Dáil Éireann debate -
Wednesday, 30 Jan 1991

Vol. 404 No. 4

Financial Resolutions, 1991. - Financial Resolution No. 5: Income Tax.

The Taoiseach

I move Financial Resolution No. 5:

(1) THAT Chapter III of Part I of the Finance Act, 1984 (No. 9 of 1984), be amended—

(a) in section 12, by the substitution of the following subsection for subsection (11):

"(11) This section applies only where the shares concerned are issued in the year 1984-85 or any of the 8 years of assessment immediately following.",

and

(b) in section 13, by the substitution in the provisos to subsections (2A) and (2B) (inserted by the Finance Act, 1987 (No. 10 of 1987)) of "the year 1992-93" for "the year 1990-91".

(2) THAT, as respects eligible shares (within the meaning of that Chapter) issued on or after the 30th day of January, 1991, the said Chapter be further amended—

(a) in section 12, by the deletion of the first proviso (inserted by the Finance Act, 1989 (No. 10 of 1989)) to paragraph (c) of subsection (1),

(b) in section 13, by the insertion after subsection (2) of the following proviso to that subsection:

"Provided that, and notwithstanding the provisions of subsection (2A), relief shall not be given to the extent to which the relief in respect of the amount, or the total of the amounts, subscribed by an individual for eligible shares issued to him (whether or not by the same company) in all years of assessment (being the year 1984-85 and subsequent years) exceeds £50,000.",

(c) in section 13A (inserted by the Finance Act, 1989), by the substitution in subsection (1)—

(i) of "the 30th day of January, 1991" for "the 12th day of April, 1989", and

(ii) of "£500,000" for "£2,500,000" in both places where it occurs,

(d) in section 15, by the deletion of subsection (13) (inserted by the Finance Act, 1987),

(e) in section 16—

(i) by the deletion of subparagraph (iii) of paragraph (a) (inserted by the Finance Act, 1987) of subsection (2),

(ii) by the deletion, in paragraph (I) of the second proviso (inserted by the Finance Act, 1989) to subsection (2), of the words "except where it forms part of the carrying on of qualifying shipping activities within the meaning of section 28 of the Finance Act, 1987,", and

(iii) by the substitution, in subsection (2A) (inserted by the Finance Act, 1987), of the following paragraph for paragraph (a) (inserted by the Finance Act, 1989):

"(a) the operation of tourist accommodation facilities, for which the Bord maintains a register in accordance with the Tourist Traffic Acts, 1939 to 1987, other than hotels, guest houses and self-catering accommodation,",

and

(f) in section 26, by the deletion of subsection (1A) (inserted by the Finance Act, 1987).

(3) THAT the Second Schedule to the Finance Act, 1984, be amended, in paragraph 1 (inserted by the Finance Act, 1987), by the deletion of "(other than a subsidiary which is a qualifying subsidiary by virtue of section 26 (1A) (inserted by the Finance Act, 1987))".

(4) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

This resolution carries into effect the changes in the business expansion scheme which were announced in the budget speech to take effect in respect of shares issued on or after today. The changes being introduced are as follows: first, the scheme which was due to expire on 5 April is being extended for two years. Second, shipping, hotels, guesthouses and self-catering accommodation are being excluded from its ambit from now on. The BES will still, of course, apply to manufacturing and certain international services, advance factories, special trading houses, tourist facilities other than the ones I have mentioned. Third, the £2.5 million limit will be reduced to £500,000 and, finally, a lifetime cap of £50,000 is being placed on the extent to which any individual investor may benefit from a BES scheme.

Mr. Barry

I move amendment No. 1:

In page 10, subsection (2) (e), to delete subparagraph (iii).

The purpose of this amendment is to restore the benefits which the business expansion scheme have bestowed on the tourist industry for the last number of years. I am amazed that any Minister for Tourism and Transport should allow this to happen when it is patently obvious to anybody who lives along the western seaboard particularly, but in other tourist areas as well, that this scheme has been of benefit to the tourist industry.

The Minister in his Budget Statement said that the BES scheme cost £40 million last year. The point to be made about this scheme is that it is an incentive scheme. It is an incentive to people to invest. If the incentive did not exist, then people would not invest. It is as simple as that. Therefore, there is no loss to the Exchequer because the investment would not have been made unless the scheme was in place. To pretend that the scheme has cost the Exchequer x amount of money, in this case £40 million, is not correct because investments would not be made or at least would not be made on the same scale unless the projects concerned were built and employment provided. Because employment is provided we are concerned that it should remain in place. It was originally designed to encourage investment in industries in the manufacturing sector and afterwards it was extended to include shipping and the tourist industry. It is obvious that there have been abuses of the scheme in the last number of years. I do not think anybody wants to defend it in the building of houses in the suburbs of any one of the cities or towns of Ireland. That was not the intention of the business expansion scheme for tourism.

Those on the west coast, on the south coast or in any of the major tourist regions will see that many hotels and guesthouses have been refurbished, updated, refurnished and are totally different establishments now from what they were five years ago before this scheme came into effect. There is no doubt that when the tourist industry is under threat, as it is at present because of the Gulf crisis and the knock-on effects on travel from all over the world but particularly from America and Great Britain, whose economies are in recession, any help the tourism industry can get should be allowed to them. We are putting down this amendment to draw attention to the fact that we want to see the tourism industry helped in this regard and we want to see the business expansion scheme so structured that hotels and guesthouses can continue to avail of it. I should like to know the intentions of the Minister and the Taoiseach in that regard. We will support any provision in the Finance Bill which will have the effect of closing off the abuses in the scheme to which I have referred. I understand the scheme has not operated very successfully in the area of shipping. The Government will have our support for any provision which will eliminate abuses provided they restructure the scheme in order to allow the present benefits to the tourism industry, particularly in the hotel and guesthouse sectors, to continue for a number of years.

It appears the Government are being somewhat despondent in their approach to this issue. The double capping provision they have proposed, that is, a cap on the total amount which can be invested in any one scheme and a cap on the amount of benefit any one individual can receive in his lifetime from an investment, seems to indicate it is their intention that the scheme should wither away. The manufacturing industry will not benefit from this scheme in the future if this double capping proposal is introduced. If it is the Government's intention to eventually do away with the scheme they should be more honest and say so now. The people in the construction industry who have depended very much on the business expansion scheme for employment should be told if it is the Government's intention to make the conditions in regard to investment so tightly drawn in the future that the amount of investment will be practically minimal and they will not have the benefit of this scheme in the future.

Our amendment seeks to ensure that the tourism industry will continue to benefit from the scheme, that any amendments which are introduced to the Finance Bill will enable abuses of the scheme — these must be very apparent to the officials in the Department and the Revenue Commissioners — to be weeded out, that the benefits of the scheme will be left in place and that the capping provision will not be implemented. Putting a cap of £50,000 on the amount a person may invest in his lifetime is very restrictive — it is not much more than the price of a good quality house at present — and will limit the amount many legitimate investors will invest in schemes. I ask the Government to consider my amendment in that light.

We want the benefits of the business expansion scheme to be restored to hotels and guesthouses. We will support any provision in the Finance Bill which will weed out any abuses of the business expansion scheme which undoubtedly there have been over the past number of years. I also ask the Government to look again at the capping level they propose to impose on the total amount any one person can invest. It is possible that a person could invest in more than one scheme thus giving employment in the future.

An Leas-Cheann Comhairle

I have already indicated to the House that 12 Deputies are anxious to contribute. Accordingly, I ask for maximum brevity.

Mr. Ferris

We realise that the business expansion scheme has been misused by some beneficiaries over the years. Indeed, on numerous occasions the Labour Party have pointed out to the Government abuses of what was otherwise a very good scheme. We are extremely concerned that the Minister has decided to exclude tourism from the list of beneficiaries of the scheme, an industry which we had hoped would show growth this year.

As the Minister pointed out today, in spite of our best efforts there will be difficulties in this industry. It is for this reason we had hoped the tourism industry would not be penalised by the Government. We are both surprised and concerned at the Minister's decision to include tourism in the list of industries on which he proposes to do a hatchet job. We should like to see the scheme operating as it was intended to by the House so that it can trigger off development in this area. If tax incentives are needed to create employment in this industry we could go along with such a proposal in the hope that it would create growth in the economy and jobs, an issue which the budget has failed to address.

May I refer to the general issue of income tax? This resolution deals with income tax and certain limitations are placed on income tax in the budget. I am not sure if it is possible for me to refer to this issue——

An Leas-Cheann Comhairle

I ask the Deputy to confine himself exclusively to what is in the resolution and to do so with as much brevity as he can in consideration of the other people who are offering. I must put the question in half an hour's time.

Mr. Ferris

I will have the opportunity to deal later with the other sections of the income tax code which were addressed by the Minister today in a perfunctory way. I should like to put it on the record that we are just tinkering around with the levels——

An Leas-Cheann Comhairle

That will arise under the Finance Bill.

Mr. Ferris

I realise that but this is an opportunity for Members on the backbenches to contribute to the budget debate. However, I will bow to your ruling on the matter and allow my colleagues to deal with this specific point.

An Leas-Cheann Comhairle

I appreciate the Deputy's co-operation. I now call Deputy Pat Rabbitte, after which I will call Deputy McCreevy, Deputy Jim O'Keeffe and Deputy Sean Barrett.

Mr. Rabbitte

I will be brief. Of all the incentives available to industry and businessmen which are supposed to be incentives but which turn out to be tax shelters, this is the one that has probably been most grossly abused. In the case of the notorious Shannon leasing case, highlighted I think by the Comptroller and Auditor General in his last report, something like £27 million was raised and only seven jobs created. This House cannot stand over that kind of scandal.

The purpose of this scheme was to raise seed capital for risk-prone ventures. All of us could agree with that but it has turned out to be a tax haven, a source of tax relief, for investors in asset rich investments. That was not the purpose of the scheme. Therefore, there is some conflict in that all of us on all sides of the House agree we cannot allow this situation to go on, that it must be tightened up, but when it is tightened up we say, "that is not the particular loophole I would have shut off". In regard to the Fine Gael amendment, I appreciate that one could make particular arguments, especially in the present climate, in favour of tourism. It is probably the area which will be most calamitously hit as a result of the Gulf War but I honestly do not think that some of the projects which have been raised on the basis of this scheme, for example, in the hotel area, are the kind of projects which were envisaged by this scheme or that we should continue to tolerate.

There is evidence right through the Minister's script of double think on this issue. If the Minister is really committed to the notion of a business expansion scheme for the purposes I mentioned earlier I cannot understand, as Deputy Barry mentioned, the proposal in regard to a lifetime cap of £50,000. I would have thought that if we were seriously interested in raising seed capital for productive purposes that the more money we got the better. I cannot see the merit in the present ceiling. The reasoning, I am sure, is that the Minister does not want the same person who has used it as a tax shelter to come back time and again, but that defeats the purpose. I do not have the figures off the top of my head but I know that the early years of this scheme showed clearly that before the accountancy profession got to work on it to ensure that it was practically risk free, virtually nothing was raised under the scheme. Only when it was secure and risk free did it expand and was money raised in this fashion.

I cannot agree with Deputy Barry when he says that this is an incentive to invest; if it was not there, there would be no investment and, therefore, there is no tax foregone to the State. I cannot accept that. The figure last year for tax foregone to the Exchequer was £40 million, and a similar figure is projected for this year if no action is taken. It is not right to say that if the scheme did not exist that figure would not be there because it was a tax haven used by people who had £25,000 disposable income to put into such a scheme, and if that scheme did not exist, the naive presumption is that they would be paying tax on the money like the rest of us. Of course we know there were other ruses open to them to avoid paying tax, and we will be going into that tomorrow. That is a matter for a wider debate.

I find it very difficult to support the Fine Gael amendment. This is the beginning of the end for the business expansion scheme. What we have here shows a great deal of confusion in the minds of the Government about what loopholes they may or may not close off. Will the Taoiseach when replying comment on whether or not, for example, the exclusion of hotels, guesthouses and other accommodation also applies to youth hostels.

Mr. McCreevy

I wish to make three brief points on this resolution. One relates to the general principle referred to by Deputy Rabbitte which will be dealt with in the Finance Bill. The idea of the business expansion scheme was a very good one. It may be that it was used in the past couple of years as a tax shelter but that is not to say that the original idea was not a good one.

Mr. Barry

Thank you very much.

Mr. McCreevy

From my experience with the Revenue Commissioners it is safe to say that they never wanted a business expansion scheme. I was never a member of any Government at any time but I am quite prepared to say that the Revenue Commissioners never wanted a business expansion scheme because they always knew that the tax practitioners and accountants would find ways of making it a tax shelter. The principle behind the scheme is a good one and it is a pity that because of the abuses which everyone knows took place we are now going to throw out the baby with the bath water. It is obvious that the Revenue Commissioners, and the Department of Finance, have convinced the Minister that this scheme is a bad one, that there are too many loopholes in it and given the Shannon case as an example. Officials never advise a Minister to get rid of something straight away but rather to get rid of it by degrees, knowing that it will be made so ineffective that it is really no use to anybody.

I have sympathy with the point put forward by Deputy Barry. It is better to have people investing money in something concrete rather than have it lying in a bank account. Surely there must be some project in whch they could invest which would generate jobs, and will be there for the future? The first point I want to make is that we are throwing out the baby with the bath water and this is the end of the business expansion scheme.

The second point I would like to raise is a more technical one. It has been announced in the Minister's speech that if shares are not issued by today we are in trouble. This is, effectively, retrospective legislation.

Mr. S. Barrett

Hear, hear.

Mr. McCreevy

It is undoubtedly true that in the past couple of months people have been aware that some changes to this effect may be made in the Finance Bill, but they thought this scheme would last until 5 April 1991. I know that funds have been raised and committed but shares have not been issued. I would ask the Minister, with respect to everybody, to reconsider this matter before the publication of the Finance Bill. From practicial experience of the business expansion scheme, a long process has to be gone through before a person gets the RICI 3 form — there are also RICT 1 and RICT 2 forms. There are cases where funds were raised, even some time ago, but the shares may not necessarily have been issued.

Not all the people about whom Deputy Rabbitte spoke have £25,000 in their hip pocket to invest in a scheme. Many people, for example, where there are two teachers in a family, middle class people, may have a couple of thousand pounds to invest in such a scheme. It is not only the people to whom Deputy Rabbitte referred such as the self-employed who have plenty of money who invest in such schemes. Even people who live in Tallaght participated in this scheme. It is the in thing to oppose all these schemes because supposedly it is the rich who participate in them.

Mr. Rabbitte

Some of them are in Liberty Hall. I do not claim that at all.

Mr. McCreevy

As today is the final date of issue many people will suffer hardship and a lot of schemes will not proceed. I would ask the experts in the Revenue Commissioners to think again about this matter and maybe to defer the date of issue of the prospectus. The first thing one needs in these cases is approval from the Revenue Commissioners, with the issuing of the RICT 1 form, but it may be a long way down the road before the share certificates are issued. Tax changes are made very often and people find new ways around them. This is retrospective legislation which will cause a lot of hardship.

The third point I want to make is that we are now reducing the total amount of money that can be raised by this scheme to £500,000. If we, are sincere about the business expansion scheme we should be increasing it rather than reducing it. If, in the Finance Bill, the Minister abolished the business expansion scheme it would be more honest than withdrawing it as he is doing here. I am not blaming the Minister but I can certainly see the hands of a number of experts — I have great friends in the Revenue Commissioners and the Department of Finance, people for whom I have great respect — who want to get rid of this scheme at any cost. I believe in calling a spade a spade, and if the Minister is going to get rid of this scheme he should do so and stop "mickey mousing" around with it.

Mr. J. O'Keeffe

I am convinced that this proposal amounts to a hammer-blow to the tourist industry. It is very clear that that industry is going to suffer blows as a result of the Gulf War but the effect of this proposal will be far worse than any effect from the Gulf War. I come from one of the premier tourist areas in the country and I see in my area the benefits of the business expansion scheme in the improvement of hotels and the establishment of self-catering accommodation, the kind of development that would not have taken place were it not for that scheme. I accept that there were abuses in the scheme and I accept the point raised by Deputy Rabbitte about the Shannon leasing company, but because there were abuses is no reason whatever for virtually withdrawing the scheme, particularly from the one sector of the economy that can impact on the awful job situation here. For areas along the western and southern seaboard the only potential of any consequence to solve our unemployment and emigration problems is in the tourist area. By withdrawing this development vehicle virtually entirely from tourism the Minister is ending all hope of the young men and women in west Cork and along the seaboard having any chance of securing employment in their own areas. The Minister is using a sledge-hammer to crack a nut. He is going the wrong way about this.

There were many ways in which the abuses could have been tackled. Looking at the procedures in relation to tourism and industrial projects under the business expansion scheme, I question some of the alleged independent assessments and whether they were the right kind of project to fit in with Government policies. I would see nothing wrong with the establishment of an independent review body which would look at schemes to ensure that they were in accord with the spirit and letter of the requirements. In the budget the Minister, effectively, has done away with the scheme. As it stands it is a Mickey Mouse scheme with two cappings, one in relation to personal investment and the £500,000 capping on the overall scheme. I also ask the Government to bear in mind the impact this will have on the building industry. Most of the houses built in west Cork in the last number of years were built under the BES scheme and the builders will be the first to suffer as they will have to lay off their workers. There are various tax efficient concessions in relation to income tax. For example, there was tax relief on 15 per cent of a person's income put into a pension fund although it did not do much for the economy. I know it is a separate issue but it can be compared to a person who is prepared to invest money in a business expansion scheme where something real, tangible and concrete could be done for the economy.

I ask the Government to rethink their position in this regard. The Taoiseach is present, he knows the southern area as he called into us voluntarily — and indeed involuntarily on one occasion — in west Cork. Maybe it is a slight overstatement to say that tourism is our only hope but it is certainly one of our major hopes in regard to progress in job creation. By taking tourism out of the scheme, that hope is gone. My suggestion, of reviving the scheme and having an independent review body to assess each application to ensure that abuses are eliminated would be a far more sensible approach and, from the point of view of the development of the economy, would be the best approach. Above all, from the point of view of developing our peripheral areas, which are so dependent on tourism, it is the only path forward.

Mr. S. Barrett

The fact that this scheme took some time to take off is a reflection on the financial institutions. Someone trying to start a business or expanding it finds it extremely difficult to get money from the banks unless he or she can produce personal guarantees and so on. The last thing this country needs is to prevent people from investing money. This scheme provided an opportunity for investment. We should remember that many of these investors were PAYE earners who were already being taxed at a high rate and paying a substantial percentage of their income in taxes. What is wrong with investing in the future? Why impose these Mickey Mouse restrictions? As Deputy McCreevy rightly said, if you want to get rid of this scheme say so and introduce a new one. Letting it die a slow death by providing a limited amount of £500,000 is not the answer. As Deputy McCreevy also said, we all know people who invested £5,000 or £6,000 or even less in schemes of this kind. It is not a rich man's club, it was an opportunity to create an environment for people to invest their money in expansion in various areas.

We have an opportunity to expand tourism. The Minister for the Environment is present and, on many occasions, he has spoken to farmers and rural communities of the need to protect the environment so that we can attract tourism. The tourist who comes here is not looking for the sun or a cheap package holiday. Tourists come here to rural areas for fishing and other specialist or family holidays. Many of our hotels do not have modern, up-to-date facilities and the business expansion scheme was one way of ensuring that there would be proper investment in hotels to attract the kind of tourist we want, who will spend money. Many of our own citizens want to spend their family holiday here. In spite of this the Minister has now knocked the successful business expansion scheme on the head. Of course there were abuses but that is the problem of those who examine each proposal. It is the responsibility of the authorities who were charged with the responsibility of examining each application. The ground rules were laid down and officials were paid to decide whether an application qualified in accordance with the general principles of the scheme. What is wrong in getting the ordinary taxpayer to invest money in a small hotel in a rural area to provide 20 or 30 extra bedrooms or to provide tennis courts and other facilities for children? What is wrong with getting the ordinary taxpayer to invest money in holiday homes? Nothing. If there are abuses the loopholes should be closed. I genuinely appeal to the Taosieach not to wreck this scheme, it is a retrograde step.

Mr. Farrelly

I am very disappointed that the proposal to abolish the hotel and guesthouse business expansion scheme has been introduced because it is a backward step in so far as the tourism industry is concerned. Will the Taoiseach say where the Government's plan for 1988-92 stands by the abolition of this scheme? The Minister pointed out today that it cost the State £40 million when there was in income of £485 million in taxes earned by the tourism industry, partly as a result of this scheme. I hope that there will be a review and that hotels and guesthouses will be considered in the Finance Bill later.

Mrs. Taylor-Quinn

This is a case where the Government will have to sift the chaff from the wheat; the majority of people should not suffer because of the sins of a few. We know that there had been abuses but it is a matter of serious concern that the entire tourism sector has been affected.

Developments are going ahead in Killarney, Ballybunion, Kilrush, Kilkee, Lahinch and Salthill and if share certificates have not been issued all these schemes will collapse, resulting in a major disaster. We were hoping to develop tourism in the west but that will not now happen. In an area of very high unemployment and emigration there was a potential for tourism but that will be wiped out if the Government go ahead with this action. I appeal to the Taoiseach to review the matter.

Deputy Boylan rose.

An Leas-Cheann Comhairle

The Taoiseach must reply.

Mr. Boylan

This is a very important issue.

An Leas-Cheann Comhairle

It is very important that the Taoiseach replies.

The Taoiseach

The Members opposite are just repeating themselves.

Mr. Boylan

The Minister for Tourism has stated the importance of tourism, and Bord Fáilte claim that we need to upgrade our accommodation. In the Border region we could not benefit from the grants available through the years because of the troubles which, fortunately, are not as bad now. There are no grants available and the business expansion scheme had been taken up by enterprising people who were prepared to make an investment in that area. I ask the Taoiseach to give consideration to the deprived border region.

The Taoiseach

I want at the outset to deal with two serious misunderstandings which exist particularly on the Fine Gael front benches. Let me begin with Deputy Barry who said that there is no cost involved here because if these schemes did not go ahead revenue would not arise. That applies in respect of some things. If an industry comes in here and gets the 10 per cent tax benefit it would be true to say that there would be no real loss to the Exchequer by the 10 per cent concession because the industry would not have been here otherwise, but that is not the case here. This is real tax foregone. This is real income which people have and because of this scheme they do not have to pay tax on it that they would otherwise pay to the Exchequer. Therefore, there is a real loss to the Exchequer of tax foregone.

Mr. S. Barrett

What about interest?

The Taoiseach

Every time I get up here to answer I am interrupted from those benches. The next point I want to make is that the vast majority of the arguments made over there have been made on the basis that tourism is out. Tourism is not out. There are three things out in the tourism industry — hotels, guesthouses and self-catering accommodation — but all the following are in — boat cruises on the Shannon and so on, horse drawn caravan hire, equestrian centre services, sailing — yachting marinas, sub-aqua centres — heritage houses, sea angling boat hire, game fisheries angling services, interpretive centre services, chauffeur driven operations for tourism only, international conference centre services, resort companies wholly or mainly for the provision of approved services, outdoor pursuits, activity centre services, tourist guide agencies and tour coach services.

Mrs. Taylor-Quinn

And not a decent hotel among them in which to stay.

The Taoiseach

If the Deputies do not want me to reply, I will not do so.

(Interruptions.)

The Taoiseach

Why can you not have some manners? I have been listening to the Deputies for an hour; may I have five minutes uninterrupted? It is wrong to say that tourism is out altogether, it is not; one or two aspects of the industry are being excluded.

I also want to refer to the cap of £500,000 which will not be as serious as Deputies think. Only 35 of the 239 companies involved went for more than £500,000. The vast majority of the companies which have benefited so far will still be included in the £500,000 cap.

Mr. Farrelly

How many are providing accommodation?

The Taoiseach

I am prepared to listen to all the arguments being made here now, but this is not like the other resolutions we have dealt with which were purely revenue resolutions. We want this scheme to continue because it is a very valuable scheme. I do not disagree with anyone in this House who says that it has been a very useful scheme but what we want to do is to go back and refocus on the original purposes, which were primarily to get risk capital into small ventures which would provide employment and contribute generally to economic development.

Mrs. Taylor-Quinn

That is what small hotels in the west are doing.

The Taoiseach

That was the original purpose of the scheme but what happened, as has been pointed out by Deputy McCreevy and Deputy Rabbitte, was that the accountants got going on it. They did not abuse the scheme because what they were doing was still within the law. It is no good suggesting that if we put in some sort of supervisory body and not change the law that all would be well. These people were within the law, so we have to change the law if we want to stop the things which are not in accordance with what was originally intended.

This year this scheme will cost the Exchequer £15 million in income tax foregone which is a lot of money. There is a lot one could do in relation to the creation of employment with £15 million if one did it directly. We have to stop misdirections in the scheme and try to get the scheme back and focus it on the sort of thing it was originally intended for because, as some Deputies have rightly pointed out, when the accountants got going on it they made sure there would be no risk at all involved. I think everybody in the House would agree that there should be risk capital, not just guaranteed investments. That is one of the considerations involved here.

Mrs. Taylor-Quinn

Investment in tourism is always risky.

The Taoiseach

As the Deputies keep interrupting me, I am losing my train of thought. All the discussion here this evening on the exclusion of the tourism industry is not correct. There is a limited exclusion of the tourism industry only and it was in those areas that a very limited number of identifiable people were using the scheme over and over again, going from big schemes which resulted in major losses to the Exchequer. That is the situation we have to deal with.

I will conclude by saying that I have listened to what has been said and would agree with those who say they want the scheme to continue. We will consider what has been said to see if there are any differences or modifications which can be included to ensure that it will do what we want it to do, which is to have the scheme continue to provide employment and economic development particularly in the regions that some Deputies have been talking about where tourism is the mainstay. We want to make sure that the original concept and purposes of the scheme — namely, to provide for small industries which have the possibility of viability, which can provide employment and which need risk capital — will be preserved.

Question put: "That the amendment put down to Financial Resolution No. 5 is hereby negatived and that Financial Resolution No. 5 is hereby agreed to."

The Dáil divided: Tá, 78; Níl, 68.

Tá

• Ahern, Bertie.
• Ahern, Dermot.
• Ahern, Michael.
• Andrews, David.
• Aylward, Liam.
• Barrett, Michael.
• Brady, Gerard.
• Brady, Vincent.
• Brennan, Mattie.
• Brennan, Séamus.
• Briscoe, Ben.
• Browne, John (Wexford).
• Burke, Raphael P.
• Calleary, Seán.
• Callely, Ivor.
• Clohessy, Peadar.
• Connolly, Ger.
• Coughlan, Mary Theresa.
• Cowen, Brian.
• Cullimore, Séamus.
• Daly, Brendan.
• Davern, Noel.
• Dempsey, Noel.
• Dennehy, John.
• de Valera, Síle.
• Ellis, John.
• Fahey, Frank.
• Fitzgerald, Liam Joseph.
• Fitzpatrick, Dermot.
• Flood, Chris.
• Flynn, Pádraig.
• Gallagher, Pat the Cope.
• Geoghegan-Quinn, Máire.
• Harney, Mary.
• Haughey, Charles J.
• Hillery, Brian.
• Hilliard, Colm.
• Hyland, Liam.
• Jacob, Joe.
• Kelly, Laurence.
• Kenneally, Brendan.
• Kirk, Séamus.
• Kitt, Michael P.
• Kitt, Tom.
• Lawlor, Liam.
• Lenihan, Brian.
• Leonard, Jimmy.
• Leyden, Terry.
• Martin, Micheál.
• McCreevy, Charlie.
• McDaid, Jim.
• McEllistrim, Tom.
• Molloy, Robert.
• Morley, P.J.
• Nolan, M.J.
• Noonan, Michael J. (Limerick West).
• O'Connell, John.
• O'Dea, Willie.
• O'Donoghue, John.
• O'Hanlon, Rory.
• O'Keeffe, Ned.
• O'Kennedy, Michael.
• O'Leary, John.
• O'Rourke, Mary.
• O'Toole, Martin Joe.
• Power, Seán.
• Quill, Máirín.
• Roche, Dick.
• Smith, Michael.
• Stafford, John.
• Treacy, Noel.
• Tunney, Jim.
• Wallace, Dan.
• Wallace, Mary.
• Walsh, Joe.
• Wilson, John P.
• Woods, Michael.
• Wyse, Pearse.

Níl

• Ahearn, Therese.
• Allen, Bernard.
• Barnes, Monica.
• Barrett, Seán.
• Barry, Peter.
• Bell, Michael.
• Belton, Louis J.
• Boylan, Andrew.
• Bradford, Paul.
• Browne, John (Carlow-Kilkenny).
• Bruton, John.
• Bruton, Richard.
• Carey, Donal.
• Connaughton, Paul.
• Connor, John.
• Cosgrave, Michael Joe.
• Cotter, Bill.
• Creed, Michael.
• Crowley, Frank.
• Currie, Austin.
• D'Arcy, Michael.
• Deasy, Austin.
• Deenihan, Jimmy.
• Doyle, Joe.
• Dukes, Alan.
• Durkan, Bernard.
• Enright, Thomas W.
• Farrelly, John V.
• Fennell, Nuala.
• Ferris, Michael.
• Finucane, Michael.
• FitzGerald, Garret.
• Flaherty, Mary.
• Flanagan, Charles.
• Foxe, Tom.
• Harte, Paddy.
• Higgins, Jim.
• Higgins, Michael D.
• Hogan, Philip.
• Howlin, Brendan.
• Kavanagh, Liam.
• Kemmy, Jim.
• Kenny, Enda.
• McCormack, Pádraic.
• McGahon, Brendan.
• McGinley, Dinny.
• McGrath, Paul.
• Mitchell, Gay.
• Mitchell, Jim.
• Moynihan, Michael.
• Nealon, Ted.
• O'Keeffe, Jim.
• O'Shea, Brian.
• O'Sullivan, Gerry.
• O'Sullivan, Toddy.
• Owen, Nora.
• Pattison, Séamus.
• Quinn, Ruairí.
• Reynolds, Gerry.
• Ryan, Seán.
• Shatter, Alan.
• Sheehan, Patrick J.
• Spring, Dick.
• Stagg, Emmet.
• Taylor, Mervyn.
• Taylor-Quinn, Madeleine.
• Timmins, Godfrey.
• Yates, Ivan.

Tellers: Tá, Deputies V. Brady and Clohessy; Níl, Deputies Flanagan and Boylan.

Question declared carried.