John Perry (Sligo-Leitrim, Fine Gael)

I am disappointed that Michael O'Leary would not look at the development of his airline business on the west coast. This is a very small country and people would travel from Knock all over the country. This would enhance the development of the western region.

Regarding the West on Track movement, I hope the report due from Pat McCann will ensure that we will not get a piecemeal approach. I hope we will get investment in the railway line all the way from Sligo to Limerick. It seems there is a possibility that the job might only be done in stages. It would be quite extraordinary if the railway line did not come via Knock Airport when the Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív, is opening his Department at Knock Airport. I would be astonished if the line were to merely stop at Claremorris and not come via Knock, Charlestown, Tobercurry, Collooney and Sligo. That is what is needed. The potential railway cost of €365 million is not a great deal when one considers that the cost of Luas was underestimated by €300 million and cost almost €1 billion. There is an opportunity to open up the entire western coast. We are talking of investment funds, but regarding investment in the west we no longer need lip service. We need action and investment. Coming up to the next general election, over the next 12 or 18 months, people do not want a plethora of promises and commitments that the fund will be provided. We have heard such promises before. On this occasion the electorate will not be fooled. People want signed contracts, a guarantee that the work will commence and that the western track from Sligo to Limerick will be firmly committed to, along with a development timescale.

Deputy Cowley made an important point about Knock Airport.

It is a fantastic facility which is under-utilised. It has huge capacity and is run by an excellent general manager, Liam Scollan, and a good board. I am astonished that some of the main carriers would not take a vote of confidence in the west and land aeroplanes in Knock, Shannon and Cork. All development need not take place in Dublin.

Ireland has become an attractive and competitive location for financial institutions and services. I support this Bill. I believe it will benefit the sector and, ultimately, the economy. Companies find Ireland appealing because of our highly skilled and educated workforce, our political stability and the attractive fiscal and regulatory environment we offer. To remain attractive, however, Ireland must remain competitive on the international scene. We simply have no other choice.

Our regulatory environment is a key component of our competitiveness and international reputation. Our low tax rate is also an important factor. Our highly educated workforce and low tax rates have been most beneficial for the growth of the economy. However, it is imperative that we strike the correct balance between innovation, supervision and protection. If we move too far on the side of draconian requirements, the funds industry will move elsewhere. If the regulatory regime is too light or lax, we run the risk of facilitating rip-off investors. Our reputation is at stake with every Bill we introduce so we must keep our international competitiveness to the fore when introducing new legislation.

The financial services industry is a key employer. More than 51,000 people work in the sector, of whom more than 17,000 provide wholesale or international services. The Irish Financial Services Centre has proved pivotal in our development and the development of our workforce. Since it was launched in 1987, it has become the centre of the State's financial services sector. It has been extraordinarily successful. The IFSC initially concentrated on developing sectors such as banking, corporate treasury and insurance. These sectors have expanded and are now the cornerstones of the centre.

Ireland has boomed in the 18 years the IFSC has been in operation and with that boom has come the expansion of the centre. Dublin currently plays host to half of the world's top 50 banks and is one of Europe's main locations for insurance, mutual funds and corporate treasury. This is something of which our nation can be immensely proud and we must strive to stay at this level. Institutions such as JP Morgan Chase, Merrill Lynch, ABN AMRO, NatWest and Citibank are now located in our capital. Not only do these companies provide employment, they also train our young people. This creates a highly skilled workforce in areas such as fund management, investment management, securities trading, assurance, asset financing and leasing, and broking.

A recent report by Deloitte management consultants, which was commissioned by IDA Ireland, reviewed future options for the international financial services sector in Ireland. This report concluded that there are still excellent opportunities to develop the sector based on innovation, skills and expertise. What particularly stood out was that the report identified areas in which Ireland could become a major European centre. These include specialist debt financing products and securitisation, managing global and regional banking products, developing and enhancing Ireland's position as a major centre for asset servicing, building scale in asset management and the positioning of Ireland as the pan-European location for insurance products.

The report was promising and we have much to look forward to in this sector. In fairness, I compliment the Government on the financial climate in which this economy has grown. It is important that we retain this level of growth and that changes in legislation are balanced and do not jeopardise it. The fact that Ireland has the most successful economy in Europe does not mean we do not still have major obligations to fulfil, particularly with regard to the development of critical infrastructure. Investment in the west must be considered.

We must play our cards right and ensure the necessary legislative controls are in place. It is important to introduce legislation but it is also important to police it. Week after week legislation is introduced in this House but the level of control in its implementation is another issue. It is similar to a business — one can introduce regulations but there must be management to supervise their implementation and make cross checks. In the marine sector, for example, there is a raft of legislation but the issue is implementing and policing it and providing the necessary funds to do that. Will the Minister indicate whether enactment of this legislation will impose a financial requirement on the State when implementing it?

A flexible, responsive and business focused regulatory system has been the cornerstone of Ireland's development and the Deloitte report recommended that we continue on that path. Our regulatory environment is a key component of both our competitiveness and our international reputation.

The funds industry has played a crucial role in contributing to our growth. The past decade has seen the industry experience rapid growth and today there are over 50 international funds administrators and more than 20 custodians in Ireland. This amounts to 7,600 people directly employed in the industry, with at least another 1,500 people indirectly employed with legal firms, accountancy firms and listing brokers. These companies are currently servicing 3,771 Irish domiciled funds and sub-funds with net asset values of €445 billion. Another €220 billion is under administration in non-domiciled funds. Dublin's reputation as a major international centre for funds administration and servicing lies at the centre of the sector's growth.

In 1987, when the IFSC was launched, the number of legislative vehicles that were available to the industry was rather limited. There has been much legislative development in that time but the legislative provisions proposed in this Bill are required as a matter of urgency to maintain Ireland's position as a centre of excellence and allow the IFSC to maintain its leading position. This legislation will provide the framework for an Irish authorised and regulated investment fund structure, which will allow for the pooling of assets by institutional investors. It will introduce a new type of investment fund vehicle. It also provides for the introduction of cross investment and segregated liability for investment funds. These are important measures.

With regard to segregated liability, we must strive to achieve an ideal, that an investor who puts money into a particular sub-fund should be in the same position as if that sub-fund were itself a limited liability company. We need to focus on the needs of the investor, and security is naturally top of the list. Investor confidence is critical. The investor should be subject only to investment risks and liabilities incurred in the pursuance of the investment strategy connected with the sub-fund in which he has invested. He should not be exposed to potential liability as a result of activities in other sub-funds. Failure to implement segregated liability sub-funds would severely impact on Ireland's competitive position.

In this instance, we must look abroad and follow successful examples. France and Luxembourg have two of the largest fund markets in the EU and they have already introduced amendments to their legislation to provide for segregated liability for sub-funds. Our EU partners are important figures to look to for direction. EU directives, of course, also heavily steer us. It is to be welcomed that in this Bill the companies legislation is being amended in anticipation of the transposition of two EU directives, the directive on market abuse and the directive dealing with prospectuses.

We saw what happened with the collapse of Enron in America and the big corporate cover-up that took place in Wall Street whereby people signed off on false accounts and made money on the accreditation of top accountancy firms. Good corporate governance is most important. The EU prospectus legislation will make it easier to raise capital in Europe and increase transparency and market integrity. This is imperative for a secure industry.

Market abuse and insider dealing are also dealt with in the Bill. Both have always been elements in the sector. It was critically important that the activities that took place in America, which were signed up to by banks and accountancy firms, were exposed.

A number of necessary provisions and amendments to the Companies Acts are also proposed. They arise from difficulties with the practical operation of existing provisions. These provisions will help to facilitate operators using electronic technology, which is important. We are continually advancing ourselves on a personal and business level through technology and it is crucial that the State recognises this in law. The proposed amendments will also help to address difficulties with the Companies Act, which only became apparent post-enactment.

In today's rip-off Ireland, it is imperative that we should continue to fight for our rights as consumers. People are being crippled by the heavy costs of goods and services, many of which are necessities. It is, therefore, welcome that this Bill will make necessary amendments to consumer law. It is proposed to increase the fines that can be imposed on conviction for breach of eight consumer protection Acts. It has been acknowledged for some time that the fines under certain consumer Acts were inadequate and the Director of Consumer Affairs has raised that point on several occasions. I, therefore, support this Bill for a variety of reasons and I hope it will be enacted because it will lead to a stronger economy and a stronger Ireland.

Ireland has been presented with a major investment opportunity through the enlargement of the EU. Many foreign workers are coming to Ireland so that full employment can be maintained and up to €48 billion is being collected in indirect taxation. The National Treasury Management Agency, under the careful management of Dr. Somers, is enhancing our reputation on the world stage, as it makes astute investments on behalf of the national pension reserve fund. The agency has a good track record. However, it is a pity the funds are not invested to address infrastructural deficits in the State, which could provide a return. Money is invested in foreign banks but it could be invested locally and a comparable return generated.

Public private partnerships provide a unique opportunity. If the NTMA invested in PPPs, it would provide a major vote of confidence. While Ireland has a wealthy economy, we all represent constituencies that experience significant deficits in services, for example, a lack of public transport in the BMW region. The growth in the economy is driven by demand for essential services and investment must be made in child care, hospital services and educational disadvantage. Exchequer receipts are unprecedented with €27 billion more being generated this year in indirect taxes than in 1997. There was never a greater opportunity for the economy to expand and it is important that financial institutions setting up in Ireland should invest.

Ethics in business are also paramount with appropriate corporate governance manifesting itself in total compliance with the laws of the State. Ireland is among the top five countries in which to invest safely. I congratulate the Minister of State on bringing forward the legislation. When the Bill is enacted, it will enhance Ireland's reputation. The establishment of the IFSC in 1987 was a brainchild of one individual and similar initiatives can be taken to create opportunities outside Dublin. Two thirds of the population live in the greater Dublin region.

There is an opportunity to develop Knock International Airport and the State should be obliged to assist in this regard rather than concentrating on Dublin Airport. The west presents a major opportunity for investment. Deputy Carty will advocate that the Government should invest €300 million in the western rail corridor, as proposed by the West On Track group. The line will connect Sligo, Limerick and Rosslare, and will not stop in Claremorris, as was suggested recently. The line should be extended from Charlestown through Tobercurry and Collooney into Sligo. Deputy Carty will endorse my position.

See this speech in context