Finian McGrath (Dublin North Central, Independent)
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Question 142: To ask the Minister for Finance if he will assist small businesses which are suffering in the current economic climate due to lower prices in the black economy. [42781/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Internationally, a considerable amount of research has been undertaken in this area but, by definition, it is always difficult to quantify the scale of the informal economy.

The Government is taking costs out of businesses and, since 2007, measures we have implemented have saved small firms €20 million in red tape overheads. My colleague, the Minister for Enterprise, Trade and Innovation will shortly announce further administrative savings in areas such as Company Law, Employment Law and Health and Safety Law.

The Government's priority is to ensure that the business environment continues to be supportive of enterprise. Addressing the needs of SMEs is a particular priority that my Department will continue to support.

The Enterprise Development Agencies continue to play a key role in stimulating the development of new businesses, facilitating the expansion of existing companies and targeting new foreign direct investment through a broad range of initiatives, including direct financial and non-financial supports to enterprises. These supports are aimed at improving productivity, market knowledge, competitiveness and leadership and management capabilities so that firms can compete successfully and grow their businesses and exports.

Access to bank credit for businesses, particularly SMEs, has been central to Government Initiatives in addressing the crisis in the banking sector. Both the 2009 and 2010 Bank Recapitalisation arrangements provided specific commitments from the recapitalised banks to assist SMEs. Under the 2010 Bank Recapitalisation arrangement, AIB and Bank of Ireland have both committed to making available not less than €3 billion each for new or increased credit facilities to SMEs in both 2010 and 2011. This must include funds for working capital for businesses. Finance is also made available to businesses, including SMEs, through the various supports and grant Schemes provided through the Enterprise Development Agencies operating under the aegis of my Department. My officials are also working with their counterparts in the Department of Finance and the Credit Review Office on potential new credit initiatives for SMEs.

I issued guidelines to public contracting authorities aimed at operating their tendering processes in a manner that facilitates increased participation by SMEs, while ensuring that all purchasing is carried out in a manner that is legal, transparent, and secures optimal value for money for the taxpayer. The guidelines also highlight practices that are to be avoided where they can unjustifiably hinder small businesses in competing for public contracts.

The Minister for Enterprise, Trade and Innovation also met with the Local Authority Managers in July to discuss what initiatives they can and should take to support business and facilitate training, to foster the business environment in their areas and to ensure that their procurement strategies promote innovation and provide greater SME access to public contracts. The message was also conveyed that competitiveness at local level is as important as it is at national level. Decisions made at local level have a huge role to play in determining the success of enterprise. More generally, we are seeing lower costs for business, particularly in areas such as rental of prime industrial space and office space.

I will continue to work with my Ministerial colleagues to ensure that State charges for the provision of services to business take account of the impact which such charges can have on the competitiveness of companies and their potential to create jobs in the economy.