The amendment and the resolution are interesting not so much for what they contain but for what they do not contain. At the last minute yesterday the Minister for Finance very properly, and I give him credit for that, decided that he would not proceed with what it had been indicated earlier he would be proceeding with. Long and complicated as this amendment is, and, therefore, the Financial Resolution, it does not contain the objectionable features which the Minister for Finance announced earlier, through his various officials, that it would contain. The major part of the amendment and by far the most damaging part to people who hold life assurance policies has been dropped and for that we must be thankful. However, that has been done not so much through the processes of the House but outside the House. Increasingly legislation is made, and unmade, outside the House.
In so far as the limited amount of advice I could get on this extremely technical matter overnight indicates I do not see that there is anything fundamentally objectionable in the amendment because the serious matter has been entirely excluded from it. One of the effects of it — I mention this in passing because even though it is damaging to the public at large and to people who insure their lives, it is only a pale shadow of the damage that would have been done if the Minister had gone ahead with his proposed amendment — is that the levy which is payable on life assurance policies will no longer be allowable as an expense. Therefore, the net cost to the policy holder of the levy will be increased from 1 per cent to 2 per cent but that at least is only on new business written from now on. At least people will go into that with their eyes open and will know in advance what the levy is going to cost them. The fact that it is being increased by two-thirds is regrettable but at least people will know it. It is not retrospective taxation and therefore, it is unlike some of the Minister's other proposals. It is not objectionable in principle, whatever one might say about the merits or demerits of it otherwise.
Big and long as the amendment is, the thing that distinguishes it and makes it most remarkable is what is not in it, in particular the proposal of the Minister to levy full corporation profits tax of 30 per cent of the investment income funds of a life assurance company irrespective of whether it made a profit or a loss without any allowance on that 30 per cent for expenses. That proposal, which happily the Minister has dropped, was a new concept in corporation profits tax or in any kind of taxation here because an artificial statutory profit was being declared. Whether it was made in practice or not, a corporation tax at 35 per cent was payable on that 30 per cent. In effect it was a levy of 10½ per cent of the entire fund and would have operated retrospectively.
The Minister is to be congratulated that at the very last minute he declined to go ahead with that provision. Directly arising out of that, and out of this Financial Resolution, one must ask, what are the Minister's intentions in regard to section 85 because that section, this amendment and the Financial Resolution, are entirely bound up together? It just happens that the amendment was being put in the chapter of the Bill that related to corporation tax because it was a corporation tax provision. In fact, it is entirely bound up with section 85 and what is proposed in it. Since there are not going to be these onerous changes in the law in relation to the corporation tax, the provision in section 85, presumably, will only operate for this year. On what basis does one justify a once-off provision of that kind other than frantic searching around by the Government for some way, no matter how hamfisted or idiotic, of raising a substantial amount of money in the short term? Is the Minister prepared to look at the amendment to that section to enable this payment which would be made this year to be regarded as a credit for corporation tax that would be payable in future years, particularly now that the corporation tax will be increased to a fairly significant degree by the amendments to this resolution?
If the Minister considers, as clearly he does, that his proposals in regard to corporation tax were improper, he cannot but consider that the proposals in regard to the stamp duty levy contained in section 85 are improper. Indeed, he has already conceded as much by his change of the rate of stamp duty from 15 per cent down to 9 per cent. I should like to re-emphasise, because the matter is a technical one, that the people who will have to bear the burden of this are not insurance companies in the last resort. That impression is given because it is fashionable nowadays to be seen to impose taxation of all kinds and levies of all kinds on what are called financial institutions.
The people who have to bear it in the last resort are not the insurance companies or the people who invest substantial sums of money with insurance companies in the guaranteed income bonds and guaranteed growth bonds schemes which the Minister is quite properly seeking to get at. The people who will suffer are the with-profit policy holders of the companies concerned, the ordinary people who do not have large sums of money to invest but insure their lives for the protection of their wives and children by paying an annual, six monthly or quarterly premium. Very often those people find it very difficult to do that but in the last resort they are the people who will have to bear the brunt of what is proposed in 1986 in section 85. Now that the Minister has had, very happily for everyone, considerable second thoughts on the whole question of corporation tax, I would ask him to look again at section 85. I ask him to accept the amendment down on that section which would get over this difficulty as best one could in the circumstances and, at the same time, give the Exchequer the revenue it so frantically seems to need at present.
It is very unsatisfactory that the Minister should have introduced this resolution with perhaps a 20 or 30 seconds speech in which he said the details can be gone into on the amendment. As a result those of us who speak on it are given no information by the Minister, but he has the right to reply. At the best of times that is somewhat unacceptable. It is particularly unacceptable when the amendment is enormously complicated. It was circulated apparently at about 6 o'clock last evening, affording people very little opportunity to seek advice on it. Nonetheless we are expected to conduct a debate on it. It is just another aspect of the entirely unsatisfactory way in which the debate on this Finance Bill, and Finance Bills generally, is being conducted.
The debate is really a bit of a farce. Last evening we got to section 5, when suddenly every section up to 26 was guillotined through. I cannot see us getting beyond the first two or three sections today. They deal with this DIRT tax and several hours at least will have to be devoted to a debate on that topic, with the result that anything from, say, section 30 onwards has virtually no hope of being debated today.
I shall finish on this point, as someone who was elected to this House by some section of the people. It is no longer acceptable that the House, which they thought was their legislature, has no function in relation to these matters, that the financial legislation in effect is being handled by officials of the Department of Finance and of the Revenue Commissioners. The Constitution of Ireland does not contemplate that situation. We had better rectify it because it is a very serious situation for us. This resolution, and that amendment on which it is based, are the proof of the absolute truth of what I say. That truth is unpalatable and it simply cannot go on.
