Vol. 498 No. 6
10 Mr. G. Mitchell asked the Minister for Finance if his attention has been drawn to a newspaper article (details supplied) concerning a crisis at the International Financial Services Centre; and if he will make a statement on the matter in view of the international advisory group report on the IFSC to his Department. [26356/98]
The newspaper article to which the Deputy refers points to the shortage of office space in the IFSC and in Dublin, generally, and makes the point that there will likely be a continuing high demand for office accommodation in the city. The supply of office space for IFSC companies has historically lagged behind the numbers of projects approved for the centre. Buildings were simply not available for occupation at the time the centre was established and it was necessary to allow companies to trade outside the Custom House docks area until suitable space became available.
What has happened since is that the original Custom House docks area site which houses the IFSC is now almost completely developed from the point of view of office accommodation. Almost all of the 1.2 million square feet of office accommodation there is occupied, in the main by IFSC companies. I understand that some 30,000 square feet of new additional office space will come on stream there next year and some 600,000 square feet of office accommodation is currently under development in the extended 12 acre site adjacent to the original docks area. While the bulk of this office space has already been committed to, there is at least 55,000 square feet which will be available for letting.
I am delighted that the success of the IFSC has facilitated this physical development and helped to rejuvenate the north inner city area of Dublin in the way that it has. I am satisfied that the continued development of economic activity at the IFSC is not being inhibited by office space considerations.
The Deputy referred to the report of the international advisory group on the IFSC which he, as the then Minister of State at the Department of the Taoiseach, established and which was published last year. Among its recommendations, the report suggested that IFSC companies be permitted to locate within the newly defined greater Dublin docklands area as opposed to being required to locate in the Custom House docks area. This is one of the issues currently being examined by the IFSC clearing house group which operates under the aegis of the Department of the Taoiseach and which has been requested by the Taoiseach to prepare a strategy for the long-term development of the international financial services industry here, building on the success of the IFSC.
In this context, and given that the preferential IFSC tax regime will be phasing out in the coming years with the IFSC becoming part of the general economy, there may not be a longer term need for a specific or limited IFSC location. I look forward to the report of the clearing house group in this matter.
I understand from the Dublin Docklands Development Authority that the authority is in the process of preparing a planning scheme and action area plan to facilitate further commercial development, including office accommodation, in the greater Dublin docklands area. This will facilitate the supply of additional office space in the city.
Will the Minister confirm that when the standard rate of tax at 12.5 per cent is introduced in respect of the financial services industry in 2005 there will no longer be a requirement for the financial services industry to be located in the financial services district and that a company may set up anywhere in the State and enjoy the benefits of the tax regime?
I referred to that in my reply. When the single low rate of corporation tax of 12.5 per cent is introduced, it will apply to all operators, no matter where they are located.
Written Answers follow Adjournment Debate.
