Will the Taoiseach clear up the confusion which exists in respect of the meetings that took place between Father Alex Reid and the Real IRA? As the House and the country will be well aware, the Real IRA was responsible for 31 murders in the Omagh bombing, one of the worst atrocities in the past 30 years. Last week-end the Taoiseach indicated there was no contact between the Government and the Real IRA. He subsequently clarified in a long statement that there was contact between Father Alex Reid and his then special adviser on Northern Ireland, Senator Martin Mansergh, during the course of those meetings. The Sunday Business Post alleged there were three meetings between Father Reid and the Real IRA and that during the course of these meetings advice was given by Senator Mansergh to Father Reid. Will the Taoiseach clear up, once and for all, whether he is aware there were three meetings between Father Reid and the Real IRA? Second, was the advice of Senator Mansergh to Father Reid given with the consent and knowledge of the Taoiseach? In view of its importance, this matter needs to be cleared up fully and comprehensively.
Leaders' Questions.
In replying to Deputy Kenny I wish to go back over some of the points I made last week, which are important. Following the signing of the Good Friday Agreement in April 1998 and ratification of the Agreement by the people on 22 May 1998, a great deal of effort was put in by many people, including my then adviser, Senator Martin Mansergh, Father Alex Reid and other individuals whom there is no need to name, including clergymen on both sides of the divide. They tried to influence those still engaged in violence to desist and move away from it. That approach continued for quite some time. There was some success in that the INLA and through it those associated with the IRSP called a ceasefire. The ceasefire did not take effect until after the Omagh bombing but the decision had been made in this regard.
I do not know how many meetings Father Alex Reid had with the Real IRA but I know he was very active in trying to convince that and other groups. At that time, before Omagh, my adviser had met the 32 County Sovereignty Committee, the political movement, and I know that Father Reid, even after Omagh, had been contacted by the representatives of that group and asked to do his utmost to create the conditions under which these people could be involved in a ceasefire. Clearly, Omagh changed everything. The organisation was then responsible for the biggest atrocity ever, as Deputy Kenny said. After that, contacts were continued by some but not by the Government. The effort did not succeed. The organisation had a ceasefire, during which I know efforts did continue on the part of religious leaders, but that did not work either. After about six months it returned to violence and it never really stopped. It recently issued a statement, but we will have to wait and see whether it is valid.
After the Good Friday Agreement and its ratification by the people, and prior to Omagh, Father Reid definitely did have contact with these people and he was also in touch with my adviser. I cannot say, and neither can my former adviser to whom I have spoken, whether it was during the meeting phase or at any other time. He continues to keep in frequent touch today, as he has since 1988. Anything that was done in all this time was absolutely above board and helpful to the peace process. The work of Father Reid, although he has not been active recently because of his health, has always been extremely helpful. I will always defend his actions.
I do not doubt the validity of the work of Father Reid at all. I did receive some confidential correspondence from the Minister for Justice, Equality and Law Reform, for which I am grateful, in respect of the other matters I raised here last week. What I am really interested in is the contact between Senator Mansergh, then the special adviser on Northern Ireland to the Taoiseach, and Father Reid. Was the advice from Senator Mansergh to Father Reid given with the knowledge and consent of the Taoiseach? In other words, did Senator Mansergh contact the Taoiseach, tell him he was talking to Father Reid, who was in contact with the Real IRA, and ask for his consent or imprimatur? Was there direct contact between the Taoiseach and Senator Mansergh? Did the Taoiseach know the subject of Father Reid's discussions with the Real IRA?
On that narrow point, the answer is clearly "No." In fairness to Senator Mansergh, it was not only I who did not know. He did not know either, but he was always in communication with Father Reid, and many others who will remain nameless as they are not in the public domain, giving them advice. It was definitely not the case that Father Reid was with the Real IRA, communicating with Senator Mansergh, who then communicated with me.
I refer to today's front page story about Sir Alex Ferguson and his ownership of a stallion which brings in €5 million tax free per annum in breeding fees. Does the Taoiseach know that this is but one example in a mega-million euro industry? Is he satisfied that owners of stallions, in these circumstances, are not even required to note, for income or other profits purposes, in their income tax returns the income generated from this area? In reply to a parliamentary question, the Minister for Finance could not say how much tax was foregone. Some experts estimate it to be of the order of €100 million, although others say it is far more. Does the Taoiseach know that €100 million in tax would create a thousand extra hospital beds?
What is the excuse for allowing this industry to operate effectively outside the law? Why is this industry not required to make returns so that the State can calculate precisely how much is being foregone? How is it that this regime has not been reviewed? Is there any other single industry operating within the State in which returns need not be made, where normal compliance with company law is required? These companies do not even have to retain books. Is the Taoiseach aware that one bloodstock owner is dominating the industry to such an extent that abuse of dominance is evident and that the loophole, such as it is, is being exploited by the export of stallions for a period of the year? The resultant loss to the Exchequer is massive.
I am aware of the story in today's newspaper about Sir Alex Ferguson's horse, The Rock of Gibraltar, and many other stallions down through the years. It is the case that this aspect of the racing industry has had a special tax concession for many years. A decade ago, when the last fundamental review of various allowances and thresholds took place, this concession was not removed. It was left as it was because it was seen at the time as a very good vehicle for employment in many rural parts because those who were beneficiaries of it employed a large number of people. The view was that Coolmore Stud, which is clearly the company we are talking about, and all the smaller organisations with the ability to move, would move elsewhere if they did not have this concession. In fact, many of them would not have been here in the first place without it because in that industry, many of the stallions and their owners are from outside the country. There are other parts of the industry in Australia and Asia and they could have moved to those locations. That was the logic behind it and it has been developed for ten years.
The Minister for Finance said recently that he was reconsidering tax shelters and allowances in various areas. The case could still be made that there is a tax argument for retaining the concession. Of course these companies must comply with company law. I do not know the amounts of money they save with these concessions and I am sure the Minister would take this into consideration in any examination. I do not want to give the impression that the Minister will come to the conclusion that it should be dispensed with – this would have to be examined for its benefits. It is true that these companies have a lucrative arrangement under successive Governments. Deputy Rabbitte must agree that he sat at the Cabinet table and agreed to leave it there through three budgets. If the matter is examined again all these arguments will be considered.
Does the Taoiseach accept that when I sat at the Cabinet table, we did not need money as badly as we do now? Considering the rate of deterioration of the public finances, if the State can levy income tax on stable lads, it ought to be able to levy income tax on the owners of a mega-rich industry. The Rock of Gibraltar, to whom the Taoiseach referred, brings in €5 million per annum in breeding fees. In the case of Sadler's Wells, the amount is estimated to be €30 million per annum. Hundreds of millions of euro per annum are returned without any computation by the State. Why should this not be measured? Why should an incentive considered necessary for a fledgling industry in the 1960s be continued in circumstances in which such huge profits are being made?
The Taoiseach does not know how much is being made because he does not want to know. It amounts to hundreds of millions euro at a time when the Government is cutting CE schemes and imposing charges for services, when registration fees for students are increasing by 69% and the meals on wheels service cannot be run because the CE personnel are withdrawn. How can we justify not imposing a modest tax regime on this industry? It will not happen under the present Minister for Finance, although he will probably not be around for much longer. Will the Taoiseach make a commitment to review this or at least make a statement with an assessment of the amount of tax foregone?
I do not know the amount of tax foregone but the Department of Finance is reviewing all shelters and tax allowances and it will examine this scheme. Deputy Rabbitte is incorrect in saying that times were not worse. This tax allowance existed when there was emigration of 40,000 people a year and unemployment of 18%. It was in place when the country was on its uppers.
The only emigration taking place in this industry is to Monaco.
I have no problem analysing this issue. Rock of Gibraltar has the capacity to move around. Last year another Irish horse went to Australia and won the Breeders' Cup. Horses can move around and so can the industry.
Like their owners.
The taxes are only foregone when the animals are in this country. If they are not here, there are no fees for them and there is no employment related to them. The Deputy should take that into account. I have no problem with an assessment but I do not want to wipe out all of the staff that work in this industry in one fell swoop. That would happen if it was changed totally.
Was the Minister for State at the Department of Finance, Deputy Parlon, articulating Government policy when he was quoted in the Irish Independent on Friday saying, “We want to maximise the assets of the State in the light of the difficult situation in which we find ourselves”, referring to the crisis in Government finances? He outlined a plan to price any asset under control of the Office of Public Works that could be flogged to fill a gap in the Government's finances, as a result of the disastrous Government policy of massive tax breaks for the rich and big corporations. Does the Taoiseach agree that this intended plunder of the Office of Public Works, which I refer to as “Parlon's pillage”, would be extremely reckless? It would be wrong to use such assets for short-term benefit while sacrificing investment in future social and community needs for which many of these lands and other assets could be used.
Does the Taoiseach agree that the example of the National Aquatic Centre, which is to be ready in time for the Special Olympics, bears out my point? It is built on publicly owned land that, if it had been flogged to a speculator ten years ago, would have to bought back for tens of millions of euro of taxpayers' money.
Is it the policy of this Government, provided it survives, to privatise every significant public asset and enterprise in the State during this session, in view of the Minister for Transport's clear view that Aer Lingus should be privatised and his attack on public transport with the privatisation of 25% of Dublin Bus? In terms of his policy of privatisation, Deputy Brennan ideologically puts himself somewhere between Attila the Hun and Genghis Khan, as does the rest of the Government.
Is it not recklessness to sell off assets that will be needed for community and social purposes to make up for this Government's disastrous handling of public finances, instead of preserving and developing them for community and social uses?
The Deputy's question covers a number of Departments.
But only one policy.
The Minister of State, Deputy Parlon, is looking at areas within the Office of Public Works that are not being used for any useful purpose and are not required by the agency involved. If, after review, they are not going to be used in the medium or long-term, they should perhaps be sold off. That seems an eminently sensible thing to do. He is not looking at any existing services or utilities used by the public. If he had the opportunity to sell off some of the assets that are not being used, he would be able to invest further in the infrastructure of present utilities.
The Minister for Transport confirmed there were no plans to privatise any of the CIE companies but outlined how he believed they could be restructured, with Bus Éireann, Bus Átha Cliath and Iarnród Éireann operating as independent commercial companies that will give a more efficient service, with more flexibility for the staff and organisations involved.
The Minister has engaged in discussions with staff in Aer Lingus, who have managed to fight their way out of the difficult position they were in two years ago, are now back in profit and are looking to the future. He is engaged in discussions with Aer Lingus and the board, management and staff of CIE.
There was a discussion in the last session on the Cabinet Handbook, which states that collective responsibility requires that Ministers should inform their colleagues in Government of proposals their Ministers of State intend to announce. When the Minister for Transport clearly enunciated his view that Aer Lingus should be privatised within the short to medium term, was he articulating Government policy? Is that the policy this Government will carry out in this term?
Aer Lingus has made significant progress in stabilising itself and restoring the airline to profitability. It is now opportune to assess the current situation and the options that exist. That is all the Minister is doing.