70,000 JOBS ON THE LINE; Small firms call for help.

Byline: SARAH BARDON

MORE than 70,000 jobs will be lost if the Government do not come up with a plan to save thousands of firms, it was warned yesterday.

The Irish Small and Medium Enterprises Association said 35 per cent of small and medium businesses are going to slash their staff by 20 per cent this summer.

This is an increase of 10 per cent since its last survey just two months ago.

And an ISME survey showed 96 per cent of SMEs have introduced pay cuts in the past six months.

ISME boss Mark Fielding said the figures confirm that smaller businesses are on the verge of collapse.

He added: "The results, while shocking, are not unexpected as many firms have gone through the process of overtime bans, pay cuts, short time and are now left with little alternative but to let staff go in an effort to survive."

Mr Fielding said the Government needs to take serious action or see the economy fall further into decline.

He blasted: "What does it take to get the Government to realise the enormity of the expected job losses, equivalent to 35 Dells closing down in the next three months?

"Because the numbers are diffused throughout the economy in the SME sector there will be no 'task force' or 'special programme' as the indigenous business sector teeters on the edge, unheeded by a 'no-trickpony' Government."

Mr Fielding added there is clear evidence that banks are making it as difficult as possible for business customers to access badly needed credit, with serious repercussions for those concerned.

He said: "Government action must tackle the banks' refusal to lend to the SME sector, the costs imposed by Government on business, both direct and indirect, while introducing business incentives to stimulate the economy.

"The maintenance of wealth generating employment levels is central to any economic recovery.

"Radical initiatives must be introduced to maintain employment, as the cost is prohibitive and a key deterrent, it makes sense to reduce the cost of labour.

"The Government must get out of victim mode and assist in the recovery process."

The Association now wants a National Recovery Plan to include an emergency employment action plan. Mr Fielding added: "It is far better to have staff remaining in employment than becoming a burden on the state, adding to Exchequer costs."

CAPTION(S):

CRITICISM Mark Fielding