Burden of debt
Following a report by the Economic and Social Research Institute (ESRI) that people receiving unemployment benefit may be better off than those working, George Mordaunt told Peter Horgan how the country, the banks, and businesses in trouble need to change tack
“There are three massive issues facing Ireland at the moment,” says George, who recently released a book detailing his experiences with debt burdens and the banks.
"There is the burden of debt, the social welfare and unemployment issue and the lack of stimulus, that if were resolved, could see the country gallop ahead from where we are.”
George, originally from Clonmel in Tipperary, ran into difficulties in the mid-noughties as he tried to expand his family motor dealership into a motor group across the South-East. The downturn meant he had to to shut premises and terminate contracts with staff as he attempted to negotiate with the banks for a fair method of paying his debts.
“A lot of people were bullied by the banks, as I was. The thing is, they need to know how to communicate with them – a skillset that wasn’t needed in the boom times as the money was flowing. You have to educate yourself on transparency and debt resolution. The banks have had a sea-change and will communicate with you if you try to.”
That communication has meant that, while George continues to pay his creditors, he is still able to do business in this new age of regulation.
“There should be a limit of how long people can claim welfare entitlement, regardless of their situation,” argues George, who recently revealed he could not get three former employees to return to work as they were “better off on the unemployment line.”
“If you took people off the Live Register and moved them into a sponsorship programme where the company pays 70 per cent of their unemployment rate with the State providing 30 per cent. If you then introduce an incentive for employers to get a rebate of, hypothetically, two to three per cent of their VAT then maybe that would work.”
While admitting it may be a ‘crazy idea’, George insists that new ideas are needed, due to a lack of action by Government on the issue. He is also highly critical of the recently published Pathways to Work document by the Department of Social Protection, describing it as "overly bureaucratic", "laboured" and lacking any "stimulative effect".
However this stance is being challenged by the Irish National Organisation of the Unemployed (INOU), which stresses that "impoverishing people is not the answer to the problem."
"There are many schemes out there for training and tax rebate systems that employers can take part in," says Bríd O'Brien, Head of Policy and Media at the INOU.
"I just wish people who comment on unemployment would do some homework before speaking. There are many organisations out there who depend totally on the volunteer nature of work done by unemployed people."
George is highly critical of the recent Fiscal Treaty result. He campaigned on the opposition side, despite reservations about the parties involved in the No camp.
“A No vote would have been the beginning of the beginning of an event, similar to the bank guarantee that focused attention on us," argues George.
"This bailout has not worked and a second one will not work either. We are walking down a cul de sac."