Monday 20 November 2017

'Building up industry at home is key to creating jobs'

His latest initiative to help small business will allow struggling companies to apply for examinership through a less expensive Circuit Court route. By Maeve Dineen

RICHARD Bruton would almost certainly be Taoiseach today had he succeeded in wresting control of the Fine Gael Party from Enda Kenny a few years ago.

While many of those involved in that coup are without office, such is the Meath man's status he remains one of the party's grandees and holds one of the most important portfolios in the present government with responsibility for enterprise, trade and employment.

The job demands constant travel: Mr Bruton has already led 12 major trade and investment missions since taking office in March 2011, including five to the United States as well as trips to Saudi Arabia, India, Canada, France and China.

"The view of Ireland from outside is far better than it is at home but that's for good reason," he said in an interview in his department's Art Deco offices on Kildare Street earlier this week. "The export orientated sectors are doing very well here but we are an economy in transition."

While Bruton has criss-crossed the globe drumming up investment, his main focus is job creation – no easy task when the country is in the teeth of a recession and unemployment continues to bump along at around 14.8pc.

The Clongowes and Oxford-educated economist can't be accused of lack of ambition. The Government's Action for Jobs plan launched earlier this year has set itself the target of increasing the number of people at work in Ireland by 100,000 to 1.9 million by 2016. Many commentators have said this target is widely optimistic but Bruton remains steadfastly commited.

Real challenge

"The real challenge for Ireland is to create a strong indigenous engine for growth," says the 59-year-old who worked in tobacco company PJ Carroll and building materials company CRH before going into politics.

"We are very fortunate to have the multinationals and they are absolutely vital to have built clusters of strength but the real challenge is to build our indigenous capability."

He rejects the frequent criticism from local business that state organisations focus too much on the multinationals at the expense of our home-grown industries.

It is a mistake to put multinationals on one side of the economy and indigenous companies on the other, he adds. Both industries can grow side-by-side.

"In the ICT area, we have a mixture of both and in the medical device sector both grow together. It's not credible to say they are separate to each other except perhaps in the food sector."

But the minister does accept that there is not enough state support for companies making the jump from small to medium sized.

"This is a real problem and that's why we set up the Development Capital Fund – a €150m fund which looks at companies who reach a stage that they are growing well but they don't have the strength to make the next leap and therefore they look to international markets or sell out."

He also appears to be taking the side of business in cabinet when it comes to sick pay – an issue that irks small business. Last year Social Protection Minister Joan Burton put forward a proposal that employers will have to pay the first four weeks of their staff's sick pay under new proposals on sick pay.

The move would shave €150m off her budget but place a massive burden on Irish companies.

Bruton says a lot of very strong arguments have been put forward to oppose Ms Burton's suggestion.

"At the end of the day people will express their view," he says in relation to Ms Burton's intervention. While supporting the views of IBEC and other business lobby groups, he warns the decision will be a collective cabinet decision. We need to be very careful about anything that will be adding to employment costs in the current climate.

Strong reaction

"There has been strong reaction from the business community and they have pointed out that absenteeism in the small business sector is very low and that it would create a double tax for them.

"I can see that there is an issue of concern in Ireland that a lot of people become dependent long-term on the welfare system. My mandate is supporting employment. And what I'm trying to do is to look at the pinch points for business, where are businesses being constrained?" he added.

One area where businesses are obviously feeling the pinch is in bank lending, but can the Government force the banks to lend?

"The new lending to small business figures are disappointing," he concedes before urging businesses turned down for loans to complain to the Credit Review Office (CRO).

"We find them extremely good. Businesses can't take 'no' for an answer. People who use the CRO get credit," he claims.

Bruton said the banks clearly have to learn to lend to SMEs again and Enterprise Ireland is working with them to help reskill the bankers.

His latest initiative to help small business is an amendment to the Companies Acts that will allow small private companies to apply directly to the Circuit Court to have an examiner appointed.

"Last year there were only 30 examinerships in this country. Many, many more companies have closed. Our concern is that examinership is too costly.

Examinership process

The idea of this is to look at ways in which we could make the examinership process more available to a wide range of companies.

This initiative is aimed at the small and medium sector. It's a move that will allow businesses that are viable to seek examinership," he says.

Companies wishing to avail of the examinership will have to satisfy two of the three following criteria: balance sheet turnover not exceeding €4.4m, turnover not exceeding €8.8m and the company cannot have more than 50 employees.

As he speaks, Bruton sometimes looks tired, but it is hardly surprising. Few ministerial portfolios matter more to the country's future but require such a command of detail on so many different topics.

With so much at stake, it is not difficult to see why Enda Kenny buried the hatchet and put a man like Bruton, with his undoubted command of his brief, back at the centre of things.

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