asked the Minister for Industry and Commerce if, as a result of the classification of the whole of Ireland as a peripheral area, he will introduce measures to counteract the US government proposals to eliminate the tax-free holiday which has been a feature of Government incentives to US industrialists for many years.
Ceisteanna—Questions. Oral Answers. - US Tax Proposals.
16.
The classification of the State as a "peripheral" area by the European Commission has the effect of allowing our present system of State aids to continue.
The question of measures to counteract the US tax proposals is a separate issue not immediately affected by the Commission decision. Since the tax legislation eventually passed may differ from the original US Treasury proposals, it would be premature to introduce at this stage measures to counteract these proposals.
I have, however, visited Washington for discussions with representatives of the Administration and of Congress and the Senate to endeavour to ensure that regard would be had to the effects of the proposals on Ireland.
Surely the Minister is aware that there are certain industrial proposals for this country that have been held up as a result of the announcement by the President of America to take these measures?
The Minister is so aware. When the Deputy speaks of the statement of the President of America, I take it he is referring to the US Treasury's proposals. They have created a situation of uncertainty which is inhibiting decisionmaking in regard to the establishment of new US industries in Ireland which I considered to be so serious that I went to the United States to make the position clear. When that is said, it is necessary that we await the outcome of the Ways and Means Committee of the US Congress which is the actual body from which the final legislation will emanate and that is likely to happen within a matter of, perhaps, two or three weeks. We cannot initiate in specific form protective measures until we know exactly what we are protecting ourselves against. The Deputy can be assured, and I think my action in going to the US is index of it, that we are watching the situation literally from day to day, that we are profoundly concerned about it and that we will take every possible step to mitigate harm to Irish industrial development by US tax law when it emerges.
I think the Minister is being optimistic when he says two or three weeks but that is a matter of opinion. In the event of the American Government taking action that will remove the benefits to American investors in this country that they gained from the tax-free holiday, as it has come to be known, is there not provision in the agreement we have with the EEC to introduce a similar benefit for American industrialists and should the Minister not now at this stage be discussing with the European authorities what steps we might take if this tax recommendation becomes law in the US?
If the Deputy is satisfied that we have the power, within the agreement negotiated, to provide an alternative as good as what would be ruled out by American tax legislation, if we have that power then there is no need for us to discuss the measures we are taking with the Community but I would reiterate the point that we are continuously reviewing the situation and that we will endeavour to provide a package at least as attractive if the present aids are made impossible by US tax legislation. It is a very delicate situation. It is delicate in regard to the confidence of industry itself, it is delicate in regard to the decisions that will be made by the US Congress initially and the proposals made and I would beg Deputies to accept my assurance that we are literally monitoring it from day to day and not to do anything that would make an already difficult and delicate situation more difficult.
Question No. 17.
Did the Minister, on his visit to the US, make any effort to meet the Secretary of State for Commerce and, if so, with what result?
This must be the final reference to the matter.
I did not meet the Secretary of State for Commerce. I met his deputy. What I went to do in the US was to indicate our position and indicate the effects of the original proposals which emanated from the Administration. I do not wish to anticipate what they may do. They are a proud, sovereign nation. It is a proud sovereign Congress and what they do is their decision. All I could do on behalf of Ireland was to indicate the effects on us of the proposals which came from the Administration. I want to emphasise also that the Administration's proposals are something different to what will ultimately emanate from the Ways and Means Committee and which will then go to the Senate. We do not have hard information. We have hard information about what the administration proposed but we do not have any hard information as to what the ultimate form of the legislation may be.
Question No. 17.
The Minister has said that the US is a proud and sovereign nation and, of course, so are we. There is no implication that we are any less sovereign. I would like to ask, having regard to the question Deputy Lemass has put as to our designation as a peripheral area within the EEC, have the Minister and his Department drawn up any precise plans to be submitted to the regional commissioner of the EEC so that we can effect maximum benefit, whatever the outcome of the US negotiations may be? The Minister will appreciate the need for having very precise plans for specific projects. Has any such preparation been done?
I am glad that a member of the previous administration appreciates this need as acutely as I do. He will also, perhaps, appreciate that this is not the responsibility of a single Department. When that is said, he can be assured that the matter is under continuous review, that plans are advanced but not finalised. He is also, perhaps, aware that there is a great deal of uncertainty at Community level in regard to the whole regional policy and specifically, which is much the most important single issue in regard to planning, the size of the regional development fund. He is aware that the original figure mentioned is ridiculous and unreal and that a much larger figure has now been tentatively mentioned but it is far from being settled. For us to try to finalise plans, as distinct from having them in preparation, in that context would be premature because that has to await the final decisions.
Question No. 17.
Just one little question.
I am sorry, the Chair has called the next question and must be obeyed. I have devoted a lot of time to this. There are many questions on the Order Paper, all of equal importance.