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Dáil Éireann díospóireacht -
Wednesday, 24 Nov 2010

Vol. 723 No. 1

Corporation Tax: Motion (Resumed)

The following motion was moved by Deputy Michael Noonan on Tuesday, 23 November 2010:
That Dáil Éireann confirm its commitment to the maintenance of the 12.5% rate of corporation tax as an indispensable tool for growth, job creation and economic recovery.
Debate resumed on amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
"recognises that:
Ireland, like many other small open peripheral economies, has for many years used its corporate tax policy to encourage economic growth;
the Irish economy now more than ever has to grow its way out of its present difficulties;
the 12.5% corporate tax rate will support Irish economic recovery and employment growth by attracting in particular foreign direct investment;
an increase in the corporate tax rate would reduce foreign direct investment into Ireland and Europe;
if foreign direct investment was lost to Ireland, much of it would flow out of the European Union altogether to other parts of the world, and would inhibit our capacity to grow during the four year plan period and thus reduce our deficit; and
reasserts its absolute commitment to the maintenance of the 12.5% rate of corporation tax."
—(Minister for Enterprise, Trade and Innovation, Batt O'Keeffe).

I thank Fine Gael for tabling this motion on the corporation tax regime. It is extremely important to send out a clear and unified signal from the House on the fundamental importance of the corporation tax rate to the country and the economy. It is important that industry finds this a very hospitable and attractive area in which to locate. I was glad to see the retention and non-disturbance of the 12.5% tax rate embedded in the midst of all the documentation furnished on the four year plan.

The maintenance of this rate is of fundamental importance to the country in the context of our overall industrial policy as it has been developed since the 1950s, in particular in the context of inward investment, especially foreign direct investment. It serves as a key magnet. It must be stated that it is not the most important factor but it is one of a number of important factors in terms of focusing on our attractiveness when overseas corporations make decisions on, and evaluate whether, to locate here. Various IDA executives and others from Enterprise Ireland and Forfás always advocate it as a key aspect of Government support for industry and research and development. It is extremely important in the context of an attractive and continually enhanced tax system, particularly the fact that the corporation tax rate of 12.5% applies to all corporate trading profits. This puts us at an advantage against some countries, although countries such as Sweden and Singapore are becoming extremely competitive in this area. Therefore, it is important that we maintain this advantage.

To facilitate international business, Ireland has signed double taxation agreements with more than 60 countries, including a recent agreement with Singapore, which allows the elimination or mitigation of double taxation. Because of our attractive tax rate and well-established regulatory and legal regime, combined with our open and accommodating business environment, Ireland's status as a world-class location for international business is well-established. Approximately 130,000 jobs are IDA backed and more than 200,000 jobs can find their origins in foreign multinational companies. The implementation of this corporation tax regime came into being under the rainbow Government when my colleague, Deputy Ruairí Quinn, was Minister for Finance and John Bruton was Taoiseach. They successfully concluded negotiations on the rate with their European counterparts and subsequently it was introduced by Charlie McCreevy in 1999.

One issue that arises is the fact that many multinationals have established regional or global headquarters here for the purpose of managing their profits and shareholdings and other functions associated with their international business. They derive significant tax advantage from this but people wonder whether many jobs are created in this fashion. It is no use having a generous taxation rate, which we all advocate, without a jobs element attached thereto, and this is extremely important.

During the course of both Lisbon treaty debates, I was assured of our competence as a sovereign state and that issues of taxation rates and incentives were clearly matters for the Irish Government. Therefore, any attempts, which have been mostly of a verbal nature, to indicate that as part of the conditionality attached to the recent discussions at EU and IMF level Ireland might have to address its low corporation tax are ineffectual and ineffective and should be treated as such. Whatever the size of the other member states making such observations, they have no legal right to do so. It is an important issue in the context of our competitiveness and we must send a clear, unified and undiluted message to outsiders to keep their nose out of our business, particularly when various European treaties have asserted our independence and sovereignty in this area.

Combined with our education system are our continued investment in research and development, innovation, entrepreneurship and our science and technology focus. Yesterday, Professor Frank Gannon, the director general of Science Foundation Ireland came before the Joint Committee on Enterprise, Trade and Innovation. Science Foundation Ireland funds fundamental world-class research in strategic areas and the output from this research is likely to have a significant ongoing economic impact. In particular, funding is made available for research for Ireland's future and for research with consequences. SFI works closely with the IDA, Enterprise Ireland and Forfás to build new sources of competitive advantage for our companies. This is important as there are a number of aspects to competitiveness. The taxation rate is one such aspect but continual investment in research and development, entrepreneurship, innovation and science and technology must also be facilitated and promoted.

As Professor Gannon stated, innovation is a term that is increasingly used to describe the generation of novelty in the sphere of activities of individuals and companies. However, a characteristic of innovation is that it is not truly predictable. Therefore, one can get surprise outcomes and Professor Gannon pointed to this on a number of occasions yesterday. The committee also had a presentation from the Tyndall National Institute, UCC, which was equally informative and illuminating in this context. It plays an extremely important and worthwhile role in the following areas: the development of human capital; attracting and working with IDA clients; conducting research and development partnerships with industry; generating licences to industry; leveraging EU funds; creating start-up companies; providing assistance to business; and academic excellence. The delegation before the committee went through all of this in great detail. The institute also indicated that the identification, protection and management of intellectual property is the key to the development of innovative companies and that Enterprise Ireland funding for patent protection is very important. The delegation implored that this funding be reinstated as it is an important aspect of our competitiveness and attractiveness in ensuring that companies locate here.

More than 80% of our exports originate from the multinational sector, and the Labour Party freely acknowledges the importance of foreign direct investment and its continued investment in this country. As the Minister stated last night, it is a vote of confidence in this nation and our people. The BRIC countries, namely, Brazil, Russia, India and China, represent new areas of potential opportunities for us to explore. The IDA has opened offices in these areas in recent times and they have also spoken to Enterprise Ireland. However, there is a significant dearth in numbers and there should be a significant redeployment of personnel to these areas, particularly in the context of the Croke Park agreement. Enterprise Ireland and the IDA should focus on these areas and put more people into the BRIC economy areas. There is tremendous potential there and we have the personnel and the educated people to do so. Not enough people are being deployed in these markets.

The recent report of the Commission on Taxation recognised the importance of a low and stable corporation tax rate, as did the OECD, as being the cornerstone of Irish tax policy. It is fundamental in the context of attracting investment and investors. Any signals to transfer or tamper with our corporation tax rate are unsettling and damaging in the short and medium term. Therefore, we wish to join our colleagues in reaffirming in unambiguous fashion the Labour Party's commitment to the retention of the 12.5% rate. There should be no attempt to erode in any way our Irish tax competitiveness or our corporate strategy. We see it in the number of jobs generated by IDA supported companies, which is more than 130,000. The importance of retaining the 12.5% tax rate is fundamental in the context of recovery, which undoubtedly will come.

I was glad to hear the German Chancellor, Angela Merkel, indicate quite clearly that she does not wish to meddle with our corporation tax rate of 12.5% and that it will not be related in any way to the ongoing discussions. Our indigenous industries are also important, particularly the agricultural and food processing areas, and we see the success of Glanbia, Kerrygold and the great work of Bord Bia under its chief executive, Aidan Cotter. There is still tremendous untapped potential. We are an island country with approximately 150,000 people directly employed in primary agriculture and agri-food processing, with an estimated total of 250,000 people employed in agriculture. Agri-food processing and related services account for approximately one in five people employed outside of Dublin and there is a projected export growth rate of approximately 12% in this sector with another €750 million this year. We should not forget the importance of the indigenous sector, micro industries and enterprise, along with foreign direct investment, in the context of the corporation tax.

The Minister of State, Deputy Áine Brady is the next speaker. I understand she wishes to share her time with Deputies Michael McGrath and Timmy Dooley, Minister of State, Deputy Billy Kelleher and Deputies Mary O'Rourke and Beverley Flynn. Is that agreed? Agreed.

I welcome the opportunity to contribute to the motion on our corporation tax policy.

As a member of the Government party and as a Kildare Deputy, I, as many others in the House, clearly understand the benefits of our corporation tax policy. Despite the difficult economic challenges we face, one of the key successes of our taxation policy is our corporation tax. While fully recognising the contribution of our flexible and educated workforce, our improving competitiveness and our greatly improved Infrastructure in attracting foreign direct investment, our 12.5% corporation tax has been a key incentive in attracting inward investment to Ireland. We have the youngest population in Europe, with one in three under 25. We have the highest proportion of graduates among the 25 to 34 age cohort in the European Union and we have the third highest proportion of maths, science and computer graduates in the 20 to 29 age cohort in the Union. Taken together with the investment in our infrastructure, our roads, rail, airports, research, innovation and our educational facilities, this gives us an ideal opportunity to maximise the benefits of our corporation tax policy.

It is important, as many other Members have said, that we send out a clear and united message from this House that all parties support the current corporation tax rate of 12.5%. My county of Kildare is home to many world renowned companies, such as Intel, Hewlett Packard and Wyeth, which have successfully built their businesses from their Irish base. Our tax policy and our people have been successful in attracting leading multinational companies to Ireland and in the process have created hundreds of thousands of jobs that would otherwise have been lost, not just to Ireland but to the European Union as a whole. Ireland is home to eight of the top ten global technology companies and 15 of the top 25 medical devices firms. Foreign direct investment accounts for €110 billion, or over 70%, of total exports in the Irish economy. So far this year alone, the IDA has secured over 70 new investments into Ireland, with 20 of these from companies setting up operations in Ireland for the first time. Our corporation tax policy was key to ensuring that these investments came to Ireland.

In debating the merits of our corporation tax policy, it is important that we realise that Ireland's corporate tax rate is not the most competitive in the world. When Ireland competes for jobs and investment, we are not competing against the European Union. We are competing against countries such as Israel, Singapore, China and India. When we are successful in attracting inward investment and win jobs, the entire European Union benefits. When we lose investment to countries outside the European Union, the investment is lost to the European Union, not just Ireland.

Intel is one example of a successful multinational company based in Ireland. Kildare is home to one of the largest Intel manufacturing sites outside the United States and this site is now a hub for some of the most exciting technology and manufacturing research currently taking place in Europe. Intel has established a partnership with NUI Maynooth, as it appointed NUI Maynooth as its first ever global education partner. It has built on the already strong relationship between NUI Maynooth and Intel through the Innovation Value Institute. The building of such links, whether with NUI Maynooth or the community, is a further example of how, once companies are established here, we can strengthen the links with Ireland.

The publication today of the four year plan includes a firm commitment to maintaining the current corporation tax rate. While the rate in itself is not the most competitive in the world, it gives security and comfort to foreign companies based here, that there is consistency in our policy. Our export market will be the key element in a return to growth in our economy. It is important that we send out a strong signal to existing companies based here and potential future investors on our strong and long-standing commitment to the 12.5% rate. Our position on our corporate tax is unambiguous. It is protected in an EU context by the principle of unanimity in taxation matters and is further protected by the legal guarantee in the Lisbon treaty.

As a Deputy who represents a constituency where successful foreign direct investments are based, I am delighted that the Government and this House reaffirms Ireland's long-term commitment to the 12.5% corporate tax rate. I know from talking to companies based in Kildare that our corporation tax rate has helped us build the credibility of Ireland as a business-friendly country and it is important that we protect this reputation as we build for the future.

I welcome the opportunity to support the Government amendment to this motion. It is rare to have such agreement across the House and it is essential Members speak with one voice on this critical issue for the economy. I welcome the National Recovery Plan 2011-14 which was published today and which reaffirms the Government's commitment to retaining the 12.5% corporation tax rate as the cornerstone of our industrial policy and our wider economic strategy. It was clarified beyond doubt during the Lisbon II discussions and campaign and by various Heads of State across the European Union since the referendum, that setting the corporation tax rate is entirely a matter for domestic law. While many of our European partners may not like the fact that we have such a low rate, which gives us a competitive advantage in terms of attracting inward investment, it is exclusively a national competence and will remain so. It is important we are clear and definitive on this point.

As a country which is geographically peripheral and an island nation, a low corporation tax rate gives us a critical advantage. It is an essential tool for attracting inward investment as has been reaffirmed by the IDA, the American Chamber of Commerce and the various multinational companies that operate in Ireland and support up to 240,000 jobs. The importance of these jobs to our economy cannot be overstated. The front page of my local newspaper the Evening Echo today states the Apple workforce is set to hit 3,000. Apple Computers has a major base on the northside of Cork city and currently employs 2,665 people. It now plans to take on at least another 300 employees over the next 12 months, which will bring the total number of employees to over 3,000. This is a remarkable success story. If we were to send out any kind of uncertain or mixed message about the corporation tax rate here, investments such as that and the future of companies such as Apple in Cork might be open to question. It is essential we are crystal clear on the issue of our tax rate.

When I look at the other companies in my constituency, I note they form the bedrock of the economy and the employment base in Cork. These are pharmaceutical, medical device and technology companies, like Pfizer, Novartis, Centocor, GlaxoSmithKline, Johnson & Johnson, Eli Lilly and Schering-Plough. All these companies have bases in Cork and strongly support the need for the corporation tax rate to be kept at 12.5%. For that reason, I support it wholeheartedly. Even though some of these companies have had to reduce the number of employees because of a reduction in global demand for various products, all of them have reaffirmed their commitment to remaining in Cork and in Ireland. We should not miss that crucial point in this debate. If there was a question mark around the future of the corporation tax rate, much of that investment would move to find a more attractive home internationally. We need to end any speculation about the future of the corporation tax rate and stand united in support of the Government's commitment to retaining the 12.5% rate.

In the context of the funding package that is to be agreed with the IMF and the European Union, it is inevitable that there will be some diplomatic and political pressure brought to bear on the Government on this issue. That pressure must be resisted at all costs. I know the Government is resolutely determined to resist pressure and to ensure our corporation tax rate remains the cornerstone of our economic strategy.

As Deputy Michael McGrath has noted, it is vital that we collectively speak in favour of this motion and I am happy to support the amendment. The contributions from both sides of the House clearly indicate that any future Government will retain the 12.5% corporation tax rate, which emerged from the old manufacturing tax rate of 10%. I am familiar with the latter tax because it was part of a suite of measures used to attract foreign direct investment to my constituency of Clare. Government policy in those days was to attract overseas investment into the west and, in particular, the Shannon Free Zone. The tax was later amended to a 12.5% corporation tax rate to meet the requirement that our tax base be made uniform.

It is a significant plank of our policies for increasing employment and investment. Deputy Michael McGrath outlined the companies located in his constituency that benefit from the tax and, more importantly, the number of citizens who have jobs as a result. In my constituency, more than 7,000 people are employed in the Shannon Free Zone. Much of the investment there is by multinational companies, including over 100 US companies. A number of these companies have communicated to me, either directly or through the chief executive of Shannon Development, Mr. Vincent Cunnane, the importance of retaining the 12.5% rate.

The national recovery plan published today emphasises the necessity of broadening our tax base. I welcome that the Government recognises the importance of retaining the 12.5% corporation tax because getting people back to work is central to national recovery. Regardless of the other tax measures required to bridge the gap between what we spend and what we generate, the economy will only recover when people enter the active labour market. The only way jobs will be protected or created is through the retention of that policy.

We have come under pressure from certain countries in Europe which have indicated an interest in reducing our competitive advantage but I am sure the Government will resist. While the EU hierarchy may not be excited about the policy, there is little it can do about it. The Treaty of Rome ensures that taxation matters are the competence of national governments and Parliaments and this was reaffirmed in a declaration to the Lisbon treaty on foot of concerns that had arisen among the Irish public. I do not doubt the rate will be preserved whatever administration is in power. Other European countries should figure out how they can manage their own tax affairs rather than seek to erode our competitive advantage.

However, it is not the only reason we are able to attract foreign direct investment and international employers. We have an English speaking population, a good education system and a highly qualified and flexible workforce. Dell moved to Poland in the belief it could improve its circumstances but I understand that despite the grants it received from the Polish Government to relocate, the labour market in that country is not as flexible. Ultimately, the company will move on to another jurisdiction. This debate should not distract us from the quality of our people.

I welcome the opportunity to speak on this motion, which allows the House to reaffirm its support for the 12.5% corporation tax rate as a central plank in Ireland's economic development in recent years. We must send a clear message that it can only be changed by a decision of the Irish Government and the Oireachtas. The former President of the European Parliament, Pat Cox, has stated:

The consent of the governed in Ireland for the Lisbon treaty was informed by the guarantees, including the tax guarantee. Its nullification without their consent would be an act of duplicity unworthy of any law abiding and self-respecting institution.

Every political party represented in this House supports the 12.5% corporation tax rate policy.

The policy attracts significant foreign direct investment and supports job creation both directly and in spin-off companies servicing multinational companies. More importantly, it facilitates the expansion of indigenous expertise across all sectors, from medical devices and life sciences to software and computing. Our own people have worked in multinational companies before starting up their own small enterprises. Several indigenous companies in the medical devices and software sectors have enjoyed significant growth.

Alongside our corporation tax rate, we must also maintain a competitive marketplace. Multinationals consider several factors before deciding on a location. These factors include the education of the workforce and investment in innovation and research and development. The Government will have to target investment in science, engineering and technology if we are to ensure we produce the best graduates who can serve these multinationals and, more importantly, become leaders in their own disciplines.

With the IFSC, Ireland is recognised as a hub for financial services. Despite the current difficulties in our banking sector, Ireland's international reputation for financial services has not been damaged to the extent that some in this House would allege. We are recognised for strong regulation and governance in this area. The difficulties we experienced primarily arose in the context of indigenous banks.

The hare of corporation tax has been flushed by various individuals in the context of the Lisbon treaty referendum and, more recently, with the visit of the European Commissioner for Economic and Monetary Affairs, Mr. Olli Rehn and officials from the IMF and the European Commission. It is stated in the Treaty of Rome and reaffirmed in the Lisbon treaty that our corporation tax rate is a competency of the Government and Parliament. This debate has been positive in every way and sends out a strong message to the many foreign direct investment companies that are looking around the world to see where they will locate. We have a lot to offer and this is a central plank in that offering.

I am glad to speak on the motion put down by Fine Gael. As the Minister of State, Deputy Kelleher, was speaking, I thought how appropriate the motion is for the times we are living in. It is also suitable to give a clear signal that the country, the Government, no matter what its make-up, and all sides concur on this very important measure, namely, the 12.5% corporation tax rate.

It is extraordinary that, whenever things get difficult, we hear siren songs and voices, particularly from the larger countries of Europe, saying that this will have to be looked at and that Ireland will have to get its "wings clipped" or words to that effect. It is said we should not be allowed to "get away" with this corporation tax rate for much longer. What is often forgotten, and it often struck me when I used to attend the Council of Ministers, is that it is very easy for people in the countries of continental Europe, such as France and Germany, to get to Brussels, Strasbourg or Luxembourg. In geographic terms, we are an island off an island off Europe. When that is considered, if the 12.5% rate gives us some advantage, that is fine by me.

The corporation tax rate is long established and underpinned by our ratification of the Lisbon treaty. It was noted in documentation I received that we were given cast iron legal guarantees prior to the Lisbon treaty referendum that our corporation tax rate would be protected. While it took a while to do so, we passed the Lisbon treaty and we should hold fast and be quite determined in this regard.

The corporation tax rate is a major attraction. When I think of Athlone, I think of the firms located there such as Elan, Covidien, a great firm which has gone through several changes, and LM Ericsson, which has been in Athlone since the early 1970s. While I am not sure what the corporation tax rate was at that time, I am sure these companies continue to avail of it. These are three of the major firms and other new firms are coming in. For example, Georgia Tech, which is small but will grow, involves the concept of industry on a university campus and does fine work. All of these companies are benefiting from our corporation tax rate.

The companies are not just coming for tax reasons but for the quality of people in Ireland. One cannot separate a firm or business from the people who run it and who come to work there with their qualifications, whether they are graduates, at technical level or otherwise. This is another good reason we should continue our rate of investment in education and in research and development in particular. If a company keeps on making and sending out the one product, it will never succeed. Companies must always look around the corner and over the next hill so they know what is coming.

I was invited to Covidien to see what it is producing and supplying. I was fascinated by a statistic I was given, namely, at any minute of any of the 24 hours, somebody in the world is using a Covidien product, which surely says something. The companies are nestled in well, and this is one of the benefits of having built the main roads. When people say "You squandered the money. What did you spend the money on?", I ask how long it took them to come from Dublin, and the answer is one hour and five minutes.

There are plenty of tolls too.

The network of main highways is remarkable. We in Athlone and Mullingar, to which there are main highways, look forward to welcoming many fresh new industries which will be attracted in the beginning by the corporation tax rate and later by the quality of the people who wish to work in them.

I welcome the opportunity to speak on the motion. With the publication of the four year plan today, I am delighted the Government has reconfirmed its commitment to the 12.5% corporation tax rate, which is central to our employment policy, growth policy and the total growth of our economy. One need look no further than the comments of the president of the American Chamber of Commerce in Ireland for an indication of how important this tax rate is to Ireland's economy. The president said foreign direct investment accounts for €110 billion, 70% of total exports in the Irish economy, 240,000 jobs, 55% of corporation tax, €19 billion in direct expenditure, €7 billion in payroll costs and 73% of the business spend on research, development and innovation.

I am fortunate to come from a county that has benefited in a major way from foreign direct investment in the shape of four major companies, Baxter, Hollister, Ballina Beverages, known as Coca-Cola, and Allergan. Only recently, Hollister, with the announcement of an additional 250 jobs in my county, stated that the key reason for its locating those jobs in Ireland was the 12.5% corporation tax rate. If we need any further recent indication of just how important and influential the rate is, we see it there. The benefits are seen not just in my county. The spin-offs from these companies in terms of the benefit to indigenous companies are very significant and everything possible must be done to retain them.

The four year plan is based on average annual growth of 2.75% over the four years and that growth will only be achieved through the development of exports. When we see that foreign direct investment accounts for 70% of our exports, it shows how significant international companies will be in the development of this economy for the years ahead. It is great that all Members of the House are at one on this matter. It is highly important that, as a country, we would resist any attempts, whether from Europe or anywhere else, to in any way interfere with our corporation tax rate.

When we passed the Lisbon treaty, we went to the Irish people. In the course of the first Lisbon campaign, one of the key concerns was the fact corporation tax might be interfered with so we got legal guarantees which made it very clear that this was a matter for Ireland itself to decide. Considering some of the comments from Ms Angela Merkel and Mr. Sarkozy in the past days and weeks, we see clearly that this remains the position. It is important that we reiterate and preserve this into the future as it is so significant for our economy.

The corporation tax rate is the key plank in the policy of IDA Ireland and Enterprise Ireland in trying to attract investment into Ireland. It has come about over a number of years. Corporation tax was as high as 50% in 1986 and 40% in 1996, so we can see how significant the low rate has been in the period since then. While we are fortunate enough to have the benefit of these companies locating here, it is important that any capital programme, although slightly reduced as it will be under the four year plan, would be focused on areas where we have companies like Baxter, Hollister, Allergan and Coca Cola, particularly in regard to roads and infrastructure development.

It is important we do everything we can to retain jobs given the significant input these companies have in our economy. I want to put on the record of the House, as I have done on many occasions, that a 40 km portion of the N5, the main artery between Dublin and County Mayo, needs to be upgraded to safeguard such companies, some of which have had a base in this country for 38 years. These are not fly by night companies but have been here as long as 38 years, as in the case of Baxter in my town. They have been encouraged to stay, are investing in research and development and are committed to the future. A large part of that is because of the 12.5% corporation tax.

The next speaker is Deputy Damien English. There are 30 minutes in the slot and I understand the Deputy is to take five, as is Deputy John O'Mahony, with four minutes each for Deputies Pat Breen, Michael D'Arcy, John Deasy, Kieran O'Donnell and P.J. Sheehan.

Did the Acting Chairman mention Deputy Deasy?

I did. I would not leave out the Deputy.

The Acting Chairman has saved me from reading out all the names. The 30 minutes start now.

I appeal to all Deputies to stick to the time because otherwise their colleagues will suffer.

The Acting Chairman might let me know the time at four minutes because I have a tendency to ramble a little towards the end. I am sure he will sort that out.

I am glad we are having this debate. Like many in my party, I never believed the 12.5% corporation tax was at risk. Sometimes Ministers like to show off, claiming they are saving things and getting things done. They dream up events and potential disasters, everybody panics and then they say everything is grand, they sorted it out. However, because Ministers have done that or allowed it to happen over time — not only in the past week — it is important to have this debate so that every Member can clarify his or her intention with regard to this tax and where its position will lie in the future.

Many foreign direct investment companies locate in Ireland. They cater for almost 70% of our exports and massive employment, direct and indirect, is generated by them. It is very important, therefore, to send out a clear message to them. It must be totally clear and contain no doubt. The Minister has tabled an amendment and expressed his agreement about the rate in the plan which was launched today. I would like him to clarify and confirm that in addition to our maintaining the headline corporation tax of 12.5%, there will be no requirement, explicit or otherwise, for this country to introduce or agree to any measures in regard to its corporation tax regime as part of the financial assistance package from the EU and the IMF. I hope he will do that in his wrapping-up speech and put beyond any doubt that, the tax apart, the regime will not be touched in any other way. Business leaders want to see that because they make decisions for ten or 15 years ahead. They are not like governments which try to bring in a budget and plans for the coming year. I am thankful we now have a four year plan. I called for one two years ago because people need to see exactly what is going to happen. Business people make long-term decisions and they need to know whether there is any doubt about the tax regime. I do not believe there is but we need total clarity. That is why we are having this discussion tonight about this matter and other issues. I hope the motion will be accepted and the message will go out very clearly.

This sector is very important. We know the business generates approximately €110 billion. The expenditure in the Irish economy is about €19 billion but the number of jobs created and the money created by the job payroll is about €7.1 billion. A great deal of money comes into the country, with nearly €3 billion in corporation tax also contributing to the State. This is an area we cannot let go and must protect as much as we can.

Other countries in Europe may be concerned about our tax regime and may think they are losing out because of us. It must be made clear to them they do not lose out. The companies that choose to locate here do so for many reasons but if they did not come here they would probably go elsewhere and not to mainland Europe. The Minister for Enterprise, Trade and Innovation, Deputy O'Keeffe, stated that last night. I agree with him but the message must be made clear to people and leaders in other countries who are concerned and look with envious eyes at us. Ministers must get that message across and use their positions at various meetings in Europe to explain this situation is unique to Ireland and no other country in the European project is losing out because of it. Now more than ever we need this tax rate because we have a massive amount of money to pay back. Whether we will ever manage to repay it is one thing but we certainly have to pay the interest due which on its own might cost €10 billion, if not €11 billion, per year by 2014.

We need serious growth and job creation plans in order to create jobs. That means we must attract more business from abroad and cannot take the situation for granted. The tax rate is one area but we must chase after other areas too. The cost of labour here is enormous having jumped that way because of the cost of property. That needs to be addressed but I do not agree it should be done by cutting the minimum rate of pay. That is not what it is about. There are other ways in which labour costs too much. I call on unions to be part of this and have a proper discussion about it because when wages in certain areas are too high, that is a big issue. The cost of doing business here is affected and most of the Government-regulated costs are too high — insurance, banking charges, energy and so on. We must drive down these costs. We cannot take the international businesses for granted but must work with them and drive down their costs. We must also work with them on planning matters, driving down delays and speeding up decision making. Reference was made to Maynooth, Intel and Photex. There was a very worthwhile project in that area which was shot down by the planning authorities, stupidly so to my mind. I am all for proper planning but common sense is also required. We must work with and keep new businesses in this country.

I am glad to contribute to this debate and I strongly support the Fine Gael motion. It is great to hear the positivity regarding this motion from every side of the House. Along with Deputy Noonan last night and many of my colleagues during this debate, I express total exasperation at the Government's attitude to my party's proposal. I would like the Minister to explain in his contribution why it was necessary to bring in an amendment when our motion is very simple. Every one of the 166 Deputies in the House supports this motion, as, I assume, does every person in Ireland. Why could it not be a simple process with the Government supporting the motion rather than bringing in its own amendment? Twenty-four hours ago the Taoiseach appealed to this side of the House making it responsible for ensuring that four year plans and budgets would be passed. The Government wants consensus from us but it does not give consensus to us. This is an example of that attitude. The time for playing games is over. The Government has played games with the taxpayers' money for the past 15 years. I wish to leave that aside and move on but I am interested in hearing the Minister's explanation as to why an amendment was included.

The maintenance of the 12.5% corporation tax is crucial to the economic recovery of the country and the continuance of inward investment from outside, particularly from the United States. Multinational companies from the US employ 3,000 people directly in my constituency of Mayo. Allergan of Westport, Baxter Healthcare in Castlebar, Hollister and Coca-Cola in Ballina are the main employers. They provide 3,000 jobs with probably another 3,000 in back-up or spin-off jobs, if the truth were known. They want to be in Ireland because it is a gateway to the rest of Europe, with an efficient and well-educated workforce. However, we cannot take these things for granted. We need this pillar of corporation tax at 12.5%. If this rate was vital in attracting investment in the first place during the good years, it is even more critical now at a time when we need to protect what we have and encourage more business.

In recent weeks my constituency has witnessed the knife edge on which many of these jobs lie. Two hundred and fifty jobs were welcomed with great euphoria in Ballina by the Government. A week later 200 jobs were lost in Baxter in Ballina. The corporation tax is vital and a clear message must be sent out about it. There are certain incentives which are non-negotiable, whether it is the Government, the IMF or the ECB which is making the decisions. If the tax was needed during the boom it is needed thousands of times more now. There is another aspect to the debate on raising the corporation tax. During the Lisbon treaty debate when Members went around the country talking to the people we were assured by Europe that tax rates were to be decided upon by the individual country. There were no ifs, buts, provisos or opt-out clauses. Now is the time, in our hour of need, to deliver on the clarification given at that time. The Lisbon treaty would not have passed if that guarantee had not been given and therefore a different view is not acceptable now and cannot be contemplated.

Corporation tax affects and influences the mobility of investment. In Ireland we depend more on this mobility to attract jobs than most other countries do because of our peripheral location and because we are a gateway to the core countries of Europe.

A four year plan was published today. Many multinational companies are planning ten years ahead and we cannot afford to send out any other signal other than that the corporation tax rates will be capped at 12.5% now, into the future and ten years ahead. I commend the motion to the House.

I welcome the opportunity to speak on this important motion on the tabling of which I commend my colleague, Deputy Noonan. Today in Government Buildings we saw the pain which generations of Irish people will have to carry for the sins of the Government and its banker friends. Like Deputy O'Mahony, I am angry at the fact that the Government added an amendment to our motion. It has been preaching consensus for some time but unfortunately there was no consensus on this occasion. The Minister for Finance knew last night that corporation tax would be protected in the four year plan and he should have agreed with the Fine Gael motion. I am disappointed with that and it is very shortsighted.

Nevertheless, I welcome the commitment to maintain our corporation tax rate at 12.5%. It is hugely important for our country and critical for our economic recovery. Foreign direct investment accounts for €110 billion or 70% of total exports. Multinationals are the one bright spark we have in driving export growth in this country. According to a recent survey by the IMI 47% of multinationals located here expect their turnover to increase in 2011 and 26% expect to increase the number of people they employ.

Today our party leader met the new boss of Intel in Ireland who was very concerned about corporation tax. He informed Deputy Kenny that he commended Fine Gael on tabling the motion and will send the transcripts of the debate to the company headquarters in the United States. That is how strongly it felt about corporation tax. It employs 4,500 people here in Dublin and Shannon, which is my constituency. The Intel projections for the future are quite good. I have been to Intel in Shannon and visited its research and development plant. The future technology which is being developed in Shannon is super. It is very important to have an industry like it in the region.

The IDA has a very ambitious target for developing foreign direct investment in its strategy document, Horizon 2020. As part of that strategy it is committed to developing 50% of the projects to locations outside Dublin and Cork. The mid-west region, for example, has preclearance available in Shannon for scheduled transit and general aviation traffic. That is very important and I understand negotiations are ongoing with the DAA regarding the Lynx Cargo group which I hope will be successful. The agreement would pave the way for the development of a cargo hub at Shannon Airport which in turn would create more than 5,000 jobs throughout the region.

Another area which I want to promote is the Shannon estuary. It is an area which could potentially be attractive to multinational industries and retaining the corporation tax rate of 12.5% is very important. We have a deep sea port and the airport and it is an ideal location for alternative energy or manufacturing. Multinationals will be attracted to the area once our economic situation is rectified. I commend the motion to the House. I thank the Government for getting it right on this occasion. It was the only course to take and was the Fine Gael position.

It is crucial for the future development of our country that we have certainty regarding the 12.5% corporation tax rate. The rate should be considered in the context of our European partners. Many of the 27 member states have lower rates than ours. They have had a good look at our rate and the amount of foreign direct investment which comes in, based purely upon the amount of corporation tax to be paid by the corporate entity. I understand two of the 27 member states have a corporation tax rate of 0% but they get the benefit of employment and other taxes which swell the coffers in their countries.

Something which might be considered is the Swiss position, where there are different rates of corporation tax based upon where the company establishes itself. Some are located in the outer cantons of Switzerland which have a corporation tax rate of 0%. The companies based in the capital pay a standard country rate. The benefit of this is that it is not a version of aid coming from anywhere, rather, it is a tax reduction. It is something which we should consider.

As someone who is from Wexford, unlike my colleagues who have just spoken, including Deputy Breen who spoke about the benefits of Clare which has an airport and a deep sea port, I know transport hubs will always have the benefit of companies establishing in those areas. We do not have those companies and therefore do not have the benefit of the employment and cash in the local economy.

The tax growth will be approximately 1.75%. That cannot happen without a clear and unequivocal message to companies which are established or establishing. The value of their products has been mentioned but I want to put it into context. A neighbour of mine has a trucking company and was taking a lorry load of product from Intel to the Continent. He had to increase his insurance on his cargo by a multiple of millions. One lorry load of high value added product costs millions. We have the benefit of that for the country. We also have the benefit of many of the internationally recognised global companies which have decided to establish the European base here and some have even establish their world bases here because there is one benefit, corporation tax.

An amendment which was not required is merely another example of business as usual. Even though the Government applied for funds from the IMF and the European financial stabilisation fund on Sunday night we had business as usual here. There was no attempt to recall the Dáil in emergency session. How this Chamber can continue to operate with a business as usual mentality when fiscal and financial emergencies are happening is beyond me. It is no wonder the public are angry and vexed with everybody in this Chamber when those circumstances prevail.

I want to refer to the role of the IDA as the primary development authority with responsibility for attracting foreign direct investment. Parts of my constituency of Waterford have been treated as an afterthought by the IDA for many years, in particular west Waterford and Dungarvan. They stand out as being the worst affected. Last week I received figures detailing the number of visits to Dungarvan by potential investors over the past four years. There were five visits by potential investors which is not an impressive number.

At this point in time we need to consider the relationship of the Dáil with the IDA and Enterprise Ireland and determine how to maximise the effectiveness of our inward investment strategy as a whole. I have a background in international trade; it is one of the areas I worked in when I lived in the United States. I have come to the conclusion that the level of interaction between legislators in our national Legislature and the IDA needs to be more frequent and far more comprehensive.

I have found the IDA to be attentive and responsive when contacts have been made by my office. I have found it to be very professional and skilled at what it does. However, the effectiveness of agencies like the IDA and the other development authorities will be one of the key determinants as to whether this country can recover economically.

In any new Administration next year, I propose that the workings and deliberations of the IDA are reported to every Member of Parliament on a regular basis. In other words, the Legislature and the development agency need to work more closely and more frequently together. If we are to achieve reasonable growth in the coming years, this Parliament needs to take a hands-on approach to international trade and inward investment matters. That would mean regular briefings and meetings with these agencies on a regional and national level. That would increase scrutiny of their strategies and would make the Dáil a little more relevant as it relates to where we are now and where we need to be in a few year's time.

Ultimately, as we found out over the past five years, there are too many ways not to answer parliamentary questions and this area is no different. As a matter of course, the Dáil, this assembly, needs to be a more active element of oversight as it relates to potential foreign markets and foreign investment.

I am pleased to support this motion. The Government amendment is an amendment for the sake of it. It comprises a lot of words but says very little. The Government is looking for co-operation and yet our motion is very direct and is committed to the maintenance of the 12.5% rate of corporation tax as an indispensable tool for growth, job creation and economic recovery. There was no need for the amendment. The Government could have agreed with what we put forward — a commitment to the maintenance of the 12.5% rate of corporation tax.

This rate was introduced by the rainbow coalition Government in 1997. I was in practice at the time and saw the benefits of it. Companies in the indigenous sector were paying a 40% rate of corporation tax which was suddenly reduced to 12.5%. It was a major growth tool for small companies which were able to reinvest in their businesses and provide much needed jobs. It is critical to the multinational sector. Currently, more than 70% of our exports come from the multinational sector.

In terms of the ongoing negotiations and the European Commission, the European Central Bank and the IMF looking at Ireland, this is a fundamental tool to our industrial base, in particular to the multinational sector. If they are looking for repayment of funds extended, why take away the great tool we have in the form of the 12.5% rate of corporation tax? What also needs to be explained is that if we remove it, many of the companies here will not go elsewhere in Europe where the rates are higher. Therefore, it would be a loss tor Europe. That is something which needs to be put forward with great force.

The constituency from which I come, Limerick East, and the mid-west region, including Shannon, has an enormous cluster of multinational companies. It is probably the largest cluster outside Dublin. The multinational companies are great providers of employment.

The 12.5% rate of corporation tax is enshrined in the Lisbon treaty and it must be a bottom line issue. For me as a Deputy from Limerick, it is a vital component in terms of our industrial base, in particular for providing jobs. In terms of driving the indigenous industry, we must provide a climate which encourages entrepreneurship. The 12.5% rate of corporation tax leads to companies reinvesting in their businesses and, above all, to job creation.

The private sector will bring this economy out of recession. That is why I am so disappointed in the four year plan produced by the Government. We have a plan but it is not much of a plan. It lacks the measures to enable the self-employed sector to grow. However, I welcome the retention of the 12.5% rate of corporation tax. I hope the Government will not press its amendment and will support the motion in the interests of unity.

We are discussing a vital interest to our nation's economic prosperity which has been ruined because of the reckless policies of the party opposite which has once again brought this country to its knees with a begging bowl out to our neighbours.

I was first elected to this House in June 1981 and immediately on entering it as a Government backbencher, we faced an economic crisis as a result of the most corrupt political document ever produced, the 1977 Fianna Fáil Party general election manifesto. Fine Gael, the Labour Party and even the former party, Democratic Left, have a proud history of putting the nation's interests before the political interests of their parties, often to their political cost. However, that will not stop us from again giving our best to sort out the economic well-being of all our people to rebuild a strong independent nation in the European family. We have done so four times in the past four decades and we are willing and able to do so again.

Fine Gael has always put the truth before spin. Fianna Fáil has always put out spin instead of the truth. A friend once described it to me as follows. There is the right way, the wrong way and the Fianna Fáil way. In other words, even when the truth jumps up and bites it, it blames all those around it, including the Opposition, the media, Lehman Brothers, the credit crisis and conspiracies. It is now blaming the euro crisis. Has one ever heard a word from one of them saying they had made a mistake?

Fine Gael has led the Governments which have rescued this country in the 1970s, 1980s and 1990s by turning around the economy from a crisis to a very healthy position on leaving office. The 1973-77 Government led by Liam Cosgrave had to take tough measures to restore our economic well-being. They were fair measures and by the election of 1977, the economy had been turned around and was on a steady upward trend. We then had the irresponsible actions of Fianna Fáil in a desperate grab for power. It produced the famous 1977 general election manifesto for which we have all been paying since. There was no rates on houses or tax on cars.

When the Fine Gael Government, led by Dr. Garret FitzGerald, came to power in June 1981, Fianna Fáil had once again recklessly brought the economy close to the brink with the IMF almost knocking on the door on that occasion. Along with its coalition partner, Fine Gael set about creating a path to economic recovery to create employment and sustainable growth. Fianna Fáil fought against every proposal tooth and nail.

By 1987 the economy had been returned to a healthy economic position with positive growth rates, increasing employment and reducing unemployment. It took Fianna Fáil two years to again bring the country to its knees.

I would love to discuss economic history with the Deputy.

In 1989, Fine Gael put the country first with the Tallaght strategy. It is widely acknowledged that the outgoing rainbow Government led by John Bruton from 1994 to 1997 left the country in a very sound economic position. The economic health of the nation was so good that it took Fianna Fáil over two terms of government to wreck it again. Fianna Fáil has always gambled with the economy to save the party and its gambling has never paid off. The Irish taxpayer has always paid a high price for the high-risk bets put down with the taxpayer's hard-earned money. For the good of the country Fianna Fáil cannot be returned to power for at least a decade and possibly longer.

Fine Gael has had to repair damage done to this nation by Fianna Fáil on each occasion it was elected to office over the past 40 years, and we are ready to do so again. We are ready to put our shoulder to the wheel to rebuild this nation from the current economic disaster that Fianna Fáil has once again brought upon us.

Fine Gael has the team and the policies to address the issues facing the nation. Fine Gael has always put the interests of the nation before the party. We have never left the economy in a mess like Fianna Fáil. We have always left Government with the economy in a healthy state, built on a strong foundation for future growth. We have never tried to build a tower of Babel.

When the Minister is on this side of the House after the election, he should try to act for the good of the country rather than the good of Fianna Fáil.

I am glad the Deputy is promising me my seat.

He might not have a seat.

The Minister should remember he has much penance to do.

I thank Deputy Sheehan for his kind wishes on the general election. It is useful to have a debate on the motion before the House and I thank Fine Gael for tabling it. It is not every day we have consensus across the floor of the House on a Private Members' motion.

The consensus and agreement we have will send a clear signal to the outside world on the strategic importance of the issue for Ireland.

There is an amendment tabled.

I have no particular problem with the motion as drafted, although there is an amendment in our name which can be considered. It was prepared with the advice of officials in my Department. It makes a case——

Who is in charge?

There is no point in being contentious.

The Minister should not blame somebody else for his policies.

He is blaming somebody else.

I am not blaming anybody but simply making the point that the alternative motion presents the case rather better than Fine Gael. If the party wishes to press the issue, I will not cause a vote when there is agreement on it. I thank all Members across all parties for their contribution over the past two nights. My colleague, the Minister of State at the Department of Finance, Deputy Martin Mansergh, was correct when he reminded us that we are in essence talking about a successful 50 year old strategy which has been upheld by various Governments over the years.

I assure Deputies that the threat to the corporate tax rate is not an invention of mine or this Government. Far from scaremongering about the threat to our corporate tax rate, I have used every available occasion to reassure the international investment community of the absolute commitment of this Government to the continuation of this rate. The Government has once again restated a commitment to the 12.5% rate in the national recovery plan published today, which has secured very broad acceptance and support from the European Commission. Deputies should put their minds at rest on this issue.

When will the Government put the people back to work?

There is a difficulty in the context of external funding, with the idea that any of the relevant organisations might have a negative view about our corporate tax regime. They do not have such a difficulty. One of the facilities is contingent not just on support from the European Commission, but from the different member states of the eurozone. Both President Sarkozy and Chancellor Merkel have made the position clear that they do not see this as an issue in these negotiations; it has not been an issue in the negotiations for international and external assistance and it will not be an issue. It does not arise and we would be better occupied devising the strong arguments that exist and developing cases for Ireland having the 12.5% rate.

There are individuals, economists and commentators in some member states who feel this is some form of predatory advantage for Ireland to enjoy this corporation tax rate. It is important to put on record that various states have hidden subsidies for their industrial systems. For example, very large countries often have arms industries which play a very significant part, through public procurement, in the relevant member state of building up the economy. Happily, we do not have any arms industry in this country but that is an example of how industrial growth can be procured in larger countries through an industrial policy that is unavailable to us.

We are a peripheral eurozone member state and we must use all the tools and weapons at our disposal to attract inward investment. We have had a consistent policy for the past 50 years, as the Minister of State, Deputy Mansergh, pointed out and we intend to continue with the policy. I thank Deputy Noonan for his contribution and I agree with his view that economic recovery is not about cutting and taxing, but above all about growth. He pointed to our well-established export-oriented services industries, including the IFSC, and the contribution they can make to our revival.

There is a good story we must tell about our export markets. Our exports have increased by 6% this year and although we have real difficulties with our budgets and in our banking sector, our exports have increased dramatically. Our unemployment levels stabilised in October and November, with a month-on-month decrease in the live register for the first time since 2007.

People are emigrating.

There are positive signals in our economy and we should build on those positive elements. We should conclude our discussions on the external negotiations and above all we should send a clear signal to the world on 7 December about how we manage our budgets.

The final slot will be shared by Deputies Terence Flanagan, Tom Hayes and Brian Hayes.

I welcome the comments of the Minister and I am delighted that there is full consensus in the House on the corporation tax rate. That is to be welcomed. I thank Deputy Noonan for bringing forward this important motion, which reaffirms the commitment of Dáil Éireann to the 12.5% rate for corporation tax.

This rate has been a great success for Ireland and much of the international investment in this country would not have occurred if the corporation tax rate had not been introduced. I am delighted that a Fine Gael-led Government introduced the rate in the mid-1990s. The objective should be for the tax rate to continue for the foreseeable future and there should be negotiation on it in the talks with the IMF. For that reason, the Minister's comments this evening are welcome and will put people's minds at rest.

Unfortunately, our economy is in serious trouble and our ship has hit rocks. There is much money leaving the country and that has to be made up with tax increases in the coming years. This is one area we cannot tinker with. The tax rate is a key ingredient for the export sector and the success of that industrial area. The quality of education is another issue and the Minister must consider that in greater detail at budget time to ensure the fewest number possible of cuts in education.

The last thing this country needs is bad news for the 1,000 multinational companies active in Ireland. Foreign direct investment creates thousands of jobs and it is a key factor. Businesses will leave the country if we do not protect what we have. IDA Ireland is charged with selling Ireland abroad and this is a key element on which this country is being sold on an international basis. We are the envy of Europe in this regard and we are under pressure from other European countries, such as Germany and France, which want the rate to be increased. We must be strong in this case in avoiding such action.

The United Kingdom has a corporation tax rate of 38%, China has a rate of 25%, Germany has a rate of 30% and the United States has a rate of 39%. We have a competitive advantage with this low tax rate. We must ensure it remains in place.

A recent statement by German Members of the European Parliament that Ireland's rate of corporation tax should double if the country borrows from an IMF-EU fund was unhelpful. It is the last thing the country needs. I am pleased the Minister has put to bed speculation in some newspapers today that a special bank levy would be imposed on foreign banks located in the International Financial Services Centre. Such a move would undermine the great work being done in the IFSC and result in a haemorrhage of jobs. We must not introduce a bank levy.

Commissioner Olli Rehn's recent statement that taxation rates are a matter for each sovereign government and the Commission will not put countries under pressure in this regard is reassuring. Nevertheless, we must avoid complacency if we are to ensure our low rate of corporation tax continues for the foreseeable future. Notwithstanding the proposed increases in income tax rates and the fact that everyone will be hammered because the country has been run into the ground, I welcome the consensus in the House on our corporation tax rate.

I am glad to have an opportunity to say a few words in this worthwhile and important debate, and pleased the Minister indicated the House would not divide on the motion. I have never seen so many people unite behind an issue as they have in recent weeks with regard to the need to retain the corporation tax rate of 12.5% which Ireland has enjoyed for many years. The current rate has delivered significant benefits to constituencies, counties and individuals. Every constituency has examples of companies which have located there as a result of the success of the 12.5% rate.

Ireland's corporation tax rate has been discussed in boardrooms across the world and is one of the determining factors in companies' decisions to locate here. We have reaped considerable benefits from foreign direct investment, FDI. Enterprise Ireland has recorded that FDI companies are responsible for exports of €110 billion, contributions of €19 billion of direct expenditure in the economy and a total payroll of €7.1 billion. These companies employ 136,000 people directly and a further 100,000 people indirectly, and most of their employees are looked after well.

In my constituency, FDI companies are located in Cashel, Clonmel, Carrick-on-Suir and, to a lesser extent, Tipperary town. Certain towns are crying out for foreign direct investment. Tipperary town, for instance, where the Minister of State, Deputy Martin Mansergh, and I live, has been waiting for a long time for such investment. I hope a company will avail of the opportunity to establish itself in the advance factory constructed in the town. This would deliver major benefits to Tipperary which has been crying out for industry for many years.

We must examine how we do business in areas other than corporation tax. Local authorities need to speed up their procedures on planning applications. While some local authorities are good at welcoming foreign direct investment and roll out the red carpet for foreign companies, many such companies face planning delays. We should do everything possible to accommodate foreign companies.

Many young people are leaving our shores because they no longer have employment opportunities. Facilitating multinationals which are considering Ireland as a location for investment would help address this problem. We have an educated population which is keen to work. Many of our young people are departing for the United States and Australia and will bring benefit to the economies of those countries. We should leave no stone unturned at local authority and national level in our efforts to accommodate multinational companies.

While we all support the 12.5% corporate tax rate, we need to continue our efforts to encourage as many companies as possible to locate operations here. Ireland has a clean environment and is one of the best places in the world to live. We must take up the challenge to encourage companies in the United States, Canada and elsewhere to locate here. People will work hard and give a lifetime commitment to their place of employment. Foreign companies have a great future here.

I thank colleagues on all sides for their contributions to this debate both last night and tonight. In a week when the international reputation of this country has been sullied as a result of the fiscal and economic crisis in which we find ourselves, this debate is crucial to our international standing.

I am convinced — I have information to this effect — that senior CEOs and executives of companies in the United States and other parts of the world which have considerable investments in Ireland are reading and watching this debate. What businesses which invest in this country want more than anything else is stability. They want to know their investment is effectively guaranteed and that third countries such as Ireland to which they relocate plants and businesses are stable. The debate on this motion will send out a positive signal to the international business community that this country is still open for business. The only way out of the crisis is to expand business, increase exports and ensure we improve our trade through domestic industries and multinational companies based here.

I do not underestimate the importance of this debate for those who take an interest in whether Ireland is open for business. I am completely indifferent on the amendment because the House is speaking with one voice tonight in a most difficult week for this country. Ireland's corporation tax rate is a sovereign matter for the House and Governments of every complexion to determine policy on business profit tax.

That sovereignty extends to all forms of taxation.

Yes, it is a sovereign matter, as has been confirmed by a number of EU treaties which have been formally ratified by Irish people. Once such an agreement is made, our EU partners are duty-bound to respect it, not only because it has the imprimatur of the House but also because it has the sovereign imprimatur of the Irish people.

Businesses do not choose to invest in Ireland solely and exclusively for the purpose of availing of the 12.5% tax rate. They come here because of the skills of the population, the proximity of our market to the European mainland, the fact that we speak English and because it is a good place to base their business.

Our future strategy is not only about creating new jobs as these must come about as a result of some spark in the economy. We must have a dual strategy of protecting every single job in this country.

Ireland is not Greece. We have 1.8 million people at work in this economy and despite the enormous increase in unemployment, we still have a much lower rate of unemployment than Spain, Portugal and Greece. We need to adopt a twin-track approach in that while building new jobs and creating the environment to get new industries working, we also must protect every single existing job both in this sector and elsewhere in the economy.

Each action we take must have this as a sharp focus. Any proposal on tax, on red tape or which could clog up the planning system, could all be to the detriment of the 1.8 million people who currently are at work. We face a huge task in trying to create an environment for new jobs, while also trying to protect those people who remain at work at present. I believe the consensus position arrived at last night and this evening on this matter will send out that strong signal.

Amendment, by leave, withdrawn.
Motion put and agreed to.
Barr
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