I wish at the outset to thank you, a Cheann Comhairle, for allowing me to raise this important matter on the Adjournment. In so doing I will be permitted, I am sure, to relate to the background of this exercise and the proposal for a free port area in Cork.
Adjournment Debate. - Cork Free Port Area.
(Interruptions.)
Deputy Lyons should be allowed to speak.
The arguments going on in the precincts of the Chamber should be carried on outside the House, particularly the one between the Taoiseach and ex-Minister Collins. We might then have some order in the proceedings.
The action required for the setting up of a free port area in Cork emanated from the task force that was set up by the Government. It was first announced by the Taoiseach when he said in October 1983 that Cork needed a boost. The task force was set up towards the end of that year. A condition of the setting up of the task force was that they would report within six weeks. I am happy to say that they did report within six weeks. There finished the urgency as far as Cork was concerned. In May 1984 Minister Bruton announced that Cork was to get a free port area. It is important to remember that date and to keep in mind the Taoiseach's statement in 1983 that Cork needed a boost. It was not until early 1986 that the enabling Bill came to the House, more than two years later. We should also keep in mind that the task force reported within the six weeks which was required of them.
The recent draft proposals that we have been calling for during the last session of the Dáil eventually surfaced in recent weeks. In accordance with the attitude of the Government towards the Cork area we got a second rate set of draft proposals. I did not see them but the 21 members of the Cork Harbour Commissioners who received the draft proposals for their consideration totally rejected them out of hand. I will refer to a number of other areas that are linked with the free port area of Cork. I will indicate how the speed and efficiency of the local task force was not taken on board by the Government but rather that they have been guilty of delays, uncertainty and inactivity. I mentioned one of them already this morning. The ferry for Cork is essential. I appeal again to the Taoiseach to personally undertake the establishment of a ferry link with the UK. As I said before, we need equipment on the quay side for the free port area which is to be located at Ringaskiddy. The Government refused to sanction the amount of money, which is not great, for the provision of cranes on the quayside of the deep water berth.
Charlie did not even promise that for Cork.
As I said previously, a deep water berth without the facilities to operate is like a pub with no beer. The commitment is also lacking for Cork recently in the matter of the airport.
I want to come to two items in the draft proposals sent to the harbour board. (1) The rate of corporation tax for companies non-manufacturing was not made available in the draft regulations in the way that it applies in the other free area, namely Shannon. They were given 50 per cent, as is known throughout the country. (2) For the free port area to be a success it is reasonable to expect that the draft regulations would include that all goods entering the free port area would be free of VAT at the point of entry just as at Shannon. Why should it be different for Cork? That is why I ask that the regulations be re-examined. We will not accept second rate regulations, we want first class regulations. We are not, and I have no intention of indicating that we are, in competition with the other designated area of the country at Shannon, but we must have the same regulations. We will be no threat to Shannon if given those regulations; rather would we complement the activity that goes on at Shannon. I emphasise that we will not accept second class regulations for this free port area.
We are not second class citizens despite the Minister's, Deputy Barry's, acceptance of the position outlined recently at the dinner in Jurys at which I was present. The Government's image in Cork is in tatters. That goes without saying and for very good reasons. We had hoped, and believed, that the Government would at least respond to the cases that have been before them now for years as far as Cork is concerned. Yet in one week they produced a set of second rate free port regulations, having failed to respond as yet to the case for a car ferry service to the UK and ignored the advice even of Aer Rianta about what was a relatively small investment in the upgrading of Cork Airport.
We have had continuous assurances from Government Ministers and Deputies of the Government party in Cork that Cork is on the way back. As a contribution to that we were told that another special force, an IDA team, were out seeking industry for Ringaskiddy. The good people in that IDA team, I suggest, are out seeking industry for Ringaskiddy with their hands tied behind their backs by the draft regulations issued recently to Cork Harbour Commissioners for that area. In the end Cork has got nothing in the areas for which this Government have direct responsibility.
I am sorry, that is not quite correct. We did get something recently. We got the hell of a fine lecture from the Minister, Deputy Barry, in Jurys this night week that Cork deserved no more than second class rating. That was the tenor of his lecture to us and I was present listening to it. While many of the other 400 people there might have been surprised at that I was not surprised at it. I am aware that that sort of thinking reflects the attitude of the present Government in regard to the Cork area. The recent inaction by the Government in regard to Cork suggests that that is official Government policy in so far as any policy exists.
I am requesting that there will be no more dithering, delay or inactivity by this Government and by Ministers of this Government as far as Cork is concerned. I am demanding that the fate of the free port area be not undecided any further and that the regulations will be first rate, not second rate. For far too long we have seen the inability to take decisions, the uncertainty, the delays. I have spelt them out on this subject earlier in my contribution. I am demanding for Cork and the entire south-west region that these draft regulations be redrafted to provide for a first class free port area comparable to the other free port area that exists at this time.
I want to couple with that the other items that I have mentioned where action, not inaction, by the Government would help to restore Cork and the Cork region to the proud position they once held particularly in our industrial and commercial life. The region has been devastated and I accept readily that some traditional industries went out of business but that is an insufficent excuse for inaction by the Government. I am only too well aware of the statement by the Minister, Deputy Barry, and others when Fords closed down and the famous quote: "Fords will not be allowed to walk away from Cork" and for three years plus not another word was heard until very recently when the same senior Minister for Cork chastised the Ford people for not setting up an alternative industry. Deputy Barry, senior Minister in Cork, must stand indicted for the hopelessness that we find when we have not got a car ferry, an extension to the airport or a proper set of regulations for the free port area. If the Minister's idea of progress and that of members of his Government is reflected in the idea that the runway at Cork Airport is the same length and the same measurements as when the airport was opened 25 years ago then how can they expect Cork to return to the proud place it once held?
The mood and feelings of the people of Cork were very well reflected this night week in Jurys when all over the huge auditorium there, people were resentful of that Minister lecturing down to all of us. I have never witnessed a similar situation. We have all had to sit from time to time and listen to extroardinary statements from a Minister but out of respect for the office that the Minister might hold we accept them quietly, but the attitude of those people to their own senior Minister last Thursday night was something that I would not like to see recur or be part of again. The Minister lectured us and told us that we should be good second class citizens and accept second class treatment from the Government and that as a layman he had no idea of what way the finances in the Exchequer would be for improvement of the airport. This is the thinking, the attitude.
In conclusion I emphasise, speaking as a representative of a constituency in Cork, that I represent the feelings, the mood, the attitude of the people of Cork as reflected in the recent editorials of the Cork paper. We have had enough from this Government.
I went to a play once in London called "Anyone for Denis". It was a caricature of a funny man, Mr. Denis Thatcher. But the skit that that play represented could equally apply to a Deputy who acts, talks and thinks like a second class citizen. Is it any wonder that Cork is in the difficulties it is in with representatives like him? He is like old Mother Hubbard who had so many children she did not know what to do; she got her dates wrong, consistently, like he got his date wrong.
The Bill enabling free ports was passed by this Government in March of this year. Second, the original proposals from the Cork Harbour Commissioners in relation to the free port were received in my Department in June and, notwithstanding the fact that the holiday period intervened, there have been extensive negotiations and discussions involving not only my Department but the Revenue Commissioners, the Department of Finance and the Department of Industry and Commerce. Trying to get all people available for discussions at different stages has not been easy, despite our best efforts.
Also, despite what we read in the paper — and I will come back to the paper and the disgraceful editorial and behaviour of that paper in a few minutes — the fact is that we have had no communication from the Cork Harbour Commissioners as to whether they accept the regime offered in relation to a free port. We are awaiting a reply and if Deputy Lyons was the first class representative he should be he would be down seeing that Cork Harbour Commissioners got out their response to my Department.
While he was at it Deputy Lyons introduced other subjects, like the deep water berth at Ringaskiddy, Cork Airport and the Cork-Swansea ferry service. Since this Government came to power, Cork Airport, for the first time is making a profit. Passenger numbers have increased at Cork, most notably this year. Since this Government came to power several capital allocations were made for improvements at Cork Airport including, recently, £.25 million for improvements to the buildings there. In relation to the extension of the runway at Cork Airport, that is being considered in my Department. Proposals have been made to Departments and the necessary interdepartmental consultation has taken place as it must. We do not, like Fianna Fáil and Deputy Haughey, announce things without any consultation.
It took a long time.
Air Rianta and the airlines have to be consulted about matters like this and it takes time. When public money is at stake, these matters must be properly considered, and they will be properly considered. Decisions will be made, not to suit the leader of the Opposition or an election, but on the merits of a project. That is the way the State companies in my Department are and will be run. We will not return to the mess we found the State companies in in 1982 and which they were in for ten years before that.
What about the dates the Minister said I was wrong on?
I want to talk about The Cork Examiner, the standards of reporting and the activities of that paper. I had a telephone call to my home from a reporter of that newspaper a week or two ago. He told me he was going away for four days and asked me confidentially if a decision would be made while he was away. I said he could take it that a decision would not be made while he was away. The next day The Cork Examiner, based on that confidential friendly chat published a scathing editorial attacking me because there was no imminent decision. Let me tell the House that I will never speak to that reporter again. The Cork Examiner, with its total lack of objectivity, is in no way helping the Cork region, any more than are the standards Deputy Lyons brings to this House I would suggest to the electorate of Cork that whatever party they support, they should elect people to this House who can articulate properly and factually the needs of Cork.
I come to the question of the ferry because that was the subject of the telephone call I received from The Cork Examiner. Last year and the year before this Government were asked to make sums of money available to set up the Cork-Swansea ferry. We provided the money——
It was too late.
If it was too late, we were asked too late. This year my Department received a formal submission in the middle of September which then had to be considered in the Department and become the subject of the normal inderdepartmental consultation which anybody in Government knows takes at least three weeks. That matter was before the Government today and the Government have again come up trumps and have grant-aided the ferry to the tune of £500,000. Now we are told it is too late again even though we only got the submission a month ago.
Who said it was too late again? I did not.
These are the facts about the ferry. Money was provided last year and the year before and was not taken up. Money is now being provided again, despite the extremely difficult financial circumstances of the State, and it is being found by putting money elsewhere. The Minister for the Environment will be dealing with that matter.
In relation to this free port regime what is on offer to date to the Cork Harbour Commissioners is the following: (i) VAT-free importation of materials and components for use in the processing or manufacturing of goods there; (ii) VAT-free importation of machinery or plant for use there in connection with such processing or manufacture; (iii) zero-rating of goods supplied within the free-port by one VAT-registered person to another and similar supplies from the freeport to Shannon; (iv) VAT-free importation to the freeport of equipment etc. for repair and servicing; (v) VAT-free importation of finished goods declared for re-export which are subsequently re-exported.
What the Cork Harbour Commissioners require is a total waiver of VAT at the point of entry on all goods, including finished goods, entering Ringaskiddy which would be imported onwards into the State and at which point VAT would be paid. Such a concession is difficult to contemplate for two important reasons. First, it would represent a fundamental breach of the VAT at point of entry system — and we know who introduced that. That is what is at the kernel of the problem with the Cork Harbour Commissioners.
That is a lame excuse. The Coalition are in Government now and they can change that if they think it is wrong.
This is an essential tool of budgetary policy. Removal of the VAT at point of entry system at this stage would cost £200 million. The concession for Ringaskiddy would be the first step in this process. Secondly, and more importantly, a concession of the nature requested for Ringaskiddy would lead to substantial diversion of trade away from other parts of Cork harbour and, indeed, other ports in the State where the VAT on imports system would continue to apply. This would put traders outside the freeport area for instance at Kinsale Harbour at a grave disadvantage and would be untenable given the precarious financial position of ports generally. The aim behind the freeport is to stimulate new activity in that area, not to create economic problems for other parts of the country.
The position in Shannon is that there is no payment of import VAT on goods imported into the duty-free zone. Payment of VAT arises under the internal tax system when and if the goods are supplied to the rest of the State. However, to compare Shannon to Ringaskiddy is not comparing like with like. The nature of activity and transport at Shannon is such that the scope for diversion of merchandise trade from other points of entry in the State is very limited and has not taken place. The likelihood of such diversion in the case of a port like Ringaskiddy, as already mentioned, is much greater and the opportunities that would be presented to "rogue" traders to import goods VAT-free and then default on payment of tax under the internal VAT system would likewise be considerably greater.
The reference in newspaper reports that the non-availability of the 10 per cent corporation tax rate to service industries was also a feature of the decision to reject the concession package came as a complete surprise. It has always been understood that Cork Harbour Commissioners were not pressing for this concession as they appreciated the severe pressure being put on the Department of Finance by the EC Commission in relation to the concession at Shannon and that it was accordingly pointless and dangerous to look for it at Ringaskiddy.
By way of conclusion let me say that the dialogue between the Cork Harbour Commissioners and officials of my Department is still open and that every effort is being made on all fronts to reach some agreement in the matter so that Cork will be the venue of a thriving free-port.
What about the dates I was wrong about? The Minister did not supply the dates.
The Dáil adjourned at 5.30 p.m. until 10.30 a.m. on Wednesday, 29 October 1986.