Liam Twomey (Wexford, Fine Gael) | Oireachtas source

I found the last two contributions interesting, especially that by Deputy Ross. We should probably discuss the whole idea of Ireland's reputation in international financial services at some point. We went through a very difficult period of time a number of years ago, partly due to the international crisis, and some reputational damage was done to Ireland. However, it is important for us to correct that reputational damage and ensure we do things to acceptable international standards. Deputy Boyd Barrett's hankering back to making things has a playful naivety about it but the world has moved on dramatically. It reminded me of comments made at the launch of the original iPhone. I do not know to whom the comments are attributed but someone said he thought it would come to nothing. No doubt he rued the day he made those comments publicly. There is nothing wrong with wanting to go to banking and financial services of the pinstripe suit, the bowler hat and the black umbrella but the world has moved on.

One of the biggest issues with which we are now dealing is global trade and global taxation. We have an open economy and are very involved in global trade and global taxation. When global trade took off a century ago, the biggest issue was tax treaties between nations, which allowed for trade to be taxed in one jurisdiction only. It was all about ensuring profits and investment were not taxed in two jurisdictions, that is, double taxation. Over the last century, the pendulum has swung back and the issue is of no taxation in this jurisdiction, and that is where much of the discussion is focused currently. Preventing double taxation in the last century was also a global issue and it was resolved by up to 3,000 global taxation treaties. The solution to the current problem will also be a global one.

That is why the discussion currently is very much at OECD level, involving 50 of the world's developed nations, including Ireland. It has been heavily involved in the global taxation debate and global taxation avoidance issues since 1999. This discussion has been going on for the past five years. The G20 has made this a key issue to be addressed in the coming years.

If one listened to some individuals in this House, one would think the only country which needed to look at itself was Ireland. This is a global issue. We are not involved in any criminal money-laundering. We have the most open and transparent system, which may not, to some degree, be to our advantage because it makes it easy to beat up on us as it is easy to see where our taxes go and how we tax people. Many countries have very opaque systems of taxation, especially when it comes to large multinationals or even large conglomerates in their countries.

At times there is a need for us to stand up for what we are doing well. The Irish Financial Services Centre is something good. We are recovering in terms of getting our reputation back. One of the things which attracts investors to this country is that we have a very sound legal system. It is a very competitive country in terms of keeping costs down and having the right calibre of people to administer these funds. We are attractive to investors, because these things are very important to them, and also to employees who want to come to work with these companies. Many of the employees who work in these types of services are of the highest calibre and they are difficult to attract. One should not for one moment believe that all we need to attract these individuals is to speak English and have a well-educated workforce. If one visits the areas in which Google, Facebook and LinkedIn are located in the evening, one will see that people from every nation in the world are working in those companies. That must be borne in mind.

One thing at which we have got particularly good over the past few decades is innovating and changing how we do business, whether it is Enterprise Ireland, the IDA or the civil servants who lead these policies in the Department of Finance and other Departments. We constantly innovate and evolve how we do business and constantly keep up with the way international business is carried out. As soon as we stop, we will be dead in the water. When we see problems in Departments and in parts of the public services we are supposed to provide, the major problems are in the ones which fail to reform, innovate and evolve.

I do not consider myself an expert in collective investment or transferable securities or understand what the Alternative Investment Fund Managers Directive is all about but what I do know is that international financial services and banking are a vital part of our economy. It is not only those 13,000 individuals who represent every nation in the world and who are so important to us, this spreads beyond them. Ireland, for instance, is a leading nation in aviation re-financing. How did that happen? We do not build aircraft or have the population to generate that sort of activity but someone somewhere got that expertise together, innovated and evolved. That is another niche area in which Ireland is successful.

We are a great people for attracting direct foreign investment. I hear talk of reputational damage, and that we are corrupt. Deputy Ross referenced the political cronies in the banks and so on but in terms of what went wrong in banking, it was stockbrokers, investment bankers and other professionals who made the mistakes. In dealing with these issues we must learn from our mistakes. We are making sure we regulate what we do here with this Irish Collective Asset-management Vehicles Bill. We have to continue regulating because Ireland must protect its reputation, but there is not a requirement to regulate these vehicles in the way we have to regulate other companies. It is an unnecessary cost and an unnecessary burden. It may make people in opposition feel comfortable but it hinders our potential development. We must remain innovative in that regard.

What we are doing here will not be easy, and the Minister will have a lot of work to do. The impression has been given that somehow we are competing with countries like Luxembourg. We are not. We are competing with the City of London. Dublin and the International Financial Services Centre are minute in comparison to what the City of London is about. In some respects we would be irrelevant to international finance if we disappeared in the morning because we are so small. In comparison to what happens not just in the City of London but in New York, Singapore, Hong Kong and across the world, we have a very small share of the international financial services sector, regardless of what we might think.

There have been many attacks on us with regard to issues to do with our taxation. I found it interesting that the British Prime Minister, David Cameron, criticised Ireland's taxation issues yet his Government is bringing out a corporation tax plan for 2015 to 2019, which is different from the one it brought out for 2011 to 2015. He is bringing in changes to compete with us, some of which one could say directly contradict what he says at G20 meetings. We need to position ourselves in terms of this debate, which is very much at international level, and we must be very careful in the way we move forward. We do not need to kill off what is a vital part of our financial services sector. At the same time it is a very small part and it could be easily damaged. That is an important point.

The Minister will take this Bill to the finance committee where we will tease out many of the concerns raised about it by some people. Other countries operate a very similar system. The French operate the SICAV system. The United Kingdom operates its own open-ended investment company, and many other jurisdictions have very similar legislation to the Bill before the House. We are not doing anything particularly new. We are adding another area to our financial services, and I hope we will get it right. I hope that everybody here will go out and promote Ireland because we cannot compete with Wall Street. If one travels to those jurisdictions one will see that the Financial Timesor The Wall Street Journalpromotes their own countries. They will not promote Ireland on our behalf so we have to do that for ourselves. We have huge advantages. We have a sound legal system, which is very attractive to investors. We are part of the eurozone. We should emphasise more often that we are not just an economy of 5 million people but that as part of the eurozone we are part of a much wider economy of over 250 million, and that we can trade freely within the European Union. We need to promote our fine attributes outside Europe and America in terms of being a country in which to do business and carry out financial services and banking transactions.

I wish the Minister of State the best of luck because he is also examining a new strategy for the Irish financial services industry and international banking. It is recognised that we have a great future and that there are many opportunities for us in that regard. We have built up a huge corporate memory over the course of the past 25 years in how to deal with international financial services. Our civil servants have built up a huge amount of knowledge in terms of how to work this, which is very important. Deputy Boyd Barrett's Luddite thinking was to the effect that we should all go back to making things, whatever that means, but the day of this country having major industries is gone. We have to be sharper than that if we are to progress in the future. It is important that we have opportunities in what we do well, and one of the things we do well is that we never fall behind. Not only do we keep up with what everybody else is doing, we try to go beyond that and become even more innovative in how we make it work. Nobody will ever go back to a situation where we would look for deregulation or some sort of free-for-all as happened in the past.

There have been changes in international finance. Over the past decade some people who tried to make more money engaged in practices that were dangerous for international finance. We should avoid that. It most certainly is not a squeaky clean industry, no more than any system where people set out to make a profit and try to be different, but we must be very careful that we do not get involved in that, even if it may appear attractive at the outset. We must be cautious in that regard but we have to plough on. There is great scope in this area for Ireland, and we are in a pivotal position to make a difference with regard to this issue.

I wish the Minister the best of luck with this Bill and I hope we can discuss it further on Committee Stage. I have no doubt that much more legislation along these lines will be brought forward and discussed. I have not seen anything in the Bill that we should be overly concerned about but I will listen to members' contributions in the finance committee debate. The Bill will probably come to the finance committee relatively quickly and therefore we need to make sure we have an opportunity to discuss those concerns with the Minister.

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