Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Bill 2020: Report and Final Stages

Will the Cathaoirleach outline the procedures for the legislation as the debate will be curtailed at 12.30 p.m.? How often may Members contribute?

Members may contribute once, aside from the proposer of an amendment, who may reply to the discussion on the amendment.

May we contribute at a particular time or should we indicate when we wish to come in?

Members may indicate when they wish to come in. There is one amendment.

To clarify, I wish to speak on a particular matter, the retail export scheme.

We will be dealing with an amendment.

I appreciate that but will the Cathaoirleach allow me to speak on the scheme? I do not wish to have a row with the Cathaoirleach.

That is okay but there is only one amendment so the Senator is only allowed to speak once.

Okay. The Cathaoirleach might allow me to speak when I indicate.

I will allow the Senator speak to the amendment, with a bit of latitude. I remind the Senators that a Member may speak only once on Report Stage, except for the proposer of the amendment, who may reply to the discussion on the amendment. On Report Stage each amendment must be seconded.

I move amendment No. 1:

In page 47, between lines 10 and 11, to delete the text inserted by amendment 4 at Seanad Committee.

I second the amendment.

The amendment concerns a review and I will speak to that matter. I welcome the Minister of State, Deputy Thomas Byrne, to the House. I wish him well in his endeavours in the next critical period.

The decision of the United Kingdom to scrap VAT-free shopping for non-EU visitors will, according to the UK Treasury, save £500 million in a calendar year. That is without any review taking place. As reported in The Sunday Times last Sunday, the Centre for Economic Policy Research predicts that the wider economic damage will end up costing the UK Treasury £3.5 billion.

I wholeheartedly support the Leader's amendment, as it is the correct approach. Why can we not retain a review of the retail export scheme that would give us an opportunity as a country to have a real look at the consequences of what the Government proposes and, if necessary, to ensure that the process would be scrapped if no benefit accrued.

Last week in the House, the Minister of State at the Department of Finance, Deputy Fleming, attended and spoke correctly about the €175 imposition being reduced to €75, with the €175 figure being introduced for the 2020 calendar year. The Minister of State did not say that the legislation was passed for the context of a no-deal Brexit and the United Kingdom operating a similar scheme, which it is not. It was a contingency for a no-deal position.

It is important to note the €175 imposition did not come into effect.

Another point that needs to be addressed in the Bill in the context of where we are today is that, by 1 January next, retailers will need to have a new management system and new till operating system in place to deal with the imposition of this threshold. The Minister of State has responsibility for Brexit. Has there been engagement with retailers and, if so, has that engagement been reviewed? How will retailers update their systems to facilitate the introduction of the €75 imposition? For example, how will it operate with Revenue regarding refunds? How will the Government work with traders and Revenue to implement the provision in a positive way on 1 January if it comes into effect?

If we are serious about the European Union in the context of the Brexit Bill, we need to ensure a digital solution is operational and we have an ability to ensure compliance with this aspect of the retail export scheme. Has there been any engagement with the United Kingdom on this? How will we manage the scheme for tourists coming into the country? A tourist will be asked to spend €75, which is great, but what happens if a purchase to that value is not possible in a particular shop? To take the example of clothing, such as a jumper and pants at the high end, purchases of such products could be made in Quills in Killarney or Kenmare.

The Senator is talking about this in the context of a review.

I am coming to that.

He should speak about it in the context of the amendment.

Such purchases could be made in Blarney Woollen Mills or, as the Cathaoirleach who is from Kenmare will know, in many fine shops in Kenmare. I am sure he would want to speak up for those retailers.

Please speak to the amendment, Senator.

As the Minister of State, the Leader and the Cathaoirleach know, a review is necessary and it relates to this amendment. To give an example, the Guinness Storehouse is the biggest tourist attraction in the country. I referred to it last week and I did some research over the weekend. It would be difficult to spend €75 in the Guinness Storehouse as people might buy a trinket, T-shirt, glass or cap. To give the example of the Shannon heritage sites, including the Cliffs of Moher, Kylemore Abbey and Bunratty, to name but three. A tourist would find it difficult to spend €75 in a visitor attraction shop at those sites. As the Cathaoirleach will know well since Kenmare is a tourist town and is close to Killarney and Blarney, there are hierarchies in terms of product. A tourist shop selling Waterford Crystal, Aran sweaters or high-end scarves would have no problem making a €75 sale unlike visitor attraction outlets selling T-shirts and key rings. We are now introducing, without any review or commitment, a new tier of tourism product. We are saying to the tourist attraction shops in Kylemore Abbey, Bunratty, the Cliffs of Moher and the Guinness Storehouse, to name but a few attractions, that they are different from other places. That is not right.

In addition, it is not right to foist this measure on the retail sector, given that, as I said in the previous debate, 2021 will probably not see a major influx of tourists holidaying here. Given that the amendment was passed, why not delay until March the introduction of the €75 imposition?

That would give the Department three months to engage with and talk to Revenue, the Department of Finance, the retailers, the companies that work to put in place till system updates and digital solutions, and the refund agents. If I am wrong, I would like the Minister to tell me. By my reckoning, as someone who took pass maths in the leaving certificate, today, 8 December, is 23 days from 31 December. That gives the Department 23 days to engage with all these groups. I do not see it happening. I therefore ask the Minister of State to consider 1 March as an option.

The other point I wish to make in the context of the Bill is that the retail export scheme has expanded to over 65 countries around the world. Many of the organisations involved in the management and operation of this excellent scheme work hand in glove with retailers to provide a seamless experience for the customer and the tourist. The €75 threshold is causing consternation. To put this into context, I will give the Minister of State three examples of where businesses will suffer. No review has been issued by the Government. There has been no cost-benefit analysis. Has there been any engagement? If there has been, we have not heard of it. Is the Minister of State aware that the average visitor from the United Kingdom, for example, spends 11% of his or her budget on shopping and will therefore not represent a threat to the retail export scheme? Secondly, UK visitors to our country contribute €1 billion to our economy and, therefore, 95% of that VAT will always stay in Ireland. I welcome the change in the benefit of the UK tourist but I go back to the point I made the other day.

I ask the Minister of State to consider the representative bodies and what they said in the tourism committee about the challenges our hospitality sector faces. Senator Gavan this morning made a comment about people coming into work. The Leader quite rightly said that people who come in and volunteer should not have to face that threat. Our plateau in respect of the number of tourists arriving from the UK has been reached. Their numbers are declining following Brexit and the exchange rate volatility. The retail export scheme will encourage UK visitors to visit more and spend more in all sectors and therefore contribute to our economy if the scheme is available.

I do not have an issue with a quid pro quo philosophy but I think many in the House will agree with me that we need to keep jobs and promote sustainable jobs in rural Ireland and our regional towns. I have referred to a number of the visitor centres there. What Fáilte Ireland has been doing has been about ensuring regional distribution through, for example, the Wild Atlantic Way and Ireland's Ancient East. That is done in a number of scales, not only through seasonal distribution but also through promoting the visitor experience and the physical experience of tax-free shopping in our country. No other country is doing what we are doing on tax-free shopping.

I accept it was in the Bill last year in the event of there being no deal. That Bill was never implemented or enacted. What consultation has taken place with the refund agents who have articulated a concern about the UK visitors' usage of the scheme? Why is there now a sudden need to introduce this provision? Despite our tourism figures in 2020 having understandably plummeted, in 2021 with the likelihood of Covid still being here notwithstanding hopefully the availability of a successful vaccine - all of us in this House should encourage people to take the vaccine - we are now saying that with travel virtually ceased, 50% of other tourists and current Irish retailers are being penalised.

Nobody wants the threshold to be abused. I have no vested interest other than being from Cork and seeing the importance of the cruise liners to the Port of Cork, Blarney Castle and Blarney Woollen Mills. We are selling ourselves short when we have a unique tourist experience. Senator Casey spoke about the corporation tax last week. This is our calling card in respect of our visitor experience. This is a short-sighted decision. It would be logical to continue to allow tourists from different countries to be able to spend money when we emerge into a new normal whatever that may be.

I hope we will come back here again to have that review. I thank you, a Chathaoirligh, for your indulgence and latitude. This is a very short-sighted decision by the Government, which regrettably does not allow for the experience that has been enjoyed to date to be continued.

I call Senator Wall on the amendment.

Absolutely on the amendment. I welcome the Minister of State to the House. I wish to confirm our total support for the overall Brexit Bill. Members have spoken about how important Brexit is to the country and we all hope we can get a deal. I again acknowledge - for the fourth time, I think - the work the Minister, Deputy Coveney, the Minister of State, Deputy Byrne, and their officials have done in getting us to where we are. The Labour Party totally supports that work. We all hope we will get the deal which this country deserves.

We have an amendment before us today. The Cathaoirleach will correct me if I am wrong. When we were at this stage last week, our amendment was accepted by everybody in the House. Today we find that the Government has tabled an amendment to remove last week's amendment tabled by the Labour Party. We tabled that amendment for many of the reasons espoused by Senator Buttimer this morning. I want to concentrate on a few of them again. This provision is basically a new tourist tax. Senator Buttimer mentioned management systems. Many small businesses will now need to install those so-called management systems. That is the reason we proposed the review in the first place.

Based on conversations with my colleagues in the Dáil, I believe the Government made a commitment to accept this amendment. When that did not happen in the Dáil we tabled our amendment here.

Once again, and I hope I will be corrected if I am wrong, this was accepted by one and all in this House, including the Government parties, last week. We need to ensure that a review of this measure is carried out. It will affect a great many businesses. Last week, I put on record a number of conversations I have had about the potential for this tourist tax to affect up to 500 jobs at a time when the youth employment rate is over 40%. Again, I will state that many young people start their working careers in these businesses. For all the reasons Government and Opposition Senators spoke about last week and which have been mentioned again this morning, the introduction of this tourist tax is totally unacceptable. We will oppose the amendment and call for a vote. I thank the Cathaoirleach for giving me time this morning.

I welcome the Minister of State. I echo the words of Senator Wall. As he rightly said, we in the Labour Party entirely support the Government's efforts to ensure a deal is reached with regard to Brexit. We know what a critical time we are at this week. We understand and acknowledge that. We are certainly not opposing the Bill but, as Senator Wall has said, our amendment on Committee Stage last week, amendment No. 4, was not opposed by any Government Senator. It was passed. I know things can happen and that it may have passed inadvertently. We saw that happen with Government amendments on the Judicial Appointments Commission Bill 2017. We understand why the Government has proposed this amendment today but we have to oppose it. The reasons we tabled amendment No. 4, which would insert a new section 68 allowing for a review after 12 months, were set out eloquently by Senator Wall on Committee Stage last week. The amendment was supported by many, as he has said. We will oppose the Government amendment which seeks to take out that review. We understood that a commitment was given in the Dáil that there would be such a review.

For all of those reasons, we cannot support the Government amendment, although we will not oppose the Bill, despite our discomfort with the guillotine which Senator Sherlock expressed on the Order of Business earlier. As leader of the Labour Party group, I have put our position on the record. Our amendment was reasonable and it deserved and got Government support last week. We are disappointed to see the Government seeking to delete it this week. It is for that reason that we will oppose the Government amendment.

Cuirim fáilte roimh an Aire Stáit. I will not prolong the discussion any longer than is necessary. I agree with a lot of what Senators Bacik and Wall have said on the Government amendment. As the Minister of State will know, the overarching themes and issues involved were debated on Committee Stage. We had our own amendment which, unfortunately, did not make the cut in the end but the Labour Party amendment represented a reasonable position to adopt and it is worthy of consideration. I do not know why the Government is so opposed to revisiting some of these issues. This is but one proposal in which we, as Opposition groups, are asking the Government for a punctuation point at which we can stop and take a breather in what I appreciate is an ever-changing and dynamic situation. We are not saying that such a review will ultimately result in a change. That will depend on political, societal and economic dynamics. The amendment simply sought a point at which to stop, reflect and review the measure. The cause for such a review was very eloquently outlined by Senator Buttimer. Much like Senator Bacik, our group will oppose the Government amendment because it is not good practice not to review issues that are of such importance for communities across this State.

Gabhaim buíochas leis an Seanad as an deis teacht isteach anseo agus an leasú seo a phlé. Táim buíoch den Seanad go léir as ucht an chomhoibrithe ó gach duine maidir leis an mBille, go háirithe comhoibriú na Seanadóirí Rialtais a chur an leasú os comhair an Tí inniu. I thank Senators for the genuine cross-party co-operation on Brexit from all Members of the House, which I accept. I also accept the genuine feelings people have about the tax rebate scheme.

Senator Ó Donnghaile asked pertinent questions about why there is such a rush and why we are opposing the amendment the Seanad made last week. Senators are right.

We have given a political commitment that we will carry out the review that is envisaged by the amendment. The commitment has been given and the review will happen. As I understand, it must happen under Seanad Standing Orders anyway, but we have given the commitment in writing. The situation is that the Bill itself is urgently required ahead of the end of the transition period on 31 December. As Senators know, the reasons for the Bill are to protect consumers, facilitate the sound functioning of key businesses, and continue the common travel area and North-South co-operation. However, it is not just that. If we were to accept the amendment, we would then have to look for Dáil time to get the approval of the Dáil. That presents a real difficulty. The pressure on the Bill is not just due to the time pressure of 31 December, it is also the genuine pressure on officials who are now observing what is going on at the Brexit talks and the discussions of the joint committee on the Northern Ireland protocol. It is the same officials who are looking at all these issues. I left a meeting with Michel Barnier this morning to be here. That is my duty. That is not said by way of complaint. There are genuine time pressures.

What we are doing is asking the Seanad to support the Bill. I will speak on the substance of the amendment. We are looking for the understanding, help and support of Senators to accept the amendment on the basis that it lets us close this book for the time being on this legislation. When the Taoiseach goes to Brussels on Thursday, it allows us to be able to say to our colleagues that we have done everything and that the book is closed. If the European Commission starts to discuss its own contingency measures at this late stage, as there has been pressure on it to do, we can say that we in this country have done what we need to do.

I repeat the commitment of the Minister for Finance that the Department and the Revenue Commissioners will report on the operation of the VAT retail scheme in the course of 2021. That commitment was made genuinely. The only reason the Bill was proposed in the Seanad at this time is simply to do with Dáil pressure and to get the legislation passed. That is not to dismiss the concerns that have been raised or to say that we are not going to do this or that it was a bad idea. I accept this probably should have been done in the Dáil originally, but it was not. That is fine. I have discussed that in the Dáil with the former leader of the Labour Party, Deputy Brendan Howlin, as well. It did not happen.

We genuinely want to do this. We appreciate the co-operation shown by members of all parties on Brexit. The Minister for Foreign Affairs, Deputy Coveney, was in Brussels yesterday. I expect the Taoiseach and I are going to Brussels tomorrow. There are general issues of availability and the officials are in a similar position as well. That is the only reason the Bill is before the Seanad, and the Government is asking the House to let this Bill pass and to accept the political commitment that we have made that we will carry out a review in the course of 2021. It is quite clear as well from a Government point of view that some of the strongest voices were Senators Buttimer and Casey, who are on our own side. The Minister for Finance has a delicate job to do.

I am not directly involved personally in this particular issue. It is the Department of Finance that is involved. The purpose of this Bill is that every Department takes its own sectoral issues. I understand there was strong engagement by the sectors over a long period on this issue with the Department. The Revenue Commissioners will make information available on this. The report will be carried out. As I understand it, a report must be made under the legislation. That is our case here today. We are under severe time pressure and we want to have this done and to continue the other work that is going on with the co-operation of everybody. It is a matter for the Seanad itself and not a matter for me how it conducts its business and what votes are called. That is our case, and I hope Senators accepts the Government's bona fides, as we accept their bona fides on all of these issues, in particular the one in question.

Amendment put:
The Seanad divided: Tá, 30; Níl, 12.

  • Ahearn, Garret.
  • Ardagh, Catherine.
  • Blaney, Niall.
  • Burke, Paddy.
  • Buttimer, Jerry.
  • Byrne, Malcolm.
  • Casey, Pat.
  • Cassells, Shane.
  • Conway, Martin.
  • Crowe, Ollie.
  • Cummins, John.
  • Currie, Emer.
  • Daly, Paul.
  • Davitt, Aidan.
  • Doherty, Regina.
  • Dolan, Aisling.
  • Dooley, Timmy.
  • Fitzpatrick, Mary.
  • Gallagher, Robbie.
  • Kyne, Seán.
  • Lombard, Tim.
  • Martin, Vincent P.
  • McGahon, John.
  • McGreehan, Erin.
  • O'Loughlin, Fiona.
  • O'Reilly, Joe.
  • O'Reilly, Pauline.
  • O'Sullivan, Ned.
  • Seery Kearney, Mary.
  • Wilson, Diarmuid.

Níl

  • Bacik, Ivana.
  • Black, Frances.
  • Boyhan, Victor.
  • Boylan, Lynn.
  • Higgins, Alice-Mary.
  • Hoey, Annie.
  • Keogan, Sharon.
  • Moynihan, Rebecca.
  • Ó Donnghaile, Niall.
  • Sherlock, Marie.
  • Wall, Mark.
  • Warfield, Fintan.
Tellers: Tá, Senators Robbie Gallagher and Seán Kyne; Níl, Senators Ivana Bacik and Mark Wall.
Amendment declared carried.

As it is now 12.30 p.m., I am required to put the following question in accordance with the order of the Seanad of this day: "That Fourth Stage is hereby completed, that the Bill, as amended, is hereby received for final consideration, and that the Bill is hereby passed."

Question put and agreed to.
Sitting suspended at 12.31 p.m. and resumed at 1.30 p.m.