in the area. I strongly suggest that people make direct applications and appeal decisions if the loan is refused in the bank. The Senator mentioned Mr. Morgan Kelly and the initiative is very much being taken on by the Minister for Finance, Deputy Noonan, based on evaluation of the restructuring of SME debt. A Cabinet committee is to be set up under the Minister, Deputy Noonan, along with the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, in that regard. We must examine the issue of banks refusing to loan but there is money available and banks have indicated they are meeting targets.

Senator Mooney commented on the membership of the SME network. I agree there are some very skilled people on it and some representatives of trade bodies also attend the meetings, so it is not dominated by politicians or civil servants. All the retail and business associations across Europe attend the meetings and contribute, so it is an inclusive membership. There was an interesting point regarding the change of culture of education in schools, which is important. The Senator also mentioned trade agencies and Mr. Kelly's report, and the Minister for Finance is working on it. The Senator also mentioned the importance of local communities. There is a matter of a one-stop shop for business in every county and that is relevant in identifying an appreciation of business in the community.

Senator Mullins noted the issue of costs and rates, as well as the black economy, and that is an area which the Government is considering. We have produced a report on the matter and we are examining the trafficking of illicit goods such as cigarettes, alcohol and other products. The Government is determined to promote entrepreneurship in schools, and the knowledge that is out there is evident from the young entrepreneurs going to the Young Scientist event in Dublin.

I thank Senators for their positive contribution. Senator Cullinane mentioned red tape and the regulatory burden on business. I know he has been in Brussels and met people in the SME envoy network. The success of Europe is the 23 million small and medium enterprises and within that the 200,000 Irish companies, employing 700,000. There must be meaningful direct access to credit and we must cut red tape so as to support enterprise. Local government must work with enterprise and trade and there should be a joined up network with Enterprise Ireland. We must create jobs and confidence in the Irish economy.

We have met representatives of the banks and discussed the relevant issues. The issue of procurement was mentioned and there is a clear policy in that regard. There is a national procurement office and we are engaging with small and medium enterprises, particularly to see how directives can be interpreted to include the clustering of small companies to avail of over €8 billion in procurement.

I hope I have not left out anybody. There has been mention of local economies and local enterprise units. The local enterprise offices have been rolled out and they will be very important in bringing mentoring and banking supports. A new tool is being launched allowing a potential business owner to figure out what is required to establish a business. Legacy debt is another problem that is being addressed by the Cabinet sub-committee on mortgage arrears and credit availability, and progress is being made in that regard.

It is essential this work is continued, to ensure viable small businesses can look to the future and grow their businesses without being crippled by legacy debt.

I thank Senators for their positive contributions to our discussion today. The SME network provides an important forum for member states to share best practice, prioritise issues of relevance to SMEs and ensure the small business agenda remains at the forefront of EU policy. The development of the LEOs is important and we will have a LEO in every county in Ireland with a service level agreement to deliver a targeted suite of supports to SMEs in the local economy. I agree with the Senator's comments regarding regulations. Common sense is the primary element in policy making in this regard. Senator Mooney knows only too well that we are encouraging enterprise in every village and town. I believe that with the involvement of local government and the newly elected councils in June we will have a new forum which will have a big impact on the re-emergence and retention of jobs. Many ideas have come forward from the Government in regard to the issues of viability and access to credit and banks, such as the Credit Review Office, the microfinance fund and loan guarantees and better procurement.

The Government understands and respects the concerns of small businesses and will provide a service to small companies as these are the backbone of our €90 billion economy. The small business sector is the driver of this engine. As the Taoiseach has said repeatedly, this is the year of jobs. If we have 200,000 companies in Ireland, one job created in every company would dramatically reduce unemployment. We have our Intreo offices, the back to work scheme and apprenticeship schemes giving significant encouragement to businesses to retain jobs. These schemes provide support and acknowledgement of the costs of doing business.

I am conscious of the issue of commercial rates, but I am confident that the Minister for the Environment, Community and Local Government, Deputy Hogan, will introduce a situation similar to that in Northern Ireland, and that we will have tiered rates. Rates have been reduced in some areas. Ultimately, it is the customers who pay the rates as these are part of the stacked up costs of business and if one is working on a net margin of 2% or 3%, the rates are built into the cost base. Business people who do not incorporate rates into their margins end up with them being a cost of doing business. It is the job of the Government to ensure it gives encouragement to use vacant units and to encourage a fair system.

Paddy Burke (Fine Gael)
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When is it proposed to sit again?

Michael D'Arcy (Fine Gael)
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At 2.30 p.m. on Tuesday, 8 April 2014.