Big ambition for small business
Since his appointment as Minister of State for Small Business in March 2011, John Perry believes the government has helped to put the "best supports" for SMEs in place. Gillian Hamill spoke to him to learn more
Print18 June 2013
"During the last two years, this government has delivered a series of measures aimed at putting the best supports in place and creating the right business environment, so that indigenous companies can grow their businesses and help rebuild the economy."
Minister for Small Business, John Perry’s approach certainly sounds like a common sense one but what exactly are the measures his department has helped to put in place and how effective are they?
Licences reform
Upon meeting with ShelfLife in the Department of Jobs and Enterprise, one of our first topics of discussion was the planned introduction of one single integrated licensing system for retail outlets. This is due to be implemented in the fourth quarter of 2013 and Minister Perry appears confident that the scheduled timeline will be met. "It’s looking very good at the moment, there’s a very good buy in from the different licensing bodies. It will be quite revolutionary in the sense that you’ll have one issuing body…We’re very confident that every effort has been made [to meet the schedule]."
Naturally, any initiative that can help reduce the red tape burden experienced by retailers has been widely welcomed across the trade. However at the time of its announcement just before Christmas last year, NFRN Ireland president Joe Sweeney welcomed the move yet voiced his concern over the extent to which it would actually reduce costs once in practice. "As the report does not go into any detail pertaining to the costs of amalgamated licenses it omits a huge concern for retailers. I would hope that the combination of licenses would result in a saving for retailers but as this is not in print, I am concerned it will not be the case," he said. When asked about this, Minister Perry insisted that the move would indeed make the licensing process less costly, stating: "I think it certainly will very much make it easier to cut down the costs and reduce the red tape burden."
Directive on Late Payments
Another initiative that the government introduced earlier this year was the EU Directive on late payments. In Ireland this came into effect from 16 March in the form of the revised ‘Late Payment in Commercial Transactions’ legislation. This states that public authorities must pay for the goods and services that they receive within 30 days or, in very exceptional circumstances, within 60 days. Enterprises meanwhile "should pay their invoices within 60 days, unless they expressly agree otherwise and if it is not grossly unfair to the creditor". The new law also allows businesses to claim interest for late payment and to receive a minimum fixed amount of €40 as compensation for recovery costs.
Minister Perry believes this is a helpful initiative and told ShelfLife: "There’s been [good] buy in by retail organisations," and that, "we are looking at a voluntary code as well on late payment".
His overall verdict on the new law was highly positive: "The Late Payments legislation is a welcome mechanism that can help improve cash flow for businesses. It is particularly valuable for small firms. Its implementation by all parties will make a real difference to business in these troubled times," he said.
Minister for Small Business, John Perry
Meeting with the banks
Another area which many retail representatives have been vocal about speaking out on is the issue of banks lending – or failing to lend – to small business. According to Minister Perry: "[The banks] have very much been given a clear mandate about the amount of money that they are expected to lend. It’s important that they are open for business. I think the banks must lend to survive and the government has taken a number of actions where SMEs have been refused credit to improve the situation in relation to credit availability." These include the government’s ‘credit guarantee scheme’ whereby on behalf of SMEs, it will give lenders a state guarantee, covering 75% of the value of a loan, over a three-year period. The government’s micro enterprise loans fund, adds Perry, "will provide €25,000 to start-up, to newly established or growing micro enterprises who employ less than ten people, who have commercially viable proposals that do not meet the conventional risk criteria that apply at the banks".
RGDATA has previously spoken out against AIB’s decision from 1 June, to scrap 17 cent and 25 cent transaction rates for lodging cash and charge a standard fee of 45 cent per €100 lodged. The lobby group said this represented an increase in fees for many RGDATA members who bank with AIB, and that members "are extremely angry at this news". ShelfLife asked the Minister about this practice. "The banks obviously have their own autonomy. While it is regrettable, that’s the state that we’re in at the moment. The government can’t interfere in that. [However] we have invited them; the banks are coming in to give a report. Both AIB and Bank of Ireland will be coming in to this department to give an update on what they’re doing. And it’s very important…that they are participating in enterprise, that they realise how important it is."
Minister Perry has written to both Richie Boucher, CEO, Bank of Ireland and David Duffy, CEO, AIB to request that they, or a representative from their bank attend the next scheduled meeting of the Advisory Group for Small Business (AGSB)* on 20 June. They have been asked to provide an overview of the current activities their banks are engaged in to support SMEs and their commitments in respect of loans to SMEs over the period 2011 to 2013.
Commenting on the importance of such meetings, Minister Perry said: "It is imperative that we listen to the voice of small business. The dedication and perseverance of business people running locally traded companies throughout the regions should not be underestimated. They are crucial to the enhancement of Ireland’s overall competitiveness and growth and should not be overlooked.
"As Minister for Small Business I engage with the banks on a frequent basis about the issue of access to credit for small businesses. Access to finance can mean the difference between survival, or failure, for many viable new start-ups and existing small businesses".
New ‘one stop shop’ for business
It is reassuring to know that the Minister is following up with the banks on this issue and hopefully this will prove beneficial. Another positive piece of news, according to Perry, is the introduction of Local Enterprise Offices (LEOs) across the country. This was launched in Fingal County Council last month.
As part of the reforms the County and City Enterprise Boards – 35 separate legal entities – will be dissolved. The Minister states that the LEOs will draw and build on the successful County Enterprise Board (CEB) model which supports 33,000 jobs across the country, and supports 900 new projects per annum as well as approximately 25,000 training participants. However it will also bring together for the first time in a structured manner, the skills, experience and resources of Enterprise Ireland, the CEBs and the local authorities to micro and small businesses.
The Minister outlined the efficacy of this approach but was keen to stress that it didn’t show the CEBs had been somehow deficient in the past. "The LEOs will allow local businesses to access vital information, advice and guidance, including access to other State services with supports relevant to small business," Minister Perry said. "I should stress, that by undertaking this reform process, it is not to suggest that the CEB model has been lacking over the last 19 years. On the contrary, the County Enterprise Boards have served the micro-enterprise sector excellently since 1993. However, since then there have been many changes to the social, economic and technological landscape of Ireland." He added that the new model would
"deliver a high quality, innovative, first-stop shop support service for small businesses across the country."
Describing high commercial rates as "a legacy of the last government", Minister Perry told ShelfLife: "Local government will be very much involved in this department in making the viability of business more sustainable. I think that also [involves] the water charges and the [fact that] the tax base has been widened at the moment with the domestic houses tax. We are very much looking at the whole restructuring of local government, which is the biggest restructure in 100 years and is currently taking place, so that in 2014 I think there will be planning facilities there to encourage people to look at the whole situation to encourage enterprise into many of the vacant units that exist at the moment."
Scanning success
The ongoing problem of Ireland’s burgeoning illicit tobacco market was also discussed. "The level of detection at our ports and surveillance has been very effective," said Minister Perry. When asked if Ireland needed more scanners he responded: "I think scanning is one aspect but there’s a lot of other surveillance that occurs. I think the scanning element has been very successful…If you go to the airport at the moment, there’s a lot of surveillance going on and there’s the random inspection of ports as well. There’s increased surveillance now from the co-operation with Europe. They have a very good detection system around the suspicious movement of goods. It’s an ongoing battle [but there’s] certainly been progress in that area as well."
Together with Jobs, Enterprise and Innovation Minister Richard Bruton, Minister Perry has launched a public consultation inviting interested parties to make submissions to assess and improve the current environment for entrepreneurial activity.
Within the Action Plan for Jobs 2013, the Department of Jobs, Enterprise and Innovation has committed to publish a National Entrepreneurship Policy Statement in Q4 of 2013. The main aims of the project are to outline key recommendations and actions to support entrepreneurship for inclusion in the 2014 Action Plan for Jobs. The consultation – the deadline for which is 7 June – will help provide ideas for this.
Hearing directly from retailers
Minister Perry told ShelfLife: "This government wants to speak directly to retailers and to hear from them about ideas. We want to ensure the potential of retailers in every village and town across Ireland because that is the backbone of the economy.
"With social enterprises [which are] vitally important, community regeneration, sponsorship – they’re the real heroes of Ireland – the retail sector. They tirelessly give service, 365 days a year, so they’ve got to be supported, they’ve got to be praised. In every action in government we’ve got to ensure…that we support them in every way that we can."
Speaking more about why he enjoys his current portfolio as Minister for Small Business, he added: "The whole issue of retailing, the dedication and interaction with communities, I think it’s a fantastic portfolio. I love the job that I’m in. This country is on the uplift so we’ve got to support our own local stores; it’s all about jobs, the creation of jobs. The amount of experience that retailers give to young people in work experience is huge so we have a huge recognition of the retail sector and we want to help them in every way that we can to survive the times that we face."
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