Breen cites the example of Tony’s Menswear Closure during Dail Debate on Small Businesses.

October 18th, 2010 - Pat Breen

On Tuesday night last, Fine Gael tabled a Private Members Motion which called on the Government to introduce a loan guarantee scheme to assist small and medium sized businesses.

Speaking during the debate Deputy Breen said that while “Minister Lenihan had promised “a wall of cash” which would get credit flowing to small businesses when Nama was invented. Small businesses certainly haven’t seen this “Wall of Cash”. When they run into difficulty and have short-term cash flow problems; all they meet with is a “wall of silence” from the Banks. ”

He told the Dail that Local enterprise boards have witnessed a huge upsurge in interest from people who have already being made redundant and who want to re-invent themselves by setting up their own business and that “The biggest challenge will be to sustain these businesses”.

He cited the example of Tony’s Menswear, which has been in business in Ennis for the past 21 years and is closing its doors on Friday, warning that “this could be the thin end of the wedge if small businesses were not given a lifeline.”

Urging SME’s to be given a lending hand, he said that it is a “no brainer that the sector which has the most potential to create jobs is given a helping hand.”


Deputy Breen’s Transcript Underneath together with Fine Gael Motion.

Dail Eireann – Private Members Debate

Tuesday, 19th October 2010.

Deputy Pat Breen T.D.

Deputy Pat Breen: Consumer confidence is at rock bottom. It is sad to say that this Government has done little to help the unemployed and to protect small businesses. As previous speakers have pointed out, the Minister for Finance promised a wall of cash which would get credit going to small businesses when NAMA was established. There was no such wall of cash, but small businesses that have run into difficulty and have had short-term cash problems have met a wall of silence from the banks, banks which we taxpayers bailed out.
I see it every day in every town and village my county. Shops, pubs, small companies and post offices all closing down and many of these go unreported because the numbers losing their jobs are small, but the closures add up and the numbers involved are significant. Near my constituency office in Ennis for example, the owner of Tony’s Menswear, which has been in the town for 21 years, has announced that it will close shortly. He is angry because he has been forced to close. Rents are too high and rates are an issue for many businesses. The shopkeeper in my local shop told me that small business rates are €10,000 per year in a rural area. People cannot afford to pay these rates. Tony’s Menswear is just one example and this could be the thin end of the wedge for other businesses if small businesses are not given a lifeline. Deputy D’Arcy referred to an important issue in respect of people who close down their businesses, in that they are not entitled to jobseeker’s benefit for 12 months. That is wrong, given the number of businesses closing down.
Electricity prices are high. We all know of the amount of money that small businesses must spend on fridges and coolers. In my constituency, Kilrush town centre has seen businesses close recently. It has a domino effect and will affect many other businesses.
We need a fresh approach. Fine Gael has outlined one to the Minister. A partial credit guarantee scheme is the way forward. Small and medium-sized enterprises, SMEs, act as a lifeline for other businesses and many manufacturing businesses have gone elsewhere. Creating two, three, four, five or six jobs in every village is the way forward. There must be some type of market intervention. Billions of euro have been spent on saving the banks. It is a no brainer that the sector which provides a large number of jobs should be given a lifeline.
I commend the motion and Deputy Perry for tabling it. I hope the Minister will take heed. If he does not, rural Ireland will take heed of him.

Fine Gael Private Members Motion.

Calls on Government to:
· Introduce a loan guarantee scheme for small and medium sized businesses based on the following operational principles:
o Risk-sharing between financial institutions and the State
o Auctioning of loan guarantee contracts to financial institutions
o Credit assessment carried out by the banks and the Credit Review Office
o An emphasis on start-ups and export-oriented companies
o And exclusion of financial institutions that approve high rates of non-performing loans