Vol. 712 No. 3
34 Deputy Leo Varadkar asked the Minister for Enterprise; Trade and Innovation the senior bankers and bank representatives that he has met with to discuss the lack of credit available to small business and the outcome of those meetings; and if he will make a statement on the matter. [24695/10]
35 Deputy Willie Penrose asked the Minister for Enterprise; Trade and Innovation if in view of his statement on 14 May 2010 in which he said he intended to summon top bankers for talks over the business credit crunch, he will list those bankers he has met to date; the response he has received; if his attention has been drawn to the difficulties still being experienced by many businesses in accessing credit; and if he will make a statement on the matter. [24634/10]
I propose to take Questions Nos. 34 and 35 together as they substantially address the same issues.
I met separately with Allied Irish Banks, Anglo Irish Bank and Bank of Ireland during the week beginning 17 May 2010. These were private meetings held with each bank to discuss the availability of bank credit for businesses, especially small and medium sized enterprises. At the meetings, I raised concerns about the claims of many small businesses that some bankers were stonewalling loan requests and not providing credit to viable enterprises. I reminded the banks of the purpose of the recapitalisation package and the substantial investment of taxpayers' money into the banks aimed at getting our economy moving again.
The message from the two main banks was that they were open for business and available to provide credit to viable businesses. They assured me they were fully committed to supporting businesses and would meet the requirements laid down for them in the recapitalisation package of 30 March 2010. They confirmed that they had submitted plans to the Department of Finance and credit review office on how they intended to meet their requirements and these plans are being reviewed.
Since my meetings, there has been considerable activity and announcements by the banks relating to supports available for the business sector, particularly small and medium sized enterprises. I welcome these activities and announcements. As I have stated in the past, however, the promises and activities of the banks must be matched with specific commitments and increased lending. All viable businesses must obtain appropriate access to bank credit.
The banks' performance in meeting their obligations under the recapitalisation scheme will be closely monitored by Government. I want our banks, which have been rescued at enormous cost to the taxpayer, to act responsibly and in the best interests of small businesses in order that we can create jobs in the domestic economy and advance our recovery as a nation. I will meet with the banks in the future, as necessary, to ensure they are providing sufficient credit to the business sector.
The reason I tabled a question on this matter is the ongoing concern expressed by many of those who run small and medium sized enterprises that they are not securing access to working capital. The Minister has made some efforts to meet representatives of the banks to impress on them the importance of extending credit to small businesses. Who attended these meetings? Did the Minister meet Richie Boucher, Mike Aynsley or Colm Doherty?
While I do not propose to name individuals in the Chamber, I met the chairperson and senior executives of one of the leading banks, the chief executive officer of another leading bank and the chairman and chief executive of Anglo Irish Bank.
Exactly what was achieved by the meetings? What commitments did the Minister secure from the banks?
The Taoiseach, in a statement on banking at the annual general meeting of the Dublin Chamber of Commerce, indicated the Government was not satisfied that banks were providing credit to small and medium sized businesses. The Government is particularly concerned about this issue because the SME sector provides employment for approximately 700,000 people in a workforce of 1.9 million. Our concern is that such businesses cannot survive if finance is not available to them.
We called representatives of the banks to a meeting on the basis of the recapitalisation and because the Government wants to continue to create jobs, as it is doing through the IDA, Enterprise Ireland and other efforts. The SME sector can only create further jobs if credit, the lifeblood of business, is available to them. We made clear to the banks that we were unhappy with the manner in which they were treating customers, pointed out that they had forgotten loyalty and shunned people and noted that they were converting their credit terms from overdrafts into term loans, increasing the interest rate on such loans, calling on loan guarantees and closing down businesses. Our general view was that the position was highly unsatisfactory.
In the circumstances, two important matters emerged from the meeting. Allied Irish Banks gave a commitment that it will, over the course of the rest of the year, make available a sum of €500 million for loans, while Bank of Ireland indicated it has lent €1 billion. Both banks gave commitments to make available €3 billion in 2010 and 2011. Each of the banks submitted its plans for making available this funding and the Departments of Finance and Enterprise, Trade and Innovation are examining these plans. A number of issues have arisen from the plans and further clarification has been sought from the banks to ensure their commitments are met. The Department will monitor the level of advances being made to businesses and the chief credit reviewer will be involved in the monitoring process.
On behalf of the Labour Party, I have argued the case for small businesses consistently and at every opportunity and forum, including in the Dáil Chamber. The banks, unlike me, do not recognise that more than 250,000 small businesses provide 750,000 jobs. On the contrary, they have treated small business in a disdainful fashion. The Labour Party proposed the establishment of a strategic investment bank because the disgraced private banking institutions failed us and brought the country to its knees.
How will the Minister monitor the commitments made by the banks given that they have been past masters at fudging the figures and creating a mist of confusion and contradictions? The losers in recent months have been small businesses which have sought to expand, pursue new avenues of business or secure additional overdraft facilities. The Minister used a good expression in stating the banks have stonewalled. How will he be certain that the promised moneys will be made available to small businesses? There is a great fear that, notwithstanding his bona fides and efforts, which I acknowledge, the banks will engage in a public relations exercise to get the Minister off their backs. Having secured the funding to recapitalise, the banks will use viability and other factors as an excuse. Many small businesses are family run and have been viable for years. Why then are the banks calling this tune now?
The authors of the third Mazars report could not establish what criteria the banks were using to make funding available for small businesses. Much of the information is not precise and they admitted a number of factors limited the collection of relevant data. If Mazars was unable to get to the bottom of the issue, how will the Minister monitor the commitment the banks gave to ensure it is implemented?
The Deputy has asked pertinent questions and the issues he raises will exercise us. In the past, money was not made available when the banks indicated it would be made available. On this occasion, however, there are two differences. I have secured a commitment from the chief executive officers and chairpersons of the banks concerned that they will provide the funding. They have admitted in meetings with me that obviously there were major shortcomings in the way they were dealing with their customers. They also indicated to me that there would now be an appeal system within the bank itself. In other words someone refused at a local level could appeal to a higher level in the bank. A customer who is still not satisfied that he or she has been treated equitably and fairly in his or her application can appeal that decision to John Trethowan, the chief credit reviewer. I also met Mr. Trethowan because I thought it was important to ascertain precisely from where he was coming. This man was chief executive of National Irish Bank and he knows the banking system. In my meeting I was very impressed that he knows what he is at. The chief credit reviewer will give a quarterly review to the Department of Finance outlining his findings from the appeals made to him.
The chief credit reviewer was very strong on one point. The Mazars report indicated that four out of five were getting approval of applications. Of course the small businesses were claiming that only one out of five were getting it. However, if a small businessperson was looking for €100,000 and a bank granted approval for €40,000, it seems the Mazars report regarded that as an approval even though it was no good to the future viability of that small business. He will evaluate all the applications. Importantly he requested that every stage be documented in writing so that an audit trail is available to us.
What proposals have AIB and Bank of Ireland made to indicate they will meet the targets? The Minister indicated that he got an additional €500 million. Where does that fit in, in the context of the €3 billion that was supposed to have been provided for in 2010 and 2011? Is it in addition to that or is it a portion of that to get the thing up and running. Were they simply sitting on their hands until the Minister met them? After getting the taxpayers' money and with small businesses paying through the nose trying to keep the show running, they were sitting on their hands. Can the Minister confirm that is what they were doing? I hope the Minister gave them a good kick up the transom and I hope he gives them plenty more.
Is that parliamentary language a Leas-Cheann Comhairle?
I think so.
It is very parliamentary when compared with what I would like to say.
In that case, I am very glad for the Deputy's forbearance.
We had very forthright discussions, as a result of which I am satisfied that the €500 million will be part of the overall €3 billion they have committed. The chairperson of AIB, who was present at the meeting, indicated clearly that there were deficiencies, that in the restructuring the bank had lost sight of its customer base and the loyalty of those customers, and that it was prepared to ensure that AIB local management would deal equitably with applications that came before them. We will continue to monitor it on a quarterly basis and I will report back to the House on an ongoing basis to ensure they are complying.
36 Deputy Deirdre Clune asked the Minister for Enterprise; Trade and Innovation the steps he has taken to seek a purchaser for the Pfizer plants in Loughbeg and Shanbally, County Cork, to prioritise job retention in the area; and if he will make a statement on the matter. [24696/10]
Pfizer remains a major industrial employer in Ireland with more than 4,200 workers, in seven locations, involved in the manufacture of high-end life science products for world markets. I have asked IDA Ireland to continue to work with Pfizer to save the jobs at risk due to the planned future sale or closure of plants in Cork and Dublin. Any impact on jobs at the facilities in Loughbeg and Shanbally in Cork would occur in 2012 to 2014.
IDA Ireland is confident that a buyer will be found for at least some of these facilities. In the recent past, IDA Ireland and Pfizer have been successful with the sale of Pfizer's animal health plant in Sligo and its Cork Loughbeg API plant, preserving jobs at both locations. Pfizer is planning further capital investments and new positions in its biotechnology operations in Ireland and the Government will do all it can to support the company's growth plans and is in discussions with the company.
The Government is working hard to sustain and create jobs throughout the country by creating a business environment that is supportive of Irish enterprise and export growth, and ensures we continue to attract high value foreign investment. In the past ten years, direct employment in IDA Ireland-supported companies in Cork city and county has grown from just under 16,000 in 1999 to 20,000 now. Since 2006, company projects with a job potential of more than 4,222 have been approved. Enterprise Ireland has approved approximately €50 million to client companies in Cork city and county since 2008. EI has a client base of more than 700 companies employing approximately 18,000 people.
For the micro enterprise sector, grant approvals in the period 2000 to 2009, by the four Cork city and county enterprise boards amounted to €11 million, supporting 647 projects. Capital funding for these boards in 2010 amounts to €1.5 million. It is generally estimated that the jobs directly created result in approximately the same number of jobs being generated in the local economy.
As for other regions, the Government and the industrial development agencies will continue to focus on attracting investment and creating industrial jobs.
I thank the Minister for his response. Of the two plants in Cork at Loughbeg and Shanbally, the Minister mentioned that IDA Ireland is confident of providing a buyer for one. I presume he is referring to the Shanbally site, which is a more modern facility. I know Pfizer and IDA Ireland are working to sell the plants. Are there any specific targets in mind and has any market research been carried out as to who might be a likely buyer? People want to hear that there is something tangible out there? There is the possibility of offering tax breaks for the Loughbeg facility which is currently producing Lipidol, which will have gone off patent in 2011. There must be some area that is being targeted rather than the general open market. People want to hear that there is something more specific.
Some of the plants are really marketable and IDA Ireland is very confident that it will be able to sell off some of them and bring in companies that will sustain and preserve many of the jobs that already exist. It is very helpful that the closedown of these facilities is over a period from 2010 up to 2014 in some cases, which will give us a great opportunity. IDA Ireland has been in discussions with some companies on these matters. There will be regular site visits to the facilities to see how appropriate and fit for purpose they are to some of the companies with which IDA Ireland is in contact. We remain very hopeful. It is too early for us to give any definitive signs, but from its experience and the contacts it has made, it remains steadfastly confident that it will be in a position to sell some of them.
Specifically on the Loughbeg facility that is producing the Lipidol, is it possible to market that with tax breaks for research and development purposes? I know something is available under that scheme. Is that a tool the Government is using?
Any company coming in that will commence a process, of course, will be subject to the 12.5% corporation tax. If it is involved in research, development and innovation, it will be able to obtain the further tax credits that would be available to any multinational or other company coming in. It would be seen as a totally new entity. Irrespective of the grants paid or the time lag, they would obviously need to be paid back to IDA Ireland if such moneys were to be refunded to the IDA. However, anything new coming in would be regarded as a new project that would be entitled to all the appropriate grants.
37 Deputy Willie Penrose asked the Minister for Enterprise; Trade and Innovation if his attention has been drawn to the recent report published by the Migrant Rights Centre of Ireland seeking changes in the current arrangements for issuing work permits to those from outside the EEA area which it claimed was leading to exploitation of workers; the changes he is planning to the current regime; and if he will make a statement on the matter. [24355/10]
I am aware of the recent report by the Migrant Rights Centre of Ireland, entitled Work Permits and Exploitation: Time for Reform, in the context of proposing changes to the system of issuing work permits, and assume this is to what the Deputy's question refers.
Since 2004, a key element of Irish labour market policy has been to ensure that general labour and skills needs are met from indigenous labour and from within the workforce of the European Union. For strategic skills or labour shortages in designated occupations in key economic sectors, Government policy is to issue employment permits for the employment of non-EEA nationals for specific vacancies and in response to employer demand. The various schemes that give effect to such policies — green cards, work permits, spousal and dependant work permits, and permits for intra-company transferees — were introduced following enactment of the Employment Permits Act 2006 and came into effect on 1 February 2007.
The Employment Permits Act 2006 provides immigrants with greater freedom, autonomy and control over their own employment choices by enabling workers, for the first time, to apply and reapply for their own permits. The Act also allows workers to change their employer after a period and move to another employment to take advantage of better conditions or career options.
It is important to retain the current arrangements which operate to protect employees as it allows the system to trace employers who employ permit holders. The current arrangements for moving jobs are sufficiently flexible. A properly controlled employment permit system requires that permits be issued to a specific employee for a specific job with a specific employer. To do otherwise would not only risk abuse of the employment permit system but would make it much more difficult to ensure that employers observed the employment rights of employees.
Although employment permits are employer and location specific, the Department currently makes efforts to facilitate those who encounter difficult positions and who wish to change employers with new employment permits. In the past year, for example, almost 1,500 new employment permits were issued in respect of employees changing to new employers. These permit applications were issued without regard to the normal requirements of advertising the position in daily newspapers and with FÁS.
Exploitation in the labour market is unacceptable and I urge all who find themselves in this position, including employees on employment permits or persons who know of such an issue, to contact the National Employment Rights Authority, NERA, which will investigate these matters. Whereas reporting of breaches can sometimes present difficulties for employees who hold permits linked to a particular employer, I remind the Deputy that NERA will also act on complaints made anonymously. That is critical. We have heard very disturbing stories from the Migrant Rights Centre of Ireland so anybody with information should contact NERA, even if it is on an anonymous basis.
Additional information not given on the floor of the House.
The Employment Permits Act 2006 provides for regular review of Ireland's economic migration policies and my Department keeps these policies under review on an ongoing basis.
I thank the Minister of State for his reply. In 2010, one would think the holder of an employment permit only being allowed to work for the particular employer stated on the permit is very restrictive. The logical consequence of such a binding system is to deny the holder of the permit basic freedom to change employer; it is fundamentally flawed, unjust and discriminatory. We should be clear that such action encourages exploitation.
Nobody wants to throw out the baby with the bath water and there is a system in place. We want an administrative change. I accept the thrust of the Minister of State's reply but does he agree that a better and fairer employment permit system would have the employment permit granted to a worker within a designated occupation or job category? The job category and designation would remain the same so a carpenter could not work as something else but he or she could go to a different employer after three or four months provided it is in the same category of work.
That is a simple administrative change and there is no need to overhaul the entire system. The labour market need tests would still be applied, as the Minister of State correctly indicated. With a change of employer, I suggest it is quite simple to notify the Department of Enterprise, Trade and Innovation or the Department of Social Protection. It is not a big deal. Does the Minister of State agree it would be good for ensuring compliance by employers so they will not be undermined and can compete on a level playing pitch with those who might look to exploit people within the current system?
Our first obligation is to the EEA labour market.
We accept that.
It is the first obligation of the State to ensure that is the case. The process is demand-led to ensure specific skills shortages can be filled on a continuous basis. Some 1,500 work permits were issued to employees changing employer in 2009, so the system is flexible while maintaining integrity. The system is being continuously reviewed, with the last occasion in early 2009.
We continuously consider the needs of the economy and employees. This is critical. When I was Minister of State dealing with labour affairs I always urged people to relay any information they had concerning exploitation of workers. We have urged unions to do so and I met representatives from the Migrant Rights Centre of Ireland on several occasions. If Deputies in the House have information they should contact the National Employment Rights Authority which will investigate. We have put in many resources for language training, and inspectors have access to Polish, Chinese, Lithuanian, Latvian and so on. There are more than 12 languages in published documentation on employment rights.
The position of the EEA system is accepted but this concerns non-EEA issues. Surely the Department has an obligation to ensure there is no exploitation or undermining of people's rights? In that context why is there such an obstinate refusal by the Department or somebody within it to review the issue? In a month's time the Minister of State could return with an answer and I would be happy with it.
I will give an answer I hope the Deputy is satisfied with now. In the past year we have issued 1,500 work permits to employees allowing them to change employer. The system is flexible and wherever there are issues of exploitation, the Department will consider them from a humanitarian and sympathetic perspective if an employee wants a transfer from an employer. We understand the needs but we urge everybody in the House to report incidents of exploitation.
38 Deputy Leo Varadkar asked the Minister for Enterprise; Trade and Innovation if he will report on the workings to date of the inter-agency team that he set up, comprising of Enterprise Ireland, FÁS, Industrial Development Authority Ireland, relevant county enterprise boards, the Department of Social Protection and his officials following the announcement of some 900 voluntary redundancies at Quinn Insurance; and if he will make a statement on the matter. [24697/10]
In response to the announcement of redundancies in Quinn Insurance, I established an interagency team comprising Enterprise Ireland, IDA Ireland, the relevant county enterprise boards, FÁS and the Department of Social Protection. The interagency response team, which held its first meeting in Cavan on Friday, 30 April, has met on four other occasions since and is chaired by Mr. Dan Flinter. It is important to note that this co-ordinated response to the position in Quinn Insurance is a work in progress. The group oversees and monitors the direct responses of the relevant State agencies concerned with the Quinn Insurance locations in Cavan, Navan and Blanchardstown.
Information sessions for Quinn employees have been delivered at all three sites by Enterprise Ireland, FÁS, the county enterprise boards, the Department of Social Protection, other agencies, education providers and financial institutions as required. The focus is to ensure that employees have all the relevant and practical information necessary to help them make informed decisions as they consider their options for the future. A Start Your Own Business programme is being rolled out in Blanchardstown and Navan in response to the numbers of expressions of interest in self-employment received by the employee representative committees.
A job availability portal is now operational and it will extract information from websites on employment opportunities for the whole region, including north Dublin. This portal will be targeted at those people leaving the company and will initially be password protected to them.
A sub-group comprising the company, Enterprise Ireland, IDA Ireland and the county enterprise boards is being established to keep a particular focus on responding to companies who indicate an interest in recruiting staff leaving the company and those who are known to be actively recruiting in related sectors. From 9 June, the Department of Social Protection and FÁS have been on site in Cavan, Navan and Blanchardstown to process benefit applications and assess training needs.
I consider that the interagency team approach is the most effective way to co-ordinate the activities of the relevant Departments, State development agencies and county enterprise boards to ensure that every avenue is explored as regards potential employment opportunities for the workers affected.
I thank the Minister for his response. The announcement of 900 voluntary redundancies in Cavan, Navan and Blanchardstown came as a body blow to all those areas, not least my own constituency of Dublin West, which has lost so many jobs in recent months. I appreciate that some good work is being done by the different agencies to assist people taking up the voluntary redundancy offer to access their entitlements and to receive benefits and training.
Has the Minister had any meetings on a possible new owner for Quinn Insurance? Who are the potential new owners? Is there a possibility that any owners would retain the jobs, take over the business as a going concern and provide the gap in the reserves? Even at this late stage could they reverse some of those redundancies?
The Deputy is aware that I met the administrators on the evening they announced the redundancies. At the meeting we made it quite clear that if the business were to be sold off, it would be better to be sold to a company not operating within Ireland. In fairness to the administrators they indicated clearly that this would be their preference. That said, they would have to put it in the public arena and bids would be made. A judgment would be made on the offers put on the table.
I understood at the time that in excess of 20 expressions of interest in respect of purchasing the company had been made.
I cannot interfere with the administrators. Enterprise Ireland has an officer who liaises on an ongoing basis with the administrators and Mr. Dan Flinter, who chairs the inter-agency group and from whom I receive regular updates, is in constant contact with them. I cannot become involved by indicating the groups I might wish to see purchase the company, that is a matter for the administrators. The administration process is independent and is set up by the courts. It would be completely wrong of me to involve myself in that process or to indicate what should ultimately be done.
I appreciate what the Minister stated. I suppose, however, that he must have some influence on the administrators, with whom I also met. Surely he could indicate to them that he would like the company to be taken over by a new owner who would be in a position to build up the reserves and take on the business, particularly that relating to the UK, as a going concern — this would ensure that existing jobs would be retained — rather than it being taken over by an owner who potentially might want to close down that market and reduce competition.
There are two issues that arise, one of which relates to sustaining the existing jobs. The most important factor, for ourselves and the inter-agency group, is that the jobs which are already in place should be retained and that the business continues to grow. We all want to ensure that as many jobs as possible will be retained and that new jobs will be created by any new regime that comes into place. As already stated, the Government is most interested in ensuring that a group which does not operate in Ireland at present should come in, take over the company and provide sustainable employment into the future.
