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Dáil Éireann debate -
Thursday, 18 Feb 1999

Vol. 500 No. 6

Written Answers. - Duty Free Facilities.

Ivan Yates

Question:

61 Mr. Yates asked the Minister for Public Enterprise the further progress, if any, on the retention of duty free facilities; and if the emerging information in this regard will provide a basis for Aer Rianta to continue the discount schemes for landing charges to airlines. [3929/99]

In my reply to the House on this issue on 10 December last, I set out in full the range of actions pursued by my colleagues in Government and I to have the proposed abolition of duty free facilities reconsidered. Our position is that there should be a deferral of the abolition of duty free for five years.

Since then, on 28 January, I addressed a symposium on duty free at the French National Assembly in Paris, and gave a very clear and strong message of support for the campaign to retain duty free. The Commission, which was represented at the symposium, was left in no doubt as to Ireland's, and many other member states', views as to the negative effects of abolition and of the widespread political opposition to its plans. I also stressed that this is no time for complacency and that it will be an uphill struggle to secure an extension for duty free. It is the Government's intention to work with all 15 member states to keep up the momentum for a reconsideration.
When the matter was raised at the Vienna summit in December last, the European Council asked the Commission and the Finance Ministers to examine, by March 1999, the problems which could arise with regard to employment and to address, on the basis of proposals from the Commission, possible means of tackling the problems, including the possibility of a limited extension of the transition arrangements. The European Commission, at its meeting in Brussels yesterday, adopted a report on the ending of intra-EU duty free. I am disappointed with the Commission's report. It is not, in my view, an adequate response to the clear request of the Vienna council for a short-term extension of the transition arrangements for ending duty free. The Commission has made no proposal in this regard. The next step is for the Commission's report to be considered at the ECOFIN Council on March 15. If the Finance Ministers of all member states do not agree on a renewed request to the Commission at that meeting then it becomes a matter for the Heads of Government at the European Council in Berlin on 24/25 March.
The Irish Government has set out its view that a deferral of the abolition of duty free for five years is necessary to allow the industry adjust to the change. That position has already been supported by many member states including France, Germany and the United Kingdom. We will continue to lobby all the member states in the coming weeks to obtain their support for a specific request to the Commission to propose a limited extension of the duty free regime.
As regards discount schemes, Aer Rianta intends to develop a revised charging structure at the State airports and has engaged Price Waterhouse Coopers to assist in that task. Their proposals are expected to be completed in March of this year and will be submitted to me for my approval.
In my consideration of any proposal in relation to airport charges, I will take all relevant factors into account, including the impact any change in the level of charges would have on airlines, and, consequently, on the travelling public. I will also have regard to the impact of any change in EU policy on duty free. As always, I will take into account the views of interested parties before reaching a final decision on airport charges.
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