Other Questions. - Duty Free Sales.

Proinsias De Rossa

Question:

8 Proinsias De Rossa asked the Minister for Public Enterprise the latest position regarding efforts to have duty free facilities for travel within the EU retained; and if she will make a statement on the matter. [26985/98]

Ruairí Quinn

Question:

10 Mr. Quinn asked the Minister for Public Enterprise the position regarding efforts to have duty free facilities retained; and if she will make a statement on the matter. [26915/98]

I propose to take Questions Nos. 8 and 10 together.

As the Deputies are well aware, my colleagues in Government and I have focused our fullest attention on the duty free issue since we came into office 18 months ago. I draw the Deputies attention to replies I gave in the House to other questions on this matter on 10 November.

The Deputies will recall that Mr. Andre Capet, Deputy for the Calais region, visited me in June when he was researching his study on the impact of the abolition of duty free sales in France. He was instructed to do so by the French Prime Minister. The report concluded that the abolition would have a major impact on industry. Following my discussions with the French Minister for Transport, Mr. Jean-Claud Gayssot on 28 September about the options available the Taoiseach wrote to the French Prime Minister, Mr. Lionel Jospin, supporting use of the series of options set out in the Capet study.

Earlier this year, I provided letters of introduction of support to a deputation from Aer Rianta who wished to meet with Commissioner Monti on this issue and to lobby various member states in an effort to widen support for a deferral option. Arising from these letters, members of the board of Aer Rianta met with officials of the Portuguese Ministry of Finance, the Finnish Transport Ministry and the Swedish Minister for Transport and Finance. In addition, on 28 October last, I wrote to my Danish counterpart, Mrs. Sonja Mikkelsen, following which the worker directors of Aer Rianta met with officials of the Ministry for Transport and the Ministry for Taxation on this issue. I also wrote to my German colleague, Mr. Franz Munterfering asking him to meet Aer Rianta delegates with a view to considering arguments in favour of retaining duty free.

On 19 November I met Commissioner Kinnock, as did the Taoiseach separately, and raised the issue of duty free. I also raised the matter in the margins of the EU Transport Council on 30 November. At ECOFIN on 1 December the Minister for Finance, Deputy McCreevy, supported a French proposal to maintain duty free. For the first time Germany supported a request for the continuation of the duty free concession, and this is a significant development. I will continue with similar efforts.

Does the Minister agree that the prospect of retaining duty free has greatly increased, largely as a result of the change of Government in Germany and the change of position by a number of other Governments? In that context, has she discussed with the Taoiseach the possibility of raising the matter at this weekend's summit? Can she now express confidence that duty free facilities will be retained?

As I have said publicly, the winds of change are blowing in favour of retention. When I started this 14 months ago, there was general approval in the House for what I was doing but some Members felt I was tilting at windmills and there was no hope. I always maintained the strong belief that duty free shopping would be retained, and I did so when few agreed with me. The change of Government in Germany has made the difference. I understand Chancellor Schroder promised this in his election manifesto. He represents an area which is strongly connected with duty free, and all politics are local.

I have discussed this with the Taoiseach and he will raise it at the Vienna summit. I think prospects have improved. This measure was meant to blend with overall tax harmonisation, but that has not happened, so it would be an aberration if brought in on its own. I think Commissioner Monti's attitude is extraordinary. He says drink is bad, and presumably perfume and other delicacies are also — we already know cigarettes are bad. He is basing his objection on the premises of health and luxury. It appears the elected members forming the Council of Ministers will be on one side and the Commission on the other. The sooner the Commission understands that those who are sent to represent the people in a democratic fashion want a change, the better it will be.

I support the Minister's efforts to retain duty free. Does she recall whether she was a Minister on 11 December 1991, when Ireland did not send a political representative to the ECOFIN meeting? Does she further recall that was when Fianna Fáil was trying to get rid of Mr. Haughey, and was busy at home during that time? Does she recall that Mr. Pádraic McKernan, then ambassador, represented Ireland at that time, that Ireland was the only country not to have a political representative at the meeting, and that the ambassador was instructed by the then Government to support the decision to abolish duty free? Does she agree, arising from that knowledge, which she must have had all along, that the flurry of activity by the Minister and her colleagues over the past two years would have been unnecessary if Fianna Fáil had sent a representative to that ECOFIN meeting and vetoed the decision, which Ireland had a right to do? The Minister is now running around Europe, trying to reverse her party's decision and making a big issue of it, as if she were a heroine. She should take credit for the decision to abolish duty free in the first place.

I was either Minister for Education or Minister for Health at that time——

The Minister had responsibility as a member of Cabinet.

I was a member of Cabinet but I was not the Minister responsible for duty free. Let the Deputy be clear in what he is trying to imply.

She is not in charge of duty free now either but she is making a big song and dance about it

I think I discern a caustic note in the Deputy's remark that I am running around Europe.

Shadow boxing.

That is exactly what Deputy Quinn called it.

It is false activity which would have been unnecessary if the job had been done properly.

Will the Deputy allow the Minister to reply?

It was my abiding faith in duty free——

Why did the Minister not express that faith in 1991?

Because I was not the Minister responsible for duty free.

The Minister was in Government at the time.

I will continue to "run around" Europe, whether the Deputy likes it or not.

She should do more than run around Europe, she should take credit for the 1991 decision and then reverse it.

I will continue to work for duty free——

She should have thought of that in 1991 and all this activity would not be necessary.

——and I will continue to work for the employment prospects of the people who work in duty free. I was not in charge of duty free in 1991, I was either Minister for Education or Minister for Health.

She was a member of Government that had broad responsibility for the decision.

Deputy Stagg, the Minister is on her feet.

Although the Deputy would like to see me at home — perhaps he does not have enough of that pleasure——

The Minister would not have to be away now if she had acted in 1991.

——I intend to continue "running around" Europe to further the cause of duty free.

I notice the Minister does not deny Deputy Stagg's central point, which is that the current Taoiseach was responsible for this dilemma. How does the Minister see the conflict being resolved between Commissioner Monti and those member states supporting change? Can she clarify the precise procedure? My understanding is that the 22 member Commission must agree or assent to the reversal of this decision — is that the case? Would a qualified majority of ECOFIN or the Council of Ministers be able to reverse the decision, or would unanimity be required? At what point would the Minister consider it to be too late to make such a change? Whatever about progress to date, what sequence of events is now necessary within the Commission and ECOFIN?

The Commission does not take the decision, it requires a unanimous decision of the Council of Ministers. The difference this month, as distinct from a few months ago, is that Germany and France are tabling the motions at ECOFIN, not our Minister for Finance, Deputy McCreevy, who tabled the motion when the issue was first passed from the Transport Council. The steps which should now be taken include an increase in the contact between the various Finance Ministers — I will do whatever I can among the Transport Ministers and we have decided to continue lobbying.

Before I arrived in the House today I received a telephone call from a person involved in the campaign to retain duty free. I have not had time to check it out but it appears the Swedish Finance Minister has changed his mind on the matter and is willing to support the retention of duty free sales. However, that remains to be verified.

As the Minister is aware, I was extremely interested in the election of the German SPD-Green Government. I am glad that it has given its full support to the retention of duty free sales. Has the Minister met officials or Ministers of the German Government to confirm that position and to give greater effect to the support of the German Government for our case to retain duty free sales? Will the Minister outline the salient points of argument? All Members are aware of the main points, such as the employment factor. However, does the argument include peripherality, a matter with which the German Greens sympathise? Will the Minister outline the extent of the arguments which are many and varied?

I met the new German Transport Minister at the last Council of Transport Ministers meeting ten days ago. I specifically talked to him about the duty free sales issue because the previous German Transport Minister was supportive. I do not know which party he represents. The new Minister and I had a good discussion about the duty free sales issue.

The main issues are employment and that duty free sales offers a shop front for goods in the relevant country. It offers a show case of the best local produce. Commissioner Monti continues to suggest that air travel is for the elite and the retention of duty free sales would pander to such people. This is a very antiquated notion.

They are retaining it for themselves.

The Minister was in agreement with it in 1991. She boasted about the great deal that had been secured.

I am replying to Deputy Sargent.

The Minister is a genius at ignoring the realities.

Air fares were reduced considerably by a man who was mentioned earlier and people are now in a position to travel by air. It is no longer only posh people who travel by aeroplane. Ordinary folk now travel by air and the abolition of duty free sales would deny them a small luxury and an enjoyable part of their journey. Duty free sales provides employment and good money. In addition, it is a show case for local goods. The overriding aspect is that there is no tax harmonisation of which the abolition of duty free sales was to be an integral part.

Commissioner Kinnock told me he does not collect his bounty. He makes a point of not being classed as a diplomat with regard to duty free goods. I accept his word but I do not know whether Commissioner Monti accepts his bounty. It would be worth finding out.

While the Minister was galloping around Europe, did she pause at any point to count the number of states which may now support the abolition of duty free sales? Given the deadline on the abolition of this concept and the slow and ponderous way in which agendas for Council meetings are arranged, will she indicate at what Council meeting we can expect a decision on the retention of duty free sales? Has she or her colleagues had any discussions with the incoming Presidency of the European Union to ensure the matter is on the agenda and will be dealt with prior to next July?

I assure the House and the Minister that I support the restoration of duty free sales. Rather than trying to secure full and permanent retention at this stage, is it possible to defer the decision beyond 1 July 1999? Is there an indication of a level of support for such a move? Which countries want duty free sales to be retained and which counties are opposed to it?

Will the Minister accept that this is effectively another fine mess she has got us into by taking her eye off the ball at a critical time? Is she aware the current Taoiseach who takes credit for the derogation of nine years was not the Minister at the time? The Minister responsible was the former Taoiseach, Mr. Haughey. He had just sacked the then Minister, Deputy Reynolds, and the current Taoiseach was not appointed until a few days later. As a result, Ireland took its eye off the ball. We had no representative at the ECOFIN meeting in Europe because Mr. Haughey was at home battling for his political life with his colleagues. Consequently, duty free sales were abolished throughout Europe, although Ireland could and should have vetoed the decision.

I will ignore Deputy Gilmore's comment that I was galloping around Europe, although it is probably a good description. However, the Deputy is correct about the agendas. Talks take place and agendas are then prepared. It takes time to get an item on to the agenda. Germany is the incoming President of the EU and that is a fair cause for optimism. If duty free sales are abolished, it will happen during the stewardship of Germany because it is due to end on 29 June. This is another reason that Germany's interest has been reawakened.

One must be ready well in advance to ensure items are placed on the agenda. The summit this weekend will I hope advance the issue. Germany and France tabled the matter at the last ECOFIN meeting and I presume other countries will continue to raise it. However, in European terms there is a short time in which this can be done.

The Deputy asked which countries support or oppose the retention of duty free sales. When I raised the matter at the Transport Ministers Council on 17 March last, 12 of the 15 countries were supportive while the other three did not say anything. The issue was then referred to ECOFIN. The number of supporting countries at ECOFIN is now growing.

Regarding Deputy Stagg's point about deferral, there appears to be a growing belief that a decision will be deferred for five years. However, when I read this in the newspaper or I am told about it by representatives of the duty free sales campaign, I do not know whether it is a case of "dúirt bean liom agus dúirt bean léi". It is in the realm of conjecture. Only a short time is available but the EU will be under the stewardship of Germany.

That is called passing the parcel. It may leave it to the next Presidency.

Written Answers follow Adjournment Debate.