Michael D'Arcy (Fine Gael) | Oireachtas source

Sometimes we describe a Bill as a very technical piece of legislation or as boring. Unfortunately, this type of thing is boring but we have to get through it, and the devil is very much in the detail in this case. We are talking about the private equity sector in respect of financial services for Ireland. As the Minister of State will be aware, the financial services sector is quite a large employer, of about 16,000 people currently. The sector has been arguing, for about four and a half to five years, that without this legislation it cannot advance the private equity side of investment in Ireland. The reason it cannot do that is the investment limited partnership, ILP, legislation in Ireland, going back to the 1990s, is out of sync with that in other jurisdictions. In essence, if a business is part of such a partnership, and if it invests €2 million in an investment vehicle worth €100 million, it can be liable for losses to the value of the entire sum. As a result, investors do not invest in Ireland because in other jurisdictions, the structure is such that they can be liable only for the sum they invest. That is a very easy decision for investors to make, whereby they decide not to invest here.

This legislation has been on the books for almost five years, which is a criticism of the Department of Finance and the way we get to legislation. It is important to be advanced and pass this legislation so we can be competitive with other jurisdictions. The criticism is a self-criticism too; for three years I was in the seat the Minister of State is in and I did not get the legislation through in that period. I wish him well and certainly hope the Bill can be pushed through before the end of the year because it is important.

To put it in context, the sector has said for quite some time that there are probably 1,500 jobs attached to this. If we can move, therefore, and get the private equity world operating here in Ireland, it will be worth 1,500 jobs.The companies in question are all around the country and not just in Dublin. The perception is that they are all down on the docks along the River Liffey, but that is not the case. There are funds like State Street in Kilkenny and BNY Mellon in Wexford. I am using those as two good examples. The Ireland for Finance strategy that was launched in April 2019 entailed getting 5% of the sector to be based in Ireland. If we can get that base, it will give us the 1,500 jobs. In the context of Brexit and given the potential for Covid to rear its ugly head again, the hope and expectation is that those 1,500 will be higher value jobs with higher levels of pay and will benefit the Irish economy to a considerable degree.

Another important aspect of this debate is the question of how large the sector is. We are discussing trillions of euro worldwide every year, and we badly need to get a bite of that. However, I have consistently highlighted the bigger picture, that of sustainable finance. There are large quantities of funding to be spent, not just in Ireland but worldwide. The figure that people put on it is up to €100 trillion, which in itself suggests to me that no one really knows what is required to deal with everything that is attached to global warming and climate change. What is clear, however, is that this cannot be done through a single strand of investment. Rather, it must be done with private equity, of which Ireland has practically nil because this legislation has not been passed. It will also be done with borrowing - the standard borrowing that we know and understand and the multilateral borrowing from multilateral banks such as the Asian Infrastructure Investment Bank, AIIB, and so on - and Government funding. We need three legs to the funding stool of sustainable finance because enormous quantities of money will need to be spent to decarbonise the world economy. If Ireland is to become a truly global leader in this regard, which I believe we can in terms of investment, then we need this legislation passed. As the Minister of State said in his 19-page speech, the Bill passed all Stages in the Dáil but fell when the Houses of the Oireachtas fell.

I welcome the Bill. I will not go into its details, but I have a couple of questions and will discuss two points. From my experience, investors are significantly ahead of everyone else. They are the people with private equity funds and who administer the moneys that will be crucial if we are serious about sustainable finance. They are well ahead of everyone else because, if we destroy the world through climate change, there will be no world economy. They are clear that they want there to be a world economy.

I am pleased with the beneficial ownership element. It shows that the Irish authorities - the Department of Finance, the Central Bank and the Houses - are moving on that matter. We are actually moving beyond what is required. European directives are the requirement, but we are doing more. I support that entirely. The "more" in question is that we are trying to deal anti-money laundering, AML, and counter-terrorism financing, CTF, to ensure that the regulator knows who the owners of the private equity funds are and that their bona fides are above board.