FROM THE ARCHIVES:The success of the IFSC was crucially important to government policy at the end of the 1980s: Jim Dunne reported on the high-level effort that went into the search for occupants at a function in London. – JOE JOYCE
IT HAS not happened to the Industrial Development Authority for some time. They invited 150 people to a promotional seminar, and 407 turned up. The occasion was a presentation in the City of London yesterday on “Dublin – an International Services Centre”. The attendance included Japanese banks, Italian insurance companies and New York securities houses. It was precisely the kind of audience which needs to hear the message about the Custom House Docks site, though yesterday’s selling was more soft than hard.
“Never in the history of financial services,” declared Padraig O hUiginn, Secretary of the Department of the Taoiseach, “have so many gathered together in so short a time to learn so much about how profitable this venture could be.”
The Financial Services Industry Association – part of the Confederation of Irish Industry – took the lead in organising the seminar. Member firms were ordered to assemble London-based clients and contacts in the Brewery, Chiswell Street. Demand comfortably exceeded the organisers’ initial ambitions. Right on cue, Chase Manhattan announced the evening before that they would locate some treasury operations on the Custom House Docks site. It was the biggest fish the IDA had yet landed for the international financial services centre.
However, Dublin is to be no “brassplate” operation in the fashion of a typical tax haven. “There must be limits of probity and prudence – of which I’m sure you must approve.” In particular, he emphasised, the employment target of 7,500 jobs in the centre is dear to the heart of the Irish Government. This appears to be the source of some difficulty in the marketing of the centre. The current chairman of the FSIA, Mr Alex Spain, told the delegates that there are no minimum employment targets: “Two people are enough provided they are the right two.” The official position is that companies wishing to apply to the centre – and so enjoy the 10 per cent tax rate and other benefits – should include in their proposals employment targets for a period of three or five years.
In practice, one American banker told me, employment features more prominently in the Government’s thinking than he, at least, had been given to understand. Another delegate to the seminar, whose company has actually made a commitment to the centre, confirmed that there is some divergences between the official position – “two people are enough provided they are the right two” and the demands made in actual negotiations.
Mr Padraic Fallon, managing director of Euromoney (Bible of the capital markets) and now a director of Allied Irish Banks, told the seminar the sort of economic and political climate he thought they might encounter in Ireland. The centre will be a success, he said, because Ireland sees itself as part of Europe. The creation of a single market in 1992 will “ruthlessly destroy inefficiencies” in European financial services. He likened the prospect to Guderian’s tanks breaking through the Maginot Line.
In this climate, controlling costs will be all-important, and that is, in essence, what Dublin is offering. After 15 years of self-seeking Government, Mr Fallon went on, Ireland now has a government more like Mrs Thatcher – “though it still has a long way to go”. The present Irish Government supports the private sector “rather than the other way around”. However, Mr Fallon warned, the Government would have to drop its bank levy – “the traditional socialist way of taking profits twice” – and abolish exchange controls.
Mr O hUiginn had the last word. “You know Voltaire’s story about the Geneva banker. If you see a Geneva banker jump out a window, jump out after him because there’s money in it. And now, ladies and gentlemen, Irish people never combine business with pleasure. So it is our pleasure, we hope, to welcome you to Dublin. It is our business to defeat England tomorrow.”
http://url.ie/5b2k