Tuesday 21 November 2017

Simon Says... don't be taken in by all this Greek mythology

Simon Harris is the youngest star of the current Dail. Donal Lynch spoke to him about the Greeks, the future of the IFSC and the link between economy and society.

Simon Harris by Jon Berkeley
Simon Harris by Jon Berkeley
Donal Lynch

Donal Lynch

You badly want Simon Harris to be swinging on his chair like Tom Hanks in Big, a kid with magical access to a world of grown-ups. Or to burst in on him demonstrating how to solve some complex economic problem on a blackboard for Maistear Enda Kenny.

But even in the imposing setting of Leinster House, with its corridors full of scheming wonks - phones clamped to their ears in most cases - there can't be many as thoroughly grown-up as this precocious young fogey.

Once you get past the overwhelming nerdiness you realise that this 28-year-old is preternaturally capable, incredibly well-briefed and slickly eloquent. When you're young, he says, you have to work "twice as hard to prove your worth" - but six months after his appointment as Minister Of State at the Department Of Finance, Harris, with all eyes on him, has convinced many of his doubters.

In fact there's a feeling in some political circles that he's being eased into doing the heavy-lifting of media appearances while his boss, Michael Noonan, takes something of a back seat.

Harris has said it's part of his job to talk and he has much to talk about. It's only been a couple of days since a document, entitled 'Vision and Targets for IFS 2020', was leaked to the press and we learned that a new strategy, aimed at creating 10,000 jobs for the IFSC, will be considered by Cabinet next month.

The authors of the report have presented a draft strategy with 22 proposed actions to Harris, including, a "dedicated syndicate to fund FinTech start-ups" and the establishment of a "payments hub".

To certain sensibilities it might all sound quite exciting but does it presage further over-reliance on multi-national investment and financial services jobs?

"No. That was a leak so I won't get into the actual jobs figures,"he begins. "But there is a perception in Ireland, a myth really, that the IFSC is about big banks. It's not just that. It's about foreign direct investment, we want to keep that, but, for instance it's also about the people you see at the Web Summit - young people, my own age, coming up with new solutions in technology.

"In 1987 when the government of the time set up the IFSC it wanted to regenerate the docklands and create employment. There were three companies employing 55 people. At the end of 2014, there were over 200 firms employing 35,000 people and 10,000 of those are outside Dublin. There's a huge indigenous start-up element to it as well. One of my challenges is tackling that perception."

Harris says his role is joining up the thinking around the IFS. "When the Taoiseach appointed me the biggest challenge I faced is that there is so much work going on - you've Enterprise Ireland, the IDA, the Department of Finance, the Department of the Taoiseach - but they weren't meeting and talking and planning. I received Cabinet approval that we'd have a fortnightly strategy meeting of all of those agencies for the IFS.

"I also devised a new strategy to pull together interests across the public sector and interact more with industry. We're trying to put together an action plan."

Besides the document leak the other big financial story of the week has, of course, been Greece. The Simpsons suggested that Europe might put the country up on eBay but in the real world the Greeks and the Germans are negotiating. If, despite the public mood in Germany, the Greeks do secure a deal, what does it say about our own Government's inability to secure a meaningful write down of our debt?

"That's another misconception," Harris responds. "Ireland has received four deals, so far. We've had the IMF reduction, we've had the promissory note deal, the interest rate reductions and we've had the extension of maturities. We now have retrospective capitalisation as a possibility but that would involve the Government exchanging shares in a bank for cash from Europe.

"There have been many game changers in terms of the Irish economy, so we have to decide whether we'd be better selling to many different entities rather than one European monopoly."

He's dismissive of the notion that Berlin's willingness to play ball with the Greeks lends a credibility to the stances of some of our own opposition parties.

"Sinn Fein aligning themselves with the new Greek government is worrying on a number of levels," he begins. "Before the last election Gerry Adams told us he was going to send the Troika and their money home, but the Troika money wasn't to clear bank debt, it was to pay for hospitals and schools and general public expenditure.

"The Greek government is already seeing that confrontation gets you nowhere and I'm encouraged by the fact that they want to sit down around a table and remain in the euro. I was struck by the fact that TD Paul Murphy was actually making greater demands for the Greek people than their own government was. There's a sense that some people are getting involved in the Greek situation for their own political gain in Ireland."

He says that the reason this is a fallacy is that our position is not comparable with the one in Greece. "There they still have 25pc unemployment and there you only get €300 per month social welfare for a year and then nothing. They've had to slash public pay across the board and leave go large numbers of public servants. We're not a crisis economy, even if some people want to compare us to one.

"The Greeks have gone through a level of austerity and pain that this Government chose not to put people through."

But boy, they did put us through quite a lot, particularly some in the business community. After his appointment last year Harris gave a speech to the Financial Services & Technology CEO Forum in which he lauded "you as entrepreneurs as our most valuable resource in terms of achieving a sustainable economic future for our country."

But how much does the Government really value entrepreneurs? Speaking after last year's budget, Mark Fielding, the chief executive of ISME was highly critical of the Government's treatment of small firms.

"Actually I think he had a point. There have been anomalies since kingdom come in how the self-employed are treated by the tax system in this country," Harris responds. "The tax reform plan has to be about more than reducing rates.

"We are looking at ways we can get SMEs more involved in procurement. You want them involved. It's a market worth more than €8bn. From February 1, there is a tender advisory service for an SME which has a query on procurement. We're doing meet-the -buyer events, we had one in Citywest. As the economy keeps growing you have to make sure we don't slip back to the ways of the past."

Harris says words to this effect about a lot of different topics and given that his generation has borne much of the brunt of the mistakes of the past it feels right that some of them should be in Government.

The queasiness one might feel about someone so young being a career politician is alleviated slightly when you learn that the impetus for getting into politics was his family's fight for services for Simon's younger brother Adam, who has a form of autism. Harris began campaigning for families, interacting on their behalf with the State. "Disability services is an issue of conscience for me, it's why I got into politics."

After a degree in journalism at DCU he was elected in the 2009 local elections with the highest percentage vote of any candidate in the country. He was elected as the youngest TD to the Dail in 2011 and became a vocal member of the Public Accounts Committee. He was unsuccessful as a candidate in last year's European elections - but many thought he was better off staying a TD.

In the months after his appointment as Minister Of State at the Department Of Finance he said that phasing out the Double Irish would give the country "first mover advantage" and he's supportive of the Government's counterbalancing move to shore up investment - the so-called knowledge development box.

How will this compete with similar schemes in places such as the city of London?

"A lot of countries already have similar products," he says. "One of the advantages of coming to things later than your competitors is that you have the chance to be the so-called 'best in class'. The Government could have legislated in the last budget for the knowledge development box, instead the minister has done it a better way and said we'll take 12 months and wait and see."

What about US President Barack Obama's announcement this week that he would pursue firms who avoided US tax overseas?

"We've no problem with President Obama and the US authorities doing whatever they need to do," he says. "I get irked that a lot of the anomalies in the US tax code system that can only be addressed in the US get blamed on us. For instance one of the things I've had to rebut was President Obama's statements on brass plate companies.

"Ireland has no interest in brass plates because they don't bring in any investment and actually increase our European contributions. The problem with them is actually caused by an American tax anomaly."

He continues: "The ending of the Double Irish was important. The Double Irish wasn't invented by a group of politicians scheming in a room. It evolved over time as tax experts playing one tax system off against the other. Minister Noonan always makes the point that Irish financial policy needs to be based on the three Rs - Rate, meaning the sacrosanct 12.5pc. The Regime, meaning things like the knowledge development box. And Reputation.

"When the Double Irish started becoming a reputational issue for the country, it made sense to end it."

Besides tax reform, Harris is good at articulating the overall value system that he thinks should underpin policy and despite his apparent enthusiasm for the merits of the whip - he's defended it in the past - he's not afraid to criticise his own party's perception problems.

"The thing we've gotten most wrong is that we haven't got the connection between the economy and society," he says. "It was societal issues that brought me into politics and that's the same for many people I think.

"At times we've sounded robotic. When we sold the 30-year bond on the public markets this week for 2pc. That means that for the next 30 years we actually have money to invest in public service, but we don't draw that connection in the public's minds.

"In a recent poll we did well on the economy but bad on caring about society. We need to make it understood that the economy and society only work properly together. I want to fix the economy not as an ends but as a means to doing something with it."

'Maybe because I'm no good at football'

The most condescending thing that someone has said to me about my youth since I became a TD is… "I could tell you quite a few anecdotes - but one stands out. There was this woman who I had to meet in Leinster House, and we'd done all the niceties and there was a pause - and she looked at me directly and asked me: 'When is the TD coming?'"

I wasn't asked to join the so-called five-a-side gang of young Dail deputies because… "Hmm, I actually don't know why - possibly because I'm no good at football? I don't know why, I suppose you'd have to ask them. I didn't feel left out."

If I had to choose between Simon Coveney and Leo Varadkar as party leader I'd choose… "Er, there is no vacancy at the moment. That's the cliche, isn't it? They're both very good and have a lot to offer, as would Frances Fitzgerald."

The best gift I've given recently is… "No rings (for his girlfriend) yet. I haven't had time."

I get my suits in… "I get a lot of them in Best."

Sunday Indo Business

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