When we discussed the Air Navigation and Transport (Amendment) Bill some months ago, many Deputies expressed grave concern at the proposed ending of the duty free trade and called on the Minister for Finance, Deputy McCreevy, and the Minister for Public Enterprise, Deputy O'Rourke, to take every conceivable action to have the decision reversed. I commend the Minister, Deputy O'Rourke for some of the steps she has taken so far, such as instituting a broadly based study into the effects of the abolition of duty free and in raising the issue at every opportunity in European fora. However, she is a hapless victim in this campaign——
Private Members' Business. - Duty Free Sales: Motion (Resumed).
The following motion was moved by Deputy Noonan on 10 February 1998:
That Dáil Éireann recognises:
that duty free shopping generates almost 2,000 jobs in Ireland,
that revenue from duty free sales supports investment in infrastructure, vessels, and facilities by airport and ferry companies, that abolition of duty free sales may lead to higher travel costs to and from Ireland,
condemns the Government for its lassitude in not seeking to reverse the EU decision of 1991 to abolish duty free sales, and calls on the Taoiseach to contact all Heads of Government in the EU to seek such a reversal.
Debate resumed on amendment No. 1:
To delete all words after "That" and substitute the following:
"Dáil Éireann supports the efforts made by Ireland, at EU level, to have the issue of intra-European duty free and tax free shopping re-examined by the European Commission and Council, and endorses the action taken by the Minister for Finance to carry out a study, by independent consultants, of the impact on Ireland arising from the ending of intra-European duty free and tax free shopping."
—(Minister for Finance.)
I would not recognise myself in that description.
——in that she has been placed in an invidious position by a decision taken by the Taoiseach a few short years ago. This Government has become famous in the last few months for its string of U-turns on so many issues. I had to remind the Taoiseach last week about the upsurge of joyriding — where is zero tolerance? What happened to the reverse on corporation tax? Where is the support for the anti-nuclear campaign? The Labour Party had to take the initiative on public sector pensions to make the Government live up to its election promises. We also had the unbelievable embarrassment for the Minister of State, Deputy Kitt, of having to vote against a Bill on Sunday trading which he had drawn up and presented to the House in Opposition. The Government's decision on duty free is another betrayal of the people, of thousands of suppliers and workers, which endangers the economies of north Dublin, Cork and Shannon. I call on the Minister, Deputy McCreevy to take every possible step to reverse the decision.
Aer Rianta developed the present concept of duty free and blazed the trail in airport shops and management. In many countries it uses the facility — through airlines and in its own airport facilities — as a shop window for key Irish goods. Aer Rianta is a highly successful public sector company and in the debate before Christmas the Minister, Deputy O'Rourke said that about half Aer Rianta's profit comes from duty free and as a result we continue to have one of the lowest rates of airport charges in Europe, despite the rhetoric of some airline operators. Our industry, particularly the food and drink sector, has been buoyed up by the operation of duty free and at least 2,000 jobs are totally dependent on it. Unfortunately, this Government is telling those people that their livelihood will vanish in the next few months — there is no hope.
The northside of Dublin is in all our thoughts at the moment and some of us will spend a lot of time in the pleasant streets of Swords, Skerries, Rush, Balbriggan and other towns. The airport has 8,000 workers and if one counts the surrounding industrial estates in Finglas, Ballymun, Clonshaugh and Baldoyle, perhaps 40,000 people are directly dependent on the aviation industry — many of these issues will be raised in tomorrow's debate on aviation. A key ingredient of the success of that sector has been duty free. Many famous goods, such as our whiskeys and Bailey's Irish Cream, received an important shot in the arm from duty free sales. There are still areas of deprivation in the northside and agencies such as Nordubco, the partnership company of Ballymun, Finglas, Coolock and Baldoyle, have tried to set in motion many enterprise and employment supports. However, the Minister, Deputy McCreevy is pulling the rug from under the efforts of north Dublin communities over many years.
Who is responsible for this? Last night the Minister for Finance blamed Commissioner Monti and said the matter was out of his hands, all we could do was hope. However, the person clearly responsible is the Taoiseach, Deputy Ahern. As Minister for Finance in 1991, at an ECOFIN meeting for which he may not have been well prepared, where a unanimous decision was necessary to abolish duty free, he sold out the nation and the duty free industry in a disgraceful abnegation of duty. He could have followed the past example of politicians from France, Germany and Britain by leaving the meeting but he refused to do so. He took the popular, consensus route which was not in Ireland's interest.
There were attempts last night to present the 1991 decision as almost inevitable but it was only a proposal. Some conservative countries had ideological commitments to a single market, as we have seen from some of Commissioner Monti's recent pronouncements. Nonetheless it was up to the Taoiseach, in his previous role as Minister for Finance, to alter that decision but he failed dismally. I hope the voters of Dublin North and Limerick East will bear this in mind and that Dublin North returns my colleague, Senator Ryan, to the House.
We have seen widespread popular support throughout Europe for the retention of duty free. There was a massive demonstration in Brussels recently, attended by people from all 15 member states. Some 140,000 jobs are endangered by this mad decision of the Finance Ministers. Following the Luxembourg Summit, we are enjoined by the leaders of all parties to campaign for the success of the referendum on the Amsterdam treaty, but how can we sell that treaty when a key industry for this nation, which is heavily dependent on air transport, is endangered? It is imperative that we tap into the groundswell of popular opinion in Europe opposing this measure. The Minister for Finance said that only Finland would support us in taking on the crazy ideologues in the single market. That is a useful start and other Nordic countries may support us also.
Over the next few months we will have significant debates on European integration. Distinguished commentators such as Mr. Damien Kiberd, Mr. Matt Cooper and Mr. Paul Tansey have indicated they would like us not to join the euro. They outline why we should not give up our monetary independence, that it would be crazy in light of how well the economy has fared in the last three to four years, but at the end of their articles they leave the matter hanging. Those gentlemen should be frank with us and spell out their considered view. Those of us who supported European integration over the years find it more difficult to do so because of this crazy decision on duty free.
From the middle of next year we will suffer a catalogue of negative economic consequences of this decision. There will be higher charges at our airports and on our ferries and the price of consumer goods will be subject to inflationary spirals. It could turn out to be a very negative economic force for our economy in many ways.
In the current dispute, which will probably feature heavily in tomorrow's discussion on aviation policy, many people have said the success of Ryanair is due to the fact it could take advantage of duty free sales. I commend the Minister for her sincere efforts at European level but I ask her, the Minister for Finance and the Taoiseach to strengthen those efforts, to not give up the ghost and to continue to fight for an extension of our duty free sales industry.
I listened with interest to Deputy Broughan and I agree with much of what he said, except what he said about the Taoiseach.
Does the Minister wish to share her time?
I wish to share my time with the Minister of State, Deputy Cullen, and Deputies O'Flynn and Killeen.
Is that agreed? Agreed.
I agree with Deputy Broughan that if one wants something one should fight for it. The Irish people, in common with the majority of the people of Europe, do not want to see their duty free concessions abolished. I am prepared to fight for this and I have spent a significant proportion of my time pressing the case with my colleagues on the Transport Council in Europe and with others of influence.
While many have written off the duty free sales campaign, I will not so do. I heard a prominent member of Deputy Yates's party, Joe McCartin MEP, giving radio interviews backing the Commission stance that duty free sales should be abolished next June. I am, obviously, saying that from a party political stance, but I am also saying the Deputy should talk to Mr. McCartin because the European Parliament will have something very definite to say on the matter.
The Minister should talk to Commissioner Mario Monti.
He is impossible to talk to.
She should talk to the Taoiseach.
This afternoon I arranged a meeting with my German Transport Minister counterpart, Matthias Wissman, for Tuesday, 3 March, in Bonn. There are growing indications the German Government may back the campaign for the retention of duty free sales after June 1999. I also hope to meet the UK Deputy Prime Minister on Monday, 23 February. I will underline the loss of jobs, dearer air fares and access costs if duty free sales are abolished.
Duty free sales began in 1947 with the passing of the Irish Customs Free Airport Act which installed the first duty free sales outlet at Shannon Airport. It was a most imaginative step which grew from a small kiosk in Shannon Airport to a major business which, as Deputy Broughan rightly said, underpins much of the profits of Aer Rianta and provides much needed employment and a showcase for Irish goods. In 1995 world-wide duty and tax free sales through airports and on ferries and airlines amounted to £13.1 billion. The EU is the largest market for those sales.
In Ireland and elsewhere the existence of duty free sales has been crucial in helping many quality brands to become established or to be revived. Products such as crystal glass and cream liqueurs owe much of their success to the exposure they received in duty free outlets, which acted as showcases. New lines were developed which became successful through duty free sales and word of mouth.
As every speaker has said, we must highlight the link between duty free sales and transport. Ireland is an island beyond an island. We have a small open economy which is heavily dependent on air and sea links with our trading partners. The Irish experience has been that profits from commercial activities, particularly duty free sales, have enabled the transport sector to minimise access costs. Deputy Yates spoke at a committee on which we both sit about the importance of this competitiveness. We do not see this as a distortion of competition. As we do not have the luxury of land borders with other member states, we see it as sound commercial practice to reduce access costs, both for exports and imports and for tourism.
The position of our Government is that the duty free sales industry has been shown to make a major contribution to the economics of the travel industry. My unrelenting call at Transport Council meetings of the European Union is that the European Commission must conduct a study into the economic and social impact of the implementation in 1999 of a decision taken in 1992.
Time is short. Reversal of the present decision requires a proposal from the Commission and agreement by ECOFIN. I think they are afraid to conduct the study. We unearthed a commitment to undertake a study by the then Commissioner of the European Parliament — a solid spoken commitment which was recorded in the minutes. This is also occurring against the background of the harmonisation of tax, which has not been realised and was a right wing, ideological stance at the time.
The primary reason for abolishing duty free sales is that such sales are inconsistent with an internal market. However, it is simply untrue that they are a distortion of competition.
It is now clear that many elements of the single market will not be in place by 1999. Huge disparities remain between the levels of excise duty applied in member states and will continue to do so for a long time to come. The Commission is no longer saying those rates must be harmonised, so why does it insist that duty free sales cannot exist in a Single Market?
It has become a matter of dogma which should give way to a more practical, pragmatic approach. Customers want duty free sales. Some commentators adopt the line that duty free sales are élitist — why should people "subsidise" the élite who travel? That argument must have gone out 25 years ago. The idea that one must be part of the élite before one can travel on an airline is élitist in itself. Did they never hear of ordinary people — and rightly so — going on package holidays for a week or travelling to see their folk around the world? They have some harmless fun spending money in the duty free shops. I have heard this argument from commentators who have a degree of influence on radio and television. This argument about a travelling élite smacks of élitism itself.
The latest argument I heard for abolishing duty free sales is that cigarettes and drink are bad for people. Thank God we have not yet adopted a policy of forbidding people to smoke or drink. All cigarette packs carry a Government health warning and advertising has been reduced, which is quite proper. However, the idea of a nanny state telling people that they cannot buy a bottle of whiskey or wine because drink is bad for them is undesirable. What about perfumes, make up and glassware, which are also available in duty free shops?
People do not want to come home from holiday with money in their pockets which they could spend on the aeroplane. On their journey out they are in good form and in a holiday mood——
They will be coming home with euros in their pockets.
——and would like to spend some money. They are not large sales but are modest impulse buys. However, they create good employment in the duty free outlets and the companies which produce the goods. They also reduce airport charges, which have been kept stable by Aer Rianta for 11 years.
That all adds up to a good story. However, the miserable, overly bureaucratic determination of Europe says that because a decision has been made it must be stuck to. It upsets their "neat" minds to have what they allege is a distortion. A recent survey showed that people in the UK are becoming disenchanted with Europe, although that has not happened yet in Ireland.
The Amsterdam Treaty is about employment but at one stroke it will take away much employment. My colleague, the Minister for Finance, and the Cabinet agree with me on this matter and I have carte blanche to trumpet the cause of duty free sales in Europe, which I will do. The Germans have a general election coming up and I hope they act. I will ask other countries to rally to our cause. I would like to see——
Perhaps a Labour Government in Germany.
Perhaps in September. Chancellor Kohl is being exercised by that and the result will be tight. The House should not divide on this issue. If we are all at one, why is the House dividing on the issue? I will welcome any support and look forward to continuing to promote the cause.
I am sharing my time with the Minister of State at the Department of Finance, Deputy O'Flynn and Deputy Killeen.
I agree with the sentiments so eloquently expressed by my colleague, the Minister for Public Enterprise. This debate has been useful and fairly constructive on the issue of the ending of duty free sales. I am sure some of the confusion on the subject has now been cleared up. In contributing to this debate, I echo and emphasise some of the points made last night. It is crucial the House is at one on what is an important issue. Duty free sales have had cross party support in the past and it is important that it continue in the future if we are to resolve this issue.
The issue should not be a target for electoral point scoring and I am sorry to see that emerging. If we cannot convince ourselves on a single point of action — indeed, on a single cause — we stand no chance of convincing our partners, let alone a Commission that is hostile to the idea of reopening the duty free issue. As we know, the Commission has stated that it regards the issue as past, settled and enacted into law. The task before us is to change its mind and there is little value in dividing our forces.
We should join in a clear effort to press the Commission to change its mind on duty free sales. This action is not the sole responsibility of this Government, although we will continue to keep up the pressure. As was mentioned yesterday, Deputies opposite have also been in contact with the Commission, our Commissioner and, indeed, other Commissioners. The more contact made with the Commission, the more it might get the message that we are serious about the potential impact of the ending of duty free sales on Irish travellers.
As we are an island on the periphery of the EU and cannot drive directly to Europe, we are disproportionately dependent on air and sea travel. We need sea ferry routes available and we need them throughout the year, not only during the peak holiday months of the summer season. Any consolidation of routes as a result of this deadline would not be helpful to business and industry. The leisure traveller would also be discouraged.
Our network of regional airports, including my local airport at Waterford, all play an important part in local economies. They help to underpin activity in the regions by making access for business and leisure travellers much easier. Without direct air services a weekend tourist trip from England to Dunmore East, for example, is hardly likely to be practicable. The duty free issue is important not only for Dublin and Shannon, but for the whole country.
We have led the running up to now and must continue to do so but we need allies, as the Minister for Public Enterprise outlined. At this point I would like to turn to a misconception which is being put about that Ireland alone could have secured the permanent retention of duty free sales while agreeing on the tax arrangements for the Single Market. It is not reasonable to allege that the Minister for Finance signed away duty free facilities in 1991. A valuable agreement that paved the way for the Single Market was reached in ECOFIN. The Single Market has been good for the economy, for jobs and for Europe also.
We are now much clearer on the procedure required to change that decision. How we got here in the first place is still the subject of some inaccurate reporting. It must not be forgotten that the original Commission proposal was to end duty free sales on 31 December 1992. Faced with this proposal for the immediate ending of duty free sales and the requirements to reach an agreement on central aspects of the tax arrangements for the Single Market, to achieve a seven and a half year extension against the views of the Commission must be recognised as a success for negotiating skills. This meant reaching a compromise in the ECOFIN Council against the strong opposition of others who sought an immediate, or a very early end to duty free sales. The common reaction at that time was pleasure and relief that a deal had been agreed. The Opposition last night tried to argue that we should never settle anything at Council but veto every issue. It seems to recommend the "not an inch" approach that it criticises in others.
It must be recognised that Ireland came to the defence of the duty free industry and, with others, was instrumental in obtaining a delay in the abolition of duty free sales. The seven and half years delay has provided a unique opportunity for the industry to prepare. Seldom has such a long early warning been given. Most industrialists would be delighted with such certainty as to market conditions. It is particularly regrettable that during that time the industry, which has spent considerable sums on publicity at home and abroad, has not mobilised much support in Brussels.
The other misconception mentioned last night concerns the linkage with a possible harmonisation of excise rates. Although the differing excise rates may well have been discussed, there was no agreed linkage between harmonisation and the extension to duty free sales. The extension of time was to enable the industry to adapt. My colleague, the Minister for Finance, said yesterday that considering our strategy for taking this issue forward is crucial. We know the Commission is strongly opposed to reopening this subject and we must avoid overplaying our hand and being seen as the Irish eternally singing the same old song.
One thing that may cause the Commission to reconsider is a well thought out and carefully documented and professionally substantiated impact analysis. Rhetoric and emotional claims of doom have not made any impression on the Commission. We need to be able to show hard numbers to the Commission, not only figures based on particular pessimistic assumptions. It is for this reason that the study being carried out for the Department of Finance by independent consultants is running somewhat behind the original schedule. We have stressed the need to get this study right. The consultants have very diligently gone back to those who provided some of the source data to be absolutely sure that all the information is complete and can be backed up under scrutiny.
We owe it to those affected to give our best even if this means a small delay. We must also recognise that in the scale of issues in the European context in the run up to EMU, duty free sales are still a low priority for many of our partners. ECOFIN will be heavily involved with economic and monetary union over the next few months and would be more than irritated at a discussion on a case that is not well thought through, or one that does not have the support of several other member states.
We need allies at the table and it is reasonable to suggest that will be central to Ireland leading the charge to reverse this decision on duty free sales. There are signs, because of the pressure from Ireland through various Ministers and the Taoiseach, that there is a rethink taking place. Putting in place the hard evidence which will be available to us when the report is complete very shortly will be the key to making our case in a determined way and will enable us to substantiate all the issues which have been genuinely raised by Deputies.
There is another aspect which might help us to understand the attitude of the Commission. The Minister for Finance, Deputy McCreevy, spelled out yesterday the main reasons put forward by the Commission for its approach to this subject. The abolition of duty free sales may be for the Commission a very visible sign of a leap forward in the progress towards a true single market. For the Commission, the stakes are high. If it rows back on this decision, its objective of a truly open and transparent Single Market is delayed, or set back if a permanent extension to duty free sales is agreed.
We will continue the campaign at every opportunity. We must support the Taoiseach, the Minister for Finance and the Minister for Public Enterprise and those involved in pushing forward the issue. There is nothing to be gained in electioneering on a national issue of common interest. I hope the House sees the wisdom of a united front on this issue.
I wish to share my time with Deputy Killeen. I am disappointed that the EU is pressing ahead with its stated intention to abolish duty free shopping at air and sea ports. The group which formed the EU sold membership to states on the basis that it would benefit citizens. I do not understand why the EU is now demanding that we conform to selected internal market rules. We are all more than aware of the disparity in excise and VAT within the EU. Why is there a demand for conformity in this area only?
The EU has not honoured its commitment to undertake a study into the consequences of the abolition of duty free shopping and Ireland has had to commission its own study. The European attitude is a classic example of double think. The bureaucrats are demanding that we meet a timeframe which is being imposed on us in the context of tax harmonisation within the EU. We are all aware that fiscal parity within the Single Market is not a reality. Tax harmonisation has not been achieved, but the EU has chosen to ignore this and is insisting on the abolition of duty free shopping which was only one part of the package of tax measures agreed in 1992.
Will the EU compensate us for the loss of jobs and revenue we will suffer if we do not get a further derogation? We should be given a derogation until such time as all member states are really equal in terms of taxation. No recognition seems to be given to our dependence on the revenue generated by the tourism industry, of which duty free shopping is an integral part. In this context, it would be more correct to refer to duty free shopping as travel shopping as it can only be availed of by those who travel. Tourists generate much revenue and the loss of any portion of this will lead to a loss of employment. There are 25 people employed in the duty free shopping section of Cork Airport which earns £2.5 million from duty free sales. The abolition of duty free sales will also lead to the loss of vital advertising and selling outlets which act as a shop window for all that is best and beautiful in Ireland. We could not pay for the publicity provided by duty free outlets.
Duty free shopping was supposed to have been phased out as far back as 1987 but it was decided to defer implementation until 1993, following which we were given a final derogation until 1999. It is very difficult to understand the hard line being taken on this tax source given that a blind eye seems to be turned on many existing tax anomalies in Europe. Ireland is a small nation and entitled to fair play. The fact that duty free shopping is not a priority issue in Europe does not mean we should have to pay the price in terms of the loss of many hard earned jobs.
There must be intervention by the Government at the highest level in actively canvassing European Heads of State, members of parliaments and MEPs. However, we must adopt a unified approach and not be divisive. I commend the Taoiseach on his efforts to prioritise this issue at last year's EU summit on employment. He rightly highlighted the impact of the abolition of duty free shopping on employment in this and other states. While the Minister for Finance must adopt a proactive approach, he needs to be armed with the facts, which is why he is awaiting the study. It is demoralising to realise that we are raising this issue more or less in isolation.
I commend the leader of the Labour Party, Deputy Quinn, for raising this issue during our Presidency of the EU. Unfortunately, he did not succeed in his excellent presentation in convincing the Commissioner of the importance of the retention of duty free shopping. I wish his colleagues in the Labour Party would follow his example and exercise their minds instead of their mouths. The Labour Party was in Government from 1992-7 and the vocal professional knockers who spoke last night should produce their submissions during that period so that they can be fairly judged on their work record in regard to duty free shopping. They should also invest in hand basins and towels so that they can perform their Pontius Pilate act in public in a more convincing manner.
The bureaucrats in Europe are preoccupied with ensuring that all states market the same size potatoes and tomatoes. They have even suggested that producers should market a straight cucumber of a standard size. It would be better if they focused on the reality instead of being enthusiastic and voluble about such mind-boggling matters. They would be well advised to devote a similar amount of time to studying the jobs market.
I congratulate the leader of the Fine Gael Party and his colleagues for their honesty in tabling this motion which acknowledges their inaction on this issue during their term in office. They have been unfairly critical of the record of the Government and of their partners in the rainbow Government. While I am sure they made many inspiring speeches on this vital issue, I do not remember them. I sincerely hope they are not suffering from a degree of lassitude.
I support the Government amendment and urge all Members to do likewise in the national interest. We should go forward together to fight at European level for a further derogation for duty free shopping.
The proposed abolition of duty free sales poses a huge threat to tourism, industry and trade and will lead to an inevitable increase in sea and air fares and a loss of jobs. A constructive approach to the issue is required. Those who are serious about the issue should support the Government and put forward suggestions on how best to deal with it. Unfortunately, some people have made a political football of the issue and used the opportunity of the debate to hurl insults at each other. It is too late in the day for this and what we need is a constructive approach. I am not impressed by the efforts from whatever quarter to belittle the importance of jobs in my constituency through silly point scoring.
It is important to put on the record the background to duty free sales. The setting up of duty free shops at Shannon Airport in 1947 was the brain child of Dr. Brendan O'Regan. As I am sure my colleague on the other side of the House is aware, he is still very active on this issue and has put forward several suggestions on how to deal with it. Prior to 1947 the airport enjoyed custom free status under the Chicago Convention. Dr. O'Regan was successful in persuading the then Government to accept his revolutionary proposal and allow duty free shopping at Shannon Airport.
The revenue generated by duty free shopping was extremely important and provided the seed capital for setting up the Shannon industrial estate and the Bunratty medieval banquets. I am sure many people thought this was a daft idea at the time. Unfortunately, I have not had an opportunity to read the Dáil Official Report on the issue. Dr. O'Regan had an uncanny knack of turning impractical ideas into major successes.
Regardless of how successful State companies and agencies are, they can never fully address the problem of unemployment, particularly during times of recession. Dr. O'Regan has suggested that the profits from duty free outlets should be linked with local community employment development initiatives. As this is consistent with its policies, we should be able to persuade the EU to go down this road. This initiative worked well in Britain in the 1980s when British Steel carried out much work in various unemployment blackspots.
Duty free shops are very important in terms of employment and providing companies with a global window for their goods. Many companies have gone on to achieve greater success as a result of this. If duty free shopping is abolished the effects will be most keenly felt in the surrounding areas. Direct employees are deeply concerned, as are suppliers of local craftspeople who depend on the outlets.
It is extraordinary that at a time when unemployment is by far the greatest problem in the EU, this proposal is put forward by the competition-driven section at EU level. Dr. O'Regan's advice was that confrontation between the Commission and the duty free sales lobby is not the way to proceed but rather to suggest initiatives, which to some extent would take the Commission off the hook and allow it to fit the various duty free shops into a European network to help local communities. Dr. O'Regan did enormous work in that regard. For instance, Dr. Stewart Evans, with whom he was in contact, suggested a levy on duty free outlets — in many countries they are private enterprises, here they are semi-State companies and in other countries they are State companies — and that it be directed, with European agreement, at specific employment funds as seed capital. That is entirely consistent with the EU White Paper on Growth, Competitiveness and Employment, 1993, which envisages the development of work and employment, sustainable and internationally competitive, at local level.
Ba mhaith liom an t-am atá agam a caitheamh le Teachtaí Barnes, McGinley, Hayes agus Donal Carey.
Is that agreed? Agreed.
The contributions I have heard from the Fianna Fáil benches tonight indicate that it supports the motion put forward by the Opposition. The best way to ensure a united House on this issue is for the Government to drop its amendment to the Opposition proposal and go to Brussels with a united House behind it. The arguments I will make and those made by the Opposition last night are precisely the same as those made on the other side of the House. There is no reason, therefore, for conflict and division in the lobbies tonight. I appeal to the Government parties to withdraw their amendment and allow the House to pass the motion unanimously.
The move to abolish duty free sales within the European Union is a reflection of the rigid and inflexible decision-making process that makes so many people in so many European countries cynical about the whole European project. Someone, somewhere in the European bureaucracy decides that the concept of duty free sales is incompatible with the principle of the Single Market and that it must go, irrespective of the implications for jobs, the impact on the cost of air and sea travel and the consequences for the tourism industry.
As an island nation on the periphery of Europe, with a high level of travel between here and other European countries and a tourism industry that is crucial to our economy, the proposal to abolish duty free sales was clearly a matter of vital interest. Most disappointing is not that we seem to have lost the battle to save the duty free industry, but that Fianna Fáil seems to have thrown in the towel so easily. Duty free shops grew out of the idea of the custom free zone at Shannon airport pioneered in the 1940s by people like Dr. Tim O'Driscoll and Dr. Brendan O'Regan, in the face of the usual opposition from the Revenue Commissioners who warned that it would not work and insisted that the custom zone would have to be surrounded by a 20 foot high wall, barbed wire and flood lighting. It was a short logical step from the first custom free zone to the first duty free shop. The concept of duty free sales was one of the many fine things Ireland brought to the world, yet the Fianna Fáil Government seems content to see it washed away with little more than a token protest.
The Taoiseach is justifiably regarded as a shrewd operator with his finger on the political pulse. Yet his decision as a member of the Council of Finance Ministers in 1991 to agree to the abolition of duty free sales must rank, alongside his decision to introduce the tax amnesty, as one of the greatest political errors of his career. Make no mistake about it, the damage was done in 1991 when the then Minister, Deputy Ahern, went in and surrendered without a struggle. Since then we have been fighting an uphill battle to recover ground.
It is difficult to understand how any Government or international body like the EU would deliberately put people out of work. Sometimes governments have to make difficult decisions leading to job losses where, for instance, a State-owned industry is a huge loss maker with no future and costing taxpayers an excessive amount of money. It defies belief that any institution would decide purely for dogmatic reasons, to jeopardise 11,000 jobs in this country and 140,000 in the wider EU by imposing a death sentence on an industry that is successful, viable and popular with the general public.
The ideological basis on which the decision of 1991 was based — the assumption that full harmonisation of tax rates in EU countries would be in place by 1999 — no longer holds water. Tax policies in member states are more divergent than ever. Duty free sales have been an important element in air and sea travel for almost 50 years. They have stimulated trade, created jobs and helped keep travel costs down. As night follows day, their abolition will reduce trade, jeopardise jobs and increase travel costs.
Aer Rianta is one of Ireland's most successful and go ahead companies. Its expertise is in demand all over the world and it runs airport shops in the most unlikely of places, but its core business is running Irish airports. Duty free sales account for about 40 per cent of Aer Rianta profits. If that revenue goes, it will have to be made up in other ways. Car parking charges are likely to increase, as are landing and handling charges for aircraft — according to Aer Rianta's commercial manager, Frank O'Connell, they will increase by 50 per cent — and these will inevitably be passed on to the public though higher air fares.
The same is likely to happen in regard to ferry travel, an area where much of the travel is for leisure purposes, often day trips. Ferry companies estimate that every 10 per cent increase in fares leads to a decrease of about 10 per cent in the numbers travelling.
The knock-on effects on the tourism industry are likely to be quite dramatic. The Irish Duty Free Association has estimated that the abolition of duty free sales could lead to an increase of 30 per cent in travel costs and a consequent loss of 760,000 visitors to Ireland each year. Even if, as a group with a vested interest in this area, that association has painted the worst possible scenario, even if it is only half right in its estimates, the consequences would be catastrophic. Some £50 million worth of goods were sold by Aer Rianta in duty free shops in Ireland. The total Irish duty free market is double that. A huge proportion of this consists of Irish made products. Some 20 per cent of Irish Distillers' whiskey sales are made through duty free shops. Duty free buying is virtually all discretionary spending. People buy a bottle of whiskey or a bottle of perfume because the duty free shop is there, but if the duty free shops are gone, they are not likely to go down to the supermarket and make the same purchase. Trade will suffer and jobs will be lost.
The free movement of people is one of the cornerstones on which the EU is supposed to be built. Is it not a great irony that the EU is now proposing to do away with something that makes travel cheaper and more accessible to the majority of people? Time is ticking away, but it is not too late to act, if action is taken immediately. There are 16 months before the June 1999 deadline is reached, but a far more aggressive and proactive approach is required on the part of the Government. The Taoiseach promised to raise the matter at the pre-Christmas EU summit, yet nothing happened. He must grab the attention of the other leaders and ensure they know how important this matter is to this country. If this requires banging a few tables, that should be done. The motion before the House suggests the Taoiseach should contact each head of government in the EU. That is the minimum that must be done.
We are discussing an issue that has the potential to do significant damage to the aviation industry and it would be inappropriate to finish without briefly referring to another issue that has the potential to damage the aviation industry, that is the dispute at Ryanair. It is appalling that we are standing aside and allowing the Ryanair company and its chief executive, Mr. O'Leary, to rubbish the social partnership on which good industrial relations have been built in recent years. It will be catastrophic if the disease of refusing to negotiate with legitimate trade unions in a company is allowed to stand. I appeal to the Government to do everything possible urgently before this dispute escalates out of control.
The decision to abolish duty free and tax free sales was unanimously adopted by the Council of Ministers representing EU member states in 1991. The Taoiseach represented Ireland at that critically important meeting in his then role as Minister for Finance. He is the only person who now has the opportunity to right that wrong. If he had used his veto in 1991 we would not find ourselves in this position.
Duty and tax free sales are a major international business. For example, in 1995 global DTF sales were valued at $20.5 billion. In that same year, DTF sales by the principal Irish owned operators exceeded £85 million, which is small in the context of the global figures. However, it is of major importance to Ireland for two reasons. First, Irish DTF sales per head of population are the fourth highest in the EU. Second, intra-EU duty and tax free sales comprise almost 80 per cent of total DTF sales in Ireland. Abolition would, therefore, have major repercussions for the travel business here.
Cessation of DTF would deprive travellers within Europe of access to cheaper goods. More important, duty free abolition will increase passenger fares to and from Ireland and will increase the international transport costs facing Irish exporters. For example, Aer Rianta estimates that it will need to raise charges and fares by as much as 50 per cent to restore profitability to preabolition levels. This would have serious implications for the tourism industry.
Reductions in access fares have played a key part in initiating and consolidating the tourism drive that Ireland has fortunately experienced over the last decade. The abolition of intra-EU duty and tax free sales will halt and reverse reductions in access fares, making it more difficult for tourism to expand in the future. In addition, Irish exporters will be unable to avoid these increased charges by substituting road or rail deliveries for shipping or air freight because of the absence of a land bridge with the UK and Europe. It must be clear to the Minister that higher passenger fares and increased freight rates will have negative implications for the tourism and export sectors of the economy. It cannot be overlooked that revenue from duty free sales supports investment in infrastructure, vessels and facilities by airport and ferry companies in Ireland.
An even more potentially serious consequence for regional airports supplying duty free airgas and Jet A1 aircraft fuel is the inevitable reduction of airport business opportunities. In the case of Donegal International Airport, with which I am familiar, duty free sales constitute a significant percent of earnings, but the greater concern for the company would be the threat to airline routes and future route development arising out of increased fuel prices. The fuel volumes consumed within aviation represent a major overhead. The impact on the bottom line for all companies involved in international travel, transportation and tourism resulting from the proposed change would be very negative. The resulting differential on fuel rates from intra-EU transportation will cause a huge cost burden on airlines. A review of such services, especially on regional routes comprising mainly fare sensitive leisure and tourism markets, is likely to follow.
Passengers using Donegal International Airport are mostly Scottish and Irish visiting friends and family. They enjoy the fun of getting a good deal in duty free shopping. If such purchasing enables airlines and other vital industries to gain cost savings by spreading charges in a more beneficial and universal way why change it? The significant loss in revenue to airport and airline companies, highlighted in the recent report on the status of duty free sales by Tansey, Webster and Associates, is of major concern to regional airports.
Overall, the abolition of duty and tax free sales would be a major blow to our regional airports and would result in lost revenue, significant fuel increases to international airlines, increased air fares, reduced employment and lower traffic growth rates. The Minister and the Government have a duty to undo the damage inflicted by the 1991 agreement in which they participated.
I join with other speakers in expressing my regret that the Government does not appear to be taking this matter seriously. I read the speech by the Minister for Finance and listened to the Minister of State, Deputy Cullen, earlier. They appear to concede that the decisions on duty free sales are almost irrevocable. The Taoiseach conceded as much during Question Time.
In his speech the Minster for Finance said:
Naturally, the more Heads of Government and Finance Ministers call for a discussion on this subject, the greater the pressure on the Commission to bring forward a proposal, but I sometimes wonder if the pivotal role of the Commission in the handling of EU business is fully understood. It is the Commission who must be persuaded in the first instance, not the Government, Finance Ministers nor Heads of Government. The Commission must be persuaded of the need to keep duty free.
Neither the Minister nor the Minister of State, Deputy Cullen, indicated how they propose to change the Commission's position.
We are already trying to do that.
The most disconcerting moment in the House yesterday was Deputy Noonan's reference to two letters, one from Commissioner Wulf-Mathies and the other from Commissioner Flynn. As they have not succeeded in even getting Commissioner Flynn to listen to their case I am not convinced that the Minister and Minister of State are serious about helping the duty free interest. The Commissioner offers no comfort to anybody. Coming from County Mayo he knows most about the impact of peripherality. There is even a reliance on duty free sales in County Mayo, at Knock. The Minister for Finance never mentioned the role of the Commissioner in his speech.
The real problem is a lack of understanding of the aviation industry. When the then Minister for Transport, Energy and Communications, Deputy Cowen, removed the transatlantic status of Shannon Airport no preparation was made for the future. It was known at that time that the abolition of duty free sales was inevitable.
We told the industry seven years ago.
How is the airport to survive when one of its major profit making assets is duty free sales? Deputy Killeen spoke of how the concept of duty free sales originated at Shannon Airport.
Political decisions must be made but the Fianna Fáil led Government appears to be inactive. There appears to be some kind of trade-off.
That is not true. The Deputy's rhetoric is not helpful to Ireland's case.
The greatest Tadhg an dhá thaobh I ever heard in the House is the Minister of State, Deputy Cullen. He runs with the hare and hunts with the hounds. He did not offer one suggestion on how to tackle this matter.
I offered three or four suggestions.
I did not hear any suggestions.
The Deputy obviously was not listening.
Did the Minister of State look over his speech before he came to the House?
I know what it contains.
Did he get the doctrine right?
I do not listen to anybody's doctrine, only the facts.
Deputy O'Malley said the Government has ten years to save Shannon Airport. It requires infrastructure, but the Government is sitting on this issue and duty free sales will be abolished with the consequent loss of approximately 11,000 jobs in the entire economy. Although the Minister of State is from County Waterford, he does not even understand peripherality. He has no idea and I am very disappointed with him.
I wish to share my time with Deputy Hayes.
Acting Chairman
Is that agreed? Agreed.
As time is limited I will not repeat the many significant and important points made by other speakers. However, I ask the Government to take them on board. Duty free sales are as vital to Ireland now for economic reasons as when they were first set up. Two of the most significant and important developments in the economy are the promotion of tourism and the production and export of high quality products. Duty free sales at air and sea ports contribute greatly to the success of this business and I hope this will expand.
All sea and almost all air traffic from Ireland is to EU countries. The trade is not peripheral although Ireland is peripheral and, therefore, the damage to the sale and marketing of Irish products and the indirect business associated with them is almost impossible to calculate and predict accurately. The employment and increased travel resulting from the attraction of duty free sales are most significant as is the concentration of employment in certain areas which is beneficial to the entire community. For example, Aer Rianta estimates that at least 250 jobs at Dublin Airport can be attributed to its duty free business. In my constituency, Dun Laoghaire, the ferry services are substantially subsidised and supported by duty free sales. They are the life blood of the area and in turn add to the network of business and tourism flowing from the throughput of passengers.
Duty free outlets are the sales windows for good quality Irish products. Most of the cosmetics and perfumes sold are made abroad but there is a huge increase in production in this area and duty free is the outlet in which they could market their products. Half the alcohol, two thirds of cigarette and three quarters of jewellery and glass sales are Irish made products. Suppliers to duty free outlets who manufacture in Ireland and sell directly to them depend to a significant degree on those sales. Deputy De Rossa and others referred to the high level of duty free sales of Irish Distillers and Gilbey products. Some specialist companies rely almost entirely on duty free outlets. They might go under because a higher percentage of their sales and marketing depend on duty free outlets. As other Members pointed out, travellers also gain. I will not repeat the points about the increase in the costs of fares and services and that improved standards will be denied to passengers if the subsidy provided by duty free profits is abolished.
Ireland has a good case to make in Europe and I hope, as Deputy De Rossa said, that the House will act collectively on this matter. There is also a collective feeling among other EU countries which will be adversely affected by the abolition of duty free sales. These countries include Finland and Sweden which as a result of their location will be seriously affected. This aspect also applies to Ireland. The difficulty is to get across the point to the mainland Continent that the ease of travel there in terms of car and train journeys is not afforded to Ireland. We must stress our reliance at every level of business, tourism and social activity on transport by water or air in terms of people travelling from Ireland or attracting tourists. This aspect must be made clear.
Regional differences and disparities have always been recognised in the European Community. This is one of the most positive aspects of the EU. Many battles have been fought and won with regard to the harmonisation of the production of sausages and cheese. We must win this battle. If other countries and cultures can make their points, stress the practical good sense of their arguments and win, Ireland has a powerful argument to make. I appeal to Members to work collectively. The House should run with this motion and ensure that the Legislature and all elected representatives are full square behind the case being made in Europe. The Government should use its lobbying potential and Commission contacts to get the other countries which will be adversely affected on board. We cannot allow the abolition of duty free sales. Reversals and revisions have already taken place in the EU. This is what a community is supposed to involve and I appeal to the Government to take this matter on board. It is not partisan because it involves everybody and our future.
The motion is fine except for the part which condemns the Government.
Mr. Hayes
I wish to deal with two specific aspects. I did not think Ireland would reach the depths of the debate which took place in Britain on its sausages or the curvature of a banana. However, this type of maniac tendency has unfortunately gripped the public's imagination. The public in Ireland and in the EU supports a basic and fundamental part of travel in modern Europe. The issue has clear public support and it is obvious that a certain number of jobs are provided in the EU as a result of duty free sales. A turnover of approximately £4.5 billion a year in the EU is generated and 140,000 jobs are provided. The entire European Union wins if the status quo in relation to duty free sales continues. Yet a maniac decision to abolish it was taken some time ago by the European Commission.
European institutions must get a handle on the issues which are important to people in the EU. I condemn the European Parliament in this regard. I read its six page report but it is all over the place on the issue. If the European Parliament has any teeth and is supposed to represent European citizens and advocate their case, it should have the clear position that it is opposed to the abolition of duty free sales in June 1999 by the Commission. The Parliament must get its head round this issue, take a clear position and respond to the popular view in the EU. The case for the retention of duty free sales has popular support. Countries such as Ireland are winning as a result of duty free sales and it would be ridiculous to change the status quo which has created so much extra revenue and jobs.
The Government amendment calls on the Minister for Finance to carry out a study and to do everything possible to lobby against the abolition of duty free sales. However, that is not the view of the current chairman of ECOFIN, the British Chancellor of the Exchequer, Mr. Gordon Brown. He is very clear in his views. After the first meeting since Britain took over the Presidency on 9 January he said:
There is no widespread move to revisit that decision. I have not seen any evidence of support for duty free among the member states.
What is the Minister doing if the Chancellor says no opposition to this matter is being raised at ECOFIN meetings? The British Chancellor has stated that our Government has not done enough to raise this matter where it counts.
I support the amendment because, like all Members, I support duty free. I recognise that duty free is not about the £7.99 bottle of whiskey, cheap perfume or great value in aftershave. It is a £13 billion industry world-wide that is worth £100 million to Ireland.
The bottle of whiskey contributes to that.
All Members should support the amendment. The Government is correct in undertaking a study of the economic impact of this decision. It is the only way we will be able to convince our partners in Europe.
That is where the problem lies. It is difficult to have this matter raised at ECOFIN. Duty free is not as important to other European countries as it is to us. We are the only country without a land bridge to the rest of Europe, and we are heavily dependent on the export industry. Other countries can maintain duty free for travel outside the EU, which is an option we do not have apart from with America. It will not affect Heathrow, Amsterdam or Frankfurt, which are hubs to the rest of the world. Duty free is not important to some of the southern European countries because alcohol and cigarettes are cheap there. It is not important to other mainland European countries because they have land borders.
However, it is a showcase for Irish products. Duty free is directly responsible for 1,500 jobs and a further 6,000 jobs in manufacturing and services. It helps to maintain our ferries and airports. We cannot afford to have our tourism drive affected by higher fares. Aer Rianta claimed that charges would rise by 50 per cent, which would restrict the numbers coming to Ireland. Dún Laoghaire, my constituency, depends on ferries which, if duty free were abolished, would suffer a £9 million loss based on last year's figures. There would be higher fares, and Dún Laoghaire benefits from 150,000 to 170,000 day trippers each year who come over on cheap fares and take advantage of duty free shopping. Duty free revenue is reinvested in developments like the HSS ferry, which crosses in 99 minutes.
That is the kind of investment needed by the ferries and by towns like Dún Laoghaire, which is a thriving port. For that reason I support the Government's efforts. The Dáil should call on the rest of Europe to support our efforts and not condemn the Government. This decision was taken some years ago and now seems to be catching us unprepared. There is a criticism that duty free only affects the élite — those who travel. There are six million people among that élite, because that is the number of people who benefited from our duty free shops. If this means the cheap whiskey, perfume or whiskey, so what? It also means high employment, high reinvestment and high tourism figures. That is an industry we cannot afford to lose.
I wish to share my time with Deputies Yates and Sheehan.
Acting Chairman
Is that agreed? Agreed.
The abolition of duty free will have a severe effect not just on the national economy but in local areas such as Dublin, Cork and Shannon. The loss of 1,500 direct jobs and 6,000 jobs in manufacturing and services would be very hard. The Government must ensure this does not happen and must fight all the way. Europe cannot dictate that these jobs will go. A Fianna Fáil Government sold out on duty free in 1991, and a Fianna Fáil Government must now recover this facility in the interests of the economy and the families of those depending on it.
Duty free has been part of international travel for decades. The world-wide turnover is approximately £13 billion and the Irish turnover is approximately £100 million. The abolition of duty free would have severe cost implications for travel, as Deputy Hanafin said. An increase of 50 per cent in air charges would adversely affect travel costs, tourism, commercial efficiency and international trade. Business is now an international activity, and businessmen travel around Europe on a daily basis.
The abolition of duty free would be another nail in the coffin of Shannon Airport, which has been fighting a rearguard action for decades to preserve what it has created over 50 years. The removal of the stopover has had a severe effect. Figures are bandied about, but there is a noticeable reduction in activity in Shannon now compared to the situation before the stopover was abolished. I do not know where the air traffic authorities are getting their figures, but Shannon has been severely affected. Recent hints from Aeroflot that its business may not continue in Shannon suggest another blow. If duty free is abolished, Shannon will have another nail in its coffin.
I implore the Government to fight tooth and nail for the retention of duty free for the benefit of those employed in that area, the economy and the regions directly affected.
This is a very important motion, because the future of our airports depends on duty free. Our airports will not survive without duty free shopping outlets. The Government cannot approach this matter with kid gloves. When this move was first mooted, the Taoiseach was in the driving seat to lobby support from his counterparts in the EU to nip it in the bud. However, he threw in the towel at the fateful EU meeting and accepted the termination of duty free facilities by the end of 1999. We appear to be acknowledged as the goody goodies of the EU. We are quick to accept EU laws without fighting for our rights in that forum. We must impress on the EU that we are the only island nation in the EU since Great Britain was joined to mainline Europe by the Channel Tunnel. Surely the status of an island nation should ensure we get preferential treatment in so far as duty free is concerned.
I urge the Taoiseach to lobby his counterparts in the EU to retain our duty free facilities. I urge the Government to support the motion because united we stand, divided we fall on this issue. It is well known that the viability of our three major airports, Dublin, Cork and Shannon, will be seriously jeopardised if we do not maintain our duty free image in Europe. We are not at the crossroads in Europe where major airlines meet. It is important that we show a united front. I appeal to the Minister to support the motion and fight to retain our duty free facilities.
I thank the Deputies who contributed to the debate. Our spokesperson on Finance, Deputy Noonan, clearly outlined the political reality of this matter in his speech last night. At best one could describe the Taoiseach's performance as half-hearted, at worst he must be accused of being disingenuous. When there was unanimity on the matter in 1991, not only did he sign away our duty free facility, we now have evidence that the British, the Spanish and the Portuguese sought a 15 year derogation, which would have run to the year 2007. Yet we sought only a five year derogation and they averaged out what happened in the peripheral states. The evidence shows that the Government's sympathy on this issue extends only to the polling day for the two relevant by-elections.
The real effect of the abolition of duty free became apparent yesterday in the statement by the commercial manager of Aer Rianta, Mr. Frank O'Carroll, on the consequences of the abolition of duty free for his business. It is significant to note that between 1987 and 1997 there was no increase in airport charges. Passengers travelling through Dublin Airport increased from 3.5 million in 1987 to 10.5 million last year. It is evident that the majority of travel is discretionary and lower fares in Aer Lingus and Ryanair, in conjunction with the freeze on charges, were pivotal to that increase. If, as Aer Rianta claims, a 50 per cent increase in airport charges applies from 1 July 1999, Dublin, Cork and Shannon, which are number 46 on the competitive league table of a standard 737-400 Boeing aircraft, will move to the top ten in charges in Irish punts on a 70 per cent load factor. The cost for such an aircraft to land will increase from £1,048 to approximately £1,800 Irish punts. That will be one major impact of the decision to abolish duty free.
The fastest growing segment of the passenger market in the marine sector is the day return trip to avail of duty free facilities. There will be a major hole in our revenues when our tourism industry is underpinned by cheaper and more competitive access transport. Ireland will suffer disproportionately as a result.
We all know the procedure at Council of Ministers' meetings in Brussels. There is a facility for a member state to table an item for discussion 14 days before a meeting takes place. When I was Minister I frequently used the facility to raise questions about sheep compensations, APSs and export refunds for beef and grain in the agriculture sector. Did the Minister ever table a text or a formal debate, as opposed to an ad hoc addendum to a speech that merely shows he raised the matter at Commission level?
If duty free is abolished the future will be dismal. Airports like Heathrow that deal with large volumes of traffic travelling outside the Union will still be able to sell duty free. The average sales per person in US shops is approximately £3 per head whereas in Europe it is approximately £13 per head. Our duty free business will shrink to a quarter of its existing rate.
The matter should be raised at prime ministerial level. We share many common interests with the UK, which currently holds the EU Presidency, there is increasing support from Germany on this matter and the peripheral Scandinavian states experience many access problems. When all those matters are considered it is obvious what we should do. When we were in Government we inherited beef fines of the order of £192 million, but every week the Taoiseach contacted Mr. Santer and his permanent secretariat to make a concerted effort, which involved Iveagh House and DG VII, to resolve the matter. It is possible to devise a strategy with our Commissioner.
He is not interested in the matter.
The Government has accepted defeat on this issue. What will happen to those selling goods in the duty free shops and those involved in the manufacture of them? The Government has not sought compensation for those who will be affected. The Minister for Public Enterprise, Deputy O'Rourke, is paddling a canoe and pretending to put up a valiant fight, but the Taoiseach and the Minister for Finance are simply sitting on their hands. This motion had to include a condemnation of the Government's lassitude because it is not fully engaged. The letter from Commissioner Flynn to Deputy Noonan clearly indicates the lack of sympathy the national commissioner has for this issue.
This is a national priority. I have never seen the Commission neglect an issue where the national interest of a member state was at stake. The Commission will fight for the rights of small member states. I do not accept the crocodile tears, the explanations or apologies that are going nowhere. The ground is being prepared politically, we did our best but nothing more could be done.
I commend the motion to the Independent Deputies. We will not forget this issue, given that people's livelihoods and jobs are at stake. We must maintain the underpinning of our aviation, marine and tourism sectors.
I commend the motion to the House.
Amendment put.
The Dáil divided: Tá, 68; Níl, 62.
Tá
- Ahern, Dermot.
- Ahern, Michael.
- Ahern, Noel.
- Ardagh, Seán.
- Aylward, Liam.
- Brady, Johnny.
- Brady, Martin.
- Brennan, Matt.
- Brennan, Séamus.
- Browne, John (Wexford).
- Byrne, Hugh.
- Callely, Ivor.
- Carey, Pat.
- Collins, Michael.
- Cooper-Flynn, Beverley.
- Coughlan, Mary.
- Cowen, Brian.
- Cullen, Martin.
- Daly, Brendan.
- Davern, Noel.
- Dempsey, Noel.
- Dennehy, John.
- Doherty, Seán.
- Ellis, John.
- Fleming, Seán.
- Foley, Denis.
- Fox, Mildred.
- Hanafin, Mary.
- Harney, Mary.
- Haughey, Seán.
- Healy-Rae, Jackie.
- Jacob, Joe.
- Keaveney, Cecilia.
- Kelleher, Billy.
- Kenneally, Brendan.
- Kirk, Séamus.
- Killeen, Tony.
- Kitt, Michael.
- Kitt, Tom.
- Lawlor, Liam.
- Lenihan, Brian.
- Lenihan, Conor.
- Martin, Micheál.
- McCreevy, Charlie.
- McDaid, James.
- McGennis, Marian.
- McGuinness, John.
- Moffatt, Thomas.
- Molloy, Robert.
- Moloney, John.
- Moynihan, Donal.
- Moynihan, Michael.
- O'Dea, Willie.
- O'Flynn, Noel.
- O'Hanlon, Rory.
- O'Keeffe, Batt.
- O'Kennedy, Michael.
- O'Malley, Desmond.
- O'Rourke, Mary.
- Roche, Dick.
- Smith, Brendan.
- Smith, Michael.
- Wade, Eddie.
- Wallace, Dan.
- Wallace, Mary.
- Walsh, Joe.
- Woods, Michael.
- Wright, G.V.
Níl
- Allen, Bernard.
- Barnes, Monica.
- Barrett, Seán.
- Belton, Louis.
- Boylan, Andrew.
- Bradford, Paul.
- Broughan, Thomas.
- Browne, John (Carlow-Kilkenny) .
- Burke, Ulick.
- Carey, Donal.
- Clune, Deirdre.
- Connaughton, Paul.
- Cosgrave, Michael.
- Coveney, Hugh.
- Crawford, Seymour.
- Creed, Michael.
- Currie, Austin.
- D'Arcy, Michael.
- De Rossa, Proinsias.
- Deasy, Austin.
- Deenihan, Jimmy.
- Enright, Thomas.
- Farrelly, John.
- Ferris, Michael.
- Finucane, Michael.
- Fitzgerald, Frances.
- Flanagan, Charles.
- Gilmore, Éamon.
- Gormley, John.
- Hayes, Brian.
- Higgins, Jim.
- Higgins, Michael.
- Hogan, Philip.
- Howlin, Brendan.
- Kenny, Enda.
- McCormack, Pádraic.
- McDowell, Derek.
- McGahon, Brendan.
- McGinley, Dinny.
- McManus, Liz.
- Moynihan-Cronin, Breeda.
- Naughten, Denis.
- Neville, Dan.
- Noonan, Michael.
- O'Keeffe, Jim.
- O'Shea, Brian.
- Owen, Nora.
- Penrose, William.
- Perry, John.
- Quinn, Ruairí.
- Rabbitte, Pat.
- Ring, Michael.
- Sargent, Trevor.
- Shatter, Alan.
- Sheehan, Patrick.
- Shortall, Róisín.
- Spring, Dick.
- Stagg, Emmet.
- Stanton, David.
- Upton, Pat.
- Wall, Jack.
- Yates, Ivan.
Tellers: Tá, Deputies S. Brennan and Callely; Níl, Deputies Barrett and Stagg.
Amendment declared carried.
Question, "That the motion, as amended, be agreed to", put and declared carried.