This section is opposed by Deputy Ruairí Quinn.
SECTION 183.
Question proposed: "That section 183 stand part of the Bill."
Very briefly, this section has been brought to my attention by a banker whose argument, essentially, is that it is a Luddite provision, one which is a tax on new technology. I have no argument against the Minister seeking to raise revenue, but a 1p increase in the stamp duty on cheques would yield the same amount. This would at least have the merit of being a tax on paper based systems which are much more costly in the ultimate sense of the world.
As the Minister will know from his previous incarnation as Minister for Labour, people have been reluctant to take payment on a cheque basis rather than in cash. The ATM card became the easiest way to deal with this because many of the arguments against taking wages in the form of cheques came from people who were not used to the banking system. They felt they could not get their money when they want it. The ATM system gave people access to their money virtually 24 hours of the day, seven days a week.
I do not believe we should be taxing technology, for the person who would have been reluctant to take an ATM card in the first instance. The vast bulk of people will take ATM cards for the countervailing convenience which they convey and will willingly pay the tax.
In 1987, as the Deputy will recall, I argued that this should be held off until the system was established sufficiently well. At that stage it was imposed at a rate of £5 and the payment of wages by cheque was just settling down. I think those arguments no longer hold. What has happened is that about 750,000 people are now using ATM accounts and the use of cheques had declined, so to try to hold on to some of the revenue base, we had to cut in there.
Is this compensation for the loss of revenue from stamp duty on cheques?
That is one consideration. However, at the same time, we do not want to impose a high charge. If I were to follow the old rule, which was £5 in 1987 it would be £8.50 now. As the Deputy correctly said that would lead to a revival of the arguments against the payment of wages by cheque. The system is now working very well, and this charge will not affect it——
What is the estimated yield?
The sum of £1.5 million.
Would one penny increase in the stamp duty on the current level of cheques not yield something similar?
The trouble is that the cheque is a declining base, but to do that would probably assist its decline.
I will not press my opposition.
Question put and agreed to.
Section 184 agreed to.