Government and banks squeezing life out of small businesses


IN Switzerland they managed to find a particle so infinitesimally small that it once only existed in theory; while in Ulster Bank they cannot find their customers’ lodgement details.

The ongoing chaos in Ulster Bank reminds us how dependent we are on the banks, not just for the services they provide, but also for how they record and collate our various transactions with honesty and integrity.

The bosses at Ulster Bank and RBS stress that this breakdown of IT and computing is not a breakdown of banking. They may technically be right, but it certainly looks and feels like a breakdown of banking, especially as Irish customers wait two weeks longer than customers in Britain to have their problems sorted.

Can you attribute sending Irish customers to the back of the queue behind RBS and NatWest’s Scottish and English ones to just computing and IT considerations?

Allowing this crisis to drag out over a month borders on recklessness. As the thousands affected already know, this is no mere inconvenience; this is a major disruption to our economic well-being.

It may not be as nasty as AIB’s systemic overcharging that left it having to pay out €65m in 2006 in restitution and interest, but its impact may even eclipse it.

Small businesses already face enough problems. All the evidence and analysis from across the world proves that it is the small- and medium-size employers who create the jobs. It is the sector that lifts countries out of recession, but to do this it needs certainty and clarity.

Yet it is not getting that certainty and clarity — and on two fronts.

The banks are still not making sufficient credit available. They are squeezing companies’ cash flow to the edge of forcing them out of business.

I was recently shown a letter by a business customer of Bank of Ireland from its credit operations section in Dublin. The letter ordered him to stop making any payments by cheque or credit card as he had temporarily gone €1,200 over his €20,000 overdraft limit. This was despite the fact that his total assets are in excess of €2m, including over €27,500 in deposits with the same bank.

This is just one recent example, there are thousands more.

The other front, unfortunately, is the Government. Its 2 per cent VAT increase; its decrease in redundancy rebates from 60 per cent to 15 per cent and its proposals on sick leave pay are hurting small businesses up and down the country.

Not satisfied with this onslaught, some in the Cabinet are determined to make the situation worse, as evidenced by Minister Joan Burton’s recent suggestions of PRSI increases.

These attacks on small businesses are met with silence from within Fine Gael. Maybe the party is taking its lead from the Taoiseach’s approach to European politics?

If the Government’s own publicity is to be believed, the progress made in Brussels recently was all down to the Taoiseach and Tanaiste’s amazingly quiet diplomacy.

The Italian Premier, Mario Monti, hardly gets a mention.

Yet, for some reason, most of the international media believe the concessions suggested at that summit were due to the pressure applied by Italy and Spain.

According to the Bloomberg service, it was Monti’s threat to scuttle a €120bn plan for growth that prompted Merkel to “agree to language supporting Monti’s so-called spread shield … to bring down borrowing costs for countries meeting their fiscal commitments”.

The outcome prompted Italian newspapers to compare Monti’s success over Merkel to Balotelli’s performance against Germany. This contrasts with Enda Kenny’s role as the “Blanche Dubois” of the EU Council: always depending on the kindness of strangers.

It is not that we want to know the details of the Government’s European strategy; we just want to know that it has one and that other EU leaders are aware of Ireland’s genuine concerns and needs.

This is particularly vital now as our EU Presidency is only six months away. When it ends at this time next year, we want to have a lot more to show for it than just 10,000 empty silk tie and scarf cases.

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