Government to review workings of IFSC group

The Government plans to review the operations of a controversial committee that acts as link between the International Financial Services Centre (IFSC) and the Department of the Taoiseach.

Members of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform yesterday criticised the continuing secrecy surrounding the IFSC Clearing House Group, chaired by secretary general of the Department of the Taoiseach, Martin Fraser, and whose members include representatives of domestic and foreign banks, such as AIB, Bank of Ireland and Citi.

Following claims that it was too secretive and gave the financial services industry unprecedented access to Government, it began publishing minutes of its meetings last year, but the work of its sub-groups continues to be done behind closed doors.

Wielding influence
Labour TD Kevin Humphreys argued yesterday that the sub-groups, which focus on areas such as asset management, banking, funds and insurance, wield more influence than the overall organisation.

He pointed out that the sub-groups had discussed proposals for a financial transactions tax at 13 meetings between October 2011 and May last year. The Government decided against introducing such a charge.

Mr Fraser, who appeared before the joint committee yesterday, agreed that the Irish financial services industry was unlikely to welcome the tax, but explained that the Government had decided against introducing it because of fears that its impact on competitiveness could cost jobs. “If there wasn’t one in London, we could lose out to London,” he said.

He told the committee that the Government is likely to review the group’s operations over the summer. Mr Fraser pointed out that it has been in existence since 1987 and might need to “refresh how its work is done”.

He added that the focus of its work is on developing the international financial services industry in the Republic in order to create jobs, and indicated that this would be the emphasis in any review.

Asked about reports that 21 measures recommended by the group were included in the 2012 Finance Act, Mr Fraser said that the Department of Finance determined tax policy.

He said that if a provision sought by the financial services industry was included in a Finance Bill, it was probably as a result of direct lobbying of that department rather than anything discussed by the Clearing House Group.