Tuesday, 7 February 2012
Dáil Éireann Debate
4. Deputy Micheál Martin asked the Taoiseach if he discussed with David Cameron the banking regulation in general and specifically the City of London and IFSC competitiveness; and if he will make a statement on the matter. [3292/12]
6. Deputy Gerry Adams asked the Taoiseach if he raised the issue of the murder of human rights solicitor Pat Finucane during his meeting with the British Prime Minister David Cameron on 12 January 2012. [3298/12]
9. Deputy Richard Boyd Barrett asked the Taoiseach if he discussed with Mr. David Cameron the issue of the proposed financial transactions tax and the possible implications for the City of London and the IFSC; and if he will make a statement on the matter. [6590/12]
As I stated in the House a few weeks ago, I met the British Prime Minister, David Cameron, on 12 January in London, at which time we discussed a range of matters of mutual interest to both our countries and to our bilateral relationship, including developments in the eurozone and Northern Ireland.
In our discussion on developments within the European Union and the eurozone crisis, we discussed the evolving situation with the draft intergovernmental treaty agreement, which, as the House knows, was agreed last week by 25 EU member states, with the Czech Republic and Britain deciding to stay outside.
Prime Minister Cameron and I also discussed the idea of a financial transaction tax. I set out the Government’s position that a financial transaction tax in the eurozone would adversely impact on the competitiveness of the IFSC in Dublin relative to the City of London. Such a tax should apply globally.
We did not get into a discussion on the details of the current proposals on banking regulation. As Deputies know, this matter is currently being dealt with by finance ministers at ECOFIN and the European Commission has proposed a wide range of regulatory reforms to the financial sector. One of the key roles of ECOFIN is to adopt such proposals in co-decision with the European Parliament.
As I have previously stated in the House, during our meeting the Prime Minister and I discussed recent developments in Northern Ireland. I also raised the matter of legacy issues, including Pat Finucane and the Ballymurphy and Dublin-Monaghan bombings. Deputies will be aware the Finucane family obtained leave for their judicial review process some weeks ago in Belfast. That hearing is expected to take place in May.
I hosted the 17th summit meeting of the British-Irish Council, BIC, in Dublin Castle on Friday, 13 January. It was an excellent meeting which provided an opportunity for BIC member Administrations to discuss current economic developments, with a particular focus on the many challenges we all face from youth unemployment. We agreed to examine further the effectiveness in our respective jurisdictions of initiatives for youth unemployment and to report on this at the next summit of the British-Irish Council, which will be hosted by the Scottish First Minister, Alex Salmond, in June. We also had a discussion on the misuse of drugs, focusing particularly on rehabilitation. The misuse of drugs workstream is one of 11 workstreams under the British-Irish Council and is chaired by Ireland. The discussion at the summit on the misuse of drugs was led by the Minister of State, Deputy Róisín Shortall.
Deputy Micheál Martin: I regret that Question No. 4 has been grouped with Questions Nos. 5 to 9, inclusive. Question No. 4 deals specifically with the issue of the IFSC transaction tax and the City of London, Question No. 6 deals specifically with the Pat Finucane issue and Questions Nos. 7 and 8 deal with the British-Irish Council. All are distinct and separate issues. In this regard, I ask for the Leas-Cheann Comhairle’s forbearance——
Deputy Micheál Martin: Life is as it is. I ask that I be allowed to respond first to the Taoiseach’s response to Question No. 4, following which I will come back on Question No. 8 in regard to the British-Irish Council.
Deputy Micheál Martin: Yes, Question No. 9 deals with the same issue as Question No. 4. As regards the Taoiseach’s discussions with the British Prime Minister on the financial transaction tax, it appears the momentum behind this is well under way, in particular given the announcements made by President Sarkozy. However, it may be that this will only last as long as the election campaign in France. We will have to wait and see what happens in that regard. I would like confirmation and clarification from the Taoiseach as to the Government’s position in this regard. This is not only about Ireland, Dublin and the City of London. I would argue it is about European and eurozone competitiveness with the rest of the world. It is important that Ireland should adopt a joint approach with the British Government on the overall issue of a financial transaction tax and a European approach regarding European competitiveness vis-à-vis Asia or the so-called BRIC countries or in respect of what is happening globally. The world is much more mobile today than it was.
I refer to a matter of greater importance. A statement was made in December that the common tax base was to be put on the agenda in the context of enhanced co-operation. The Taoiseach mentioned earlier that he intended to discuss this with Prime Minister Cameron. As the Taoiseach is aware, the common consolidated corporate tax base is an extremely serious issue. The Department of Finance has commissioned research that indicated this proposal would have a significant impact on Ireland’s gross domestic product, GDP, and would result in a reduction by a number of percentage points in Ireland’s GDP. Did the Taoiseach discuss this matter in detail with Prime Minister Cameron? Did they agree on a joint approach in respect of the evolution of Europe’s position on a common consolidated corporate tax base?
The corporation tax rate is central to Ireland and the International Financial Services Centre, IFSC, provides 33,000 jobs on foot of a very far-seeing initiative by a former Fianna Fáil-led Government in the 1980s. More than 33,000 people work there at present and it is of crucial importance to Ireland. Both a financial transaction tax and the common consolidated corporate tax base would be harmful, as would any attempt to undermine Ireland’s corporation tax rate on foreign direct investment in general and in particular in respect of the IFSC. In this context and in the context of the fiscal treaty, the Taoiseach is aware that before the second Lisbon treaty referendum, the then Government secured a protocol that safeguarded Ireland’s corporation tax rate and which entailed all the other European states signing up to a commitment not to undermine or to make any attempt to affect Ireland’s corporation tax rate. Has a similar agreement or protocol been attached to the European Union fiscal treaty? Alternatively, is there an understanding that as this intergovernmental approach develops, there will not be moves to undermine Ireland’s position in respect of corporation tax?
The Taoiseach: The Deputy raised a number of important questions. The common consolidated corporate tax base, CCCTB, is a subject of a paper prepared by the European Commission. Deputy Martin is aware the European Commission is the body responsible for the promotion and initiation of legislative measures within the European Union. As a member of the European Union, Ireland has agreed to engage in the discussions about this matter. I can inform the Deputy there is much resistance to that matter around the European table. It was not discussed in any shape or form or to any extent at the European Council meeting and was not the subject of a discussion between Prime Minister Cameron and me. However, a financial transaction tax was the subject of discussion between Prime Minister Cameron and me. Clearly, this is an issue Deputy Martin rightly identifies as being broader than simply being between Dublin and London. It also is of serious import to people in Frankfurt, Amsterdam and Paris. I note the comment of the French President that he intends to introduce unilaterally a financial transaction tax in France. While that of course is his right if he wishes to do so, it is the view of the Government that were a financial tax to apply, it should apply on a global basis. One cannot have differences of impact between, for instance, the cities of London and Dublin.
Deputy Martin is correct when he stated that 32,000 people are directly employed in the International Financial Services Centre in Dublin, which is the location of more than 5,000 firms. Moreover, substantial indirect employment also is generated and the sector contributes €2.1 billion in corporate and payroll taxes to the Irish Exchequer. International financial services account for 10% of multinational employment and represent an estimated 7.4% of GDP. In addition, 5% of European Union international financial services activity is carried out from Ireland. The fundamental goal of public policy in respect of the IFSC is to develop an international financial services industry in Ireland that is built on sustainable, responsible and internationally respected foundations to maximise both the number of jobs and the quality of the employment, as well as the future sustainability and growth prospects of the industry. The Government believes it is necessary to continue to adopt, articulate and implement a clear vision for the future of the IFSC and to demonstrate Ireland’s commitment to promotion and growth there.
The Deputy also will be aware that I announced a new IFSC strategy for the next five years, which came from the industry itself. It reckons it is possible to achieve 10,000 net new jobs in that period and the strategy sets out the key drivers in this regard. Its foundations are a tax system and tax framework that are competitive and internationally respected, as well as a regulatory regime that supports responsible business operations and ensures effective oversight and control. As Members are aware, the oversight of that and the clearing house in respect of the IFSC and all these areas are vested in the Department of the Taoiseach. The strategy I launched recognises and fully supports the critical importance of a credible, responsible and proportionate regulatory system, the capacity and reputation of which will provide in itself a source of competitive advantage for this jurisdiction, attracting reputable, responsible and sustainable financial services activity. I have met numbers of representatives of the firms in question and they always have proposals and observations to make on the manner in which the IFSC is structured and run and I appreciate that. The sector is convinced that given the system that applies in Ireland, it will be possible to achieve 10,000 new net jobs in this industry over the next five years in the green area and in the Islamic finance sector, which is growing rapidly. From this perspective, the Government obviously understands its absolute importance.
I can inform Deputy Martin there was no discussion, good bad or indifferent, on the financial transaction tax or the corporate rate of tax at any of the Council meetings. I discussed it specifically with the British Prime Minister, who is completely opposed to it unless it was to apply globally. While tax obviously is a national competence, universal endorsement is required if there are to be changes across the board. While individual countries may wish to take measures, they cannot apply in an overall universal sense. It is a very important industry for Ireland and on foot of the publication of the strategy, all concerned are anxious to drive it on. I make the point that a chief executive from the United States observed to me the reason that organisation shifted its primary financial products to Ireland was because of the passion — that was the word used — of its young people to do the job and to move on to evolving new financial instruments and products, which are of enormous interest to Members in respect of the creation of jobs.
Deputy Micheál Martin: It disturbs me there was no discussion on the common consolidated corporate tax base, CCCTB, with the British Prime Minister because Ireland must work much more proactively on this serious issue. Its potential impact on multinationals coming into Ireland and investing further is very serious and would be negative. The Department of Finance commissioned research that makes this point. However, Ireland appears to be adopting a silent approach in respect of corporation tax and the CCCTB.
Deputy Micheál Martin: We have gone along with Europe on the basis that we had better be co-operative and so on, whereas up to approximately two years ago, Ireland’s position was to oppose the CCCTB as a policy and as an initiative. There has been a change, whereby Ireland now is engaging in discussions. In addition, I refer to French statements on corporation tax and note their recent pronouncements on this matter have been clear enough as to the future direction they seek in this regard. Ireland should be clear that the European Union fiscal treaty does not represent a threat to its corporate tax rate. Moreover, people must be assured in respect of the enhanced co-operation approach, which is in line with the intergovernmentalism that is being driven by the German and French Governments in the context of this treaty. It must be emphasised that this does not pose a threat to Ireland’s corporate tax structure. People are not clear about the matter to which I refer, particularly in light of the various pronouncements that have been made in respect of it. We have not adequately asserted how central to our economic regeneration are our corporate tax structures.
The Taoiseach: We are asserting that fact and we have made our position very clear. Since the day after I was appointed as Taoiseach by this House, I have resisted a great deal of pressure in the context of changes to the corporate tax rate. That rate will not change and will remain at 12.5% — 11.9% effective — across the spectrum. That certainty and decisiveness and the position I have adopted have been responsible, in part, for the restoration of the reputation of the country. There is not any confusion about this matter, neither is there a lack of clarity in respect of it. People are absolutely clear on what is our corporate tax rate and it will not be moving either way.
My position on the CCCTB has not changed. The fact that it is the right of the Commission to initiate legislation and promote proposals for such legislation does not mean that by participating in discussions on these one must change one’s position in respect of them. Far from this matter being on the back burner, when the relevant discussions are held in the future we will participate in them. The issue of corporate tax levels was not discussed at the European Council meeting. The fiscal treaty has no bearing on that matter. We are very clear on that point. This is an issue upon which Ireland has not equivocated in any way. We have been very clear and decisive. The announcements made by a number of foreign investors in the country give credence to that. The latter are very clear with regard to what is on offer when they come here.
I reiterate that when I visited the Deputy’s city in recent days, it was made perfectly clear to me that there are 800 vacancies in the Cork region for IT personnel. We must identify where the changes are occurring and consider how we can take steps, on behalf of our young population, to ensure we can meet the demand which exists. Prime Minister Cameron and I were extremely clear with each other in respect of the financial transaction tax. I can testify that equally strong views — which would align with my own — were expressed by other leaders present at the European Council meeting.
Deputy Gerry Adams: I thank the Taoiseach for raising the issues of the Ballymurphy killings, the Dublin-Monaghan bombings and the killing of Pat Finucane with the British Prime Minister, Mr. Cameron. I would like to recap the position. Sunday next will be the 23rd anniversary of the killing of Pat Finucane. His family has been campaigning since his death occurred. Sinn Féin is totally against any hierarchy of victims and has argued for an independent international commission to consider all of these cases and deal with the various victims and those who were hurt in the course of the conflict. In this instance, however, the British Government has acknowledged that there was collusion. Every member of the squad which killed Pat Finucane — an officer of the court and a human rights lawyer — was either a member of the British army or an RUC special branch agent. There is no doubt at all about that.
The British Administration is currently in breach of the Weston Park agreement, an accord between the two Governments. The Dublin-Monaghan bombings occurred almost 40 years ago and successive British Governments refused to deal with any of the inquiries or investigations into them. In the case of the Ballymurphy killings, there is no doubt the British paratroop regiment killed all of the citizens involved and then went on to Derry to kill more on Bloody Sunday. Its members then went to Belfast and killed further civilians on the Shankill Road, on Springhill Avenue and in other parts of the city.
The Government must develop a strategy for dealing with these matters. It is a deeply traumatising obstacle to the furtherance of the peace process if these citizens are left outside it and if the British Government, which is clearly responsible for the killings to which I refer, is not prepared to give the families involved their entitlements. I ask the Taoiseach to develop a strategy such as that to which I refer. He stated at one point that he would raise this matter with the relevant people in the USA and seek their support. It is clear that Prime Minister Cameron has no responsibility for events which took place almost 40 years ago and others which occurred 23 years ago. However, the fact that he will not deal with the issue poisons the relationship between the British Government and a new, changing Ireland which is putting war behind it. I appeal to the Taoiseach to come forward with a strategy.
Justice for the Forgotten is a group which comprises the families of the victims of the Dublin-Monaghan bombings and which is not being provided with funding. We refer to victims, we deplore what occurred and we try to ensure that events of this nature will never happen again. Surely, therefore, the group to which I refer should be at least given the minimum amount of funding it requires. Sinn Féin Teachtaí Dála from Dublin, Deputy Ó Caoláin and I have raised this matter a dozen times in the House. I ask the Taoiseach to provide a commitment that the minimum amount of money this group requires to continue its work will be given to it by the Government.
The Taoiseach: Deputy Adams and I can agree on this matter. Before he became a Member, the House agreed an all-party motion which was very clear in calling for a public inquiry into the murder of Pat Finucane. That is accepted by everyone in the Dáil. The British Government has clearly admitted that collusion took place in this instance. Prime Minister Cameron was very forthright, strong and correct in respect of the Blood Sunday inquiry. I have a difference of opinion with him in respect of the matter to which the Deputy refers. As a result of what Judge Cory stated and on foot of the agreement between both Governments which was made at Weston Park, I am of the view that holding a public inquiry would be the correct route to take. I am still of that opinion.
I cannot direct any other government. However, I raised this matter with the Prime Minister and I will continue to raise it with him. I am aware that my meeting with him took place on the day before the Finucane family was granted a judicial review which, I understand, is to be held in May. I do not know the position with regard what has happened in respect of the Queen’s Counsel de Silva being appointed or any other related matters. We remain of the view that the best thing to do would have been to hold a public inquiry, specifically in light of the Weston Park agreement and because Judge Cory recommended that one should take place. I said that to Geraldine Finucane directly when I met her and her family in Belfast on the occasion of presenting an award to her. I undertook to raise this matter in the United States and I will do so when I have the opportunity to meet representatives over there.
As stated in the House on many occasions, I do not believe in any hierarchy of victims. Regardless of which side they were on, those who were shot, murdered or died as a result of the Troubles were lost by their families and loved ones. In the case of Pat Finucane, there was an agreement between the two Governments to the effect that whatever Judge Cory recommended would happen. In this jurisdiction, the Smithwick tribunal was established as a result of the agreement to which I refer and on foot of the judge’s recommendation. It continues to be my preference that this is what should happen in the case of Pat Finucane and I informed the Prime Minister directly of that fact. In light of what Mr. Cameron did in respect of the inquiry into the Bloody Sunday killings in Derry, I made sure to make that point very clear to him on behalf of all the representatives here and of the people of our country.
Deputy Gerry Adams: I thank the Taoiseach for raising these issues with the British Prime Minister. My colleagues and I were involved in very close negotiations with the British Government for at least ten years in a very open way. I know how it works and what it takes to get it to come to conclusions. The decision to establish the Saville inquiry after decades of campaigning by the families and others came to be made not least because some very good work was done on the ground assisted by the Irish Government at the time. Martin McGuinness and I were with Mr. Tony Blair in Chequers and he had a report; he left us to read it and it changed his mind.
It is not enough to raise the issue with the British Prime Minister. It is not enough to state there is a difference of opinion. It is entirely within the grasp of the Government to bring forward such a report on Pat Finucane’s killing, the Dublin and Monaghan bombings or what happened in Ballymurphy and present it to Mr. Cameron. It is entirely within the width of the Government to enlist its diplomatic and consular services to raise this issue globally. I recommend this approach and know how it works.
I also know how deeply wounded all the people concerned are. I lost family members also. I hear the Taoiseach railing against IRA killings, as he is perfectly and fully entitled to do. I regret that there was a war at any time in the history of the island. We need to deal with these legacy issues, the issues which are subject to acknowledgement and admissions by the British Government that it was involved — in the case of Pat Finucane there is an agreement between the two Governments. I recommend this approach and ask the Taoiseach to consider making a solemn declaration to the Dáil that he will do everything possible in his power to seek closure for the families.
The Taoiseach: All of the facts, in so far as we know them, lead to the inescapable conclusion that there should be a public inquiry. I do not say this just as a public representative or as Taoiseach. The agreement between the two Governments at Weston Park was that whatever Judge Cory recommended would be followed through. This was very clear and straight. Judge Cory recommended that there be a public inquiry into the murder of Pat Finucane. We know about collusion which has been acknowledged.
The British Government decided not to hold a public inquiry but to appoint a Queen’s Counsel to go through all of the documentation — all 1 million pages of it. The Finucane family was very aggrieved by this because their clear understanding was that there was agreement between the two Governments that Judge Cory’s recommendation would be followed through. They were upset, as they told me to my face. We support the holding of a public inquiry.
For my part, I will follow through on my conviction. I do not know what will happen in terms of the judicial review which will be held in May, but I will continue to raise the matter on each and every occasion on which I have an opportunity to do so with the British Prime Minister. I cannot speak about what will happen at the judicial review in May, as I am not aware of what work is being undertaken by the Queen’s Counsel, but my view, to put it simply, is that the Weston Park agreement should be honoured, that the recommendation of Judge Cory should be followed through, and that there should be a public inquiry into the murder of Pat Finucane. I will continue to raise this issue on each and every opportunity on which I have to do so.
Deputy Richard Boyd Barrett: I want to return to the financial transactions tax. This is one of the instances in which people from the United Left Alliance have a very different view from the political establishment on both sides of the House. I am amazed that in a situation where Europe faces its gravest economic crisis since the 1930s and this country faces its gravest economic crisis in its history — we all know the crisis was caused by the anarchic casino-like behaviour of the financial markets — the strategy of the Government, with Mr. David Cameron’s Government, is to block a tiny measure to regulate and rein in these same financial markets that have wrecked the European economy. The excuse that we cannot do it unless everybody else in the world does it also is pathetic because it is a recipe for never doing it, as the Taoiseach and Mr. Cameron well know.
I find it amazing that the Taoiseach, like the previous Government, has rammed poisonous destructive austerity down the throats of the people, ordinary citizens who bear no responsibility for the economic crisis, and says he is being made do it by the European Union and the troika. However, when one half decent proposal comes from the European Union, that we should put a tiny tax on the crazed financial markets that caused the crisis, we cannot do it because it is too difficult and would wreck the economy. We can wreck the lives of working people, force hundreds of thousands into mass unemployment, send tens of thousands abroad by way of forced emigration, but we cannot put a tiny tax on the financial institutions which wrecked the economy, as well as the entire European economy.
How will we ever have a financial transactions tax if this is the attitude? The previous Government which bankrupted the country made similar arguments about the property sector; it called on us to look at the employment created in property development and the stamp duty received and stated it could not possibly do anything to dampen the sector because of the economy’s dependency on it. It seems the Taoiseach wants to do the same with the financial services sector. This is very shortsighted. Any short-term advantage the Taoiseach or Mr. Cameron may think they will get from——
Deputy Richard Boyd Barrett: Is it not the case that any perceived short-term advantage — the Government has not given any statistics or figures to back up the assertion that jobs will be lost in the Irish financial services sector — by essentially blocking the imposition of a financial transactions tax on the financial markets in Europe will amount ot a pyrrhic victory because it will make the position more volatile? It is inevitable there will be further shocks on the international financial markets and we will be hardest hit, along with Britain, because we will have failed to put a tax on the institutions and diversify and sustain the economy, which is what we desperately need to do, by getting some money back and investing it in economic, industrial and manufacturing activity that could provide jobs and a sustainable economic future instead of riding on the backs of the anarchic financial markets.
The Taoiseach: The question is to ask the Taoiseach if he discussed with Mr. Cameron the issue of the proposed financial transaction tax and the possible implications for the City of London and the IFSC——
The Taoiseach: The point I was making was that President Sarkozy said he intends to introduce a financial transaction tax unilaterally in France. The same applies to any other country that wishes to do so. We have no intention of introducing a unilateral financial transaction tax here. The Deputy’s question was whether I discussed this——
The Taoiseach: ——with Prime Minister Cameron. The answer is “yes”. Did I discuss the possible implications for the City of London and the IFSC? The answer is “yes”. As was pointed out here before the Deputy came in, there are 32,000 people working in the IFSC.
The Taoiseach: That has neither relevance nor resonance in terms of people who are working and contributing to a €2.1 billion corporate tax payment to this country and payroll from the IFSC. The answer is “yes”. I did discuss this with the British Prime Minister and I made it clear to Deputy Martin that quite a number of other leaders around the table in Europe do not want to see a situation where unfairness in terms of competition or in terms of a financial transaction tax applies in one place——
The Taoiseach: ——and does not apply in another. The Deputy has a very different view: play for nothing, work for nothing and come in here and rant day after day. I am not sure that he ever did a day’s work in his life.
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