New era begins as leaders seal deal
THE two men poised to take power North and South yesterday ushered in a new era of cross-border economic cooperation.
Taoiseach-elect Brian Cowen and First Minister-elect Peter Robinson agreed an innovative new deal to allow financial services firms here to share the banking jobs boom by setting up off-shoots in the North.
In a sign of the changing times, Mr Robinson held his first public engagement with Mr Cowen just one hour after being officially elected DUP leader-in-waiting and successor to Ian Paisley.
Mr Cowen will replace Taoiseach Bertie Ahern next month. Mr Robinson will succeed Dr Paisley as Northern Ireland's leader in June.
Getting straight down to business, both men hailed the new agreement as a "win-win situation".
Under the plan, thousands of financial services vacancies in the South could be filled by workers living over the border rather than by workers imported from eastern Europe.
Mr Cowen, who travelled to Belfast to launch the plan, said there would be great benefits for the all-island economy.
"I believe this is the first time finance ministers North and South have announced their intention to work together to facilitate the growth of the economic sector on an all-island basis," he said.
The North's new leader also said that it was a good example of the positive relationship between him and Mr Cowen -- who is due to be elected Taoiseach on May 7.
"To some extent we have provided you with some evidence of us having worked together and, of course, we want to ensure that there is the highest level of co-operation to the advantage of both our peoples," he said.
Under the deal, it is possible the financial services companies will continue to pay corporation tax here on jobs based in sub-offices in the North, thereby avoiding the higher British taxes on company profits.
Details of the scheme are still sketchy but the Revenue Commissioners and the financial regulator will decide on a case-by-case basis whether the company matches the minimum activity levels required of IFSC companies to avail of the tax breaks. There are currently around 9,000 vacancies in the financial services sector, which is concentrated in the IFSC in Dublin.
Emphasising the importance of developing the all-island economy, the Tanaiste said nobody needed to feel their identity was threatened by the enhanced cooperation
Mr Cowen said it was not possible to be specific about how many jobs would be created, but he emphasised that the agreement was in line with EU regulations and would not require any new legislation.
"There will be a need to have skills that are complementary to those in the Republic and we believe that Northern Ireland is the obvious place, rather than looking internationally in Eastern Europe and further afield," he said. Mr Robinson said he hoped that some of 9,000 vacancies in the Irish financial services sector could be filled by workers in the North on average salaries of around £30,000 (€37,500).
Although these workers will pay their tax in Northern Ireland, the development of a stronger all-island economy could bring other benefits to southern companies.
"This isn't about taking jobs off the Irish Republic, because there are vacancies," he said.
The package was being hailed in the North as potentially providing thousands of high-paid jobs.
The Government envisages a further expansion of almost 40,000 engaged in financial-related occupations by the year 2015.