home » media centre » press releases

Labour Dail motion seeks action to save jobs in small and medium businesses

Issued : Sunday 23 November, 2008

The Dail will this week debate a Labour Party motion calling for an urgent programme of action to deal with the credit crisis facing small and medium sized companies and huge loss of jobs now being experienced in this sector as a result. The motion, which will be debated on Tuesday and Wednesday, will call for the establishment of a Small Business operational fund; speedier settlement of Bills by government departments and agencies; and an expanded role for the County Enterprise Boards in supporting small companies. (Full text of motion below).

The Labour Party Spokesperson on Enterprise, Trade and Employment, Willie Penrose TD, who will move the motion, said today that many small and medium sized enterprises were now facing unprecedented problems and that unless action was taken many more jobs would be lost between now and Christmas.

"While most of the attention has focused on a number of announcements of major job losses in big companies, the rate of attrition among smaller companies has been ever greater. Ten jobs are being lost here and another dozen, there which rarely get any media attention. But it is job losses at this level that is accounting largely for the huge rise in the numbers on the live register.

"The general problems being caused for small and medium sized companies have been exacerbated by the credit famine. Credit is the oxygen of small business but companies that could in the past easily access credit now find the door being slammed in their face by the bank manager.

"While the government has spent two months clapping itself on the back on the 'success' of its bank rescue package, the same banks have been denying badly needed credit to companies and more and more workers are finding themselves without a job. It almost defies belief that, while this is happening, Irish banks have not accessed the €15bn fund established by to European Investment Bank specifically to assist companies in difficulty.

"This situation cannot be allowed to go on and our motion sets out a number of key actions that should now be taken including:
- the establishment of a Small Business Operational Fund to ensure that credit streams are made available;
- the payment by government departments and state agencies of all bills within ten days, as has been done by the British government;
- the establishment of a group to monitor the lending practices of the banks;
- an expanded role for the County Enterprises Boards.

"Every TD in every party in the Dail knows of small and medium sized companies in their own constituency that are on the brink because of the credit crisis. I hope that they will have the courage to support our motion this week.

NOTICE OF MOTION

That Dail Eireann,

seriously concerned at the crisis situation now facing many small and medium sized enterprises arising from the credit famine and which is contributing very significantly to the massive increase in unemployment levels;

condemns the refusal of the banks to make available the normal credit streams, which are the lifeblood of such companies;

deplores the failure of the government to either ensure the banks makes credit available or to provide alternative sources of credit;

expresses its further concern that failure to take urgent action will result in the collapse of many such companies within weeks and a further serious increase in unemployment;

calls on the government:
1) to establish a Small Business Operational Fund to ensure that credit streams are made available to small and medium sized firms, drawing on the €15bn Small Business Operational Fund established in September by the European Investment Bank, which Irish banks have so far refused to access;
2) assist such firms by ensuring that Government departments and agencies settle their bills with within ten days, rather than the current 30 days;
3) establish a monitoring group made up of representatives of the government, small and medium sized enterprises and the banks to monitor the lending practices of the financial institutions;
4) strengthen the role of the County Enterprise Boards and, by removing the limitation on the type of enterprises the Boards can support and raising the limit on the number of jobs they can create above the current figure of ten, as well as a significant increase in Measure 1 funding to maximise their potential for job creation.