Vol. 482 No. 6
13 Mr. Cosgrave asked the Minister for Public Enterprise the progress, if any, made at her recent meeting in London regarding the retention of duty free shopping within Europe which is a service to the travelling public. [18916/97]
23 Proinsias De Rossa asked the Minister for Public Enterprise if she will give details of the discussions she had at the meeting of EU Transport Ministers on 9 October, 1997, regarding the proposed ending of duty free facilities from July 1999; the further steps, if any, she will take in this regard; and if she will make a statement on the matter. [18920/97]
28 Mr. J. O'Keeffe asked the Minister for Public Enterprise the response, if any, she has had from the EU Commission to her call for an EU-wide study into the economic and social effects on Europe of ending duty free shopping at airports and on ferries. [18645/97]
32 Mr. M. Higgins asked the Minister for Public Enterprise the progress, if any, she has made to prevent the proposed ending of duty free services at airports and in transit in view of the reduction in trade and the loss of jobs which would be involved; and if she will make a statement on the matter. [18963/97]
I propose to take Questions Nos. 13, 23, 28 and 32 together.
I assume Deputy Cosgrave is referring to my arrangements for a meeting with the United Kingdom Deputy Prime Minister and Secretary of State for Environment, Transport and the Regions, Mr. John Prescott. Due to other pressing commitments, he could not attend an earlier meeting arranged. Following this I suggested another date but found I could not attend, thus making it necessary to postpone our meeting. However, I hope to agree a mutually convenient date in the very near future.
As I said in response to previous questions, one of the key priorities of the programme for Government is to resist EU plans to abolish intra-Union duty free shopping after June 1999. I am concerned about the economic and social consequences for Ireland of the scheduled abolition of intra-Union duty free sales——
And so the Minister should be.
I am most genuinely concerned about it, in particular its effects on employment and access costs for tourism and trade. For that reason I am taking an active role in the campaign to raise awareness of the duty free issue. As I said here on 24 September, I was the main speaker and highlighted the position of the Irish Government at the meeting of Council of Transport Ministers in June last, calling on the European Commission to conduct an EU-wide study of the economic and social effects on Europe of ending duty free sales, the results of which could pave the way for an open-ended derogation which could be reviewed as circumstances change.
At that Council meeting in June last, prior to the change of Government, Transport Ministers supported the concept of this European Unionwide study. However, reversal of this scheduled abolition is primarily a matter for Finance Ministers and requires a proposal from the European Union Commission and unanimous agreement of the Council of Finance Ministers.
I am pleased to inform the House that I availed of the opportunity to raise this duty free issue in the course of recent discussions on the draft Airport Charges Directive at the meeting of European Union Transport Ministers on 9 October. I pointed out the inextricable links between access costs to markets and competitiveness and reiterated and elaborated on the Irish experience.
To date, the Commission has held its line on the matter and has not agreed to conduct an EU-wide study. However, I remain confident that continued and increased pressure will yield results.
As the House will be aware, the Minister for Finance has himself instigated a study, the results of which he hopes to receive before the end of the year. I also understand that at the forthcoming Summit on Employment in Luxembourg the Taoiseach intends to raise the matter.
Since the Tansey Webster report indicates that some 2,500 jobs here and some 240,000 jobs throughout the European Union depend on the continuance of duty free shopping, is the Minister aware of the very great unease among those engaged in the industry? While appreciating the Minister's undertaking to meet Mr. John Prescott, I would hazard a guess that, if this involved an industry of some 2,500 people in Athlone, we would witness much greater urgency on her part. Will the Minister undertake to visit European capitals to take up the special Irish case there, bearing in mind that the British take over the EU Presidency on 1 January next, so that with their support and especially that of Mr. Prescott, who I understand is very supportive of the retention of these facilities, she will have a more active role in canvassing throughout the European Union to have this included on the agenda for 1 January next?
The Council of Transport Ministers is in agreement, which was negotiated by the preceding Government and reinforced by me on assuming office.
Including the Luxembourg meeting?
Including Mr. John Prescott?
The Council of Transport Ministers is of one mind on this issue, although perhaps some to a lesser extent than others. Mr. John Prescott is very much in favour of what we are all endeavouring to do. I did raise the matter on first entering the Council of Transport Ministers.
What about the ECOFIN Ministers?
I do not attend ECOFIN meetings.
I should remind Members that Question Time concludes at 4.15 p.m. I observe there are four Members awaiting supplementaries which I intend to allow but I cannot if the Minister continues to be interrupted.
I was the only transport Minister of all member states to be invited to speak at the Euro forum and have received invitations to speak at other fora on the matter. In addition, I will write to all my counterparts within the Council of Transport Ministers prior to the Summit of Heads of Government on employment to ensure they motivate their colleagues to intervene and contribute to the debate which I hope will take place there.
Is it not obvious that there is need for diplomatic and political initiative to convince all member states of the European Union to reverse the regulation made in 1991-1992 to which the Taoiseach, as Minister for Finance agreed, which is unfortunate? Will the Minister outline what arrangements she will make with her Government colleagues to get such diplomatic and political initiative under way within capitals of the European Union to bring about a reversal of that regulation?
While this matter was not on the agenda, I raised it during the recent discussions on the draft airport charges directive — which represented a useful vehicle to do so — at the meeting of EU Transport Ministers on 9 October. At the subsequent lunch, which is when Members will know much of the talking yields results, I again spoke about it to each of my colleagues.
Between the soup and the salmon?
The Minister, without interruption.
I do not like to be questioned about lunch. My object is to assemble all the Council of Transport Ministers, practically all of whom, to a greater or lesser extent, are unanimously in favour of the retention of these facilities.
The Minister's colleagues within the Council of Transport Ministers are not the problem.
We have discussed the matter at Cabinet. The financial aspects are a matter for the ECOFIN Ministers but our Minister for Finance rightly wishes to be armed with the results of the study undertaken, which he will receive within a month, as he makes his case to the ECOFIN Ministers. In addition, I understand the Taoiseach intends to raise the matter at the forthcoming Summit of Heads of Government on employment.
Will he be embarrassed to take such a U-turn at European level?
The Taoiseach is not capable of ensuring reversal of the relevant regulation, it must have European-wide consensus. Nonetheless, I envisage this campaign gathering momentum. We will be armed with our study which I am sure will point out the job losses which were mentioned — we cannot predicate the results. The EU promised in 1991-2 there would be a European wide study on the matter, a promise which was not fulfilled. It was indicated this was in the context of harmonisation of VAT and other rates which has also not happened. The predications upon which that was based have not come to fruition and I imagine that at the beginning of 1998 there will be an irresistible urge towards changing this position.
Does the Minister agree she is peripheral to this issue and it is not fair to have her carrying the can? The Minister for Finance should be here. It is his job to get a reversal if the Government has finally agreed to seek one. Following the belated conversion of Fianna Fáil on this issue and given that the Taoiseach voted to abolish duty free at the ECOFIN council in 1991 will the Minister agree this was done on the basis that there was an integrated tax package which turned out to be a bottle of smoke with no substance except for the abolition of duty free and that the Taoiseach bought this pass from——
In fairness to colleagues, the Deputy should put a question.
Does the Minister agree the information she is giving us is much more optimistic than the reality would lead us to believe? Is she aware the Luxembourg Council presidency has informed the Parliament it is in favour of the abolition of duty free and sees it as being against the principles of the single market? This is the position of one transport minister and one minister of ECOFIN. Will the Minister state clearly whether it is her opinion that she will convince all the finance ministers and heads of state to change their opinion on this and force the Commission to bring forward a new proposal? Will she agree it is virtually impossible for the Taoiseach, who voted for the abolition of duty free, as Minister for Finance to now go to Europe and say he was wrong and try to change their minds? Does the Minister think this is a viable proposition?
The Deputy started by saying I was peripheral. I hope I will never be peripheral to anything. The Deputy then requested the presence of the Minister for Finance, Deputy McCreevy. He will answer questions as Minister for Finance but I was asked a question by four Deputies so I am fully entitled to answer it. The Deputy then went on to credit me with great powers because he asked me if I intended to persuade the finance Ministers and the Heads of State. The Deputy cannot have it both ways. I am either peripheral or central. Going back to the point the Deputy raised about the Taoiseach, in 1991-2, when this matter was decided at ECOFIN, there had to be unanimity among the 12.
The Taoiseach could have stopped it.
Please allow the Minister to answer. The time for questions is almost exhausted.
We are assisting the Minister.
The decision taken at that ECOFIN meeting was based on two things. First, there would be a European study, which was never carried out and which now becomes the stick with which we will beat Europe. Second, there was to be a harmonisation of VAT and other rates; that has not happened and it becomes another stick.
The Minister has not even frightened Luxembourg, never mind the rest of Europe.
My job is to ensure that there is a united front among transport Ministers as the pace of this develops.
The Luxembourg Minister did not agree with the Minister.
That is what I intend to do. I can tell Deputy Stagg that I intend to work extremely hard on those Ministers.
Has the Minister spoken to Commissioner Flynn?
I have.
Will the Minister outline the Government's objective with regard to duty free sales? Is it to seek a reversal of the previous decision to abolish duty free facilities throughout the European Union? Is it to seek a derogation for Ireland from the terms of that abolition, or is it to seek some kind of a phase out of duty free sales?
In my experience of dealing with Brussels I found that the Commission is the most political of all institutions. It meets every Wednesday morning, as the Minister knows, and if a vital national interest of a member state is under discussion, the Commissioner of that government can act through negotiation. Commissioner Monti will want benefits for his country that will come under the Social Affairs portfolio. Has the Minister devised a strategy with Commissioner Flynn, as we did with the beef fines, to exercise leverage in the Commission and in the cabinet of President Santer? I am advised that the Commission, under persuasion, would be open to a further derogation of two years if the right strategy was invoked.
I have spoken informally to Commissioner Flynn and he is very much aware of the campaign in which we are involved. I intend to speak to him again. I am aware that, from time to time, quid pro quo arrangements can be put in place, although I am unsure about the level at which that would be done.
Deputy Gilmore asked whether the derogation was open ended. That will depend on the way the campaign develops. Obviously, in practical terms, as the campaign accelerates and other countries become more aware of the dangers to employment arising out of the abolition, the final outcome will begin to take shape.
Written Answers follow Adjournment Debate.
