Monday, April 14, 2008
Dublin’s IFSC moves North
New laws will be put in place to extend Dublin’s Irish Financial Services Sector across the border. The announcement came following a meeting between Taoiseach-in-waiting Brian Cowen and Northern First Minister-in-wating Peter Robinson.
Under the plan, companies based in the Irish Republic, which are currently suffering skills shortages, will be able to employ undergraduates in satellite operations situated in Northern Ireland - without the risk of the Dublin’s International Financial Services Centre (IFSC) losing its present tax-exempt status. Some might see this as a further example of the development of an all-Ireland economy while others aren’t overly happy with the idea of possibly up to 5,000 Financial Services jobs leaving Dublin. Then there’s the view that such a move is only helping to make Northern Ireland viable and therefore copperfastening partition. One thing is for certain, it’s good news for Belfast. Mr Robinson says it’s win-win for Ireland, north and south.
George @ 06:23 PM
though i was brought up in the dissenting presbyterian tradition now unionist but with 1798 skeltons in the family history; I couldn’t give a rap anymore about constitutional politics. Let’s get this f…ing economy off the ground. Go Peter and Brian, GO!!!!
And any other influential investors reading this blog please do the same!!
Though important we do not all want an economy centered on understanding conflict…
Posted by on Apr 14, 2008 @ 08:01 PMThe cynic in me says this has nothing to do with a skills shortage.
The truth is that the republic are pricing themselves out of the financial services market with huge cost /overheads and with a recession around the corner jobs could easily move to London or Frankfurt two centres which dominate financial services in Europe.
If it transpires that some jobs move North then they will not be for high earners and will be more like sophisticated call centres.Posted by on Apr 14, 2008 @ 08:07 PMHats off to Biffo and Peter Punt!
Posted by on Apr 14, 2008 @ 08:22 PMulsterfan
That’s exactly how it is; the canny southerners are light years ahead in economics.It however very ironic that 10 years ago this type of move would have been seen as part of a foreign hostile takeover and resisted at all costs by the usual suspects.
Now most of Northern Irelands big companies are registered in Dublin for the lower corporate tax rate.
Could it be that when the world recession really hits, the poor Northerners will again be the first to lose out is the raison detre of the south’s plans?.Posted by on Apr 14, 2008 @ 08:25 PMBy “undergraduates” I think you mean “graduates”, but thank goodness on many counts.
1. Dublin is far under far too much pressure
I took a quick glance through the politics.ie posts and saw a number asking how does Dublin benefit from this. Well the quick answer is that it can take a sigh of relief (albeit a tiny one). No city in the Republic is capable of doing throwing it’s back behind Dublin’s woes. Only Belfast has the weight of population to carry the burden that Dublin has had to carry for far too long (and to the detriment of the rest of the country for too long).
2. Northern Ireland needs it
Forget building links between North and south. Forget demonstrating goodwill. Forget the symbolism of the Republic effectively legislating for an IFSC in the North and circumventing the UK central government’s refusal to lower corporation tax (albeit undoubtedly with the blessing of Wesminister). Forget the corporate tax returns running back down south. This is just good for Northern Ireland.
3. It’s good for the rest of the country
Cork, Derry, Limerick, Galway and Waterford can now concentrate on what they best released from the immenient threat of brian drain and without having to put on the awful act of having to go through the unsightly motions of pretending that they can play second fiddle to Dublin. The Northern Giant has stepped in and the best micro cities in Europe can now concentrate their minds on remaining the best micro cities in Europe.
4. It’s good for Irish nationalism
It demonstrates the practical benefits of an all-Ireland economy. We are better together and we can really work together. The real win will be a genuine all-Ireland labour market - but that is yet a pipe dream.
5. It’s good for Unionism
It demonstrates that a dual-jurisdiction Ireland can work, work effectively and is probably better than a unitary jurisdiction Ireland. The Republic can take some benefit from the value of the Pound. The North can take some benefit from the stability of the Euro. Why would anyone want to give up the best of both worlds when they can have their cake and eat it?
6. It’s good for Ireland
The lop-sided nature of the Irish economy/human geography - one big city in the east, a scattering of micro cities in the south and west and the bad lands in the north - can now start looking a more choicey. We, if it is now appropriate to start saying “we”, can now boast, a big city, and large city and micro cities working in harmony. This is a great looking picture and one that’s easy to sell. And to put the icing on the cake, we can even boast that in times of the turbulence in the interational markets, we can exploit it for our own (and our customers’) benefit. It’s a great package.
Posted by on Apr 14, 2008 @ 08:26 PMHats off to Biffo and Peter Punt!
Posted by picador on Apr 14, 2008 @ 07:22 PM
Biffo (Offaly) and Biffa (Antrim)??
Posted by on Apr 14, 2008 @ 09:44 PMI agree completely with both Oilifear and the Punt. This is not a political announcement; it’s plain old fashioned good business, as it allows Belfast to expand and also allows the Irish financial services industry to remain competitive.
This announcement is worth more than the New York announcement 100 times over; this is Belfast getting it’s chance to partner with a major European financial centre pretty much for free without any of the initial startup pain/risk. Now it’s up to the people here to show that they’re up to the task.
An excellent step forward, I’m surprised we’re not hearing about it, but I guess that’s because it doesn’t have a New York mayoral campaign behind it.
Posted by on Apr 14, 2008 @ 09:49 PMThe IFSC development is just another inevitable step in the economic unification of Ireland (or more accurately the Southern economic takeover of the North.)
The South now controls our food and agriculture and increasingly the building sector. Cowen is now contributing to the planning of our infrastructure as well as paying for some of it.
A Southern firm owns most of our gas network. the ESB has a big power station in Derry. O’Reilly owns the Belfast Telegraph. Aer Lingus is going to dominate our airline sector. Farrans is part of Dublin building firm CRH. Our biggest development, Titanic quarter is wholly owned by a Dublin developer.
Even Ulster Bank is now run from Dublin!
With the strength of the EURO right now acquisitions in NI must look very cheap from Dublin - although there really isn’t much left here to mop up.
Gordon Brown has told us to get lost on tax reform - so we won’t be able to compete with Dublin for investment - perhaps ever.
But why fight it?
Good luck to Nigel Dodds and his conference next month!
Posted by on Apr 14, 2008 @ 09:51 PMThis is an important development. I agree with Oilifear on the many benefits. I also agree in business all-Ireland is the best way as the international business world sees Ireland, North and South, as one economic unit. The issue of part of the UK or the Republic is superfluous and unhelpful in improving the economics in NI. It seems that Cowen and Robinson are off to an excellent start with this pragmatic mutually beneficial business agreement. Cowen and Robinson deserve congratulations.
Posted by on Apr 14, 2008 @ 09:54 PMComrade Stalin
You are absolutely right that this is much more important than the New York announcement. This is reality, the NY thing was an excuse for a news announcement. Attracting business to NI should be done on an all-Ireland basis. That’s the way international business sees Ireland and you greatly enlarge the benefits you can offer inward investors. Who came up with the idea of a NI only inward investment strategy? Was it really to keep Paisley and McGuinness out of the way so the pragmatic realists could get to work?
tootiredtoargue
While you are stuck in ‘themms vs usuns’ smarter people will see the benefits of cooperation over competition between the Republic and NI.
Posted by on Apr 14, 2008 @ 10:05 PM‘The South now controls our food and agriculture’ actually both are largely controlled by the UK supermarket industry.
‘Cowen is now contributing to the planning of our infrastructure as well as paying for some of it.’
Actually he’s paying for the bits that benefit his voters in Republic - chiefly Donegal‘A Southern firm owns most of our gas network.’
Not sure what you are on about - both NI and RoI are major importers of British gas.
‘the ESB has a big power station in Derry.’
Thank God they are state owned - the Directors would have been sacked years ago for that mistake.‘O’Reilly owns the Belfast Telegraph.’
He does at the moment - anyhow isnt he a lacky of British imperialism?‘Aer Lingus is going to dominate our airline sector.’
No it isnt. Easyjet is and will‘Even Ulster Bank is now run from Dublin!’
On paper maybe but all the important work has been relocated to Edinburgh (RBS HQ)Never let the truth get in the mind of a closed mind!
Posted by on Apr 14, 2008 @ 10:56 PMThe way things are going AND with the stadium debate still raging it’s only a matter of time before Casement Park hosts Irish Cup finals & Norn Iron internationals. The Glens & Blues walking out behind the Artane Boys Band and President McAleese taking the salute before Connswater Cock & Hens AND Sandy Row True Blues supporters clubs. Ger Canning on commentary with Pat Spillane & Joe Brolly in the studio. “A lovely handpass there from Webster to Sloan”. Lets face it economic unity is almost total & with Fianna Fail about to appear on Northern ballot forms the political unification of the island is but a mere formality. It is happening while we sleep but as long as pay packets still appear on a Friday & people have their home comforts I don’t think many will lose sleep. Middle class Unionist kids already go to Southern universities while North Down owns a fair proportion of Donegal holiday homes so the ‘national identity’ question is increasingly irrelevant. The only negative pockets will be the inner city loyalist enclaves & Bible belt fundamentalists but mainstream Unionist political leaders & both governments have already shown that these elements DON’T count at all. If the Orange Order can lose Drumcree political unity is a walk in the park. As Sinn Fein have already demonstrated principles & core beliefs can be sacrificed in the frenzy for power & ministerial office; Unionists are now following. If the UDA & UVF start to rattle their magazines about unity sure the NIO can always throw a few ‘Community Worker’ posts and ‘ex-prisoner’ funding their way. The smell of the dollar works wonders & spells that Harry Potter can only dream of. Sure it HAS worked before as the Belfast interfaces have been quiet for a while. They ONLY stir when the Government dough runs out & the Uncle Andys’ and Seamies’ beer money dries up.
Posted by on Apr 14, 2008 @ 10:56 PM“Why would anyone want to give up the best of both worlds when they can have their cake and eat it?”
Northern Ireland will truly be reformed when it can become greater than the sum of its so-called parts.
Peter Punt, another adventure into centrism. What better than a reformed Union, when politics nowadays offers the people of Northern Ireland the democratic opportunity of a working role in the Oireachtas - Dublin, Westminster - London, and refining it all in Stormont locally. That’s progress, especially it being backed with EU free movement of people with new political ideas too.
I don’t know if it can be viewed as Unionism though, Punt did say that this North-Southery was a one-way ticket to a bridge that once crossed was dire to Unionist interests. Punt seems to be eating his words alot these days, even moreso than his political master. But of course bridges can be crossed over in both directions, can Unionism manage the traffic to suit its own longstanding interests, capable as being sold under a Unionist political brand?
Posted by on Apr 14, 2008 @ 11:06 PMAnd just as the Dublin traffic was about to set solid, some of that low tax low euro interest stardust gets sprinkled on Belfast, while the City of London decides it has a surplus of financiers. This double act could run and run.
Posted by on Apr 14, 2008 @ 11:08 PMGeorge wrote: “it’s good for Belfast”
Yeah…I’m sure it is…although does that mean none of the jobs will be passed on to the rest of the region…? Go figure. You’d nearly think there was no regional economic planning up here…
LURIG wrote: “Middle class Unionist kids already go to Southern universities”....
Really? I didn’t realise that was a trend…I thought they mostly left Province for Mainland, and didn’t return…
“....while North Down owns a fair proportion of Donegal holiday homes….”
Gosh…when did Gerry and Marty take over from Sylvia…?
He also wrote: “Sure it HAS worked before as the Belfast interfaces have been quiet for a while.”
And you have figures to back up how money from America (TM) has kept the drinking classes quiet…? This is the sort of sterotyping that frankly makes me want to puke over people who deign to cast aspersions from their ivory towers. But I digress…
Tootiredtoargue wrote: “Good luck to Nigel Dodds and his conference next month!”
That’ll be the conference then, with lots of people from America coming to play golf, but not spend any money as they are slipping into recession…? As one INI rep said to me only last week, “it’s a last hurrah in the public eye.”
Elvis Parker wrote: a lot of stuff that actually approximates how it is, as opposed to a rattling good yarn from tootired. Oh and by the way…the Irish construction sector north and south is run from Dungiven…as any fule kno.
Jobs is jobs - good news all round.
Heck, Doddsy is such a pro-economy champion, he even went as far as to cancel the grant from the start a business programme, so long the jewel in INI’s local economic development crown. As I said…go figure (as opposed to “Go For It”)
Posted by on Apr 14, 2008 @ 11:57 PMDidn’t Devalera offer some bloodstock grants to race courses in the north only to be told (by Unionists) to stuff it up his whatever?
Description Medal card of Hitzen, Edo John
Corps Regiment No Rank
Lincolnshire Regiment Captain
Date 1914-1920
Catalogue reference WO 372/9
Dept Records created or inherited by the War Office, Armed Forces, Judge Advocate General, and related bodies
Series War Office: Service Medal and Award Rolls Index, First World War
Piece Hampton E - Holland D
Image contains 1 medal card of many for this collectionA bit of history for three quid fifty, that fella captured DevAlera and (??) the 1916 flag.
Posted by on Apr 15, 2008 @ 12:33 AM“As one INI rep said to me only last week, “it’s a last hurrah in the public eye.””
And that is why, if true, INI suffers from a subaltern pysche that is blighted with a sense of bureaucratic negativism. In a similar way, if the peace process was left to the NIO fuck all would have happened.
It isn’t all one-way, Eircom tied up a contract for, I think, a back office telecommunications project linked to wider IT reform withun the NI Civil Service.
Posted by on Apr 15, 2008 @ 12:36 AMgeorge
you said this was good for Belfast. Would’nt somewhere like Newry be the ideal place? I have relatives who commute from South Armagh to Dublin to work so the distance is manageable.
There are good motorway connections to Dublin and if something can be done to connect directly into the free state’s communications infrastructure-(land line and wireless) then that would be a plus.
Posted by on Apr 15, 2008 @ 02:21 AMSo filthy lucre unites us all??
Posted by on Apr 15, 2008 @ 02:25 AMheck
Newry is not large enough. In addition to not having enough potential workers, it does not have a university, an airport, enough hotels, restaurants, theaters, luxury shops, etc.
Although the motorway is good, the better mode of transport would be an excellent train service between Dublin and Belfast. One that is fast (2 hours or less), frequent (hourly) and reliable. That’s something that should be immediately addressed and used as an attraction to firms considering business in both cities. I suspect several companies will be looking into this in preparation for coming out of the present difficulties. How is Northern Ireland doing on this?
Posted by on Apr 15, 2008 @ 04:11 AMForgive my ignorance, please, but could someone explain to me how this will work?
Will these “satellite operations”, located in NI, not be subject to corporation tax in NI, and hence they will be relocating to a higher-tax economy? If so, the benefit to the companies is not continued low corporation tax, but access to labour.
Why does there need to be a change in the law in the South for these companies to open up “satellites” in NI?
Thanks.
Posted by on Apr 15, 2008 @ 09:04 AMSorry to throw a wet blanket on the party but, not so long ago, a salary survey undertaken by Invest NI, the economic body responsible inward investment into the North revealed that salaries in the IT sector between Dublin and Belfast differ on average by approximately 27%.
Salaries in Belfast are the lowest amongst cities surveyed in the UK, Europe, the US and Canada. Only Bangalore in India, Budapest and Prague have lower salary levels.
The most significant Belfast-Dublin gap was identified in salary comparisons between junior programmers. On average, a junior programmer in Belfast earns €26,005 with a junior programmer in Dublin earning €44,014, a differential of 69%. A junior programmer in London can earn as much as €47,065 or 81% more than a junior programmer in Belfast.
In addition a senior programmer in Dublin earns on average €66,515 while a senior programmer in Belfast earns €51,517. A starting salary is approximately €23,892 in Belfast and €32,617 in Dublin, a differential of 37%.
Amongst more senior positions surveyed, the differential while less dramatic is still significant, with the Head of IT in Dublin earning 18% (€107,253) more than the Head of IT in Belfast (€91,251). The Head of IT in London earns approximately €112,630.
The salary survey, produced by Watson Wyatt on behalf of Invest NI, was the first of its type by Watson Wyatt to compare salaries in Belfast with other major cities in the US and Europe and overall indicates significantly lower employer costs for Belfast than most European countries surveyed.
Commenting on the results of the survey, Trevor Killen, Director, Invest NI, Ireland said, “The findings of this survey are evidence that employer costs are significantly lower in Belfast than Dublin, London or the majority of EU countries.”Even UTV’s Jamie DeLargey conceded on last nights news that the proposed jobs would likely to be mainly at lower-end levels.
Posted by on Apr 15, 2008 @ 10:19 AMWillowfield,
Will these “satellite operations”, located in NI, not be subject to corporation tax in NI, and hence they will be relocating to a higher-tax economy?Apparently not, the financial services companies will continue to pay corporation tax in the Irish Republic on jobs based in sub-offices north of the border. The workers will pay income tax to the British exchequer.
Why does there need to be a change in the law in the South for these companies to open up “satellites” in NI?
Details are thin on the ground but I assume it is something to do with the Revenue Commissioners extending the special exemption status the IFSC has to sub-offices outside the jurisdiction as long as they meet certain criteria. Open to correction on that one.
Posted by on Apr 15, 2008 @ 10:38 AM“Newry is not large enough. In addition to not having enough potential workers, it does not have a university, an airport, enough hotels, restaurants, theaters, luxury shops, etc.”
Hmmm, I wonder why? So essentially, decades of under-investment should now be used as the excuse to not invest again? In addition to not having enough potential workers (if you build it, we will come), I would dispute the better mode of transport but if rail is best then Newry is better placed than Belfast and in the process of getting a new station.
Time for some to think outside the (Belfast) box and spread the jobs around. There are enough people from Newry clogging the roads to Belfast day and daily that would relish the chance to work locally.
Posted by on Apr 15, 2008 @ 10:38 AMSorry, I forgot to add, given Jamie Delargey’s comments, that the “new” jobs are likely to be reflective of Belfast pay levels rather than those enjoyed by their Dublin counterparts
Posted by on Apr 15, 2008 @ 12:43 PM
