Thursday, 18 May 2017
Financial Services Sector
6. To ask the Minister for Finance the way the Government and, in particular, his Department is promoting the IFSC as an ideal location in which to do business; and if the IFSC Clearing House Group is still meeting regularly. [20413/17]
The question about the IFSC is directed at the Minister of State, Deputy Eoghan Murphy. It asks how the Government and, in particular, the Department, is promoting the IFSC as an ideal location in which to do business. It also asks for a report on the IFSC Clearing House Group. The Minister of State can widen his response beyond the IFSC as a location in which to do business and address the overall strategy for international financial services.
The Government is strongly committed to the promotion and development of the financial services industry in Ireland, both in the IFSC and other locations throughout the country. This commitment is illustrated by the launch in March 2015 of the Government’s IFS 2020 strategy. The vision of the strategy is for Ireland to be the recognised global location of choice for specialist international financial services, building on our strengths in talent, technology, innovation and excellent financial services. The aim of the strategy is to increase the numbers employed in international financial services in Ireland by 30% or 10,000 net new jobs over the five years of the strategy, from 2015 to 2020. I am pleased to say we are on track to reach this target. In 2015 over 2,600 net new jobs were created in the IFS sector in Ireland and in 2016 a further 2,000 net jobs were created.
As part of the implementation of the 2020 strategy, new implementation structures were established and the clearing house group no longer exists. An industry advisory committee represents the financial services industry and a high level implementation committee, a senior group of civil and public servants, represents the public sector. These committees meet jointly on a quarterly basis under my chairmanship.
Officials in the Department are in regular contact with IDA Ireland to promote Ireland for international financial services and both the Minister and I have met various IFS firms to promote Ireland for international financial services investment. In 2016 a communications sub-group was launched as part of the IFS 2020 framework in order to co-ordinate consistent messaging and promotion of Ireland’s IFS offering to international investors. All IFS stakeholders, Government and industry bodies now use the IFS banner brand to promote Ireland on the international stage. The IFS 2020 strategy is reviewed annually through the publication of action plans. In January I launched the IFS 2020 action plan 2017. The action plan for 2017 is divided into two sections. Section 1 is a contextual piece outlining the development of the strategy, with a strong focus on Brexit. Section 2 contains a suite of 40 individual measures with lead Departments, agencies and organisations assigned responsibility to deliver these measures.
In January the second annual European financial forum was held in Dublin Castle. The forum which was hosted by me and the Department was designed to showcase Ireland's financial services offering to an international audience. About 650 individuals from more than 300 companies were present at the forum. A third annual European financial forum will be held in Dublin Castle on 31 January 2018.
I thank the Minister of State for his reply. I have read the action plan for 2017 and the 40 action points set out in it. I hope their implementation is going according to plan. Will the Minister of State give us an idea of the constraints and the issues being raised by firms with which he and IDA Ireland are engaging? In terms of regulatory capacity in Ireland, is he satisfied that there is sufficient capacity and openness in the Central Bank? He will be aware of the recent report in The Sunday Business Poston the issue. What are the issues with regard to office availability, high-end office accommodation, talent and the labour market? What are the constraints with which we could deal to enable us to do even better?
There are some encouraging signs, in the context of Brexit, of announcements that may be about to come our way. I ask the Minister of State to address those particular issues. Where are the constraints and where can we do better to improve our offering?
It is important to note, in the context of the Deputy's references to the IFSC Clearing House Group, that our offering is a whole of Ireland offering. It is not just about Dublin anymore or a particular geographic location north of the Liffey. We are talking here about IFS 2020. When one looks at the offering in terms of employment, one third of the jobs, which are increasing from 35,000 to 45,000, are located outside of Dublin.
Just before Easter the Department of Finance, as part of its Brexit preparations, had a round table with financial services entities in this country and as part of that dialogue we talked about the risks and opportunities in financial services. Presentations were give by various chambers of commerce around Ireland as to the offerings that they provide in the Brexit context, to make sure that we can get on top of all the possibilities that we now think are coming. In Deputy McGrath's own constituency, Connect Cork has been doing an excellent job not just here in Ireland but also in London and other overseas locations. I had the opportunity recently to go out with Connect Cork to talk about the offering there.
The Central Bank has increased its resources to deal with the increased interest that has come its way. It has released a number of statements recently about the changes it has made which have been received very positively. The Deputy also referred to office space. Approximately 3.5 million sq. ft. of office space is currently under development, 1 million sq. ft. of space is under refurbishment and planning permission has been granted for a further 5 million sq. ft. of office space in Dublin. However, there is also huge potential for office space outside of Dublin. In Cork, for example, approximately 1 million sq. ft. of office space is almost ready to go and will be available to new firms coming in. Deputy McGrath will be interested to know that we recently had a couple of positive announcements concerning financial services in Cork.
I acknowledge that the Department has engaged in the regions and in my own city of Cork. I know that the Minister of State has engaged quite significantly with Cork Chamber and UCC. There is a financial technology centre at UCC which collaborates very strongly with industry, including with State Street and other financial institutions. UCC also has an important tie-up with China. I acknowledge all of that. The regions can offer an awful lot in respect of financial services. The office accommodation, where it is available, is much more reasonably priced. There are significant strengths in the regions that the Department must continue to highlight. I welcome the fact that it is part of the offering and is being promoted when the Department and the IDA are doing their work in terms of attracting international financial services to Ireland.
Finally, on the net issue of the Central Bank, is the Minister of State satisfied with its approach? The Minister of State raised concerns in recent months about the role that other countries are playing on the regulatory front. He suggested that some are making offers to firms that they may not be able stand over. What is the latest information on that?
I am satisfied with the Central Bank's approach. The bank is an observer on the IFS 2020 joint committee, which I chair and to which I referred earlier. The Central Bank has a responsibility, independent of Government, to make sure that we can manage the changes that are coming as a result of Brexit.
I have raised concerns about the capacity for other jurisdictions to compete on level regulatory playing field and statements have been made on this issue recently by the European Central Bank, ECB, the Single Supervisory Mechanism, SSM, the European Securities and Markets Authority, ESMA and the European Insurance and Occupational Pensions Authority, EIOPA. Recent statements by Governor Lane of the Central Bank were very instructive in this regard. He pointed out that when it comes to regulation of entities in the Single Market, we are moving towards convergence. Proposals are on the table at the moment that will help that supervisory standard across the Single Market.
I wish to pick up on two important points made by the Deputy in his contribution. The Deputy referred to education and the tie in with UCC, which is very important. We also have a great apprenticeship programme that was launched under IFS 2020 last year. The Deputy also made reference to the tie-ins with China and we are positioning ourselves as a gateway for international financial services into the Single Market. Asia has been a very strong part of that play and we are seeing significant interest from companies currently based in China and Japan which either have no entity here at the moment or only have a small entity in a particular sub-sector - for example, aviation and aircraft finance and leasing - which are now looking very seriously at Ireland. We expect some very positive announcements in that context in the near future.