Richard Boyd Barrett: Calls 'health is our wealth', criticises SME loan plan

Thanks, Cian Comhairle. Minister, People Before Profit fully supports the objective of this bill, which is to try and protect and support employment in the SME sector. We are fully aware that small businesses are responsible for more than a million jobs and we think it is absolutely right that the government take measures necessary in order to protect and sustain the jobs in that sector. However, while supporting the objective, we would have a number of concerns about the approach that is being taken both in this bill and in terms of the part it plays in the overall July stimulus measures, which we understand you are planning and in some ways I think it repeats the mistakes, frankly, of the past that you and your coalition partners in the fall have pursued in terms of trying to deal with economic crises. And I think even more so there is a failure in your overall approach to register just how the world has changed as a result of COVID-19, the challenges that it poses and the need for an absolutely radical shift in the way we run our society and try and construct a sustainable economy. In the post COVID-19 era. Now, what do I mean by that? Well, first of all, you see, there's a sort of narrative, I would actually call it an ideology, which pervades your approach in this bill and broadly in terms of the stimulus. But it has really pervades your approach for the last decade. And that is the view that the core of the economy is private enterprise. Now, what we've learned in the last few months, but actually, I don't know if you've learned is that quite literally, our health is our wealth. It's not just a nice idea. We've suddenly learned it is a fact. Our health is our wealth. Because when the pandemic as, you know, vicious and virulent as COVID-19 arrives and public health is threatened in a fundamental way. And when the threat that that public health emergency poses threatens to overwhelm the ability of our under-resourced health system to cope, then the entire economy shuts down. All the SMEs shut down. All the SMEs shut down pretty much. And all, most, not all, quite a lot of big business shuts down. The economy shuts down. It's essential. Our health is our wealth. So if we can't deal with the ongoing threat of COVID, all of these measures are a waste of time. And I don't think that that understanding has penetrated the heads of the two major parties. They just imagine if we just nurse the system back to roughly where it was, hope that COVID goes away, everything will be OK. And I think that is a fundamental mistake. And I think the failure to recognise that both at the level of having the systems in place necessary to cope with COVID-19 in the form of a health service that could deal with surges, an education system which has to function, but which doesn't have the capacity, a childcare system that has to function in order for the rest of the economy to operate. These are absolute preconditions for the rest of the economy to operate. These are absolute preconditions for the rest of the economy to function. If they don't function, forget all the stimulus to SMEs. It's irrelevant. If we don't have an education system that's capable of operating, if we don't have a health system that's capable of dealing with the surges, if we don't have childcare that can allow the parents to go to work, the rest, forget it. And that understanding has not permeated, from what I understand, is going to come out of the July stimulus. No radical programme to recruit the 5,000 healthcare workers we need. And that's not just a health prerequisite, it is also an economic stimulus. And it's a sustainable one, because COVID or no COVID, we need those healthcare workers. And those jobs will sustain the economy and sustain the ability of our health service to underpin our entire society and economy. And exactly the same point can be made for our chronically understaffed education system and our chronically under-resourced and fragmented national childcare system. So I just say that, first of all, as a key point. But secondly, in terms of the bill itself. Now, as I said, of course we need to support the small and medium enterprises. Credit, extending credit to them, is probably, for some at least, important to do. So, yes, we should do it. Although, it is telling, as other speakers have said, that the scheme which this expands in the light of COVID, previous to it, is questionable in its success and effectiveness, in terms of its take-up. And it is highly debatable whether the SMEs that really need the help will want to take on debts from banks that, let's face it, are not the most helpful people in the world to SMEs or to anybody else for that matter. And this is the bit that really gets me about not learning lessons. Because, yes, we need to extend supports and credit to the SMEs. And it is right that the state takes on the responsibility for doing it. But the mechanism through which you plan to do it is, where have we heard this before, to privatise the profits if it succeeds and socialise the costs or the debts if it fails. That's what a proposal is. So, if the banks lend a lot and if it works, they will profit from it. We get a little premium, a little tiny 0.25% premium, but the profits will flow to the banks. If it goes belly up, because you haven't done the other things that you needed to do, in terms of the health service, education and dealing with COVID and it just doesn't work and there's a load of defaults, the people pay the bill. So, win-win for the banks. So, when we need to deal with a big economic problem, we come up with a proposal to give a win-win situation to the banks. They can't lose. Where did we hear that before? And how did that work out the last time round? Not very well. Not very well. And these will be the arbiters of who gets loans, if the SMEs even want the credit from them. Which, as we said, is debatable. Now, why on earth would you not cut out the middleman in this situation? I do not understand it. If we are going to pay the bill, if it goes belly up, if there's massive defaults and the potential for massive defaults are very, very real. If the pandemic continues to impact and we're forced back into further lockdowns, why on earth would we go through the middleman of the banks and say you can have the profits if everything goes well, but we'll pick up the bill if it goes really badly? That's just madness. And in addition, surely it is going to be more expensive in interest terms, plus the premium, to go through the banks rather than for the state to do it directly itself. I don't see how that can be the case, Damien. I honestly do not see how that can be the case. The state can borrow money cheaper. It can also, by the way, have a more hands-on human approach to supporting the businesses, as opposed to the banks' utterly inhuman approach when it comes to the businesses. And that is generally how most SMEs that I talk to see the banks. They don't see them as helpful. They don't see them as particularly human. They don't see them as looking at the specifics of their business. They just see them as utterly ruthless. Right? And, of course, the interesting, one of the arguments you will probably come back with and says, no, we can't interfere with the commercial approach to the banks. That would be completely wrong for us to do that. We've got to let the banks behave on a sound commercial basis, except if the banks lose. Then all the sound commercial stuff goes out the window and we'll underwrite them. That's the way it works for the banks. It's one law for the banks and it's one law for the SMEs. And for everybody else who the banks deal with. The only people who don't have to operate on a sound commercial basis because they will be underwritten by the state, i.e. the people or the banks. That is not an approach I favour, Count Corley. Not an approach. And I have to seriously consider, because I don't want to stop any flow of credit that could actually be beneficial to SMEs in this dire situation. But I seriously have to question whether this is effective and whether it's sensible. As the way to do that. So it's not about the objective of doing it. It is about the way of doing it. To make it effective to actually help the SMEs and indeed to ensure that if the state, i.e. the people, are taking the risk, that the benefits of taking that risk, if the enterprise goes well, will flow back to the people. Not to the shareholders of the banks, which is what it seems to me your proposal is offering. So those will be my criticisms and concerns. And the other thing I will just say. And this is more of the sort of double standards. This is part of that wider stimulus package. So here's a scheme that the banks will love. Questionable value to the SMEs. But then you're doing other things, at least if the leaks are believed to be believed. Which are actually going to increase the possibility that this scheme will fail. Namely, cutting the income of those who have lost their jobs through no fault of their own as a result of the pandemic. How on earth would is, if the plan is true, that you're going to cut the pandemic payment from €350 to €300, is that going to help the high street and the SME? I don't see how it is. I mean, it's counterintuitive, unless I'm missing something. For the hundreds of thousands of people who've lost the jobs through no fault of their own, you're planning to cut their income. And further taper the wage subsidy scheme, which will mean they will have less money in their pockets, which will mean they will be spending less money in the small and medium enterprises. How is that sensible? So the only people who are really being nicely insulated from any of the problems and risks here are the banks. Where did we hear that story before? The banks that we bailed out to a far bigger tune the last time round, who still don't pay any taxes, and who are making hundreds and hundreds and hundreds of millions of profits yet again. And you want to make sure they don't have to take any risks. I mean, it makes a joke even of capitalism, to be honest. Not that I'm a fan of capitalism. But this is capitalism with no risks for the capitalists. The enterprise economy, the pioneers of enterprise, who don't take risks. Because the chumps representing the people will underwrite any risks for them and make sure that we pay. That just doesn't seem very sensible. So, our alternative, in conclusion, Count Corley, nationalise the banks. Nationalise the banks. Because they wouldn't be here without us, without the bailout we have given them. They haven't treated the mortgage holders very well. They're not treating the SMEs very well. We're underwriting their losses anyway. We can't trust them to actually lend to the people who really need it. But we're actually enabling them. So, why on earth wouldn't we be running them? And actually dictating their priorities and ensuring that if they do profit, that the profits will come back to the people. 30 or 40 years ago, even in capitalist countries, that wouldn't have seen a particularly radical idea. But apparently it's off the charts now. But we will learn, we will learn eventually, the folly of the socialism for the banks and the capitalism for the people. Which we continue to go around in the hamster wheel of making the same mistake over and over again.