Vol. 514 No. 1
7 Mr. J. Bruton asked the Taoiseach if, further to his reply to Parliamentary Question No. 12 of 1 December 1999, he has received the progress report on the implementation of the Government's strategy for the development of the International Financial Services Centre being prepared by the International Financial Services Centre Clearing House Group; and if he will make a statement on the matter. [1722/00]
8 Mr. Quinn asked the Taoiseach if he has received the progress report on the implementation of a strategy for the IFSC which is being prepared by the clearing house group; and if he will make a statement on the matter. [3257/00]
I propose to take Questions Nos. 7 and 8 together.
I launched the Government's strategy for the development of the international financial services industry in Ireland last March. The strategy sets out a vision for the development of the international financial services industry in Ireland, building on the success of the IFSC.
In accordance with my reply to Deputy Bruton on 15 December, a progress report on implementation of the strategy has been prepared. The IFSC Clearing House Group finalised the progress report at its meeting last week and it will be submitted to Government for approval in the next few weeks.
The report will demonstrate a continued strong performance by the IFSC in business growth, employment and redevelopment in the docklands. The international financial services industry is now well placed for further growth and I look forward to the continued success of this industry in the years ahead.
Does the Taoiseach agree the absence of a final decision on the single financial regulator is an obstacle to the promotion of the IFSC as a place with a high international reputation?
It is important that matter is concluded. The clearing house group and other relevant interests made submissions to the implementation group which considered the issue. The proposals will provide for good and efficient regulation and will help to promote the industry in Ireland. The Tánaiste and Minister for Enterprise, Trade and Employment, the Minister for Finance and I hope to conclude that matter shortly.
Why is it taking so long to reach a decision?
An implementation group was set up and the Central Bank and others considered the report. There was extensive input not only by IFSC companies but others in the financial area. As the Deputy is aware, it was a minority report. There were diverging views and a considerable campaign by the industry against changing from the Central Bank position. However, the Government has to make a final decision.
Why has a decision not yet been made? The Government has been in office for almost two and a half years and this issue has been around for some time. Why can the Government not make up its mind?
The report of the committee was issued only in the summer. There is no problem and the industry is continuing to make strides. There are now 8,500 people working in the IFSC, which is on a 27 acre site. Another 3,000 will start work this year on the 12 acre site. This will bring the total number of people working in this massively growing industry to 11,500. A total of £100 billion is under fund management and whatever decisions are made will be with a view to continuing its strong growth.
I am appalled at the Taoiseach's complacency. As a former Minister for Finance he understands the fragility of the confidence of international institutions about new financial services centres of which Ireland is only one, albeit a spectacularly successful one. Does the Taoiseach agree the failure of the Government to resolve what is an interparty and interpersonal dispute at this stage within his Department is undermining confidence about the future of the IFSC and its relationship with a single financial regulatory authority?
We understand this matter has been on the Government's agenda since early last year. Unlike other issues on which the Taoiseach refuses to ask questions for fear he will get the wrong answer, on behalf of IFSC workers, will he send the Tánaiste and Minister for Enterprise, Trade and Employment, the Minister for Finance and the Attorney General into counselling or take hold of the issue himself? As a former Minister for Finance, he is well apprised of the significance of a failure to deal with this issue.
As I said, the matter will be successfully dealt with shortly. It is not under the remit of my Department but I have an interest in it.
I think you are still the Taoiseach.
I do not run every Department.
For God's sake, what a stupid answer.
The Deputy should not try to put down this area. Funds and confidence in the centre grew by 66% to £100 billion. The number of jobs increased by 2,000 last year.
Nonsense.
It is hurtful for the Deputy to see how successful it has been.
The Taoiseach's attitude is nonsense.
It was hijacked from Shannon in the first place.
I understand why the Deputy hates hearing these figures.
Of all people in the House, the Taoiseach, as a former Minister for Finance, knows precisely how fragile—
I ask Deputies to allow the Taoiseach to conclude his reply. Deputy Quinn should resume his seat until the Taoiseach has concluded.
It is not fragile. The issue must be dealt with and that will happen. A report was prepared and it set out proposals and conclusions. It was a minority report and the issue will be addressed.
When?
Shortly.
How long is shortly? Is it like the "shortly" in relation to Deputy Foley?
The Deputy has a few issues he should check.
Has the review group identified shortcomings in relation to qualified staff for the IFSC? Is this shortcoming threatening the future success of the International Financial Services Centre?
In relation to the Deputy's first query, that is an ongoing issue. The group set down a number of ways in which it believes it should be tackled. It launched a new module for training people for the financial services industry and it is important that is implemented. A meeting will be held later this year, in the spring or the summer, at which all the educational institutes, people involved in financial services training and financial services graduates at all levels, including technical and professional areas, will come together and consider what more can be done. This is an important aspect because the centre is growing so rapidly. There is need for more graduates and although that is being reflected in some of the colleges, the group believes more needs to be done.
Is the Taoiseach aware that at certain times in Luxembourg it was necessary to bring in people, sometimes as many as half an aeroplane load, from the United States to continue to fulfil its responsibilities? Will the Taoiseach assure the House that will not happen here and that there is long-term planning to ensure that, if necessary, there will be a supply of qualified, able immigrants—
Deputy O'Donoghue would not give them visas.
—who will ensure the future success of the centre?
There is long-term planning, as the Deputy knows. All 27 third level colleges have increased their output for most courses, and those dealing directly with the financial services industry in particular have substantially increased their numbers. That is not to say that from the start there have not been non-Irish and non-European people working in the centre; there have been and I am sure that will continue. Labour market growth in Ireland is far higher than in most other places; if top quality people continue to qualify at graduate and post-graduate levels and if we keep the centre growing at the rate required, that will not be a problem. The problem will be to keep abreast of changes such as those which happened this year, when the major issue concerned the tax returns of policyholders of life assurance companies and collective investment funds. These are the key issues which will continue to develop and provide employment in the centre.
Is it not the case that the centre's location was chosen at a time of serious unemployment in Dublin, but that at present we are beginning to suffer the effects of congestion in Dublin? There are traffic and housing implications involved here. Is it Government policy to see if some of the work currently being done in the centre in Dublin could be decentralised to the Objective One regions, where there is a lack of employment?
I dealt with this matter in December. The centre itself wants to keep a critical hub of activity where the industry works together and it is Government policy to do so, but the back office work, which is growing at an enormous rate, can be done anywhere. After this summer, when global crossing connectivity will be available at a tenth of the cost, the back office services could well be based in the regions.
Will the same tax concessions apply outside the IFSC to back office facilities in Ballaghaderreen, Athlone or Roscommon, for example?
Westport, where the Taoiseach was closing the commission.
Westport is absolutely flying, as is Ballina. I was in the Coca-Cola plant the other day. It is the best in the world and its capacity is 50% greater than the Puerto Rican plant. Rural Ireland is flying and Ennis is too – it is the fastest growing town in Ireland.
The Taoiseach was not in west Cork lately.
The Taoiseach did not answer my question.
Not only will the tax incentives be there, the Deputy knows that tax arrangements are better in Objective One areas than anywhere else.
