Mr. Paddy Malone:

There has been collaboration between them involving third level institutions. That is a very good example of the Louth economic forum and the councils using the memorandum of understanding to deliver. However, I have not seen any step-up on that in the past 12 months since the election of the new councils in the South and the creation of the new super-councils in the North. With the exception of that one issue I have not seen an economic driver coming up. If I were to be critical, I would say it has been a great first start, but we need further action on it and we need to drive it further forward.

In terms of structures, there is an office in the Newry and Mourne District Council which is for the co-ordinator, who happens to be from Dundalk. He spends two days a week working in his office in Dundalk and another two days in Newry, and his location on the fifth day depends on what is required. There is backing up at assistant director level within the councils. There was a change in personnel last year - there were many retirements, a new county manager and the new chief executive in the North. Those changes will take time to bed down. It would be harsh of me to say it has not moved in the past four or five months. I hope it will be of more significance in the next five months and we will have all signed up to it.

When we see the LEOs talking about the North and the Northern guys down here, we realise this is beginning to work hand in glove. When Chambers Ireland responded to Deputy Tóibín's invitation and I came to meet him, my first reaction was to ring my colleagues in Newry and Warrenpoint. Five years ago that would not have happened. We got on well with each other and we would have had social outings together, but we would not actually have met. Five years ago the only social outing we had was when we used to hire a tall ship - I believe Senator White has been on it. We would have had social functions sailing tall ships down Carlingford Lough, which was fine but that was all we did. We are beginning to think in terms of an area and we are beginning to develop the area, which is important.

On the definition of the area, it does not have to be a physical area. It could be a specific area, but I would regard it as being anywhere within the catchment area of the two local authority areas of Dundalk North and Dundalk South, and the equivalents in Newry and Armagh. We must not forget that Armagh is a separate one.

Within those areas it would be possible to decide that specific businesses or industries would get the reliefs. It should be specific and targeted and not a general one. I am not talking about something like Shannon. We need to target the industries because we need to get value for money and crucially because we do not want to have displacement. If there is displacement, it does not serve anybody's purpose. If I am robbing one area to put it into Dundalk, that will not work for all-Ireland purposes and I would not expect the committee to support it or allow it to happen. We are specifically talking about new places.

We would target using the IDA Ireland and Enterprise Ireland skills base and using the Northern Ireland equivalent to identify the industries that could be attracted. It could be pharmaceuticals in the South and financial services in Newry and Warrenpoint where there has been huge success in that area.

It could be in the area of transport, particularly as Warrenpoint Port is one of the finest ports on the east coast. My friends from Warrenpoint are always telling me that it is the best port on the east coast. It is, therefore, possible to target specific things. On one occasion I used an expression which someone told me was inappropriate when speaking about the Border. However, I will repeat it now - I want to take a rifle to the problem, not a shotgun. In other words, I want to hit the specific target I want to hit and nothing else.

I have argued in favour of mobility for some time. I am an accountant by profession. I run my own practice in Dundalk and I have clients on both sides of the Border. On a couple of occasions they have been approached by people who want to invest in a particular business expansion scheme, BES. I still use the old jargon. My response has been to state that I know somebody in, for example, Newry who understands the business in question and whose involvement - if it could be encouraged - would be a plus. The people to whom I refer cannot invest in such schemes - they can but they will not receive any tax relief if they do. When we were establishing BES schemes, we copied the UK legislation almost word for word. Hence, there is no reason a person in Dundalk could not invest in a company in Newry or vice versa. If one wants mobility of capital, such investment is what one should encourage. One cannot put constraints in place. If there are incentives to invest in one direction only, that represents an impediment in terms of the overall definition as far as I am concerned.

On employment taxes, etc., I compliment the Irish revenue authorities in respect of the way they have approached the Belfast Agreement. They implemented it, although not completely. There are some kinks in the resulting structure but it is not bad. However, the Northern Ireland authorities have not shown any great sign of a willingness to implement an equivalent. Consequently, a southerner working in the North will find matters to be okay but a northerner working in the South will be heavily taxed. For that reason, the number of northerners coming to work in the South is significantly lower than the number of southerners going in the opposite direction. The only reason people are not flooding into the North to work is that, even allowing for the different tax rates, wage rates there are significantly lower. People's take-home pay in the South is better than that of their counterparts in the North. That is one of the other reasons I am highlighting the issue of the corporation tax rate. It is interesting that at a meeting in Coleraine some ten years ago, Mr. Owen Paterson, MP, of the Conservative Party proposed setting the rate for Northern Ireland at 12.5%. I was in attendance at that meeting and I congratulated him afterward on uniting the DUP, the UUP, the SDLP, the ICTU and the Confederation of British Industry. All of those bodies said "No" to the proposal he put forward that day. They, and many others, are all in favour of changing the rate now. Many who live in my area are concerned in this regard because the 12.5% rate is our trump card. If we do not have that as a unique selling point, we will be obliged to consider what else we have to offer. If our other cost bases in the South are out of alignment with Newry and Warrenpoint, we will have a problem because displacement will occur.