Gay Mitchell
Question:1 Mr. G. Mitchell asked the Taoiseach the steps, if any, being taken by his Department and by the Government generally to take account of the findings of the international advisory group on the IFSC. [16110/97]
Ceisteanna—Questions. - IFSC Advisory Group.
Since my appointment as Taoiseach I have retained personal responsibility for the IFSC and have not delegated it to a Minister of State. This gives effect to the central recommendation of the Report of the International Advisory Group on the IFSC chaired by Deputy Mitchell when he was Minister of State at the Department of the Taoiseach.
Other recommendations in the report relating to the Government-industry interface, infrastructure, education and training, taxation considerations, marketing and the impact of EMU have already been discussed in relevant IFSC working groups and will provide an input into the ongoing decision making of Government Departments and agencies.
I recently met the financial services industry representatives on the IFSC Clearing House Group and senior ministerial colleagues to discuss the future development of the centre. This is the first time since the establishment of the IFSC that a Taoiseach has met such a representative group from the financial services industry.
The industry agrees with me that now is an opportune time to take a strategic look at the future development of the centre as we move into the next millennium. As a result of these discussions, I have asked the Clearing House Group to put in place a strategy into the 21st Century for the IFSC to consolidate the success of the centre and develop it for the future. The Deputy may be assured the excellent work which went into the preparation of the report of the international advisory group will be taken forward in the context of the preparation of this strategy.
Since the Taoiseach has taken personal responsibility for this matter, can he explain why the Government has abandoned its explicit commitment both in its joint programme and in his party's election manifesto to have a 10 per cent corporate tax rate for the IFSC after 2005?
Taxation is a matter for the Minister for Finance. Regarding corporation tax in general, the Government has followed what was already agreed, namely, that there would be a single rate of corporation tax. The Minister for Finance stated in the House last week that this is a matter he is finalising. Both he and the Tánaiste have meetings in Brussels today on the matter and he will issue his policy statement on it during the budget debate.
It is already out.
Is the Taoiseach unaware that his party explicitly stated that there would be a 10 per cent and not a 12.5 per cent rate of tax for the IFSC which he admitted some minutes ago he is personally responsible for? Can he explain this U-turn?
The Deputy may not be aware that there exists a 10 per cent rate of tax for the IFSC.
Is the Taoiseach aware what his Minister for Finance is doing?
The issue of whether there should be a single rate and if so what it should be is one for the Minister for Finance. There is no difficulty arising in relation to that matter. The Deputy should have been aware that other relevant issues were causing difficulties in Brussels when he was Taoiseach, issues which we are now trying to resolve.
That is not the issue. The issue is the breach of an explicit promise by the Taoiseach and his Government. Before and after the election he said that the single rate would be 10 per cent. The Taoiseach has now sent his Minster for Finance to Brussels to argue for the rate promised by the previous Government, namely, 12.5 per cent. Is the Taoiseach prepared to take personal responsibility for this U-turn and breach of a Fianna Fáil election promise which comes on top of breaches of promises on mandatory reporting and support for the Dundalk residents opposing Sellafield? Is this pattern of U-turns to be a characteristic of the Taoiseach's Government? Will the Taoiseach answer?
This is bombast.
Will the Taoiseach explain why he has abandoned the promise he gave before the election and subsequent to it that the rate would be 10 per cent? Is it because he has discovered that the previous Government was right and that he and his colleagues were wrong?
For once.
The matter of what rate of tax will apply after 2005 has not yet been resolved. There are ongoing discussions relating to this matter. What has been decided is that subsequent to 2005 there will be a single rate of tax for the IFSC, the international traded area, the Shannon Development area and other areas which have been the source of debate over the years. The passive rate of taxation will be 25 per cent. The rate of the tax as announced in the House last week by the Minister for Finance will be stated in the budget on 3 December.
What rate? Not the one the Taoiseach set before the election.
Can we tear up the commitments given in the Fianna Fáil election manifesto and in the joint Fianna Fáil and Progressive Democrats programme on this matter? Are these of no consequence?
The Deputy's programme was torn up by the people.
This is obfuscation.
On coming into office, I found it extraordinary that the previous Taoiseach did not bother to meet the IFSC on any occasion.
That is a weak point.