ISME head wants to fight from the inside

Two of the four main banks have agreed in principle to fund an investigation into customers' accounts where the client feels they have been overcharged, the chairman of the Irish Small and Medium Enterprises Association (ISME), Mr Peter Faulkner has said.

Mr Faulkner said the banks will fund an independent investigation of ISME members' accounts free of charge. ISME is also in discussions with one of the other banks and the fourth has so far refused to meet the association.

He would not be drawn on which banks have agreed to the investigation. However, other sources have confirmed that the banks involved are National Irish Bank and Ulster Bank.

For years ISME has been campaigning vociferously against bank fees and it was the first to raise the issue of overcharging and "grazing" on accounts in the early 1990s.

Mr Faulkner, who has just taken over the chairmanship of ISME, is determined to carry on the campaign. He says it is the small and medium business sectors which have borne the brunt of this practice and they are the most vulnerable.

"There is clear evidence of bank overcharging, some of it has been deliberate, some erroneous, but companies have not been in a position to validate whether these charges are correct."

He says small businesses have been unable to challenge the banks, as they depended on their goodwill for loans. A recent survey by ISME found 200 member firms believe they have been overcharged. Of these, some have got full refunds, some partial refunds, some have got nothing at all.

Mr Faulkner claims that although the focus is mainly on National Irish Bank, all the banks have engaged in similar practices. He says ISME wants the banks to agree to pay for training for its members in the use of a computer programme which will allow them to verify their own bank and interest charges.

"In a normal business transaction you expect the purchaser to highlight any wrong charges, but the charging mechanisms of banks do not allow for this," he says. "Interest is one line on a bank statement, it is not readily calculable by the consumer."

Mr Faulkner was one of ISME's founder members following its rancorous split with IBEC he says bank charges and the influence of the banks within the employers' body was the main reason why ISME was founded.

As he takes over the chairman's role, Mr Faulkner has no doubts about which issues he wants to tackle. He is determined ISME will win a place at the Social Partnership table. His main ambition is to ensure ISME becomes a full and co-equal partner at the talks, "or to undermine the complete process". He claims the Partnership Process as currently constituted is a "lie".

Mr Faulkner says it is an artificial structure which is designed to maintain the status quo with traditional "insiders" represented unions, farmers, the public sector, Government and the banks and big business which control IBEC.

"It is exclusive at the moment," he says. "We have no difficulty with centralised bargaining and national wage agreements, and in fairness, the partners have done a very good job."

However, Mr Faulkner says social partnership includes a number of other issues. These issues are important to small and medium firms and they are excluded from having an input in them.

For example, he says, appointments to the County Enterprise boards are just one of a number of categories to which the social partners nominate representatives. However, ISME members are not on the boards.

Another example cited by him is the discussion on creating the super-agency, Enterprise Ireland. "It will impact directly on the SME sector, but we were not consulted on it."

He says ISME cannot meet the Finance Minister on pre-budget submissions because it is not one of the social partners. "Despite pre-election promises from both the current partners in Government, they have singularly failed to make ISME a partner."

Mr Faulkner says the SME sector must be represented because it is the risk-taking sector of business. He says people appointed to enterprise boards, for example, are not risk takers.

Mr Faulkner takes over the reins with the organisation in good shape. It has bought its own prestigious offices in Kildare Street, almost opposite the Dail, and is debt free. It has more than 2,000 companies which are direct members, and 1,000 companies which are affiliated to ISME through trade organisations.

At 45, Mr Faulkner knows a bit about risk himself. He took over the family firm, Faulkner Packaging in 1981, and bought out the shareholders in 1985. At the time it was involved in distribution only and employed 13 people. Based in Chapelizod, Dublin, it now employs 78 people and is engaged in manufacturing as well as distribution.

It serves a number of multinational electronics companies, manufacturing and distributing protective packaging and is also the only manufacturer of bubblewrap in Ireland.

The company is understood to have a turnover of around £7 million per annum. But it has not all been plain sailing. A couple of years ago, the company lost a contract from a multinational firm, said to be worth £1 million a year a sizeable amount of turnover at the time.

Associates say Mr Faulkner worked very hard to replace the lost business and almost dropped out of sight for nearly a year while he travelled Europe and the US seeking new contracts. The move proved successful.

Mr Faulkner did not talk about this particular experience, but friends say it was a blow at the time. They say it also demonstrated his competitive spirit.

He admits to being competitive. A keen motorsports enthusiast, he won many titles, although he says he has given it up now. He won't take up new sports because, he says, it would irritate him if he could not be the best.

His experience in business has taught him that he could lose everything which he has done in the past, once through a failed publishing venture and build it all back up again.

It is expected he will bring this competitiveness to bear on his role as chairman. Although well-known through his contributions in the media, it is the first time he has assumed this role.

His other priority will be to campaign against the minimum wage, which the Enterprise, Trade & Employment Minister has promised to introduce. It will be pegged at £4.40 per hour.

Mr Faulkner puts it baldly: "We are not against the minimum wage, per se. What we should do is remove the tax wedge and ensure there is a minimum income."

He says it is obscene that "in rough figures" a person earning £200 a week, will take home £150 and it will cost an employer a total of £240 a week to employ that person, when all taxes are paid. "Establishing a minimum wage is a complete fudge," he says, "all the reports on poverty have shown that it is a minimum income which is needed."

Mr Faulkner says the minimum wage "is only being introduced as a sop, because Charlie McCreevy brought in a Budget which blatantly favoured the better off".

He predicts that the minimum wage, if introduced, will lead to job losses as companies switch to mechanisation or sub-contract out jobs (making them part-time). This is because, he says, lower-paid jobs are low-skill jobs.

Whether ISME succeeds in its campaign to dissuade the Government from implementing the minimum wage remains to be seen. But it is a safe bet that Mr Faulkner will be campaigning hard to change politicians' minds on the matter.