Fine Gael Frontbench Spokesperson on Innovation and Research, Deirdre Clune TD, has called for a complete overhaul of Ireland’s bankruptcy laws to promote greater entrepreneurial activity, saying the Government’s latest intervention in the area is underwhelming.

Ireland needs to develop an entirely new system of bankruptcy laws more in line with our European neighbours if we are to foster a new entrepreneurial generation. Under current laws businesses that didn’t act recklessly but are closing down due to the recession are treated like criminals if they are declared bankrupt. Even worse is the fact these same people are excluded from an economically productive role in society for 12 years. These ineffective and punitive laws are discouraging many people from getting involved in their own business venture in the first place for fear they face a future of over-indebtedness.

The Government should be introducing reforms in this area as a matter of urgency as a survey this week highlighted how 38,000 businesses are at high risk of failure.

Instead the proposed reforms contained in the Civil Law (Misc Provisions) Bill 2010 are piecemeal and barely scratch the surface of current problems.

Six years is still far too long a period of bankruptcy for entrepreneurs who were not reckless or didn’t engage in any fraudulent activity. We should be looking at the Northern Ireland system which allows greater flexibility for lengths of bankruptcy depending on the circumstances of each case. This system would encourage greater entrepreneurial activity but also ensure a penalty and deterrent remains for those involved in financial mismanagement or fraud.

Other major reforms related to issues such as the cost of accessing bankruptcy via the High Court, introducing legally binding agreements on repayments as an alternative to declaring bankruptcy, and other non-judicial debt settlement systems should be included in a sweeping reform of bankruptcy laws.