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Richard Bruton: We bailed out banks so now they have to give SMEs vital support

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Minister for Jobs, Enterprise and Innovation, Richard Bruton attends a press conference during the Informal Employment, Social Policy, Health and Consumer Affairs Council meeting as part of Irelands Presidency of the EU in Dublin Castle on Friday 8 February 2013.  Photo credit: Barbara Lindberg.

Minister for Jobs, Enterprise and Innovation, Richard Bruton attends a press conference during the Informal Employment, Social Policy, Health and Consumer Affairs Council meeting as part of Irelands Presidency of the EU in Dublin Castle on Friday 8 February 2013. Photo credit: Barbara Lindberg.

Barbara Lindberg

Minister for Jobs, Enterprise and Innovation, Richard Bruton attends a press conference during the Informal Employment, Social Policy, Health and Consumer Affairs Council meeting as part of Irelands Presidency of the EU in Dublin Castle on Friday 8 February 2013. Photo credit: Barbara Lindberg.

SINCE the 1970s new Irish SMEs have been creating jobs at twice the rate of older and bigger firms, according to new research from the Central Bank.

That is why this Government is determined to improve supports for Irish SMEs and make sure that they are at the heart of our plans for growth and job creation.

That is also why, as one of its first decisions, the Government appointed a minister of state with specific responsibility for the SME sector. In John Perry, the Taoiseach chose a person who understands the needs of small business and knows that fostering start-ups is crucial to the turnaround in job numbers.

They are playing an important part in the wider trend of net job creation in the private sector, where 1,000 jobs have been added each month for the past 15 months.

While many people are not yet feeling the benefits, and clearly there is a long way to go, the fact that more jobs are now being created than lost is crucial. This is especially so when you consider that there was a net loss of 250,000 private-sector jobs across the country between 2008 and 2010.

Access to finance is undoubtedly still an issue facing new SMEs.

It is crucial that our banking system works better for SMEs. It is no more than entrepreneurs and job seekers deserve, given the State's massive support of the banking system. Tougher targets are being set for lending to business but the banks have a significant distance to go in rebuilding their capacity to lend to productive enterprises.

The Credit Review Office (CRO) is helping to reduce the problems SMEs are experiencing with our banks. I strongly encourage SMEs who have been refused credit to apply to the CRO, as it is overturning 55pc of cases referred to it.

The Government has also introduced a number of initiatives such as the Microfinance Scheme and the Credit Guarantee Scheme to fill some of the gaps left by the banking system and provide funding totalling over €2bn for small firms.

This includes initiatives by the National Pension Reserve Fund, whose €850m finance support package for SMEs is providing vital credit lines to Irish entrepreneurs.

I also welcome the announcement on Monday by the European Investment Bank that it will provide AIB with another €200m in financing for Irish SMEs. This type of new funding was targeted specifically in the Action Plan for Jobs.

While finance is crucial, opportunities for new business development are as important. That's why our 2013 Action Plan for Jobs contains several reform measures that are specifically designed to increase the openings available to Irish SMEs.

We are putting in place measures to support more Irish SMEs to trade online. While Irish consumers spend €4bn online annually, only €1bn of that goes to Irish businesses and only 23pc of Irish SMEs are trading online.

With this in mind, last week I launched a pilot scheme with Dublin Chamber of Commerce and Dublin City Council to provide business mentoring to SMEs from three of the world's largest internet services firms: Google, Facebook and PayPal.

This pilot scheme will, I believe, provide the model for the introduction of a new Business Online Voucher for all SMEs to the value of €2,500. The target is an increase of 2,000 in the number of businesses trading online, creating 3,200 jobs.

We are also introducing a single licensing system for retailers, to reduce the burden of licensing in this area by a third and provide annual savings of €40m per annum to small businesses in this sector.

As the Irish presidency of the EU is focused on stability, growth and jobs, initiatives to help SMEs are top of my priority list.

That's why as chair of the EU Competitiveness Council, I'm bringing together the leading experts on SMEs this week in Dublin Castle. EU enterprise ministers will sit down with a range of international specialists to draw up the best new ideas for SME support and job creation.

Already the Irish presidency has achieved some valuable wins for SMEs: auditing requirements for SMEs are set to be reduced and the target participation rate for SMEs in the EU's new €70bn innovation programme Horizon 2020 has been increased from 15pc to 20pc.

We in the Government understand that SMEs are crucial to the transition that is taking place from a broken economy reliant on property, banking and debt to a new, sustainable economy based on enterprise, exports and innovation. The recovery and our country's future prosperity will be driven by entrepreneurs and their firms. This Government is behind you every step of the way.

Jobs Minister Richard Bruton will chair a meeting of the EU's Competitiveness Council in Dublin Castle tomorrow

Irish Independent