Dáil Éireann debate -
Tuesday, 20 Mar 2001

Vol. 532 No. 4

Order of Business. - Finance Bill, 2001: Report Stage.

Mr. Bradford:

I move amendment No. 1:

In page 17, before section 2, between lines 19 and 20 to insert the following section:

"2.–The Principal Act is amended by the insertion after section 16 of the following section:

‘16A.–(1) The Minister for Finance may establish a National Investment Fund to be managed by the National Treasury Management Agency.

(2)The Minister may direct that a proportion, not to exceed 75 per cent of any increases in the tax credits arising under section 461 or 472 to which a taxpayer is entitled be given by way of shares in the National Investment Fund, and such shares may be redeemable as to capital and income not earlier that 5 years from the date of issue except in the case of the death of the taxpayer or the taxpayer's spouse of the taxpayer becoming entitled to any of the reliefs mentioned in section 464, 465, 466, 466A, or 468.

(3)The proceeds on redemption shall not be chargeable to tax.'.".

Minister for Finance (Mr. McCreevy):

This amendment in the name of Deputies Jim Mitchell and Paul McGrath seeks to empower a Minister for Finance to announce increases in personal tax credits, but then withhold from taxpayers up to 75% of the benefit of those increases. The amounts withheld are to be lodged in a new fund to be called the National Investment Fund administered by the NTMA. Each taxpayer is to be given share certificates which he or she can redeem in five years at their then value and tax free. The objective of this scheme, I understand, is to reduce inflationary pressures.

As I pointed out on Committee Stage, the Programme for Prosperity and Fairness was concluded on the basis of a net increase in take home pay of 25% over the duration of the programme. The increase is to be delivered via a combination of pay and tax reductions. Subsequently the pay aspects of the PPF have been adjusted. It is difficult to see how this proposed scheme could be implemented without giving rise to a reduction in take home pay, which taxpayers expect to receive as a result of the budget. Such a reduction would be likely to open up matters already settled in the context of the PPF and the recently agreed adjustment.

Frankly, I do not think that the vast majority of taxpayers would be impressed by this scheme. Furthermore the amendment is so short on detail that I doubt it could be implemented, even if I thought it was a good idea – which I do not.

In my budget speech last December, I pointed out that in the last three years I have removed 176,000 low earners from the tax net, cut the burden on the lower paid by half, reduced the tax rate on the low paid in many cases by 10 percentage points or more and done far more than in many other advanced economies in cutting taxes on single and married earners on low and middle incomes.

If, instead of letting the benefits of our growing economy be shared by all taxpayers, I had issued them with share certificates, telling them that they could have jam tomorrow or even in five years' time, I do not think they would have been overly impressed. I believe in letting people make their own choices as to what they do with their money.

This proposed national investment fund would effectively amount to compulsory savings. I know there are some countries which have introduced compulsory savings schemes for their citizens, for example Singapore. However, I do not believe such schemes are suitable for this country. Irish people like to have a choice as to how they save their money and the Government is supplying and encouraging that choice through the new voluntary savings scheme and through the major reforms in recent years in the taxation regime for pensions. I cannot, therefore, accept this amendment.

Mr. McDowell:

This is as good a time as any to point out a significant difference of opinion between my party, the Minister and the Fine Gael Party. The general thrust of this amendment, and the Minister's saving scheme outlined later in the Bill, is to give people money and to encourage them in the case of the Minister and to oblige them in the case of the Fine Gael amendment to set aside money for a number of years. I fundamentally disagree with that. In recent years we have done a great deal to increase consumers' capacity to buy things – as the Minister puts it, to use their own money. The priority of this State and Government now has to shift very significantly towards making the investment in services which is now the priority, the opportunity and the challenge of the economic circumstances in which we find ourselves.

It does not seem sensible to generate demand and then look to take it out again, to give people money and encourage them set it aside or to give people money, as suggested in the Fine Gael amendment, and to effectively oblige them to set it aside. What we should do with the riches of this economy is invest in services so that in five years time we do not just have extra money in our own piggy banks but we have an improved economy, improved infrastructure and, most importantly, improved public services.

Mr. J. Mitchell:

I do not disagree with some of what Deputy McDowell said about improved services but the reality is that a very substantial allocation has been made for capital services. We are now running into real difficulties not only planning and compulsory purchase order difficulties but difficulties in not having enough construction companies to undertake the tasks. The result is that we are ending up with increased inflation instead of increased output. It has been suggested to me that prices for some projects may have gone up by as much as 60% because of the law of supply and demand – the supply of contractors to do the work. If anything, this would be a terrible misuse of public funds. We have to address the question of how we meet the undoubted infrastructural deficit. We have put down other amendments to help to address that problem.

Meanwhile, spending is increasing at a very high rate and is adding to inflation. In due course, this will greatly affect our competitiveness. We need only look at the foot and mouth disease crisis in the UK and here and at what is happening in Japan at the moment and the overall impact that can have on the world economy in a very short time. We should see that spending today while forgetting about tomorrow is something that should go out of fashion quickly. We should take steps urgently to greatly increase private saving. We should do more about public savings as well, although the 1% set aside has been in place for the past few years and is something I fully support. I think I suggested it initially when I was chairman of the finance committee. I would like to see it increased.

The Minister's objective in this Bill is to do something to encourage private savings. My criticism of his proposal is twofold. First, there is an unquantifiable cost to the Exchequer and, second, there is an unquantifiable increase in savings. One cannot quantify the increase in savings as distinct from switching from present savings mechanisms. I said on Second and Committee Stages that I will switch the bit of savings I have for my children's education into this scheme. Why would I not? I will advise all my friends to do likewise because it is a gift from the Government. However, that does not mean I will increase my savings – I cannot afford to do so. I am quite sure there are hundreds of thousands of people in my position. The end result will be that the Government will be paying out to people who are already saving. Some people may say that is great because we have loads of money and there are huge surpluses but will we have huge surpluses in two to six years' time to which we are committing ourselves under the savings provisions of this Bill?

As against that, this amendment proposes a form of savings which has a number of benefits. First, the cost is quantifiable as the Government will decide each year the amount of tax credits given in this way. It should depend on the level of the surplus available in that year. The cost is, therefore, quantifiable. Second, the increase in savings is quantifiable, so one can clearly reach one's objective at a cost that one knows. Those are the two weaknesses of the Minister's scheme. There is, however, a third weakness. The Minister's commitments on savings and tax cuts place a commitment on the Exchequer for every year to come. What is given in this year of a big surplus will be a charge against the Exchequer next year and in the following years. It is a recurring cost regardless of how the economy does in a few years' time.

That is the real test of the wisdom of the Government's economic policies. Is it doing things now that are wise and will safeguard our prosperity for the future? Much of what the Minister has done has been very good and innovative but in his savings scheme and tax cuts, he has not acted wisely. To that extent only, the criticisms of the European Union about the Government's policies being excessively inflationary and expansionary are valid. However, they are not valid in two other respects. First, the Minister is right, and I fully support him, in wishing to share the wealth created with the people who have helped to create it. Second, anyone who looks at the percentage of GNP spent on public services in this country knows that it is low by international standards and that spending on public services is not too high in real terms but only in terms of not having sufficient capacity to deliver the product we want at a price that is reasonable.

The amendment proposes that the Minister is given the power to establish a national investment fund. That fund would be established by statute and would be run by the National Treasury Management Agency along the lines of a private pension scheme. It would receive share certificates annually from the Revenue Commissioners in respect of each taxpayer depending on the decision of the Government each year as to the amount of the tax credit. It would invest that in a basket of shares and funds so as to minimise risk and maximise profit potential. There is a provision that these shares could not be cashed for five years. There are two precedents for that. In the Minister's savings scheme, he proposes that people must keep their money in the bank for five years. The business expansion scheme also requires that investment be kept for five years. The five years has a parallel in this Bill and a precedent in the business expansion scheme.

More than that, it is provided that people get a profit share each year depending on how the economy does. I am committed to the concept of profit sharing. It introduces an incentive for all members of society to continue to contribute to the economic growth on the basis that they will get a share. This works in many companies. I worked in Guinness, which was very farseeing in this respect. The company has operated a profit sharing scheme for its employees which depends on annual profits for many years. Guinness does not commit itself for the next five or six years on the basis of the current year's profits. People are also given a stake in society and are able to avail of share ownership.

This is different from the Eircom flotation in that these shares would be provided as a return on people's taxes and would not be charged at an excessive price. The incentive for the taxpayer to retain shares for five years is that at the end of the term if there is added value, which is likely but not certain, and there are dividends, which are likely but not certain, they will be paid tax free. That is the payback. This is a way of sharing wealth without adding to inflationary and expansionary pressures.

We did not devise this proposal on the back of an envelope. I have pressed for this for more than two years. I have discussed the proposal in detail with the Revenue Commissioners, the National Treasury Management Agency and other experts both at home and abroad and they believe this is the way to provide income tax concessions at this time. It is the way to share wealth without adding to expansionary pressures. If the Minister adopted the proposals he would not have a case to answer to the EU.

Mr. Ardagh:

Deputy McDowell is not in favour of the NTMA managing the national investment fund of Fine Gael or the savings fund and says there should not be tax cuts as there are services which still need resources. This relates to the old tax and spend ethos from which I thought we had got away. If the small percentage of people who think that way were to be divided between Sinn Féin, the Workers Party, the Green Party and the Labour Party, there would be few votes for each party.

Mr. McDowell:

The Deputy will find a number of people on the Government benches who agree with that thinking, and the Minister knows that.

Mr. Ardagh:

I agree all services need to be improved. However, the improvements must be planned and resources provided. For example, the Government has increased spending on health services from £3 billion to almost £5 billion. Services are being improved in a planned manner. Deputy Mitchell stated one of the reasons he tabled the amendment was to address the infrastructure deficit but he also suggested that the money would be invested in shares, stocks and bonds. There is a conflict about whether the money will be invested in shares, stocks and bonds or to address the infrastructure deficit.

The question is whether one uses a carrot or stick in regard to the savings of citizens. The scheme proposed by the Minister whereby people will be enticed to make savings is better than forcing them to save, which some would not want. There is a better choice for consumers in the scheme set out in the legislation. They can decide to invest in a scheme which shares profits or in a scheme run by an insurance company, building society or bank which invests money in funds related to the stock market. Deputy Mitchell also stated it would be an opportunity for him to deflect money which he currently invests in his children's education fund into the Minister's scheme because the scheme is most attractive. Everyone intends to invest money in the proposed scheme.

People who have funds available will deflect money from other savings schemes. However, those aged between 21 and 30, in particular, have a great deal of money which they spend on consumer goods and socialising at weekends. They would not have been inclined to save previously but because of the attraction of the Minister's scheme they will invest money in it. However, they would not like to be forced to save money in a scheme similar to the national investment fund proposed by the Government. All Members will agree there is too much Government interference in regard to citizens' rights. The more a citizen can do with the money he or she earns the better and that is generally accepted, although not by the Labour Party.

I am against the NTMA having huge resources and developing large funds. As Deputy Mitchell said, more people should have shares and they should have greater control over their personal finances. It is better to provide people with an opportunity to invest through the saving scheme in funds or shares because they will use their own judgment and make their own decisions rather than having it forced on them by the State. I oppose the amendment.

Mr. J. Mitchell:

Deputy Ardagh confused two issues. There is no question of investing such a fund in infrastructure. It would be up to the trustees of the fund to decide what to invest in and there would also be a reasonable mix of risk. They would not be confined, for instance, to investing in the State. The fund must have the same freedom as a normal pension fund.

Many people, particularly young people, who received direct tax cuts have sought housing, the effect of which was to increase the cost of housing, and they are greatly exposed. If there is a downturn in the market in a few years' time there is a danger they will have negative equity and no savings. Under my proposed scheme, inflationary pressures will be cooled and people will be provided with a nest egg for the future. There is a compelling case in the current circumstances for a scheme along these lines.

If it were necessary to draft a Bill to give effect to this proposal, other dimensions could be considered. For instance, if people wanted to sell in compelling circumstances before the five year term was up, could provision be made for the State to buy back the shares at a discount, depending on which year the house was sold? Such issues could be teased out and discussed. The amendment provides that where a person or spouse dies the shares would be fully redeemed to the person if he or she wanted to redeem them.

The Minister should consider whether people would want to make additional voluntary contributions to the scheme so as to increase their savings in a way that would be subject to the same tax free concessions at the end. There is a great deal with which to commend the amendment and though I do not expect the Minister to incorporate it into the Bill he said on Committee Stage, as did Deputy McDowell, that it was an innovative idea. I hope something along these lines is adopted by the next Finance Bill and we can set a headline for other countries.

Mr. McCreevy:

This matter was debated at length on Committee Stage and also during the debate on the Bill's provisions concerning the savings incentive scheme, which was also debated adequately on Committee Stage. I am not saying, forever and a day, that the savings scheme that I have thought up is the greatest thing on the planet, as some commentators said, but it is an innovative way of encouraging people to enter the savings market.

We have acted in the current and capital expenditure areas. During my time in office we have increased the amounts being spent on current services significantly – everything from social welfare to education and health. We have had a large capital programme. The national development plan sets out clearly what we intend to do through to 2006. In the same period our budget surplus will have the effect of running down the national debt, not alone in percentage terms, but in nominal terms also. At the same time I am putting money aside for the pensions reserve fund. As Deputy Mitchell rightly said and as I have indicated on numerous occasions in the recent past, our expenditure as a percentage of GDP is one of the lowest in the European Union. The purpose of the savings incentive scheme is to encourage people to save.

There is a view, as Deputy McDowell is right to indicate, that taxation reductions and expenditure increases are mutually exclusive, but it is one to which I do not subscribe, as is well known. If one has the right environment – taxation can play a significant role in ensuring this – one can gather the wherewithal to do many things in the area of expenditure of which one might otherwise only dream. We have debated this matter many times and I will not do so again. As Deputy Ardagh said, it is a matter of choice. I am giving the people a choice in these taxation changes and in the area of incentivised savings. At a future date I will consider the ideas advanced by Deputy Mitchell.

I reiterate what I have often said: economics is not an exact science. Deputy Mitchell and every one else would agree that personal savings are a very good thing for the individual. Deputy Mitchell mentioned Japan to which we should refer to prove the point that economics is not an exact science. The problem with Japan is that while people save, the Government wants them to spend. All efforts there in recent years have been geared at encouraging people to spend, but the Government has failed in that regard. I make that point to emphasise that economics is not an exact science and that one cannot just press a button for a formula that will work everywhere.

Amendment put and declared lost.

An Ceann Comhairle:

Amendments Nos. 2 to 11, inclusive, are related and may be discussed together.

Mr. McDowell:

I move amendment No. 2:

In page 18, column (3), line 11, to delete "£1,628" and substitute "£2,104".

These amendments seek increase tax credit. Amendments Nos. 2 and 3 seek increase the married person's tax credit to 3,600 with an equivalent IR£ amount for the reduced tax year in 2001. Amendments Nos. 4 and 5 seek to increase the single person's tax credit to 1,800 while amendments Nos. 8 and 9 seek to increase the incapacitated child's tax credit to 800, again with the IR£ equivalent reduced to 74% for the year 2001.

These are my primary tax amendments on Report Stage. My party has always been of the view since tax credits were introduced that they are far and away the best means of reducing tax or potentially increasing tax in future years. They give the same benefit to all taxpayers, irrespective of what the marginal rate of tax is. It is a significant benefit over and above the system of tax free allowances we used to have. That case is now generally accepted and it is one significant reform which the Minister has instituted which I unequivocally welcome.

The Minister made a number of points on Committee Stage that he has begun to repeat today. He said that he does not believe that expenditure increases and tax reductions are mutually exclusive. Clearly, based on the Estimates for this year and last December's budget, he does not believe that now, but he has believed it for most of the last three or four years. When he first came to power he said that he did not see an increase in current spending over and above 4%. He went so far as to say that if inflation was higher than this figure, it would involve or entail real reductions in current expenditure. Clearly, the Minister has either changed his mind very dramatically or he misled us in the early stages of his regime. I suspect that he has changed his mind on the matter, or rather that he is accommodating himself to something which seems to make a certain amount of electoral sense.

It is important to acknowledge, as I do, if we are to have an intelligent debate on this matter, that this year's budget and Estimates are different. I acknowledge that the measure of the increase in expenditure and investment in services is about right. That was not the case in previous years when the Minister, albeit with a little smoothing of the figures, sought to keep within the targets he had set for himself. We need to sustain the level of investment that the Minister has instituted in this year's budget, assuming we maintain good budgetary numbers, in the next three to four years.

If one has a current budget surplus and a general Exchequer surplus, there are a number of things that can be done. One can reduce the national debt, reduce tax or increase expenditure. One can, as the Government has decided to do, broadly speaking with our support, set aside money for future liabilities through the 1% of GNP payment. One can do as the Minister has done and encourage personal savings: one can give money to people and seek to encourage them to tie it up for a few years. These measures are not all mutually exclusive and the fact that they are all happening is proof of this. They are not mutually exclusive, however, because our current economic circumstances are spectacularly good. Our current budget surplus is in the region of 9,000 million, which is totally unprecedented in our economic history and which we are unlikely to experience for many years to come. We can do everything and the Minister, with half an eye on the forthcoming general election, is doing just that. From a purely electoral point of view, if one was to discount the political and economic considerations, perhaps he is doing what he sees as right.

That will not remain the case into the future. We will have to make choices. I am not saying that these are absolute "either-or" choices, but they are choices which oblige us to set priorities. We must state what we consider to be the priority of Government for the next four or five years. That priority is investment. This is not to the exclusion of reducing the national debt, something we must do. Neither is it to the absolute exclusion of delivering on some tax cuts, something we must do also. It is no more or no less than a statement of political priority; it is a matter of saying that one believes that in four or five years all of us as a society need to be better off, not just have a few extra pounds in our piggy bank.

I have no wish to paint it as a clear choice between the rights and interests of "society" and those of individuals because the two are inextricably linked. Is it in our interests, as a society, that we have a decent public transport system? Of course, it is. It is also in each individual's interest that he or she should be able to get to work or school or to go shopping in town without the hassle and oppression from which one currently suffers. Is it in our individual and collective interests that we have a better and more equal health service? It is. To attempt to draw an artificial distinction between individual interests and the interests of society generally does not serve the argument well.

In his earlier comments Deputy Mitchell appeared to suggest, with some justification, that there are difficulties in spending now. There are constraints. They exist in the construction industry and there are labour constraints in some service sectors. There are many areas, however, where there are no constraints. An additional few dozen buses have been put on Dublin's streets in recent years, for example, but many more could have been provided. Hardly anything has been done to increase the rolling stock available to Iarnród Éireann, either for the DART or mainline rail services. The plans have been in place for at least two or three years, but they are only now being implemented. As these items are purchased abroad, I cannot see how their purchase could have any impact on inflation and the constraints in our economy are, simply, irrelevant in that regard.

There is no reason that we should have to ask teachers and students to raise funds for the daily maintenance of schools. I cannot see any constraints that should restrict the Government from increasing capitation grants and grants for maintenance, caretakers and so forth to a level which would allow schools to get on with the business of teaching, assuming we leave the current difficulties aside. A great deal can be done almost immediately in terms of the investment of public moneys without being affected by the constraints which are apparent in, for example, particular parts of the labour market.

We have debated my amendments at great length and I can anticipate most of the Minister's response. There was a brief discussion on Committee Stage on the tax credit relating to the incapacitated child and I understood the Minister might discuss that element of the tax credit on this Stage. I would be obliged if he would do so.

I said on Committee Stage that I have a real difficulty with the amendments tabled by Deputies Mitchell and McGrath which focus on the PAYE allowance. This allowance is being doubled by the Minister from £1,000 to £2,000 and converted back to a tax credit. The Fine Gael amendment seeks to quadruple it. I understand the grá the trade union movement has for the PAYE allowance. I also understand the difficulties it gives rise to. I have no difficulty with the increase from £1,000 to £2,000; we can live with it, provided it is sustainable. We should not forget, however, the debate on individualisation which took place about 15 months ago. If we choose to use the PAYE allowance to remove people from the tax net, we will take a considerable additional step on the road to individualisation. It is, effectively, individualising the personal allowances, something with which I profoundly disagree.

We should seek to remove those on the minimum wage from the income tax net, but we should try to do so by increasing the personal tax credit while retaining full transferability between spouses. We should not opt to do so only on an individual basis because the PAYE allowance, or the employee tax credit as it is now called, is not transferable between spouses. It is a cheap means of doing something that is politically popular, but we should resist that temptation. We should do it properly, in a way that maintains transferability between spouses.

Mr. J. Mitchell:

I wish to discuss amendments Nos. 10 and 11 in my name and that of Deputy McGrath. We propose that the PAYE allowance be increased to £3,500 and then converted to a tax credit. This is part of a package of proposals which signifies a different approach by Fine Gael to the issue of tax concessions.

We do not believe that the Government's individualisation policies are fair or equitable between spouses who go out to work and spouses who stay at home and work. Neither do we believe that they are fair as between those who work part time and those who work full time. In addition, we do not believe that it is fair to spouses who have to give up work or lose their jobs. The problems with individualisation will come home to roost if there is a decline in the economy and jobs are lost. When people lose their salaries, they lose their tax allowance. A desperate injustice will be done, therefore, by the Minister's individualisation policy.

It does not have an impact now because employment continues to grow. However, there will be situations where a spouse might lose or wish to give up their job because they need to look after a sick child or just wish to look after their children or a new baby. In that situation they will lose both their salary and their individual tax allowance. We have rehearsed all the arguments about two couples living next door to each other, both of whom have the same gross income. In one case one spouse works and in the other the two spouses work, but the take home pay is greater in the household where the two spouses work. That is unfair and will lead to the problems I have mentioned if and when one of the spouses loses or leaves a job.

On the other hand, there is a cost attached to going out to work. In our proposals we seek to make realistic provision for this. There would also be the benefit, which Deputy McDowell spotted, that our proposal would remove a great number of the low-paid, especially those on the minimum wage or less, from the tax net. When a Minister I tried to persuade the then Department of Social Welfare that there was a major problem with how it calculated replacement ratios; in other words, the gross amount one would need to earn in employment to be better off than if one were on social welfare and other secondary benefits. I was supported by the Department of Finance at the time, but rejected by the Department of Social Welfare.

The Department would take gross pay, less income tax and PRSI, and compare it with social welfare payments and claim that there was still a big gap. However, it did not take into account what I call "off wage packet provisions" such as medical cards, reduced local authority rents and the cost of going out to work. There are many tangible costs. Eventually, I wrote an article for The Irish Times. It covered a full page and, to my surprise, the newspaper published it. It included a table showing all the factors which I believed should be taken into account. It isolated the elements which were not taken account of, but which were causing huge incentive problems.

At the time, despite high unemployment, many people with children were leaving work to go on the dole. They were worse off at work. The child tax allowance had been abolished whereas there was, and still is, an allowance per child in the social welfare system. No allowance was made for the fact that somebody going out to work had to buy extra clothes and had trade union, eating out and transport costs. Now the big cost is child care.

The proposal in amendments Nos. 10 and 11 is to increase the PAYE allowance from £1,000 to £3,500. The Minister proposes to double it, but we seek to go further. Our proposal is part of a package that also includes changes to individualisation which we propose elsewhere. Until there is a transparent and reasonable provision in the tax code to allow the costs associated with going out to work the tax system will never be completely fair. There is provision for the costs of the self-employed and others, but nothing for those in the PAYE system. Because PAYE workers pay tax on a current, up-to-date, basis there is a case for making an extra concession to them. That is the reason we make the proposals in amendments Nos. 10 and 11.

Mr. McGrath:

We are talking about the tax credits applicable in the coming tax year which are set out in the Schedule to which amendments have been tabled by Deputies McDowell, Mitchell and me. They give us an opportunity to deal with the question of individualisation. We need to look at what has happened in relation to individualisation, the effects of which, with the gap opened by the Minister, are frightening.

We take as an example two couples in adjoining households the income of which is £40,000 gross. In one household both spouses are working while there is only one earner in the other. Is it not ironic that the household with only one earner will pay in the region of £44 a week more in tax for the privilege of having just one income? Not only is that unreasonable, it is unfair.

We should consider the numbers who availed of the home carer's allowance which got the Minister out of a hole last year and redressed the balance a little. It managed to take the heat from the backbenchers off the Minister. There was, however, a very poor take-up of the allowance. In the region of 115,000 had availed of it up to November last year. Tax experts expected a far greater take-up. They expected the number to be at least double that amount. One of the difficulties was that one had to apply for the allowance. As many do not bother filing tax returns, many did not avail of it. I know of several people who came to see me at my clinic who did not look for the allowance because they did not know it was available. They do not read up on such matters. Unless tax officials were asked to include the allowance, it was not included. The whole question of individualisation needs to be put right.

The Minister tied the home carer's allowance to those with dependants at home. Many women in their fifties and above had to give up their jobs on marriage. Many of those who are still home carers will not receive the allowance as they do have dependent children under the age of 18 years. That is unfair and cuts out those with children in higher education for whom they are caring to a greater extent in the sense that they bring home their washing and need supplies for the week that they are away.

We must also look at the effect of taxation. I have taken another look at the report on our taxation system completed by Mr. King of NCB stockbrokers which makes compelling reading. It indicates that in the last ten years the system has not delivered on what it set out to deliver. The question of tax credits is misleading. If we were to ask the man in the street whether his tax situation had improved in the last ten years, he would, probably, say that tax rates were lower, personal allowances seemed bigger and he seemed to be better off. The reality is that in the last ten years matters have not changed. The survey conducted by Mr. King indicates that the amount paid in tax by the top 10% of taxpayers increased by 0.4%, from 29.6% to 30% over the period.

Mr. McCreevy:

The report deals with the years 1997 and 1998.

Mr. McGrath:

It covers the ten year period from 1990 to 1999. It includes the figures for actual out-turns and is based on completed year reports from employers as well as national income and expenditure figures. It is also based on the annual statistical reports of the Revenue Commissioners from 1990 to last November. It contains up-to-date accurate information and has not been challenged anywhere by the Government. For the next 30% of taxpayers the percentage fell from 21.8% to 20.5%, a change of 0.7%. There was, therefore, only a marginal change in the amount paid by them in tax. This is surprising. For the remaining 60% of taxpayers the percentage fell from 11.2% to 10.2%. In other words, there was a 1% change in the bottom rate. That is frightening. It is not all that long ago when someone on a salary of £20,000 would have been in receipt of a personal married couple allowance of about £7,000. They were then taxed on the balance after mortgage and other allowances were subtracted. What happens now? Personal allowances are being converted to tax credits. Allow ances of up to £11,000 for a couple appear very big, but when translated to a tax credit are quite small.

Another problem discussed on Committee Stage was that presented by the new tax form. It is causing bedlam. I received a video and CD-ROM explaining it, but have not yet had an opportunity to play them. Only a small percentage of tax forms have been issued, but amazing numbers are causing difficulties. Intelligent individuals are finding it difficult to understand the new tax form. As people are encountering difficulties, perhaps the Minister will persuade the media moguls to run programmes on the issue. Maybe he will also invite Mr. King along to interpret his report.

Mr. Barrett:

I take the opportunity to express my personal views on the concept of individualisation. I listened earlier to the contributions made by my colleagues on this side of the House and do not have any difficulty with anything they said. Tax laws should not interfere with the society of which we are very proud. I am inclined to ignore what happens in other countries; we should not follow suit for the sake of it.

Traditionally, we have had thousands of stay-at-home spouses in this country – primarily women – who have contributed enormously to society in terms of child care, voluntary work, care of the elderly etc. They make contributions which, irrespective of what allowances are made in a Finance Bill, can never be rewarded.

I do not have any problem with two spouses going out to work, if they wish to do so. They are entitled to a fair crack of the whip through the tax laws. Equally, those who stay at home and make voluntary contributions to society, which are never taken into account in terms of their monetary value to the State's coffers, are entitled to recognition. If we imply that those who stay at home do not have any great value in monetary terms to society or the State, fewer and fewer people will continue to provide the services that they currently provide and will, instead, take the view that the State should do so. What will happen then? What will it cost the State if increasing numbers have to be placed in nursing homes, hospitals or other institutions? What will happen to elderly relatives who, perhaps through loneliness, may fall into bad health because relatives and neighbours no longer visit them?

Young couples, particularly in Dublin and its environs, are forced by economic necessity to go out to work. They are obliged to pay high mortgages and travel long distances to work. I speak from personal experience because my daughter who has a young baby lives in a semi-detached house, on which there is a high mortgage, between Bray and Greystones. The type of society in which she and other young people live in is far different from the one in which I was reared. People get up at 5.30 a.m. or 6 a.m., feed a young child, drop him or her to a crèche, get stuck in traffic for up to an hour and a half on their way to work, arrive at 8.45 a.m., leave between 5 p.m. and 5.30 p.m., face into the traffic for another hour and a half, pick up their child and get home by 7.30 p.m. or 8 p.m. These couples, both of whom contribute to their child's welfare in terms of love and affection, are physically and mentally exhausted at the end of the day.

I am gravely concerned by the implication in our tax code that those who stay at home and do not avail of crèche services are, in some respect, lesser human beings. We must examine the human aspect of this issue. I want to live in a society where people have choices, not one which victimises those who take a certain route which may not be the most fashionable in the western world. One need only look at what is happening in other countries which have introduced similar codes to see their adverse consequences. Ireland has one of the highest rates of teenage drinking and that will increase if parents are not at home to supervise their children when they come home from school. I referred earlier to young babies, but what will happen when those children reach 10, 11, 12 or 13 years of age? Who will be at home to take care of them?

Other Members may hold different views on this subject and they are entitled to do so. I do not believe, however, that the tax code should reflect adversely on those who choose to stay at home and take on the parental responsibilities people took on in the past. It is insulting to those who choose to stay at home and contribute to society in a voluntary manner to see the State implying that they are lesser human beings. I am opposed to this discrimination in the tax code. Those who go out to work should, certainly, be rewarded, but the same should apply to those who choose a different way of life and contribute services to society which, were they not provided voluntarily, would have to be funded by taxpayers.

Mr. McCreevy:

The amendments propose to increase various tax credits proposed in the Bill as follows: to increase the basic personal tax credit for a single person from £814 to £1,052 in 2001 and from 1,397 to 1,800 in 2002 and subsequent years; to increase the basic personal tax credit for married couples from £1,628 to £2,104 in 2001 and from 2,794 to 3,600 in 2002 and subsequent years; to increase the tax credit for an aged person from £238 to £438 – married – and from £119 to £219 – single – in 2001; to raise the tax credit of £238 in respect of an incapacitated child to £438 in 2001 and from 408 to 800 in 2002 and later years; and to increase the employee tax credit – formerly known as the PAYE allowance – from £296 to £533 in 2001 and from 508 to 914 in 2002.

We had a comprehensive discussion on the whole area of tax credits on Committee Stage. In response to identical proposals to increase the credits covered in the amendments, I reminded the committee that I had allocated £1,231 million in the budget to fund cuts in personal income tax, almost £300 million more than in my previous budget which, in itself, was far in excess of anything that had previously been given in a single year, and nearly three times the amount promised under the PPF for this year, representing a very substantial cost and a further highly significant step in the fulfilment of the commitments set out in An Action Programme for the Millennium.

In keeping with that plan, this year's budget, as reflected in the provisions of the Finance Bill, continues to concentrate on the reform of the tax system which is designed to remove as many people on low incomes as possible from the tax net while at the same time significantly reducing the burden on those remaining within it. The increases in the personal tax reliefs of £800 for single persons and £1,600 for married persons and the doubling of the PAYE allowance to £2,000, announced in the December budget and shown as tax credits in the Bill, will result in standard rated personal allowances for single persons on PAYE of £7,500. When taken in conjunction with the changes in the tax rates and the standard rate band, there will be a significant reduction in the tax bill of all taxpayers.

This area was discussed in some detail on Committee Stage. I noted the concerns raised by Deputies and, as indicated on Committee Stage, will, in particular, look at the question of the credit relating to the incapacitated child in the context of the next budget and Finance Bill. I understand the proposed increase in the employee tax credit, formerly known as the PAYE allowance, is aimed at exempting from income tax those persons earning only the minimum wage. The allowance was doubled in the December budget from £1,000 to £2,000. At the rate of 20%, this converts to a full year tax credit of £400 and to £296 in the short 2001 tax year, the figure included in the Bill.

While calls for further increases are not unreasonable, in the three budgets prior to that introduced last December, I removed 176,000 low earners from the tax net; cut the burden on the lower paid in half; reduced the tax rate in many cases by up to 10 percentage points or more in the case of the low-paid, and did more than many other advanced economies in cutting taxes for single and married earners on low and middle incomes.

Last December's budget, to which the Bill gives effect, increased the entry point to the income tax system to £144 per week. The figure was £77 per week when we entered office. A further 133,000 taxpayers will be removed from the tax net when the Bill comes into effect from 6 April, over 75% of the total exempted in the previous three years. There is no denying that this represents progress on a massive scale.

I have announced previously that it is the Government's intention in the next budget to raise the entry point towards the level of the minimum wage. This will result in the removal of a further 150,000 taxpayers from the tax net. The allocation of £1,231 million to fund cuts in personal income tax to which I have referred is generous by any standards. Realistically, I cannot accept proposals for further relief on top of amounts of the scale mentioned and must, therefore, oppose the amendments.

Mr. McDowell:

I did not hear one of the words. Did the Minister say that he wanted to raise the entry point towards the level of the minimum wage or to the level of the minimum wage?

Mr. McCreevy:

Towards the level of the minimum wage. Let me deal with the question raised by Deputy McGrath regarding the NCB study to which he referred on Committee Stage. The NCB concluded that increases in tax bands and allowances over the ten year period 1991 to 2001 had no more than matched corresponding income increases and the tax burden had more or less remained constant. The calculations done by the NCB were necessarily confined largely to historical figures up to 1997-98 which pre-date the significant tax concessions introduced in the 1999 and 2000 budgets. It appears that the NCB used growth in incomes over the period as the basis for measuring the tax burden compared with the traditional basis of using growth in the consumer price index as the benchmark for determining the minimum increases necessary in allowances and bands to keep the tax burden constant. The consumer price index, over the ten years to 2001 has grown by a cumulative 29% compared with income growth, on constant numbers, of about 70%. Clearly, tying the growth of tax bands and allowances to income increases instead of increases in the consumer price index would be much more expensive.

It has sometimes been suggested that any increase in the total tax take automatically means that the burden of taxation is increasing. This is incorrect as the following example demonstrates. Let us assume that the expected inflation rate is 3% and the Government indexes the tax structure accordingly. Let us assume further that the taxpayer receives a pay rise of 3%, just maintaining the real value of his or her pay. The result is that the taxpayer has a higher income. While his or her tax bill has increased in monetary terms, as a percentage of total income, the tax bill remains constant. This means that there is no change in the overall burden of taxation. If the taxpayer receives an income increase greater than the increase in the consumer price index, it naturally follows that the nominal tax bill will increase accordingly.

One of the indicators of the tax burden is that aggregate tax, as a percentage of aggregate total income, fell from 22.5% in 1991 to 21.7% in 1997-98, based on historical revenue figures, and by a further 4.7% between 1997-98 and 2000-01, based on provisional figures. This confirms the relatively modest level of tax cuts in the first half of the 1990s and the much greater level of relief conceded in later years. The budget 2001 concessions will reduce the proportion by a further 2%, which changes postdated the NCB commentary. If the 2000-01 tax regime had been replaced in budget 2001 by cumulative indexation of the 1991 exemption limits, allowances and rate bands, an increase of 29%, the cost to the Exchequer would have been £854 million or £309 million less than the corresponding elements of the 2000-01 budget scheme.

Deputy McGrath raised the question of what he termed the complicated certificates now being issued to employees which he states are causing confusion. I have been informed by the Revenue Commissioners that the number of queries received by the chief inspector's office about the new tax form known as the notice of determination of tax credits and standard rate cut-off point is not higher than normal. Like any new document, it will take time to become familiar with it. I readily expect that when people become aware of the reduction in their taxes in April, they will come to appreciate it. The document is a little more complicated than normal on two fronts: it shows the changeover to the tax credit system and that tax credits are reduced to 74% of the total in a full year due to the short tax year from 6 April 2001 to 31 December 2001.

When I spoke to people yesterday in an informal setting, it being a public holiday, I found that they have a good grasp of what tax credits are all about. In two or three years, they will be totally familiar with them and the system will be accepted. I am informed by the Revenue Commissioners that the number of queries from taxpayers is not higher than normal, although Revenue offices are inundated with requests from foreign nationals for information on the tax system. They could do with personnel able to speak Chinese, Russian and other languages. The Deputies may find this amusing, but it is a fact that the numbers of inquiries from foreign nationals is growing.

Mr. McGrath:

Most of the confusion arises from the second column on the form. There are two columns on the yellow form. One column shows the allowances at the 20% rate while the second shows them at the 40% rate. People are wondering where they stand and what their allowances will be. Someone who last year had a tax free allowance of £120 will now have a tax credit of £30 per week. They are worried as a result.

Mr. McCreevy:

They are not known as allowances any more. It is a simple calculation, depending on what one's income will be, say, £22,000, £36,000 or £56,000. The first £29,000 will be taxed at the rate of 20% as and from 6 April 2001. The balance will be taxed at 42%. From this one subtracts the total tax credits available to the person concerned. I accept that it is a different method and that people have got used to the tax allowance system over the past 40 years. The PAYE system was introduced in 1959-60 or thereabouts. It will be a far simpler system when one gets the hang of it. I find that people usually get the hang of something quickly when it involves monetary deductions. The video and CD-ROM are available from the Revenue Commissioners and have been distributed to employers. I did not know that they had been distributed to Members. I had my son put it on for me at home in order that I could watch it. It is a very good video. I have not yet had an opportunity of saying to the unit in the Revenue Commissioners that produced it that it is an excellent video which explains the matter succinctly for employers. It will take time to get the hang of tax credits, but people will say that it is a much more efficient mechanism.

Deputy McGrath also raised the question—

Mr. Barrett:

Does it inform the public that some of the credits given last year will be lower this year because of the reduction in the tax rate?

Mr. McCreevy:

It does not state that, but people's tax rates—

Mr. Barrett:

Some 22% of something is higher than 20% of something else. Does the video inform the public of this?

Mr. McCreevy:

When the Deputy visits his constituents at the end of April when they will have more money in their pockets, he will find that they are pleased with the tax changes in the budget.

Deputy McGrath raised the issue of the numbers applying for the home carer's allowance. I said in reply to a parliamentary question from him on 28 November 2000 asking the number availing of the allowance that the figure up to 2 November 2000 was 114,600, which represented 61% of married couples who paid tax and where one spouse was earning and 30% of all married couples who paid tax. The corresponding information in respect of claimants who are self-employed taxpayers will not be available until self-assessment tax returns for the income tax year 2000-01 are received and recorded.

People did not have to apply for the home carer's allowance. The Revenue Commissioners used the information available to them under the child benefit system and allocated the home carer's allowance to the majority of the 114,600 claimants. That is how most received the home carer's allowance. I am sure figures can be produced for the numbers who had to apply, but the vast majority appeared on the computerised child benefit records and automatically received the allowance as a result. Some were inadvertently omitted and later claimed it, but the bulk of recipients became aware that they would receive the allowance after they were informed by the Revenue Commissioners.

On the issue of low pay, there has been less criticism in recent months since I produced the figures for low pay. These were produced in response to a parliamentary question tabled by Deputy Jim Mitchell, when Chairman of the Committee of Public Accounts, requesting the different figures for the tax take for increasing strands of income and a comparison of the resultant figures for take home pay with similar figures for take home pay in the United Kingdom. As the Deputy will have noted, the net take home pay for low paid Irish taxpayers is much greater than the equivalent figure in the United Kingdom. The Irish tax system becomes severe for those in the middle, namely, middle income earners. I have tried in recent years, despite the opposition of Deputy McDowell, to have them pay a realistic amount of tax. When I complete the process in the budget for 2002, everyone will have benefited considerably. It is not possible to do it all in equal stages, but a transition to the tax credit system and having a single standard rate tax band will help everyone. The system for deducting the tax and social insurance take in Ireland is much better for the low-paid than that in any other EU country. An EU study complimented Ireland and the United Kingdom on their systems as compared with those in other EU countries, and the systems compare favourably with others in the rest of the world. I do not accept criticism in this area given the figures published which first came to light in the reply to Deputy Mitchell's question and also in the light of the EU report which placed them in context.

Deputies Barrett and Mitchell raised the issue of the widening of the single standard rate tax band. I will not refer to the debate on the matter last year. While I agree with Deputy Barrett on many finance issues, I disagree fundamentally with him on this one. Up to and including the tax year 1980-81, there were many rates of taxation, but only one tax band which was not automatically doubled for married couples. It was only after that tax year that it was doubled. It was a feature of income taxation since it was introduced, although the participation of those in the workforce was much different, that the tax system had many rates, but only one band. It was an innovation in the 1981-82 tax year that the bands were doubled for married couples. No one has suggested to me that women were discriminated against from the foundation of the State until 1981. All my revolution amounts to is a reversion to that situation.

Deputy McDowell referred to the Fine Gael policy of continually increasing the employee tax credit as the poor man's way to individualisation. The Deputy's opposition to individualisation is not shared by his confreres in the labour movement. Since I became a Member of the House, those who support the Deputy's party, such as trade unionists and especially female trade unionists, have lobbied successive Governments long and hard to travel this road. The Deputy is aware of this and he would not find agreement in the wider labour movement for the proposition he has advanced. At least, he has been consistent in arguing the point in the past 15 months, even though his view is not shared by many of his party colleagues and 98% of trade unionists and, certainly, not by any of the female trade unionists I know or have known, most of whom support the Labour Party. The Deputy is in a small minority on this issue. Nonetheless, he has been consistent and not said anything different.

While Deputy McDowell has been consistent, the Fine Gael Party's proposal is not consistent. Increasing the PAYE allowance, now known as the employee tax credit, is the sneaky way to introduce individualisation. Deputy McDowell referred to it as the poor man's way to individualisation. The same effect would be achieved, but at less cost to the Exchequer. When Deputy Mitchell was Chairman of the then Joint Committee on Finance and the Public Service up to 1997, I found him to be a very fair-minded individual. If he studies my proposals for widening the single standard rate tax band and considers what the end result will be, I will be surprised if he does not conclude that it is the fairest way given the current structure of society. It is a fair system and the fairest one to have. I only propose the widening of the single standard rate tax band, not the individualisation of the tax system.

To individualise the tax system means that the personal allowance would be the same for a married couple with one person earning as for a single person. That is the system in the United Kingdom and in most other countries. The married tax free allowance is double the personal allowance for a single person, and in relation to tax credits it is double also.

Mr. J. Mitchell:

Is the Minister making a Second Stage speech?

Mr. McCreevy:

No, but Members have raised particular questions. That is what individualisation means in any accepted definition. It is the system that applies in other countries but I have never advocated that system. All I have decided to do, and this is accepted by the social partners, is to return to the system that operated up to 1981. When Deputy Mitchell investigates further, he will see individualisation as a fundamental change that is fair to everybody. Deputy Mitchell also raised the question of child care costs and he should agree that a widening of the tax bands is an effective way of addressing that question. The changes which will widen the standard rate band are fair and equitable.

Deputy McDowell spoke about the balance struck between expenditure and taxation. There is a point where maximum return to the State is achieved, allowing it to increase expenditure in necessary areas. I cannot precisely say what the personal business tax rate should be to achieve that maximum point. However, my experience tells me that tax rates of 50%, 60% or 70% are not the optimum rates, whether in personal tax, corporate tax, capital gains tax, gift tax or inheritance tax.

I do not have a magic formula which tells me exactly what point is the optimum, but I know that high tax rates are not desirable. They are a disincentive to all and encourage evasion. Even if there is no evasion, very high tax rates discourage the maximum economic activity which gives the State the wherewithal to take the measures which all Members desire. That is a fundamental difference of political opinion between Deputy Mitchell and myself.

Mr. J. Mitchell:

I thank the Minister for saying that I was a very fair chairman of the finance committee. However, he has probably heard the words of Samuel Johnson who said that the Irish are very fair people because they never speak well of each other.

Amendments No. 10 and No. 11 are designed to increase the PAYE allowance because there are costs involved in going to work for individuals, whether or not they are two individuals in a relationship. The Minister has tried to escape the implications of the Murray judgment in the Supreme Court. I doubt whether his proposals would survive a Supreme Court challenge. Has the Minister considered the Murray judgment in the context of his individualisation proposals?

Mr. McCreevy:

That judgment does not bear on my individualisation proposals. The matter was considered before the budget of last year and legal advice was received from the Attorney General.

Mr. J. Mitchell:

I am glad to hear it but I am unsure whether the courts would uphold the opinion said to be expressed by the Attorney General. The proposals in amendments Nos. 2 to 11 should be taken together with the next set of amendments.

The Minister is right to say that middle income earners in the Republic are at a tax disadvantage. Those on lower pay fare better than those on low pay in Britain or Northern Ireland, but that does not mean that the position is over-generous here. It means only that the position is quite unkind in the UK. We should remember that in the UK council taxes must also be added which are not payable here. They do not appear on a person's payslip but are paid afterwards and worsen the tax position of UK citizens.

If you compare the totality of discretionary or disposable income after taxes and PRSI it is true that Ireland has made great strides, but we still have a problem when it comes to those on middle incomes. In that sector more tax is still paid here than in the UK, a matter I will come to. These amendments are a way of dealing with the cost of going to work for both individuals and couples and I ask the Minister to consider them.

Mr. McDowell:

There is a great deal in what the Minister said which could detain us for the rest of the night and beyond. On the debate about individualisation, the Minister rightly points out that some of my colleagues in the trades union movement do not agree with the analysis I put forward. It is the primary job of the trades union movement to represent workers whereas my party has a broader remit.

I find it difficult to disagree with most of the analysis put forward by Deputy Barrett. I am a bit younger than some of my colleagues who have spoken in this debate, and at a slightly different stage of the life cycle. I am at a stage when friends are having their second or third child and I have several female professional friends who have decided to opt out of work for a number of years to look after their children. I respect that choice, although I have been surprised by it in several individual cases as I never thought some of these friends would opt out of work. The doubling of the width of tax bands since 1981 has facilitated and supported that choice and to move in the opposite direction now will send out a contrary signal.

What I have said about individualisation is not entirely in keeping with what other trades unionists have said, and I know some of the individuals the Minister refers to. However, there are others in the trades union movement who share my view.

Mr. Barrett:

We also have a different definition of what work is.

Mr. McDowell:

That is fair also. I am unsympathetic towards the discussion we have had about taxation. One cannot discuss tax as if it is medicine that you take for no reason, something that is deeply unpleasant and has no positive sides. We should look at what type of investment in services the State needs and then look for the money to fund that investment. The level of current investment is inadequate and we must improve it. We have the surpluses and extra money available that would allow us to do that and they should be channelled towards investment in services.

I am not arguing for 50%, 60% or 70% tax rates or anything remotely close to that. I disagree with some of the tax reductions the Minister has introduced largely because they have been inequitable and have disproportionately favoured the wealthy. That has been the primary argument between the Minister and me, and I suspect it will continue. The focus of my amendments is to ensure, in so far as taxes are being reduced, this will be done by way of tax credits. The focus of my amendments is to ensure, in so far as taxes are being reduced, this would be done by way of tax credits.

Question, "That the figure proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Amendments Nos. 3 to 9, inclusive, not moved.

Mr. J. Mitchell:

I move amendment No. 10:

In page 18, column (3), line 44, to delete "£296" and substitute "£533".

Question put: "That the figure proposed to be deleted stand."

The Dáil divided: Tá, 65; Níl, 40.

Tá

Níl

Tellers: Tá, Deputies S. Brennan and Power; Níl, Deputies Bradford and Coveney.

Question declared carried.

Ahern, Dermot.

Ardagh, Seán.

Aylward, Liam.

Blaney, Harry.

Brady, Johnny.

Brady, Martin.

Brennan, Matt.

Brennan, Séamus.

Briscoe, Ben.

Browne, John (Wexford).

Byrne, Hugh.

Callely, Ivor.

Carey, Pat.

Collins, Michael.

Coughlan, Mary.

Cullen, Martin.

Davern, Noel.

Dempsey, Noel.

Dennehy, John.

Doherty, Seán.

Ellis, John.

Fahey, Frank.

Flood, Chris.

Foley, Denis.

Fox, Mildred.

Gildea, Thomas.

Hanafin, Mary.

Harney, Mary.

Haughey, Seán.

Healy-Rae, Jackie.

Jacob, Joe.

Keaveney, Cecilia.

Kelleher, Billy.

Kenneally, Brendan.

Killeen, Tony.

Kirk, Séamus.

Kitt, Michael P.

Kitt, Tom.

Lenihan, Brian.

Lenihan, Conor.

McCreevy, Charlie.

McDaid, James.

McGennis, Marian.

McGuinness, John J.

Martin, Micheál.

Moffatt, Thomas.

Molloy, Robert.

Moloney, John.

Moynihan, Michael.

Ó Cuív, Éamon.

O'Dea, Willie.

O'Donoghue, John.

O'Flynn, Noel.

O'Hanlon, Rory.

O'Keeffe, Batt.

O'Rourke, Mary.

Power, Seán.

Roche, Dick.

Ryan, Eoin.

Smith, Brendan.

Smith, Michael.

Treacy, Noel.

Wallace, Dan.

Wallace, Mary.

Woods, Michael.

Belton, Louis J.

Bradford, Paul.

Browne, John (Carlow-Kilkenny).

Bruton, Richard.

Burke, Liam.

Burke, Ulick.

Carey, Donal.

Clune, Deirdre.

Connaughton, Paul.

Cosgrave, Michael.

Coveney, Simon.

Creed, Michael.

D'Arcy, Michael.

Deasy, Austin.

Deenihan, Jimmy.

Dukes, Alan.

Finucane, Michael.

Fitzgerald, Frances.

Flanagan, Charles.

Gormley, John.

Hayes, Brian.

Higgins, Jim.

Higgins, Joe.

Hogan, Philip.

McCormack, Pádraic.

McGahon, Brendan.

McGinley, Dinny.

McGrath, Paul.

Mitchell, Jim.

Mitchell, Olivia.

Naughten, Denis.

Noonan, Michael.

O'Keeffe, Jim.

Owen, Nora.

Perry, John.

Reynolds, Gerard.

Ring, Michael.

Shatter, Alan.

Sheehan, Patrick.

Stanton, David.

Amendment declared lost.

An Ceann Comhairle:

As there was a problem with the division bells, I will ask for a report on the matter. As Deputies will appreciate, the Ceann Comhairle was in the Chair. The matter will be examined and Deputies will be informed of the position.

Minister of State at the Department of the Taoiseach (Mr. S. Brennan):

I add my voice to what the Ceann Comhairle said and ask that the matter be investigated urgently. A number of Deputies were waiting for the division bells to stop ringing before voting.

Mr. J. Mitchell:

I add my voice to the sentiments expressed. After voting, the division bells were still ringing. Some Deputies were, therefore, locked out. Clearly, something went wrong.

Mr. S. Ryan:

I was outside just before the door was closed.

Mrs. Owen:

The Deputy was not able to lodge his abstention.

An Ceann Comhairle:

I will have the matter investigated and will report back to the House.