News Analysis

Friday 22 August 2014

Peter Flanagan: It would be wrong to sack minister over his business failings

Peter Flanagan

Published 24/07/2013 | 05:00

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John Perry at an EU Competitiveness Council meeting in Vilnius, Lithuania yesterday

FOR people who have repeatedly called for government ministers to have "real-world business experience", it must grate that the one minister who has truly walked in the shoes of the people who need his department most appears to be on the verge of losing his portfolio.

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John Perry is not an overly impressive minister for small business. He is not the most fluent of public speakers, and you could probably count the achievements of his department on one hand.

That is not why he looks to be finished as a minister though. Like so many small- business owners, Mr Perry borrowed heavily from the banks and is now having difficulties paying those loans back. He has until September 2 to come up with nearly €2.5m or agree a settlement with Danske Bank.

That looks unlikely, but if Mr Perry has abided by all relevant laws, and done his best to come to an agreement with his creditors, it would be unfair to sack him because of his financial difficulties.

Businesses can fail through no fault of their owner, especially during the worst recession in Irish history.

The issue feeds into a core question in Irish society: Do we want to be a country that ruins entrepreneurs because of things outside of their control, or do we want to be a state that embraces the idea that companies will go under and honest businessmen should be encouraged to pick themselves up, dust themselves off, and try again?

Mr Perry's problems will be familiar to many, many, small business owners.

In retrospect it is incredible the banks lent so much to him with so few assets. Even more amazing that this debt was restructured.

Undoubtedly the minister overstretched himself and is now paying the price. But it's not as if he is alone in doing this. Unlike others, he has stayed in Ireland where he faces the very real possibility of going bankrupt and being effectively barred from business for 12 years.

Thankfully, that draconian law is being reformed, but as a country we judge people who lose their business or go bankrupt particularly harshly. To fail in business here can often turn an entrepreneurial, go-ahead person into a social and economic leper.

The British entrepreneur Michael Birch likes to tell how his first four businesses failed. The fifth was the social-networking site Bebo which he eventually sold for €640m. In Ireland would he have been given the chance to create a second company, never mind a fifth? It is unlikely.

Few would argue that Mr Perry hasn't struggled as a politician, but it would be a mistake to hound him out over the failure of his business.

In a recession good businesses will fail. As a country we need to be able to accept that fact without crucifying the people behind them.

Irish Independent

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