Gay Mitchell
Question:2 Mr. G. Mitchell asked the Taoiseach the plans, if any, his Department have for the future of the International Financial Services Centre. [22615/97]
Ceisteanna—Questions. - International Financial Services Centre.
Since my appointment as Taoiseach I have met with the financial services industry representatives on the IFSC Clearing House Group and with senior ministerial colleagues to discuss the future development of the IFSC. At those meetings it was agreed we should take a strategic look at the development of the centre as we move into the next millennium. I have asked the clearing house group to put in place a strategy into the 21st century for the IFSC in order to consolidate the success of the centre and develop it for the future.
The specialist IFSC working groups, which form part of the clearing house group structure, continue to develop policies to enhance the competitiveness of the centre in specific industry sectors.
During my time as Minister of State with responsibility for the IFSC I chaired an international group which produced a report on the future evolution of the IFSC. Is the Taoiseach aware that that report referred to the need to ensure there is not a lack of suitable educated labour available for the IFSC in the future? What steps have been taken to ensure there is a flow of suitable educated labour? How many people are now employed in the IFSC and will the target number, set during the term of the last Government, of 7,500 employees by the turn of the century be met?
The figure of 7,500 was for direct and indirect employment. The figure for direct employment was in the order of 4,000 to 4,500. I think the figure of 4,000 will be exceeded by the end of 1997. Clearly, both targets will be met. The Deputy was responsible also for the international advisory group which reported. Its central recommendation was that I should be directly involved. I have done that. The long-term review group recommended that we revamp the IFSC clearing house. That has been done. The clearing house now has a number of local IFSC leaders involved in the clearing house committee and it will involve a number of leaders of the international firms. It has started to work on that basis in the past few months.
In relation to skilled staff, a considerable amount of work is ongoing to ensure a continued supply of trained staff at the centre. The Financial Services Industry Association has undertaken a detailed survey of future skills needs across the entire financial services industry, including the IFSC. It was not exclusive of all the other sectors. This survey should provide the information for future planning purposes for the education institutes and various colleges specialising in this work. They have also co-ordinated their work with the group which Deputy Quinn set up — the Docks Development Authority. It is important that the two work together in harmony. That will ensure they continue to develop their activities properly.
Can I take it that the objective of 7,500 employees for the turn of the century will be met? The Taoiseach referred to the group which I chaired. Has he given consideration to another recommendation in the report, that location within the Dublin docklands area might be considered as a qualification for certain of the tax incentives which are now attached to the IFSC? When will the Government will be in a position to make an announcement on the tax regime at the IFSC post 2005, since for planning purposes those who are located there and intend to locate will need to have a target date in mind? In relation to back office development, what plans are in place to ensure that targets are set? What targets have been set to attract back office development to the IFSC?
I will take the questions in reverse order. The IDA has been spearheading the campaign separately to try to bring as many back office developments as possible. They have had a number of successes but they are also engaged in head hunting a number of companies which have expressed an interest in moving to Europe and other companies in Europe where they believe there is potential to get them into this country. It is not necessary for the IFSC, it is for developments in several parts of the country. It was pointed out in a recent debate that these back office developments are useful for regional development. Two or three proposals in 1997 have worked in that regard.
So far as the IFSC companies are concerned, the question of holding the 10 per cent rate of tax to 31 December 2005 is not finalised but I think it will happen. Hopefully it will be finalised early in the new year. After that date the rate will be 12.5 per cent as announced by the Minister for Finance in the budget.
On the question of accommodation, Deputy Mitchell is familiar with that issue. Lower spec accommodation is available. The Docks Development Authority intends to maintain its supply of office accommodation at the top, middle and lower levels of the market. That would remove the excuse given by many companies for not moving for a long time. If the tax differential will not exist in future, we should look at other ways because the intention was that they should be on that site and that everything should be done to encourage them on to that site. The main obstacle has continually been the price of accommodation. I am confident, having listened recently to the chairman of the Dublin Docks Authority, that he intends to make this happen. He has pointed out that he has a statutory duty to secure the continued development of the financial services activities in the docks area. In the masterplan, launched by the Minister for the Environment and Local Government last Friday, they say they will fulfil that duty.
Is the Taoiseach aware that the proposals for the eco-sphere for stack A have not been responded to with finality by the Government? Until such time as the proposal which is before the Department of Tourism, Recreation and Sport and the Department of Finance is responded to in a finite way, the Docklands Authority cannot move to complete what was the original Custom House Docks development site, stack A which is in the Taoiseach's constituency.
The Deputy is correct. I attended a Financial Services Industry Association function last week at which that point was made by the chairperson of one of the committees. There are a number of proposals which they are anxious to examine. We will make our decisions shortly to enable them to move ahead. I am familiar with the building which dates from 1815 and which was designed by John Rennie, the famous architect who designed Dun Laoghaire and Howth harbours.
There have always been architects around.
He was a good one and he was not a politician.
Is the Taoiseach considering extending the incentives to locate in the IFSC to the entire Dublin docklands area? Are there plans to ensure the technology which made the IFSC possible, that is, the communications system, is updated in line with international developments? How many companies receiving IFSC benefits are located outside it?
I do not have that figure but I would not be surprised if the number of companies with certificates was well over 100.
Two hundred?
There were 180 at one stage. As the Deputy knows, most of the big ones have moved. Their argument centred on the accommodation. There are many small ones which employ few people. While the question of extension will fall within the remit of the overall development plan, there is no proposal to extend the area. As a supporter of the development, we should allow the docklands body to make recommendations. It should be allowed to proceed with its work. It has been asked to develop in a balanced way the docklands area, which encompasses 1,200 acres, during the next 20 to 25 years. The Government will be glad to look at any proposals it produces. Telecom Éireann, the Financial Services Industy Association, the Department of Enterprise, Trade and Employment and the IDA are conscious of the need to continue to update infrastructure to ensure the telecommunications systems are the most modern available, not alone to maintain and develop the companies currently located within the centre but to attract new ones.