Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank the Deputies and Senator Noone for their questions. I will begin with Senator Noone’s question on taxation and the digital sector. It is possible that there will be reference in the conclusions of the forthcoming European Council meeting to taxation and its role in the digital sector. I wish to make clear this country’s commitment to its corporation tax rate. It is an utterly transparent principle-based agreement. We are of the very strong view that the way in which dimensions of this issue could be addressed is by means of a multilateral process in which all countries participate. That is why during our Presidency and since this country made very clear its commitment to participate in the OECD base erosion and profit shifting work that is taking place having been mandated to do so by the G20. That is the forum within which we will work with our neighbours and partners on this matter. The Minister for Finance, as members are aware, used the budget as an opportunity to restate our commitment in that regard. He also made clear that he would introduce changes in the forthcoming finance Bill to address Irish registered companies and the concept of being stateless. I reiterate our strong commitment to our corporation tax model and acknowledge that the reason we have it is because as a country that is physically remote from the Continent of Europe, we have developed a business model that will allow our competitiveness to be maintained, in the same way as it is open to other countries to use their sovereignty to decide what business and competitiveness model they wish to use.

I agree entirely with the first point made by Deputy Durkan on the disparities in the provision of infrastructure across various member states. The technical term is the concept of market fragmentation, which arises because we have so many different national markets and it is not possible for the level of scale to be reached to allow appropriate levels of infrastructure to be achieved. That is one of the key issues on which the European Council will engage.

A point raised by Deputy Durkan previously is that the digital sector will not be able to employ everybody; that there will be people who due to their own skill-set and inclinations will not work in it. The February European Council meeting will specifically examine industrial policy and the strength of the manufacturing base across all of Europe because that is crucial to coming up with an economy that is capable of providing employment to all sections of society in this country and elsewhere.

On Deputy Durkan’s point on relocation, as he is aware, in the globalised world in which we operate there is free movement of capital and companies, large and small, decide where they want to locate. We should acknowledge that within that framework this country has had extraordinary success. Based on our share of global FDI compared to our share of global output, we are punching nearly three times above our weight because of the quality of the workforce and the success we have had to date in providing the skills and the environment in which business wants to locate and within which Irish people want to do business. It is the broader job of Europe to ensure that within the framework of companies being able to locate anywhere in the world that Europe is competitive and offers workers a competitive environment within which international companies want to locate. That goes directly back to Deputy Durkan’s first question, which is that if we do not have the physical infrastructure in place and the type of environment provided by other large economies, then it will be difficult for us to compete.

On Deputy Durkan’s point about mobility and ensuring Irish and European workers have the ability to prosper within that environment, the assumption was prioritised by the Presidency and we worked very hard on the posted workers directive. We also made strong progress on the professional qualifications dossier and another dossier on the portability of pensions. I identify and agree with Deputy Durkan’s point in that regard.

I will now deal with the questions raised by the Vice Chairman. I hope I have addressed labour mobility adequately in the response to Deputy Durkan’s question. We must also acknowledge that this is an area in which national governments still very much have the ability to decide how they want to handle particular issues. We must respect that and accept that countries make choices, as we do, on such issues. The point goes back to what I said in response to Deputy Durkan. That is why progress on the professional qualifications dossier and the portability of pensions is so important. The jewel in the crown of the European Union is the ability of workers and citizens to move across the Union either freely or with limited difficulty compared to the situation historically.

We must also ensure that they do so with the ability to gain work and for their rights to be recognised.

On the point the Vice Chairman made about looking at smaller companies first, I would refer to the point he made earlier and say that we need to see national governments taking a lead in much of what needs to be done to foster the culture about which the Vice Chairman spoke. He did not do it but I am sometimes struck by the way other people blame Europe for all the failings. If there is a difficulty within a particular country or culture regarding levels of entrepreneurship, that is something national governments must tackle. They have to take advantage of the relationships they have and the tools available to them as a result of our membership of the European Union. That is something each Government must prioritise. That is why I was delighted, as I am sure were the members, to see the strong measures the Government announced on that earlier in the week.

Regarding the Vice Chairman's question about Albania, as he will be aware, a new Government was elected in Albania during the summer and it has outlined strong plans regarding how it is looking forward to moving ahead with reform. The European Commission has given an initial positive assessment of progress in Albania but the granting of candidate status and the formal moving forward of discussions with it is something in which all member states will have to engage. However, I welcome the strong messages from the new Government in Albania and we hope that leads to positive movement for it and its people. What we know to be important is that the conditions are met to allow Albania move forward its relationship with the European Union.

The last point was on the state of play within the United Kingdom. I had a meeting earlier today with Lord Wallace, as did other members of the committee. What we said at that meeting and what I have said publicly on a number of occasions, most recently during my visit to the Northern Ireland Assembly at Stormont yesterday, is that it is very much the right of any country to decide the type of relationship it wants with the European Union, and the terms of that membership. Given the number of referendums Ireland has had on our terms of membership, such a view will come naturally to us.

We are also clear that we believe the European Union is a stronger and better place for having the United Kingdom as a fully participating member and we see our future being very much back at the centre of Europe in terms of the work and the development that is taking place there. Work is taking place in the United Kingdom over the balance of competences review. As a Government we have decided not to participate in that, but were the current Government, or a new government, to become clear on a potential referendum in the future, we will discuss the impact any such decision will have on Ireland and make clear where we see our future and how we want to engage with Europe.