Amendment No. 5 has been ruled out of order as it involves a potential charge on the Revenue.
SECTION 3.
Acting Chairman
Amendment No. 5 not moved.
Question proposed: "That section 3 stand part of the Bill."
I accept the ruling in regard to amendment No. 5. However, if the amendment is ruled out of order on that basis, what of earlier amendments involving extra taxation. What is the difference between those amendments and amendment No. 5?
Acting Chairman
The Deputy is aware that rulings of the Chair cannot be discussed publicly. He may discuss the matter privately with the Chair following the meeting.
Does anyone know the difference?
Without prejudice to the ruling of the Chair, which by definition is correct, it is rather ridiculous that the Opposition can only put forward proposals for tax reduction. They are then open to criticism that their amendments never explain the way in which money may be spent and are informed that their proposals are unbalanced. The Constitution states that Money Bills must originate with the Government and cannot be introduced by Opposition Members. However, there is nothing in the Constitution to prohibit them from proposing amendments which would have a more onerous affect than the Government's proposals.
At an appropriate juncture, this committee should raise with the Committee on Procedure and Privileges the right of Opposition Members to tender amendments which might have a negative implication. While drafting amendment No. 4, much of my time was spent ensuring that it would not have an adverse affect on people.
Acting Chairman
I have given the Deputy has as much latitude as possible to make his point. However, he must agree that the Chair has made the ruling in accordance with Standing Orders and precedent.
I have never understood this provision.
Acting Chairman
There are mysteries in life, Deputy McCreevy.
I doubt that other Members understand the need for the provision.
Section 3 involves increases in personal allowances and perhaps the Minister will make a statement about it. I wish to make a general point regarding the increase in personal allowances as they affect those in employment and the unemployed. Whether Deputies comes from either the right-wing or left-wing approach to Irish economics or political philosophy, they would have to be deaf and blind to the fact that there are people in their constituencies who, because of the differentials between working and remaining unemployed, do not bother to take up low paid jobs.
The amendment which was ruled out of order represented an attempt to establish a clear differential. It was designed to ensure that people on social welfare assistance would receive a similar amount to that of their tax free allowances. This would have the affect of putting some kind of incentive in place in the system. The accumulation of the tax rates and personal allowances has led to a situation where a considerable segment of those officially unemployed could take up employment but do not. I am not engaging in right-wing sentiments when I point out that fact. There is a simple reason that people do not enter low paid employment.
Sociologists and other experts seem always to come from the upper reaches of the middle classes. Yet they seem to be aware of what ordinary people know and do. I would like to tell them the pragmatic thinking of 98 per cent of ordinary people on Sunday nights and Monday mornings. Unemployed people calculate that, if employed, they would be obliged to get up a 6.30 a.m. on a cold winter morning and spend one hour travelling to work. They also calculate that, taking into account their salary, less expenses, they would be better off drawing State benefits. That is what many Irish people and many throughout the world do.
It is totally rational.
Yes, they make decisions based on common sense. On the other hand, business people make decisions which are equally based on common sense. They do not create jobs for the sake of doing so. A business person will only employ extra staff if they believe that such action will have some future benefit. Some employers may be of a different opinion, but 99 per cent of those I have met operate in the way to which I referred. It is the exact corollary of what the ordinary employee does. Perhaps it is not fashionable or politically correct to state it, but 90 per cent of present and past Members of the Oireachtas know that this is correct. Members use common sense and pragmatism to gain election to this House and if they spend their time here with their heads in the clouds, they will not stay for long.
One of the constraining factors of Irish economic performance in recent years, despite impressive figures, is the high level of unemployment. No one knows the exact figure; now we have a dispute about last year's figures on the live register and the Labour Force Survey.
The Department of Finance approved enough money in the administrative budget for the Department of Social Welfare over a period of ten or 12 years to make it the most computerised Department of State. Social Welfare was highly computerised before the Office of the Revenue Commissioners and, with the press of a few buttons and the political will, the Minister could tell at the end of the week how many people were unemployed and their different employment backgrounds.
People physically turn up and sign on the live register. Joe Smith signs on once a week or once a month. Surveys are just what they are supposed to be — surveys — but the live register is an exact count while a labour force survey is, as the name implies, a survey, like an opinion poll. The same analogy applies as between an opinion poll and an election. An election actually takes place, people vote; an opinion poll is only a survey of people's opinions.
I do not go along with the argument which has been put forward by all politicians in this House that we must forget about the live register and look at the labour force survey. That is the same as deciding that we will not have an election in 1997, that we will survey the people coming up Grafton Street and base the next Government on that survey. People from my own party have fallen into this trap as well. It would suit many of us here to have it like that because it would save us having to go out and canvass, but I make that point to show how ridiculous it is. The same analogy applies in this row about the labour force survey and the live register.
If there is the political will, with very little extra cost — I pointed this out in the Dáil recently — those figures can be given every week, never mind at the end of every year, because people sign on. All you have to do is categorise them and this can be done by pressing a few buttons. I cannot understand why that cannot be done. If the Minister and his officials have been told otherwise by officials and politicians from other Departments, I can tell him that it can be done very simply. Of the 280,000 people unemployed, it is possible to tell how many people came from different educational backgrounds and the type of job they held. It is very simple.
This section deals with personal allowances. Personal allowances and tax rates taken against social welfare entitlements and entitlements from the State lead some of the population to make the pragmatic economic decision not to take up employment. That is the situation at which we have arrived under our tax and social welfare system. It did not come about through anyone's mal fides; it happened because successive Administrations, since the foundation of the State, have tried to do good. We have made it so complicated and so messy that we now have the situation where Joe Smith will not take up that job but will stay on social welfare. These personal reliefs go nowhere towards allowing people to make the positive economic decision to go from social welfare to employment.
Acting Chairman
I ask Members to refrain from long speeches, we are on Committee Stage and we have to dispose of sections 1 to 12 before 1.30 p.m. I want to afford all Members who have proposed amendments an opportunity to speak on those amendments but if we have long speeches we will not reach them all.
The taxation and social welfare integration group which has been sitting for about two and a half years, was established after the 1993 Fianna Fáil-Labour Government was set up. The committee has completed its work. The text of the document is now being finalised and we hope to have it published within three to four weeks depending on the normal requirements of processing and clearance. It might be useful for this committee to debate the document in full. I am not sure we will all be satisfied with its conclusions because many of the problems that appear to be easily addressed are more complex when they have been gone through in detail. The committee was chaired by a former general secretary of the Irish Congress of Trade Unions but I am not sure that its conclusions will give us the kind of comfort that Deputy McCreevy was suggesting we might reasonably expect.
I never expected that the committee would be able to come up with the solutions.
For the information of the committee, in regard to procedure and the Standing Order that does not prevent amendments such as the one that was put down being ruled in order, the only way the Opposition could have amendments ruled in order would be to have the entire Finance Bill set of amendments balance with the exact amount of expenditure that the budget proposed to raise so that one amendment that would bring about a reduction in expenditure could, in turn, be offset by another amendment that would bring about an increase. However, I suspect that even that might fall foul of the Standing Orders as they are currently constituted. Deputy McDowell said already in an aside — I will put it on the record on his behalf — that it is probably a great protection that the Opposition is ruled out of order in these matters so that it does not have the responsibility of being balanced in its approach.
Section 3 refers to personal allowances. Deputy McCreevy is, in part, referring to exemption limits. The personal allowance for a single person is £2,650 whereas the current rate of UA, now £64.50 for a single person per week, grosses £3,354 per annum. The exemption limit in tax terms for a single person is £3,900, approximately £500 more than that. Deputy McCreevy has to look at the exemption limits. When you take the other factors — the personal circumstances, etc. — into account, there are some cases where it does not pay a UA recipient to take up employment. However, on the basis of known social welfare take and entitlements, the rate of pay of many people would be considerably higher than the level of official support they receive. I am speaking of the majority of the long-term unemployed who are single men between the ages of 25 and 44. We must assume, looking at the figures, that if they were to get a job it would be at the semi-skilled rate because the vast majority of them tragically have poor levels of education. That is one of the reasons they are long-term unemployed. Nevertheless, other factors may have brought them to the conclusion that they are better off not getting out of bed on a Monday morning.
There may be grey and black factors.
There may be grey and black factors but it takes the employer and the employee to work the black economy. We are very quick to denounce the employee but we do not to say much about the employer. However, that is for another day and for another discussion. I suggest that section 3 be agreed to.
I will not repeat what my colleague has said because I agree with points he made. Has the criterion of being available for work effectively disappeared? This provision does not seem to be firmly implemented and I am deeply concerned about it. Nowadays it is not a question of whether people want to work. They will work but there are conditions attached. There is nothing wrong with people trying to get the best value but trying to get people into employment is no longer the bottom line. There are caveats and question marks attached and we are losing on this end of the spectrum.
I listened carefully to the Minister. While I agree somewhat with Deputy McCreevy, what will we do to rectify it? It is not necessarily the allowances, although it forms part of it, but it is the real cost of employment, such as PRSI on employers and employees, that drives employers not to employ people and employees not to take on work. The allowances we are dealing with in this section form part of the problem but they are not the first strand with which I would like to deal. Can the Minister respond to the issue of people being available for work and signing on? Has that dropped out of the equation?
Since the time Deputy McCreevy was Minister for Social Welfare, the signing on requirement for UA and UB is now once a month.
In fairness, we were going that way. Signing on is a waste of time anyway.
Under the law one must be available for, able to and, by implication, be willing to work. The test is applied differently around the country, if at all in some quarters.
Will the Minister take up my suggestion regarding the labour force survey and the live register? I assure the Minister that what I am saying is correct and I am sure it would be of great benefit to the Department of Finance officials, who labour long and hard monitoring the Social Welfare Vote.
The Department of Finance gave large amounts of money to the Department of Social Welfare for computerisation over a long period of years. This could be a major spin off in this regard. An accurate register could give an individual's working background, education, job experience etc. Mixing up the labour force survey with the live register is nonsense and commentators who refer to it in that vein are talking rubbish. The Department of Social Welfare would be well able to do it with little additional expenditure, if any. It would be a spin off from the large amounts of money which that Department cajoled out of the Department of Finance for many years.
I would be happy to treat Deputy McCreevy with the same respect as the former KGB Colonel Oleg Godefsky. My Department officials will be more than happy to debrief him in detail as to the secrets of the Kremlin in Arás Mhic Dhiarmada.
A great payoff.
Question put and agreed to.
NEW SECTIONS.
I move amendment No. 6:
In page 13, before section 4, to insert the following new section:
"4.—Section 6 of the Finance Act, 1982 shall have effect for the purpose of ascertaining the amount of income on which an individual referred to therein is to be charged to income tax for the year 1996-97 as if in subsection (2):
(a) ‘1996-97' were substituted for ‘1982-83' and
(b) ‘£140' were substituted for '£312' in each place where it occurs.".
My amendment, if accepted, would be inserted before section 4, which is concerned with taxation treatment of unemployment benefit in certain cases. The effect of my amendment would be to restore the £140 PRSI allowance. I cannot understand why this amendment has been allowed while my other amendments have been ruled out of order.
Acting Chairman
It is the Chairman's ruling.
As a general principle, I do not agree with complicating the tax system unnecessarily and in having a wide number of allowances. I spoke earlier about refining it with regard to exemption limits for old people. The £140 allowance started at £312 some years ago. It dropped to £286 for a long number of years and was then reduced further to £140 a result of changes in the PRSI rates. My amendment will amend the provisions in the 1982 Finance Act, which started at £312, to restore the relief.
This goes back to my point on low paid employees and women in particular, who take on part time or low paid jobs. At least this allowance gave some relief to tackling the trap to which I referred to earlier. This extra relief gave them some incentive to work. I am not concentrating on the £140 allowance itself but on the fact that it acts as a disincentive for lower paid employees. There are a large number of jobs in contract cleaning firms, restaurants etc. Removing this allowance at this stage would reinforce peoples' beliefs not to take up these jobs. Removing this allowance is affecting and will affect considerably the people to whom I referred earlier. That is my reason for asking the Minister to restore the £140 tax free PRSI allowance.
In essence, the reason for this abolition is that it is part and parcel of what we did on the other side of the equation. Two budgets ago we made the first £50 of class A contributions exempt from tax and this year we raised that limit to £80. This is a corresponding measure because the original PRSI allowance was, in effect, addressing the concerns and observations of it being another form of tax and people wanted some form of tax relief on it, which is a double complication.
Removing the PRSI exemption limit was in response to observations made to me when I was Minister for Enterprise and Employment by the exposed low wage competitive sector, particularly those trading into the UK. They told me they were losing market share and employment, if not threatened with going out of business altogether, because of labour unit costs. The reduction in PRSI contributions for employers and employees — we reduced employers' PRSI as well — was directly targeted at that low paid sector in the exposed side of the economy rather than the sheltered side. It had a beneficial effect in a range of low paid jobs that are, in effect, sheltered by virtue of the fact that they are not suffering international competition or exporting domestic services outside the public sector and are by definition effectively sheltered from external competition. It has enhanced employment prospects and reduced employment costs, a point to which Deputy Cullen referred earlier.
It was logical and necessary for us to abolish and eliminate the PRSI allowance to refocus that money into an area which needed it. It has largely been successful. The level of redundancies in those sectors of industry has dropped considerably. This is in part due to the fact that a person getting £100 a week before we introduced this system and paying class A contributions would have had to pay £70.25 per week and then pay a tax liability after that. They now do not have to pay that tax; they save a net amount of around £7 a week because of the £80 exemption limit. The PRSI allowance is not required. It would be nice if it was there as well, but we have been able to raise the threshold a little higher and take out the contradiction of giving a tax allowance against a tax.
It was.
Yes.
I will press the amendment for the reason I outlined, the disincentives being given to lower paid employees. It is simple to see why the black economy operates. It would not be fair to blame employers exclusively. They may want to hire a person to do an urgent job. Someone may turn up to do it and the employer may tell him that he will have to register him under PAYE, PRSI etc. and the employee will tell him to get stuffed. However, the employer still has that job to do. That is a result of the combination of the matters about which we spoke earlier. The reason I am pressing this amendment is to highlight that matter.
Acting Chairman
Is the amendment being pressed?
Yes.
Acting Chairman
I am putting the question, "That the amendment be made".
Question put.
Acting Chairman
I think the question is lost.
Would the Members wishing to have their dissent from this decision recorded in the official proceedings of the committee please raise their hands?
Deputies Michael McDowell, McCreevy, Cullen and Noel Ahern dissented.
Amendment declared lost.
Acting Chairman
Amendment No. 12 is related to amendment No. 7 and both may be discussed together by agreement. Is that agreed? Agreed.
Mr. McDowell
I move amendment No. 7:
In page 13, before section 4, to insert the following new section:
4.—The Revenue Commissioners may, with the consent of the Minister for Finance, from time to time make regulations for the purpose of exempting persons resident within the State from liability to taxation and levies in respect of earnings from employment in Northern Ireland to such extent as, in the opinion of the Revenue Commissioners, is reasonably necessary to create equal treatment as between such persons and other persons resident in the State and liable to taxation and levies on similar incomes earned in the State. .".
My proposal, as distinct from Deputy McCreevy's proposal, is perhaps a more broad brushed and, some might say realistically, slightly more lazy-minded approach from the point of view of the draughtsman. Nonetheless, what I am proposing is that there should be genuine equality of treatment in respect of cross-Border workers and they should not be penalised in the way they are at present.
Every Deputy has received strong representations from those people who are being double-taxed and hit for extra taxation by virtue of the fact that they work in Northern Ireland and reside within the State. It is a peculiar feature of our tax system that those people are at a disadvantage at present. I think everybody sympathises with the predicament of those workers. My motive, and I presume that of Deputy McCreevy in tabling amendment No. 12, is to do something about it and put up to the Minister the necessity for doing something about the situation of cross-Border workers.
I am suggesting simply that the Revenue Commissioners should have power by regulation to exempt from taxation levies people who are working in Northern Ireland and residing in the State in a way which would treat them equally for tax purposes to people working and residing in the State. It is a reasonable principle and the Government must deliver on it.
Amendment No. 12 is the exact same as my proposed amendment on Committee Stage to the Finance Bill, 1995. It is an attempt to address the situation of cross-Border workers. In fairness to myself, the Fianna Fáil Party and other Members, we tried to address this matter in the context of last year's Bill, because this question of the taxation of cross-Border workers has been around for a considerable time, considerable lobbying has built up in the counties and constituencies close to the Border and a number of Deputies from all parties in the House spoke on the matter, particularly on Report Stage in the Dáil on the last day when there was not enough time. I had never seen so much interest on a section. I just formally moved the amendment and speakers from all parties contributed at length and pointed out issues with which I would not have been tremendously au fait.
Having soldiered in the Donegal North-East by-election, which produced a pleasant result for my party who is now seated on my right, anybody canvassing there would know that the taxation of cross-Border workers is a burning issue. I have said in previous contributions on the matter that we cannot arrive at a situation where we create a further set of anomalies for workers in the 26 counties and I have explained that to my party at some depth, because some suggested proposals could result in people who live side by side in the 26 counties being far worse off.
The Minister signalled to all parties on Report Stage that he was to set up an interdepartmental committee on cross-Border taxation. That committee reported to him some months ago, he gave the details of its report to me and others on foot of letters which we wrote to him and he made some changes to PRSI levies.
The effect of my amendment would be to go somewhat further. It more or less takes into account what we provided for in the Finance Act, 1994, for people who work for a considerable part of the year outside the State. Effectively, what was attempted in 1994 Act with regard to Irish employees who spend a considerable amount of time abroad but still work in Ireland was to give them the benefit of being classified as being outside the country for the time they spend abroad. If one works it out, such people's taxation is assessed on a pro rata basis. That was the underlying theme behind the 1994 amendment.
The effect of amendment No. 12 is to bring forward that principle as it relates to cross-Border workers. This was an amendment last year long before there was any talk of a Donegal North-East by-election; and whereas a cross-Border committee I met there would prefer amendments put down by me to go considerably further, they would accept amendment No. 12 as drafted as the best relief.
Deputy Michael McDowell's amendment would go significantly further again, which is more or less in line with what the cross-Border workers would probably like, that is, as I understand his amendment, that people doing the same type of work would be entitled to the same amount of money. My amendment is a kind of halfway house between the two extremes in order not to create further anomalies — those that exist at present are bad enough, but I do not want to put forward a situation where we would have the workers of the 26 counties up in arms about it either. It is a pretty thorny issue in all of the counties near the Border and not just Donegal North-East. From having been in constituencies close to the Border over the last year or so, I know that the problem relates to other counties too. The matter must be addressed.
I do not think the interdepartmental committee went far enough. I read its report and the arguments are well put one way or the other. I accept it is a difficult question for the Minister to have to address. Successive Ministers for Finance have tried to address it and I am not going to blame this particular Minister for not being able to come up with a solution that pleases everybody.
I hope not. I am the only one who came up with anything.
In my usual way I recognise that, but my amendment has much to recommend it because it stems from the idea which we put forward in 1994 regarding workers outside the State.
First, I welcome Deputy Keaveney to the committee. I have not had a chance to welcome her to the House or to congratulate her on her success. I hope she has a very happy experience in this House. Indeed, it is appropriate that she should join us at this very point because this is an item which was the subject of an extensive debate on Committee Stage of the Finance Bill, 1995. I must say that following the interdepartmental committee we looked again at the issues surrounding this. The balance with which the Deputy for Kildare approached the problem of frontier workers is a reasonable one. My knowledge of this has been recently informed by a meeting with a cross-Border tax group in Letterkenny, County Donegal, during the course of the by-election.
There is a secondary issue, which I have undertaken to try to resolve, although my powers are limited in that regard. That is the way in which arrears of tax assessments made under the law by the Revenue Commissioners exercising their authority have been communicated, negotiated or otherwise conveyed to the workers there. Certainly, some people have been presented with arrears of tax which, frankly, are beyond their ability to pay, given the fact that they are salaried employees and not people running a business where they would have some control over their cash flow. That in part has certainly animated an awful lot of the concern, anger and worry which I met on the ground in Letterkenny, in other parts of that constituency and with some of the deputations which I met here in Dublin.
That said, however, let me start from the very beginning. There is a very large republic called the United States of America which started off on the basis of the Boston tea-party and a slogan which has gone into the annals of history, that is, no taxation without representation. The principle of taxation and contributing to the supply of services in one's——
This also applies to the issue of emigrants' votes.
The principle of contributing taxes on an equal basis to the support of the State and the services provided is universal across the EU. We do not treat our cross-Border workers any differently to the way Luxembourg treats the thousands of workers who work in Germany, or France treats the thousands of French workers who work in Geneva. There is no difference in the treatment by the Irish State of workers working in Northern Ireland.
Except for taxes.
The two tax systems are different and the salaries are different. There is a dilemma in Northern Ireland. People who had worked in Derry, for example, as Government employees in health care or education found that, as a result of a unilateral decision made by the British Government, their status as Government employees which gave them a different tax arrangement was changed. Given the successive pay reductions that successive Conservative Governments have imposed on the public sector in the UK, public service employees in Northern Ireland get much lower rates of pay in many cases than their equivalents in the South. For example, teachers, in Northern Ireland get paid less and if they live in the Republic of Ireland they pay higher taxes. Their situation has deteriorated dramatically. On foot of the recommendations from the interdepartmental committee we have tried to exempt them from the health and employment levies. That is worth approximately £340 per year net for someone with an annual salary of £15,000. It is a start.
I am not sure what more can be done or if we can go much further before we begin to create the anomalies to which Deputy McCreevy referred. Why should a person who gets a lower salary pay a lower tax rate than someone else simply because they get a lower salary for doing an equivalent job? It would be argued — with the defence of senior counsel, no doubt — that there was unequal treatment simply because one was getting a lower salary and was entitled to a lower rate of tax.
On foot of the meeting I had with a deputation in Letterkenny we have tried to see if the status of certain workers, who were previously categorised as Government workers under the tax treaty we have with the UK, could be reinstated. We have not made significant progress on that front. The request has been made and the discussions are ongoing. It will be some time before we get a response. However, this would address only a section of the problem — the public sector workers who are so categorised. It would not address workers in the private sector, a group of whom I met from Cavan who were working in Crossmaglen.
We are not in a position to accept the amendment because it would open up a Pandora's box of anomalies. It is simply not feasible. It is not possible to go beyond pursuing the negotiations taking place between the Revenue Commissioners and their UK counterparts.
I thank the Minister for his words of welcome. I was a cross-Border worker. There can be a difference of anything up to 20 per cent in wages.
It is called conservatism.
Is it called tax and spend south of the Border?
It is a serious problem which is not confined to a few hundred people but concerns thousands of people. We worry about freedom of movement and demographic changes in Donegal where rural depopulation is taking place. We are concerned about employment and unemployment — there are places which have many jobs and places with no jobs. We talk about the peripherality of Donegal, and those who canvassed in the by-election would have realised why Donegal is considered peripheral. We talk about equal pay for equal work in a European context, yet there are cross-Border pay differentials.
Many of my contemporaries have tried living in Donegal and working in the North. They go to the North simply because the work is there. They got so badly hammered by the anomalies of the tax arrangements that they moved to the North. This further compounds the depopulation problems — the towns get smaller and the schools and businesses are affected. Ultimately, Donegal and the other Border counties will be left with just a few centres and nothing else.
The issue must be taken seriously. There is a perception in Donegal that the issue is not taken seriously because we are so far from the centre. People in Donegal feel that the extent of the problem is not realised. More notice might be taken if Dublin was closer to the Border and people were going to the North at the same rate as Donegal. If one goes to Muff or Lifford every morning and evening one can see the numbers of people involved. It is important to the economy of Donegal that so many people work in the North. If we force them to live in the North it will be very serious in the short-term. Amendment No. 12 would not solve the problem but would at least begin to address it.
I am not making an extreme proposal in my amendment but simply a point of justice. Somebody who earns a sum of money in the North and lives in the South is entitled to be in the same position for tax purposes as if the money was earned in the South. That is not a radical proposition. It does not take into account that wages are lower in Northern Ireland. I agree with the Minister that cannot really be taken into account. A benefit of conservatism is that low taxation means lower gross wages in Northern Ireland and the Minister indicated that he will be taking that course in the successor to the Programme for Competitiveness and Work.If Mr. Tony Blair becomes the next Prime Minister of Britain he is committed to a 20 per cent tax rate. I do not think new Labour will dramatically transform the situation.
The Revenue Commissioners should be empowered by regulations to ensure workers in Donegal, for example, do not pay more tax on an income earned in the North than they would on an income earned in the South. That is a fair principle. They get the benefit of the lower UK tax rates but that would be taken into account in the equation. The Revenue Commissioners should be in a position to exempt those people from being disadvantaged because their wages are earned in the UK. I do not understand how it can be in the interests of the State to take more tax from people because they reside in the South and work in the UK.
Acting Chairman
Is amendment No. 7 being pressed?
Does the Minister want to say something on it?
This is a complex subject and we will not be able to resolve it today. I am not in a position to accept the amendments but I do accept the thrust behind them. Our difficulty is that we cannot treat Northern Ireland as separate from the rest of the UK for the purposes of a number of people who commute on a weekly basis from Dublin to London.
From the south-east also.
Yes, quite a few people from there do it also. We cannot do this unless one wants to invoke Articles 2 and 3 in a manner not previously done.
Commercial television
We would then enter a wonderful area where we would need more than Thomism to illuminate our deliberations, some mysticism would be required as well. It is fraught with many difficulties. One argument is that if one works in Northern Ireland and lives in the Republic, one should be taxed as if one lived in the North. One would then get the benefit of the other side of the equation, which is a 20 per cent lower rate of pay but also a lower rate of personal taxation. That would address some of the issues and provide a reasonable balance. It would mean that two people working side by side in the Seagate plant in Derry, one living in Inishowen and the other in the Creggan, would get the same pay and be taxed at the same rate, so there would be some degree of equity. I do not think a worker could necessarily object to that; but I am not sure if I could bring in legislation which would be robust enough to survive a raid from Deputy McDowell, wearing his other hat in the High Court, to bring an action for unequal treatment. That is the core of the dilemma.
Have any calculations been done as to the cost of my amendment No. 12? That uses the principle we established in the Finance Act, 1994, rejigging it to suit the Northern Ireland situation. It may not be possible to work it out but have calculations been made?
We will try to come back on Report Stage and give a more precise update. I do not have the figure to hand. Part of the problem is getting precise information. There are various estimates — Deputy Keaveney said it was of the order of 12,000 people but there could well be more. It is more clearly known in the Donegal area because of its links to Tyrone and Derry. There is nothing like the same perceived link between Dundalk and Newry, because people in Dundalk can go north or south whereas those in Derry can only go east. I will try to provide an update, but the underlying issue is not so much the cost but the question of equity.
One good thing about the Donegal North-East by-election, apart from Deputy Keaveney becoming a Member of the House, was being able to see this problem at first hand. Although I has been told over the years, I was not aware of the thousands of people in the Inishowen peninsula who work in the six counties.
The Deputy should call it Northern Ireland. We have a Forum for Peace and Reconciliation. If their money is good enough, let us give them their title.
I used the name "twenty-six counties" earlier so I said "six counties" to differentiate between the two. I do not mean it in the political context and I do not wish to make a big issue about it. I was not aware that the Inishowen peninsula is dependent on the Northern Ireland economy. I agree with the Revenue Commissioners that it would be impossible to put a figure on it because the number of people involved has been underestimated. The biggest number work in Derry.
I accept this section and I have been reasonable about it for some time. What the Minister says is true; it will not be easy to get a solution. I think the approach should be along the lines of amendment No. 12 — we should recognise these people are outside the State. The matter must be addressed. Deputy Keaveney has put forward her first hand experience and that is the factual position as it affects people in Donegal.
Acting Chairman
Is the amendment being pressed?
Yes.
Acting Chairman
I am putting the question: "That the amendment be made".
Question put.
Acting Chairman
I think the question is lost. Would the Members wishing to have their dissent from this decision recorded in the official proceedings of the committee please raise their hands?
Deputies Michael Ahern, Noel Ahern, Cullen, Keaveney, McCreevy, Michael McDowell and Dan Wallace dissented.
Amendment declared lost.