The Government is keen to help the stock exchange in Dublin “recover” from several high-profile exits and a paucity of new flotations in recent years and is examining if it can introduce tax incentives to boost activity, according to Neale Richmond, Minister of State for with responsibility for financial services.
Mr Richmond confirmed the Government is in talks with the Euronext Dublin over a proposal by the exchange for tax-efficient savings products that would encourage retail investment in Irish stocks.
“The scheme [proposed by Euronext] has got quite clear merits. We’re keen to talk to them further. We want to make sure that we can help them recover,” he told The Irish Times on Thursday in advance of a dinner promoting the Irish industry in London.
“We’re open to any good suggestions that are reasonable. [But] they’ll all have to be taken into the context of the budget.”
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Two of the biggest companies on the stock exchange in Dublin, building materials group CRH and betting company Flutter Entertainment, both exited recently while another heavyweight, packaging business Smurfit Kappa, is due to leave shortly. Only three new listings have happened in the past five years while the number of companies on the exchange has halved in the past 17 years.
Mr Richmond said the challenges faced by the Irish exchange are not unique to the Republic and have affected smaller bourses across Europe, but the Government would continue to hold discussions with the industry to see what it could do to help.
However, European state aid regulations could inhibit any attempt by the Government to bring in new tax laws designed to assist the Irish sector.
Mr Richmond flew to London on Thursday to address a dinner hosted by Enterprise Ireland at the Irish embassy in Belgravia. The gathering was focused on the financial technology sector and attendees included Irish diaspora figures working in the industry in Britain and also IDA Ireland multinational client companies who invest in the sector globally.
The Fine Gael TD, who took on the financial services portfolio 11 weeks ago after he was considered for a full Cabinet position by new Taoiseach Simon Harris, said the Government is targeting further growth across the industry.
The Minister also addressed comments about the financial services sector made this week to The Irish Times by Rachel Reeves, the UK Labour politician who is odds-on to be the first woman appointed chancellor of the exchequer if, as expected, Labour wins the UK’s election on July 4th.
Ms Reeves confirmed that a Labour government would seek a better post-Brexit deal with the European Union for City of London financial workers, including more recognition of qualifications. She acknowledged there would have to be “give and take” in any fresh post-Brexit negotiations with the EU, although she did not get into specifics about what a Labour government might offer to Europe in return.
Mr Richmond said the Government wants Britain to have “a closer relationship” with the EU but he warned it could not expect a “free pass” to get whatever it wanted. The EU has also repeatedly warned that Britain will not be allowed “cherry pick” what it wants from EU membership.
“At EU level, Ireland will always push to keep the door open for more discussions,” said Mr Richmond. “We’ve always said we want to be the UK’s best friend in the European Union. Not just when it comes to financial services, but more generally.”
The Irish financial services sector, which employs 57,000 workers, is closely linked to the sector in the City of London, as many big UK banks and insurers have back-office operations in Dublin.
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