Professor Alan Barrett:

As we have not carried out a major analysis of it, I would be reluctant to speak authoritatively on it. The point we were trying to flag and to illustrate was again back to that theme of lessons from the past. What we learned previously is that often, tax incentives could be introduced in Ireland, for which there was a rationale at a certain point in time, but then they just stayed in place. Again, it is one of the core principles of Government expenditure or taxation incentives that there should be a market failure; there should be some issue that is being addressed. Consequently, if it is something like a weakness in an industry whereby it needs some sort of assistance or boost, Government policy can do that. However, beyond a certain point, one is not actually assisting an industry; one merely is giving handouts to the players in that industry who are doing particularly well. Again, one should remember these sorts of variations are costly and consequently should be evaluated in exactly the same way as if public money was being spent.

The point about the regional spread of these sorts of things is well taken. Whether there is scope for any regional variation in that sort of measure, I do not really know. However, it is certainly very hard to look at hotels and restaurants in Dublin, especially on a Friday night, and conclude that the owners of these hotels and restaurants need public money to help them through. The broader point is this issue of analysing and ensuring that the original rationale is still in place and really interrogating that.