12/02/2012 Sunday Politics Northern Ireland

Coming up in Northern Ireland: Billions are pumped into the

banking system yet businesses here struggle to get a penny. So is the

Apology for the loss of subtitles for 1699 seconds

game weighted against the smaller Hello and welcome to Sunday

Politics in Northern Ireland. And it's all about the money today.

As the Welfare Reform Bill makes its stormy way through Westminster,

it is estimated the changes will drain hundreds of millions a year

from the local economy. How can we afford it? I will be talking to

Finance Minister Sammy Wilson in a moment.

And they say they are lending, but are the banks really playing the

game with smaller firms? Bearing in mind the Times Newenden with

�20,000 in cash to put into an account and we have a turn down. --

betimes that we went in. But first, with me for the next 20

minutes, Ulster Unionist MLA Joanne Dobson and Sinn Fein councillor Jim

McVeigh. What is your party's solution to

what is going on with the dissident? It is very worrying this

rise in a dissident threat. I had a rise last weekend -- I hadn't issue

last weekend when a police officer went in to protect children and was

set upon by a gang of the facts. It is important that everyone appear

to the rule of law. They should look out for the neighbours and

make sure the work with the police so that we can can find this to the

history books. Jim make the, you had public discussions him on the

dissident threat. How did that go? That went reasonably well. We had

an exchange of views, followed by a play. First and foremost, it is a

tragedy for the family. If this thoroughly depressing. These groups

have no credibility they have no support and her communities and no

strategy. At the time when Donegal is looking for to an exciting year,

building the economy and creating jobs, these people try to drive

away investors, opposed the efforts of the community in the city.

is the solution? They'd do not have support. People within the

community are talking to these people, confronting these people.

Sinn Fein representatives are doing this on as a continuous basis.

Trying to engage with them, persuade them that their strategy

is pointless, futile, counter- productive, it is destroying the

communities they claim to represent. We're trying to do that on a daily

basis and we will have to keep doing that, confronting them,

arguing with them and trying to make it as difficult as possible to

operate. The Unionists need to talk to dissident republicans --

Republicans? Be done a contribute anything. A deeper doubt such a

negative image of Northern Ireland. We need to basically come down into

the history books and get Northern Ireland moving forward. But should

that involve talks with Unionism? think it is important that we keep

moving forward. Now, the banks are rarely out of

the news these days, but behind the headlines businesses say they are

struggling to get loans from our financial institutions. To discuss

that and more, I'm joined by the Finance Minister, Sammy Wilson. How

is our economy going to talk -- cope with the �600 million less

each year? First of all, that is not the case. That is the lie that

has been put around. By 2017, we'll have welfare spending in Northern

Ireland Corporate from �5 billion this year to �6 billion. The rise

will not be as big as it would have been without welfare reform, but...

What is the point of it then, if it will not save money? There are two

points, first of all to focus of the welfare payments on those who

most need it. Secondly, it is to encourage people to get back into

work by making work pay. There will be, as a result of some of the ways

in which money is targeted, they will be some losers and there will

be some groups that gain. This actually fit in with the

Executive's strategy. A whole point is to get people back into work and

indeed over the period of the next four years, through the Department

of Employment and learning, we're hoping to target 114,000 people are

who are currently on benefits to make them more ready for work and

to try to get them into work and whole apparatus of government,

whether it isn't contracts we get out, or in spending on departments,

the work we do with businesses, the investment at the track, we want to

get Northern Ireland working. We want to get the people working.

where do these jobs come from? One in five people are unemployed and

those figures are not changing any time soon, or the? Youth

unemployment has actually fallen. It but only very slightly. It has

fallen and that is the first thing. That is the result of a lot of the

good work that has been done, especially through the Department

of Employment and learning, trying to place young people into jobs.

She we have greater fiscal powers then? You could make a difference

in terms of how much money people have. We have a distinct situation

in Northern Ireland, there are more people disabilities, mental health

issues. The whole point of welfare reform and what is attached to it,

is to try and work through the problems that those people have, to

try and place those who can be placed and the -- placed in work to

be placed in work. Those people need support and we need to get at

them. Can you guarantee that? of the reason that parts of their

welfare reform in Westminster was put forward that we voted against

was that we believe that there were some vulnerable groups that were

not being properly dealt with in the welfare reform proposals and of

course the house of Lords agreed with that as well. As far as what

can we do about those we were to place in work, we are already doing

it. We have programmes for giving people training in a public

contracts, we have a social clauses which will require those who take

on public work to take on long-term unemployed. I appreciate that, but

can you guarantee that families will not be worse off, that people

not have a situation where they have a lot less money coming into

the house and their children may indeed suffer? The old problem of

universal credit is to ensure that you do not have the kind of steps

that you have at present, where you actually make work pay. But that is

the aim that we have, that if someone moves from benefit into

work, they should not have to pay a financial penalty. That is where

the welfare reform proposals need honed a bit. We have been pushing

with Westminster to make some changes and eventually they will

come here to Northern Ireland. BBC's Dragon's Den is entrepreneurs

under pressure, but that is worth it to give them a chance with an

experienced business mentor. Here at the Northern Ireland

Science Park in Belfast, small companies with big ideas are

meeting investors with big money. We're the Dragons Den for Northern

Ireland. David funding to get into business. This is the world's first

inflatable car seat for children. We had been at funding the this is

what their own cash for, but now we're at the point where we need to

look at the various funding options available to us.

This woman needs funding -- this man needs funding to turn his award

winning play into a film. It can be very prudent and successful First

investors -- for investors. Aaron Taylor's company develops software

for the fast-growing computer gaming industry. He had no choice

but to raise private investment. We've been in with two pretty well

known banks in Northern Ireland and have been declined for bank

accounts. Bearing in mind the times we have went in with �20,000 in

cash to put into an account and were turned down. If they are going

to judge start ups the same way they are going to be judging

developed companies, then there is never going to be a benefit in that

for small start ups that is really going to help them move forward.

Northern Bank has just reported hefty pre- tax losses of more than

�210 million. Business lending fell by 11%. The bank says this is

partly because firms are more focused on paying off loans. In a

recent report, the Department of Enterprise asked local small to

medium sized companies, that's firms with up to 250 staff, about

their experiences with banks. In 2007, 92% of companies successfully

negotiated a bank loan. This dropped by a third in 2010. And for

really small businesses, those with less than 10 employees, the success

rate was halved, from 89% down to 45%. Banking analysts say that

during the property boom in the last decade, businesses in Northern

Ireland were far more likely than their counterparts in Great Britain

to take on cheap bank loans for property speculation. This means

that some companies are left with toxic debts, even though their core

business is sound. The idea is being floated in political and

banking circles that a NAMA-style bad bank could be set up to remove

these debts in the hope that this might free up bank lending once

again. And and they will be opening the books, looking at what sort of

debts the businesses have. If those debts can be offloaded elsewhere or

can be constructed elsewhere to be paid off in a measured basis, then

that is certainly something that could be attractive to a lender.

have almost been made into a political football and be -- and

used to be the bankers to death. But what can we do to drive this

Do we need one of those banks for Northern Ireland? I have discussed

this with Mervyn King, who is the Governor of the Bank of England. It

would have to be an initiative which would be done at a national

level. However, the government itself has tried to find ways of

easing banks through this with their vast quantity of the easing -

- of the quantitative the easing. With no way of knowing if we're

actually benefiting -- but we have no way of knowing if we're actually

benefiting. There are no regional figures available. They could be

lending loads of money in Yorkshire but nothing here. That is

absolutely right. I have been pressing the government to give

regional figures. The one thing that we do know what is that bank

lending last year in Northern Ireland was about �60 billion -- �6

billion and De deposits were �8 billion. We do not actually know

what the net lending is, because firms are always repaying loans or

being forced, even worse, to repay loans. Those kind of figures we do

not have available. One of the problems in all of this is that

there is a huge gap in our knowledge about what is happening.

Banks make one claim and businesses make another claim. So, who is

right? Because of the gap in knowledge about what is actually

happening, we cannot be fully aware of what is happening. The one thing

I am fairly sure of and the Executive is looking at ways of

addressing this is that we're never getting that the time when the only

source of money for presences is going to be back lending. And

indeed, looking at the club that you showed there, we're going to

have taught it equity funding, were people take a stake in some of

these businesses, not necessarily a bad thing, because when they take a

stake in it, they will bring some expertise into the building, into

the business. Until could what sources we can get for the

secretary funds. The difficulty for the business people taking the risk

is that is not as same as a bank -- not the same as a bank. They could

not get an overdraft to tide him over. In many cases, because of the

venture's you're talking about, that is not the one that they need.

The need to have any put into the business which carries some of the

rest of the business. Don't forget, with a loan, all of the rest is

carried by the distance itself. If somebody put equity funds in, they

are making money available for all of which they could lose. For high

risk businesses, equity funding is one way of trying to make money

available and we have got to find new combinations. That means that

we do have to first of all pitch the banks as to what they are doing

for businesses. Don't forget, the need it and the long term and we

need banks also. We need them to be providing their oil in the economy.

We need to look at different ways of financing. A 50 million loan

guarantee fund has been introduced, which is designed to help us and

says over it does lending difficulties. Jimmy Gray, your

party called this week for greater fiscal powers. -- Jim McVeigh.

There's very little that the Executive can do to make the banks

will listen the purse strings. We want to see fiscal powers to be

devolved to this part of. At this particular time, companies need

more stimulus, investment. Just recently, Belfast City Council

announced a 150 million capital investment programme. It has been

criticised in the press for talking about money it does not actually

have yet if, in European funding that is not actually secure. Most

commentators have said it is real money for real projects. A

significant amount of air power is in -- growing in the economy. It is

not just about back money. The banks did to step up their mark. It

is a right that we feel at -- we find yourself in the crisis that we

are because at one stage they were too free with the lending and yet

they there is a danger -- a danger of strangling the recovery because

they are being offered Royd restrictive. We need everybody to

start thinking about how we invest and how we stimulate the economy.

Create new businesses and particularly a social economy

sector. Joanne Dobson, in terms of the Agriculture's -- sector -- the

agriculture sector, some businesses think they are it is sheltered from

did Lt. Agriculture and -- the agriculture industry is so

important and vital for Northern Ireland, I think banks should be do

more to support that. I'm thinking of foreign diversification schemes,

building up businesses. We have been held back and we need to help

them. The banks need to get in demand help him with their export

markets as well. Representing a large rural constituency, I know

that they are the lifeblood of up - - my constituency. My office is

inundated daily with the the very concerned local businesses which

are facing closure. I think banks and to do what they can to support

those existing businesses which contribute so much to do rural

towns. Also, you cut was very interesting with new young people

trying to get time to get presences off the ground. In my constituency,

we have a business park which is brilliant at incubating new

businesses and I think that should be rolled out across Northern

Ireland. If you missed any of this week's political comings and goings,

here's Martina Purdy with our snapshot in 60 seconds.

The Queen's Diamond Jubilee was the first top of debate at Stormont.

But what part will Sinn Fein play in the celebrations? Will it be a

part it spoiled by it churlish, vindictive Republican Beatles. --

vetoes. Golden handshakes for prison

officers wishing to escape, but they are free to return?

And what do you call it when the civil service goes ten times over

budget on a project? If it walks like an overrun and quirks like an

overrun, it is an overrun as far as the public is concerned.

Speaking of farm animals, "Don't have a cow," say politicians who

spent �70,000 on this art. Critics branded it a pile of Never mind.

Alliance gets a gaelgoir, is the Finance Minister next? Op next will

have their Member For antrum at speaking Irish? -- Antrim. Will you

be speaking Irish? I know that we're immune from it. I have no

difficulty with people speaking Irish, if they want. But the low

point of our politics is to communicate so if you're speaking

in a language that people do not understand, you are not

communicating. The other thing is that we need to pay for translators

and I think it is a waste of money. But a lot of people do understand

language that is being spoken. but the whole point of those

debates is the substantial part of the member's speech is not an Irish.