Pat Breen (Clare, Fine Gael)

I welcome the opportunity to speak on this very complex Bill, which proposes to make a number of changes to the existing law with regard to investment funds and general company law. It will pave the way for a smooth transition of certain EU directives. In addition, there are some amendments to consumer law and it will increase the level of maximum fines that can be imposed on parties found guilty of breaches of specific consumer legislation. The Bill aims to consolidate and build on the success of the Irish Financial Services Centre while tightening the regulatory regime relating to market abuses and increasing the fines for certain consumer protection legislation.

The industry has been calling for this legislation for some time and the Government's way of dealing with the matter is lamentable. More than 17,000 people work in the IFSC and there is little room for complacency when it comes to improving the environment, although Government parties appear guilty in this regard. Not only are they complacent about having one golden goose, they are also laid-back with regard to the future of these companies. However, Fine Gael welcomes the legislation, which sets out a high standard of regulation in that the consequences for abuse could be catastrophic.

Investment funds contribute to the economy but their activity is centred on the IFSC. The investment funds sector employs just 1,000 people outside of Dublin and this low figure will be augmented by yesterday's announcement that PFPC International will create 490 fund administration jobs in Wexford and Navan. Jobs are welcome in these areas, but I hope in future some of these jobs might be created in my region of the mid-west. We have lost many jobs in the area in recent times, particularly in manufacturing industry. Deputy Nolan said earlier that much of the manufacturing industry appears to be going to countries such as Morocco, India and so on where labour is much cheaper. Ireland must change in terms of the types of jobs we attract. We will also have to have a more educated workforce. I am aware the jobs announced yesterday were specifically for graduates. That is an indication of the importance of the role universities play in educating young people for today's economy.

I referred earlier to PFPC. That company has recognised the position in which Dublin now finds itself. We all know Dublin is overcrowded, congested and expensive. It is difficult to recruit and retain well qualified workers in Dublin. I recognise the attractions of Wexford and Navan. The mid-west has major attractions also, particularly in terms of infrastructure. I assure the Government there are equally attractive locations in our area west of the Shannon. I highlight in particular the importance of Shannon Airport and the role it plays in job creation along the western seaboard. It is said that 40,000 jobs depend on the airport. Shannon is an engine for growth in the western seaboard region.

It is important that the airport continues to have a full daily transatlantic service to serve the industries located in the industrial estate. More than half the companies in the industrial estate in the Shannon Free Zone are American and the importance of a direct transatlantic service to the United States, where many of those companies have their headquarters, cannot be underestimated. Such a service is important because if a breakdown occurs in a company, spare parts can be brought in as quickly as possible to the industries in Shannon thereby allowing work to continue. The Minister of State, Deputy Ahern, is a Munster man, being from Cork, and I ask him to ensure that transatlantic service continues on a daily basis, regardless of what happens in terms of the open skies policy and whatever deal is brokered in the future because the service is imperative to the region.

I note that the Minister for Enterprise, Trade and Employment, Deputy Martin, has urged other financial services companies to do as PFPC has done in Navan and Wexford, namely, examine the reasons behind that company's decision to choose a regional location. I assure him there are many more areas outside Dublin and the east coast where these jobs would be more than welcome. I read a report in The Irish Times some time ago on job creation which indicated that more jobs were being created on the east coast than on the west coast. That would be unfortunate if it were to happen. I am aware the Minister is doing his best in that regard and, as Minister with responsibility for trade, that the Minister of State is doing the same. Investment follows infrastructure, not the other way around, and the Irish Financial Services Centre project, in fairness to its founder, is proof of that.

The Government parties' fascination with large, over-priced road projects appears to be preventing it from seeing the bigger picture. It is not just about a second terminal at Dublin Airport, which is necessary, but also about Shannon and Cork Airports. It is not just about motorways but also the information superhighway. It is not about keeping in with the horsey set at Punchestown. It is also about investing in regional rail services and developing new spurs that are important for industry.

The Minister of State's colleague, the Minister for Transport, Deputy Cullen, was in Mayo last week to announce the Government's support for the western rail corridor. It is unfortunate he did not announce a timetable for that, which is necessary. I am aware the Government is committed in terms of a ten-year programme. The Taoiseach made it clear in the Dáil that he is committed to reopening the western rail corridor. If that line were reopened, it would be very important for industry in the western region. Railways are the way forward for the future. The damage being done to roads throughout the western region by trucks carrying cargo for companies is unbelievable. There is continual road restoration work on motorways because of the damage articulated heavy goods vehicles cause. I hope the Government will see the light — I know it is committed in this regard — and publish a timetable to open the western rail corridor, particularly linking the cities of Galway, Limerick and Cork. Opening the Ennis to Athenry line would create that link which would be important for industry in the western region.

The spur line I mentioned earlier would be important also. To be fair, there is a very good road network in Clare, particularly the N18 and the new motorways into Shannon Airport. As the Minister of State is aware, a bypass is being built around Ennis. It is an ongoing project which is due to be finished in the next two years, but there is a great deal of traffic in the town which makes it an unattractive place for industry. One cannot fly a company director into Shannon, assuming one can get a flight into Shannon, and bring him into Ennis on a Friday evening because of the traffic gridlock in the town. Ennis is not an attractive place at present but I hope when the bypass is completed in the next two years it will become an attractive area for industry to base itself in.

Last month, the Ennis information age park was opened. I went to see it the other day and it is a fantastic structure. It has many bays and is very attractive for foreign investment, particularly in the telesales and financial services sector, the subject of the Bill being debated. When the infrastructure is in place, I hope that IDA Ireland, Shannon Development and Enterprise Ireland will try to encourage companies to move into this area, which is very important.

Broadband is vital for industry and for financial services, especially in rural areas. The lack of broadband is not helping industries to set up in rural areas. When trying to access the Internet, there is no comparison between the ISDN line in my constituency office and the broadband available to us here in Leinster House, although I understand they will be changing that later in the year. Technology is moving ahead quickly and we must move with it.

The failure to bring broadband to rural areas is highlighted by the contrast in the success of broadband in Northern Ireland which, through a public private partnership scheme, has enabled the introduction of broadband access to every household and which will offer access to 100% of the population by the end of the year. Having broadband in one's home is an excellent service. There are more broadband users in the North than in the Republic. I hope the northern venture will be a success and that we have the imagination to examine what Northern Ireland has done in regard to broadband. We must be competitive in that regard if we are to attract international industry. The Republic's record on broadband access is not good. Notwithstanding the success of the IFSC and the general financial services sector, it cannot continue to limp along with an antiquated communications infrastructure.

Shannon town was built in the 1960s as part of the development of the regional economy, but despite having the distinction of being the only State created town it still awaits 19th century infrastructure. It does not have a rail link, which would be important not only for the town itself and the industrial estate but also the airport, particularly with the new services announced recently by Ryanair. The rail link is years down the road. A study has been done and I know the Minister for Transport supports the rail spur into Shannon, and the route has been sterilised by Clare County Council so provision has been made for it. The success of the Ennis-Limerick railway line has surpassed the expectations of Iarnród Éireann as industry and workers use it. We also still await integrated broadband access.

Despite these infrastructural gaps, Shannon has made some headway in attracting financial services companies. Some 16 companies are directly involved in the financial services in the Shannon Free Zone and they employ approximately 800 people, which represents 10% of overall employment in the zone. These companies work in asset financing, treasury management and trading in intellectual property rights. Disappointingly there is no financial assistance provided for this sector. The main benefit of locating in Shannon is the availability of the low corporate tax rate. Although the IFSC is the fourth largest re-insurance centre in the world, companies in insurance and re-insurance underwriting have found their way to Shannon and eagerly await the bridging of the infrastructural deficit.

Unfortunately Ennis, the vibrant capital town of Clare, has become more of a dormitory town than an industrial town because of the fact that major industry has not located there over the past 14 years. Last week a successful company, Organic Lenses, took on 100 more people. We are hopeful that the Ennis Information Age Park will attract financial services companies.

In 1997 or 1998, Ennis was designated by Eircom as the information age town. Since then Eircom was privatised and there has been no job creation in the area. A lack of foresight is all too apparent in the late appearance of the Bill. The Government must genuinely look beyond Dublin for job opportunities which cannot be allowed to pass. Everybody recognises Ireland has developed into a significant international centre for the administration of international investment funds and as a major international funds jurisdiction. Unfortunately, this development is largely in Dublin and I will continue to highlight that throughout my contribution in this debate. The financial services industry should be spread to the west coast but to do this we need infrastructure and communications.

The funds industry directly employs approximately 6,500 people and approximately 1,750 people in direct support services along with indirect employment in the IT industry and elsewhere. With employment levels in fund companies projected to grow by 15% this year the arrival of this Bill into the House is well overdue. The funds industry informed the Department of the pressing need for this legislation many years ago. When it is enacted it will provide the framework for the pooling of assets by institutional investors, a system which would also help those in other jurisdictions. Investment companies, two thirds of which comprise international fund companies, will benefit from the long overdue provision for segregated liability where investors in sub-funds will be subject to the appropriate risks and liabilities, and the facilitating of cross-investment between sub-funds under the same umbrella.

The Bill will provide the framework for a regulated investment fund structure allowing for the pooling of assets by institutional investors and will bring legislation in line with best international practice. It builds on the foundations on which the funds industry was built, a legal and regulatory framework which when it is adopted will change the need for industry in this country. I welcome the opportunity to speak on the Bill.

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