The chairman of small business group ISME has said the growing black economy is having a serious impact on small business and the economy in general.

Robert Berney told the group's conference in Kilkenny that the amount of unpaid taxes from the black economy, estimated at €2 billion, would be enough to pay for benchmarking and boost the fight against crime.

He said growth in the shadow economy was being caused by increased costs such as local government charges, insurance, labour and energy costs.

Mr Berney said legitimate companies' businesses and livelihoods were being threatened by black economy operators, citing the private security industry as an example.

He called for a clampdown on racketeering and rogue operators, and the co-ordination of State agencies to identify individuals and companies in the shadow economy.