Dáil Éireann debate -
Wednesday, 17 Nov 2010

Vol. 722 No. 2

Ceisteanna — Questions

International Financial Services Centre

1.Deputy Eamon Gilmore asked the Taoiseach the role his Department is playing regarding the creation of the proposed green International Financial Services Centre; if he has received the feasibility study commissioned by his Department; and if he will make a statement on the matter. [32299/10]

2.Deputy Eamon Gilmore asked the Taoiseach the role his Department plays in the supervision of the International Financial Services Centre; and if he will make a statement on the matter. [32300/10]

3.Deputy Enda Kenny asked the Taoiseach if he will report on his Department’s role in overseeing the International Financial Services Centre; and if he will make a statement on the matter. [34696/10]

4.Deputy Caoimhghín Ó Caoláin asked the Taoiseach the role of his Department regarding the proposed green International Financial Services Centre; and if he will make a statement on the matter. [41385/10]

The Taoiseach

I propose to take Questions Nos. 1 to 4, inclusive, together.

As previously stated in the House, my Department has supported the international financial services industry in Ireland since the establishment of the IFSC in 1987, by providing a forum for the exchange of views and the co-ordination of effort through the mechanism of the IFSC clearing house group, supported by working groups in the areas of banking and treasury, funds, insurance, pensions and asset management.

Since its establishment in 1993, the clearing house group has been chaired by the Secretary General of my Department and its membership includes representatives of industry associations and prominent figures from the international financial services industry. There are also representatives from my Department, the Department of Finance, the Department of Enterprise, Trade and Innovation, the Central Bank, IDA Ireland, Enterprise Ireland, the Revenue Commissioners and the Stock Exchange.

The IFSC clearing house group identifies and considers issues of major concern to the long-term development of the international financial services industry in Ireland. These issues include the strategic development of new business areas and opportunities, and the progress of relevant legislation. From time to time, it identifies the need for responsibility to be assigned for overseeing and reporting to the Government on any appropriate initiatives in this area. The clearing house group does not deal with issues relating to individual enterprises or institutions, and does not supervise or oversee the industry; that is a matter for the Central Bank in the exercise of its independent functions.

The spread of membership of the IFSC clearing house group and the IFSC working groups enables discussion to take place in an open way, which reflects a wide range of experience and expertise, so that opportunities to develop sustainable business and employment in the various sectors of the international financial services industry can be achieved. It is estimated that the industry employs 25,000 directly in international financial services firms, while contributing €642 million in tax revenue to the Exchequer in 2009. This figure for tax revenue refers only to companies who were within the original IFSC tax regime; it does not cover international financial services companies that commenced trading after 2002.

In the context of its role in identifying development opportunities, the clearing house group has responded to the report of the high level group on green enterprise, which was published in November 2009 and identified the significant contribution that the development of the green economy can make to restoring Ireland's economy.

The green initiative concept relates to the repositioning of the IFSC to take advantage of growth in the global green economy and green finance sectors. It envisages a cluster of financial and support services for the domestic and international green-tech, renewable energy and carbon sectors. The report stated that potential exists to develop a green IFSC cluster and brand incorporating green investment vehicles, the administration of funds managed under green principles, and carbon trading and associated professional services.

A feasibility study into the launching of a green finance initiative within the IFSC was undertaken by a steering group operating under the aegis of the IFSC banking and treasury group. That study, which received support from various industry associations, professional firms, IDA Ireland and Enterprise Ireland, was presented to the IFSC clearing house group last May. Since then, considerable work has taken place regarding the development of more specific proposals to advance the initiative. It is hoped to finalise the proposals for consideration by Government in the near future.

Deputy Eamon Gilmore

I ask the Taoiseach specifically about the proposal for a green IFSC, which was one of the recommendations of the high level action group on green energy. That group reported one year ago. The Taoiseach tells us the feasibility study for the IFSC steering group was submitted in May 2010. It appears we have not heard anything further on it. A report in one newspaper in September indicated proposals were expected to go before Cabinet in the coming weeks. Have any proposals been put before the Government in respect of the green IFSC? The Minister for Communications, Energy and Natural Resources, Deputy Ryan, stated a project team would be established in 2010 to progress the proposal. Has that team been assembled?

The Taoiseach

The memorandum has not yet been circulated. It is under further consideration at the moment. Various decisions must be taken by the Government on foot of the memorandum, which refer to various initiatives that await Government decisions. Then we will be to explain precisely how we want to proceed.

Deputy Eamon Gilmore

There appears to be absolute lethargy on this proposal.

The Taoiseach

There is no lethargy.

Deputy Eamon Gilmore

There is.

The Taoiseach

There is none, quite the contrary.

Deputy Eamon Gilmore

We have over 400,000 people out of work and a report from the high level action group was received one year ago. The Taoiseach still cannot tell us what is being done in practice, other than that the report of the feasibility study submitted in May is still floating around being considered. No decisions have been taken by the Government and no project team has been put in place. The Minister, Deputy Ryan, and the Taoiseach referred to the potential for 80,000 jobs in this area when it was announced. The Minister said 20,000 of those jobs could be created in the next five to ten years. We are now one year into it and not a single job has been created. The project that was to be established this year in order to progress it has not been established and the Government is still considering it. I do not get the sense there is urgency about developing this area, which has potential for jobs at a time of high employment. It is another case of official body reports and feasibility studies on the reports, which generates more paperwork. All we are getting is paperwork rather than action.

The Taoiseach

Many jobs have been created in the green sector since the Government came into office. In some cases this has been stop start. There have been thousands of jobs in a range of areas. I remind Deputy Gilmore that this concept is about developing an IFSC cluster and brand, incorporating green investment vehicles, the administration of funds managed under green principles and carbon trading and associated professional services. Much advanced work has been done on this and the draft memorandum for Government will be brought forward. Further consideration is required on a number of issues. We are coming into budget time and some issues arise in this respect. We will deal with this memorandum for Government in due course. It has a priority and it is an area in which we can make some progress. As Deputy Gilmore knows from his party's procedures, once the memo is given to the Government and it makes its decision then we can publicise the issue.

Deputy Enda Kenny

In May 2007, when the Taoiseach was Minister for Finance, he established the financial legislation advisory forum. That was to consolidate and modernise legislation governing financial regulation. The objective was to provide expert advice, support and drafting assistance in the preparation of a Bill that was to streamline the legal framework for financial services regulation. The Bill was to be published within two years of the forum being established. When I asked the Taoiseach about this on the last occasion, he said it would be dealt with after the NAMA legislation. What is the status of the Bill now? Will it be brought forward or will it be published and brought into the House?

The Taoiseach

It is being dealt with directly by the Department of Finance. A question to the Minister for Finance will give a precise update on it.

Deputy Enda Kenny

The Taoiseach's predecessor spoke at the launch of the Building on Success document and referred to the establishment of the centre for financial services skills before mid-2007. Does the Taoiseach have a report on the current status of the centre? The 2008 report said it would not require capital funding and have the full support of financial and academic experts. Is that the case? What is the status of it at the moment?

The Taoiseach

I am happy to provide information on that. The concept of the centre arose during the consideration given to the level of world-class skills, education and training required to sustain and further develop the IFSC in this country. The expert group on future skill needs was requested by the clearing house group to examine the needs of the entire international financial services industry and to put in place a strategy to ensure a continued and sustainable supply of skills to meet the needs of employers. It is clear from the study of research undertaken that no one academic institution alone had the capacity to cater for the highly desired skills set identified as being in short supply.

A sub-group on skills was then mandated by the clearing house group to bring forward immediate action to address the findings and the sub-group developed the proposal, referred to as the Fenero initiative, including the key elements of what now forms the Finuas networks programme. The model involved co-investment by the State and firms that have proven highly successful in the Skillnets training network programme since 1999 in a range of sectors and regions. Skillnets Limited was appointed by the then Minister for Enterprise, Trade and Employment as managing agent for Finuas in late November 2008. That project was launched in early 2009 in order to provide support for training in the IFSC sector. It operates on a matching funding model across four industry-led networks, with total public spending of €2 million over the two-year period 2009 to 2010 generally covering 25% to 40% the cost of training.

Investment in on-the-job training is a central plank of the development of a smart economy. A skilled workforce underpins both maintaining current employment levels in the IFSC and attracting inward investment in new employment. The Finuas project operates with the support of the majority funding of the industry and also enables greater training provision by firms, benefiting from the long-term employability of workers and Ireland's competitive position. The problem runs on very low overheads and has provided high-quality training and excellent value for money.

Deputy Enda Kenny

Some concern is being expressed that the Financial Regulator does not have sufficient staff to regulate and oversee the IFSC. Has the Taoiseach received a report on this? Is he happy the resources are being made available to the Financial Regulator so he can carry out his functions with regard to the IFSC? Given that the world is moving rapidly and the financial services industry has such potential, does the Government see other opportunities for further development in the IFSC to continue its outstanding progress over the years as a global centre for financial services? Does the Taoiseach have a view on the future growth prospects of the IFSC?

The Taoiseach

The IFSC has proved resilient in the face of the international financial crisis that has enveloped us over the past number of years. It is a matter of regret and disappointment to us all that many governance issues arose in the retail banking sector. A number of parties were sceptical and had reservations about the IFSC at the time of its initiation. They suggested that its regulatory regime would not be adequate. It is of great regret to me to see the domestic banking system is where most of the problem has arisen in terms of governance and policy issues, as distinct from the IFSC companies themselves which have been very successful trading in an area of much financial sophistication and innovation. To its credit, the reputation of the IFSC has been broadly maintained. That speaks a lot about the professionalism of the people who work there and the skills they have.

On how the IFSC itself is working, we have set out in the smart economy programme a range of measures which are needed to reinvigorate the industry, including reform of the legislative framework for financial services in this country. The update on that can be provided by the Minister for Finance if a question is put to him. Another measure is support for a targeted up-skilling programme for the industry. There has been increased support for research, development and innovation activity. Extending double taxation agreements has been an important feature. There is a need for vigorous promotion of new opportunities in areas such as specialist leasing, pensions, technology development and sovereign wealth funds.

The IFSC itself has seen the need to market itself and to promote the benefits of locating in Dublin in respect of this area of activity. In a collaborative venture with the major industry associations, the Institute of Bankers in Ireland and the Stock Exchange have agreed to market the IFSC externally. As chairman, Mr. John Bruton has a role in promoting Ireland as a location for international financial services. He is participating in outbound marketing and promotional efforts including trips to the Gulf, London, New York and Paris. He will work with the IDA and IFSC firms to attract inward investment and support business development opportunities. That is a valuable resource both for the IDA and individual firms in supporting their efforts to bring investment and employment to this country.

The primary responsibility for marketing this country as a location for international financial services resides with IDA Ireland. The agency has a dedicated international financial services team with marketing executives based both at home and in overseas offices. We are extremely satisfied with their commitment to and delivery of their mandate in respect of the international financial services sector. My ministerial colleague, Deputy Batt O'Keeffe, and I have had the pleasure of meeting many financial services investors accompanied by the IDA. We have always been impressed by their knowledge of the business and the dedication and professionalism they have demonstrated. The marketing of this sector for the country is an area of high achievement. There is a long list of international financial services firms operating in the IFSC and, significantly, in regional locations throughout the country. That is a welcome development. This country is now home to more than 200 companies employing approximately 25,000 people. The sector contains some of the leading names from the world of insurance and re-insurance, fund administration, aircraft leasing, banking, investment management and financial technology.

Deputy Caoimhghín Ó Caoláin

Estimates of between 20,000 and 25,000 jobs were suggested as the potential for job creation in a green IFSC. Does the Government have any particular measure on the real potential of a green IFSC in terms of job creation?

It was indicated earlier this year that a feasibility study would be carried out and depending on its outcome a launch was signalled for the months of March or April. Was a feasibility study carried out? If so, what were the findings of such a study? Will a launch take place that will give rise to the realisation of what is involved in this project? Will the Taoiseach give an indication of whether a committee or other structure has been established to oversee the proposals on a green IFSC under the aegis of his Department or any other? What, in practical terms, does he see as the potential yield in terms of inward investment from the putting in place of a green IFSC?

The Taoiseach

I outlined in my primary reply the areas referred to by the green enterprise group that examined the matter. That has subsequently been dealt with by taking the idea forward to the prospect of an initiative being undertaken, identifying niche markets and what areas we could identify a competitive or competence advantage in terms of locating some of the financial services areas in the IFSC proper. The group identified the potential to develop a green IFSC cluster and brand incorporating green investment vehicles, the administration of funds managed under green principles and carbon trading and associated professional services. That work has been undertaken by the IFSC Banking and Treasury Group. Much work has been undertaken as a result of that. A memorandum for Government is at an advanced stage of preparation. I hope that decisions could be taken in this area and that a launch will take place some time in 2011 but I do not wish to anticipate Government consideration.

Deputy Caoimhghín Ó Caoláin

It has been suggested that legislative changes and other provisions are required in order to facilitate this development. However, the head of the Bank of Ireland corporate banking group who is also chair of the IFSC, Mr. Padraig Rushe, indicated that he could not disclose what was required or being considered for allegedly sensitive or commercial reasons. Is legislation or other provisions being prepared for consideration and presentation in order to drive this project forward? If the changes are to be published, when does the Taoiseach intend to disclose the detail of what is intended? If, for instance, there is legislation, will the Taoiseach publish the heads of a Bill in order that we can have some idea of where the Government stands and what is intended?

The Taoiseach

A memorandum for Government is at an advanced stage of preparation. It sets out the background and rationale for this country getting involved in and providing an initiative in this area. Clearly, if there are issues they will be considered presently by the Department of Finance and the Revenue Commissioners in the context of the preparation of a finance Bill. The normal avenues of discussion or consideration are being given to issues. They are being thought through to see whether initiatives or provisions can be brought forward to assist this area consistent with the recommendations that are set out in reports which identified the potential for this to proceed. It is normal practice that until consideration is finalised by Government in terms of the general policy areas concerned or any specific initiatives that require statutory provision such as, for example, the finance Bill, they would be provided for in the normal way at the time of publication of such legislation.

Church-State Dialogue

Caoimhghín Ó Caoláin

Question:

5 Deputy Caoimhghín Ó Caoláin asked the Taoiseach to report on his discussions with churches and faith communities; and if he will make a statement on the matter. [32344/10]

Enda Kenny

Question:

6 Deputy Enda Kenny asked the Taoiseach to report on the structured dialogue between the Government and the churches and faith communities; and if he will make a statement on the matter. [34788/10]

Eamon Gilmore

Question:

7 Deputy Eamon Gilmore asked the Taoiseach the position regarding the structured dialogue with churches and faith communities; and if he will make a statement on the matter. [35872/10]

The Taoiseach

I propose to take Questions Nos. 5 to 7, inclusive, together.

Since the process was inaugurated in February 2007 by my predecessor, general and bilateral meetings have taken place with most of the participants. I am very pleased with the progress to date and look forward to further meetings with the dialogue partners. I met with the Church of Ireland archbishops in 2009 as part of the process. That was my first specific encounter with the church-State dialogue since I became Taoiseach. Last June, I met with the Moderator of the Presbyterian Church in Ireland and we discussed the dialogue process. Contact at official level has continued with various churches, faith communities and non-confessional organisations. I look forward to meeting with other partners in the process in the future.

The process of structured dialogue was envisaged from the outset as a flexible channel of consultation and communication on broad issues of mutual concern, which would supplement the normal bilateral and sectoral exchanges with the churches on specific policy issues by individual Departments. I am satisfied that it will develop in the years to come to be a valuable means of addressing issues of change in society.

I am confident that the opportunity to exchange perspectives and address issues of mutual concern in this way with key institutions of civil society will be of benefit to all the participants, given the importance of the faith dimension to the lives of so many of our citizens and the greater pluralism of religious affiliation and practice in Irish society.

Deputy Caoimhghín Ó Caoláin

The last time the Taoiseach answered questions on these matters, he spoke of his separate meetings with the survivors of child sexual abuse within the institutions and also with the representatives of the religious congregations. That meeting was on 15 April and the Taoiseach gave a detailed response regarding the exchanges with both groups in terms of the additional monetary settlements being requested from the religious orders. He indicated a figure of €1.36 billion to be paid on a 50:50 basis between the State and the congregations. He stated the congregations offered an additional €348.5 million. What is the position in respect of the additional offer?

The Taoiseach also stated that more detailed work with the congregations was necessary in respect of their property offers. One was a monetary settlement and the other was for property. Has the detailed work signalled in the Taoiseach's response been carried out? How much of the value of the property will be passed on to the survivors? Is the Taoiseach not concerned that the realisation of property values now is significantly reduced from what it would have been a short number of years ago?

In the dialogue with the churches and congregations, has the issue of the Magdalene laundries been directly addressed? Has the Taoiseach noted that the Irish Human Rights Commission, IHRC, has supported the call for a full and formal inquiry into the State's responsibility for human rights violations against girls and women who were confined in those places under the aegis of Roman Catholic and Protestant churches?

An Ceann Comhairle

We are broadening the questions.

Deputy Caoimhghín Ó Caoláin

Will the Taoiseach support the establishment of such an inquiry and indicate in the House his intention to raise this matter, or indeed if he has, with both church authorities?

The Taoiseach

No, there has not been any specific discussion in respect of that matter. As I said regarding broader policy issues, normal sectoral exchanges go on between individual Departments and churches on various issues, but that is not an issue with which I have dealt.

Regarding the broader issue, the Department of Education and Skills is the lead Department handling these matters. It has been liaising with congregations and various State bodies to determine the potential use of various property offers to determine their acceptability to the State. I understand that the Department will be reporting to Government in respect of this matter shortly. Until we have that discussion, I am not in a position to say further where we are at.

Deputy Caoimhghín Ó Caoláin

On the first matter, the Taoiseach indicated that he has not raised the issue of the girls and women who were confined within the so-called Magdalene laundries under the control of a number of religious bodies. Will he undertake to the House to raise this matter, as it is of grave concern? The survivors of the experience have been calling for a full public inquiry. As I have indicated, the IHRC has voiced its support for the establishment of such an inquiry. Will the Taoiseach indicate to the House what his personal views and intentions are in respect of this matter?

An Ceann Comhairle

We are broadening the scope of the questions considerably.

Deputy Caoimhghín Ó Caoláin

The Taoiseach stated that further meetings with the religious congregations are expected in light of the additional moneys and properties to be made available to meet the compensation required for the victims. How soon does he expect those meetings to be held? Is there an urgency behind the proposal? There should be, given the ageing profile of many of those who are survivors of institutional abuse at the hands of religious congregations.

An Ceann Comhairle

These sound like queries for a line Minister.

Deputy Caoimhghín Ó Caoláin

No, I am asking the Taoiseach. His Department is directly involved in these engagements, as he is himself. This is the context of my questions.

Does the Taoiseach plan to meet the hierarchy of the Church of Ireland regarding the victims of Bethany Home? Has he noted the recent discovery of a significant number of previously unknown graves of young children who went through Bethany Home? The champion of their case, Mr. Derek Leinster, a victim and survivor of Bethany Home, is asking on behalf of that cohort of victims for a full inquiry and full compensation to be provided. Will the Taoiseach accept that these victims are entitled to inclusion under the redress scheme that is already in situ?

The Taoiseach

As I was saying in respect of the matter regarding the religious congregations, the Department of Education and Skills is the lead Department. I understand it will report to Government on this matter shortly, so we will have to wait to see what proposals come from it as a result of the discussions.

As the Deputy knows, 139 institutions were approved for the redress scheme, which was recognised from the outset as not being "a panacea for every injustice committed on children". The redress scheme was complemented by the establishment of an independent commission to inquire into child abuse, the National Counselling Service, the Origins family tracing service and the Education Finance Board. Together with funding for support groups, these initiatives represented a comprehensive and compassionate response to the abuse suffered by so many victims while also allowing a comprehensive review of the causes, nature and extent of abuse.

The issue of extending the scheme was considered previously, but it was decided not to include Bethany Home. Following the publication of the Ryan report, there was a range of demands for the redress scheme to be extended to include specific institutions as well as specific categories of institution. The Government considered those demands and, in its statement on 15 April last, indicated it did not propose to revise the arrangements.

The general question of the church-State dialogue also relates to matters like the economic situation in the country. All of these are issues for faith communities as well. They can take the opportunity to put their views on these matters. It is not simply a question of a narrow church-State engagement in the traditional sense, but of a broader review.

Deputy Caoimhghín Ó Caoláin

Will the Taoiseach raise the issue of Bethany Home, please?

The Taoiseach

The Government made a decision on this matter back in April. We considered all of these issues and requests, but we were not in a position to extend the scheme. That is the position the Government has had to take on those matters.

Deputy Enda Kenny

The Oblate Fathers have posted a contribution of €20 million online. The problem appears to be that, while they have assets of €81.9 million and liabilities and commitments of €61.8 million, they are anxious that an independent trust be set up. It seems this is being delayed for some inexplicable reason. The residential institutions statutory funding is on the legislative agenda. However, the heads have yet to be approved by Government and it is not expected to be published until 2011 at the earliest.

I met the Oblate Fathers recently and they are very anxious that this trust should be established. Pending the trust being set up, and I know this is a complex initiative, could there be an internal arrangement whereby their contribution, which is now posted, could be used? In summary, they would like to see the independent trust set up. It is on the agenda, but the Bill will not be published before 2011. What can be done in the meantime?

The Taoiseach

I know what the Deputies had to say about that matter. The Department of Education and Skills will shortly bring a memorandum to Government as a result of it listening to all the issues. I recall that particular order made this offer. The question of establishing a fund on a statutory basis will probably be incorporated into the memorandum for the Government's consideration. We await the memo from the Department.

Deputy Eamon Gilmore

The trust fund that was to be established for the survivors of the institutions was to be €110 million, I understand. That has not yet been established and in reply to a parliamentary question from Deputy Ruairí Quinn yesterday, the Tánaiste informed him that about €20 million had been contributed towards that fund to date. Will the Taoiseach say when it is likely the remainder will be contributed?

On the wider issue of the structured dialogue between the State and the churches, in respect of the requirement on teachers to teach religion, has any consideration been given to a recent case where a teacher was awarded compensation for losing the offer of a permanent post after she was unable to offer the Catholic certificate to the effect that she could teach religion? It was compulsory in the teacher education colleges formerly that students should do religious education and qualify for this certificate. I understand, however, the colleges have now made that optional and while an alternative course may be done, it does not result in the certificate to teach religion. Given the largely denominational make-up particularly of primary schools, is this an issue the Government intends to discuss with the churches since not all students in the teacher education colleges are now taking religion as a subject, quite apart from the decision of the Equality Authority to award compensation to a teacher who failed to get a job because she did not have the certificate?

The Taoiseach

I am not aware of the specific issues raised by the Deputy. However, I believe this would be part of the normal structured dialogue that takes place in the bilateral exchanges with the churches on specific policy areas by individual Departments. I expect the Department of Education and Skills would have to look into the legal implications of that to see what precedent was being set and the extent to which it might have to review current arrangements and decide the level of adaptation that might need to be addressed as a result.

I suggest a specific question from the Deputy to the Minister for Education and Skills might elicit a more accurate reply than I am able to give him. No item on any agenda is excluded, but I expect this matter would be dealt with in the normal way in the dialogue with churches on issues that arise regarding possible changes of regulations that might be required as a result of legal cases going through the courts. I am not au fait with the circumstances, but this is the context in which that would take place, that is, the more flexible channel of communication as envisaged regarding broad issues of mutual concern, and would be supplementary to the normal contacts.

In relation to the issue of contributions, etc., in addition to the original sum of €128 million under the 2002 indemnity agreement, the Deputy is right that further offers were made, the cash element of which was €111 million that was to be provided within five years.

An Ceann Comhairle

Perhaps we might move on. We had overtime on Leaders' Questions today, which I hope will not be repeated in the future.