Wednesday 21 February 2018

Brexit: IDA faces new French smash and grab bid for London City jobs

IDA ceo Martin Shanahan and chairman Frank Ryan reporting on the first half of the year results in Dublin. Photo: Maxwells
IDA ceo Martin Shanahan and chairman Frank Ryan reporting on the first half of the year results in Dublin. Photo: Maxwells
Donal O'Donovan

Donal O'Donovan

THE IDA will seek additional resources from Government amid signs the battle to win investment in the wake of the Brexit vote is intensifying.

France yesterday launched a major push to win bankers away from the City of London, a signal that the gloves are coming off in the war for jobs and investment.

France is offering extended tax holidays for executives who move back from abroad, allowances for perks like school fees and promised that regulators in the Bank of France will fast track licence applications from financial firms looking to relocate.

Meanwhile, in Brussels the European Parliament vowed to step up its campaign for tax harmonisation inside the European Union - despite Irish opposition and Britain's move this week to slash its key business tax.

Here, IDA chief executive Martin Shannon said his agency's drive to win new business for Ireland kicked off within hours of the result of the British vote being known. "This wasn't a surprise, we had our homework done," he said.

Read More: Government must be ready to fight for the 220,000 jobs in food sector

He played down the impact of UK Chancellor George Osborne's decision to slash corporation tax to 15pc, saying it was not unexpected and still above our rate.

But he admitted that high personal taxes here, especially the low level when the top rate of income tax kicks in, is being raised as a concern by prospective investors.

"It is clearly an issue that comes up, I'm on the record as saying I believe we need to ensure personal tax rates are competitive," he said.

The IDA began contacting new and existing clients in the immediate wake of the result, and has seen heightened levels of activity ever since the result came in, he said.

Last year was a record year for inward investment, and the trend continued in the first half of 2016, he said.

The 115 investments announced in the first half of the year will add 9,100 jobs, and is up on the same period in 2015.

Traditionally strong sectors for Britain including financial services and technology investment are among key targets for Ireland, he said.

The IDA chief said he met Central Bank Governor Philip Lane on Monday and "shared perspectives" on the impact of the Brexit and potential shift of finance firms from London to Dublin. 

Read More: Exit talks need 'cool heads and time' says Honohan

The two agencies will keep in close contact he said, but will not discuss specific projects.

Funding for the IDA has increased from €130m in 2014 to €155m last year and will be higher again this year, he said. An additional 35 staff have been hired on three-year contracts and the agency is now looking at the need to extend that programme, he said.

"We are still in the market for more resources though we are conscious of the tightness of the public purse," he said.

The French government pledged yesterday to make its tax regime for expatriates the most favourable in Europe in what's seen as a land grab for London banking business displaced by Britain's decision to quit the European Union.

"We want to build the financial capital of the future," Prime Minister Manuel Valls said at a hastily arranged visit to the annual conference of France's financial industry lobby Europlace.

"In a word, now is the time to come to France."

It's a radical shift for France's financial sector which has often complained of government ambivalence towards the industry.

Brexit aftermath, p3

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