IDA IRELAND warned the Government of the potential for increased competition from the North for inward investment when a plan to enable IFSC firms to move some of their operations across the Border was being finalised, official records show.
The initiative, introduced in April, is designed to address a shortage of skilled financial services workers in the Republic by helping companies to establish offices in the North, where there is a surplus of such graduates. Companies in the funds administration area are expected to take advantage of the facility.
IDA Ireland made no public comment when the plan was introduced in Belfast by Brian Cowen, then taoiseach designate, and Peter Robinson, then first minister designate. While it is understood that IDA Ireland did not oppose the plan, neither did it actively support it.
Records released under the Freedom of Information Act show that IDA Ireland sought information on the chronology of events and contacts with the Northern Ireland side when it was briefed on the plan by the Department of Finance on March 27th, less than three weeks before the statement from Mr Cowen and Mr Robinson.
"IDA stressed the success achieved in the regionalisation of financial services in Ireland building from the strengths of the IFSC and potential for increased competition from NI [Northern Ireland] in the future," said a minute of the meeting.
The Department of Finance said in response that the "Irish funds industry was already considering locations in eastern Europe for back-office administration so the increased capacity in Ireland could help strengthen case for options on island of Ireland".
The minute also said that IDA Ireland "suggested that reciprocity could be mentioned" during a question-and-answer session with journalists when the plan was announced.
Responding, the Department of Finance drew attention to the aim of developing Belfast as a regional hub for British-based financial services "which, with strong Dublin links could build further relationships between UK and Ireland in financial services arena generally".
IDA Ireland also drew attention to the possibility of broadening the scope of the funds initiative in the financial services area generally. "The forthcoming US investment conference was mentioned in that context," it said.
IDA Ireland's spokesman declined yesterday to comment on contacts with the Government before the initiative was agreed.
"Belfast is one other location for financial services of many on the island. IDA will continue to seek these investments as it has done before," he said.
The Department of Finance said it was confirmed to the northern side that moving the operation of some funds "could be achieved within the existing regulatory framework which allowed the FR [Financial Regulator] to approve derogations from minimum activity requirements on a case-by-case basis". The minute also said the northern authorities stressed their interest in a positive statement from the Government to highlight their commitment to the all-island economy.
