Eugene Regan (Fine Gael)

Last April the Minister announced a cap of €500,000 on the pay of chief executives but not on the pay of senior executives in banks. It is interesting no such general limit applies to them. The cap has been disregarded in this instance, which highlights why the Minister is bottom of the list in a Financial Times survey published today of finance Ministers in the European Union. One of the criteria used was the swiftness with which Ministers had grasped what action was required and their effectiveness in implementation. He failed that test. The Minister has confirmed that we will be notifying the NAMA legislation which involves a bailout of Irish banks. It must also comply with European Union guidelines, to which I have already referred. One of those guidelines refers to a cap on executive pay. Where the Minister fails perhaps the European Commission may pick up.

Another survey featured in today's newspapers reports that the International Financial Services Centre has plummeted in international competitiveness rankings. The IFSC contributes approximately €1 billion in corporation tax revenue, which is 17% of our corporation tax take, and employs 25,000 people. The head of State Street Bank in Ireland, Mr. William Slattery, has indicated that the recent 4% increase in levies brings the marginal tax rate to 48% and that this has had a detrimental effect on the competitiveness of the IFSC.

The Labour Party and others propose a third rate of tax. The Labour Party would apply the new rate to incomes above €100,000. While, superficially, this may seem attractive, it would have a serious cost to the State and would do irreparable damage to the IFSC which is such a source of tax revenue and employment.