Brian Cowen (Laois-Offaly, Fianna Fail)

With regard to investment, even in the past five years there has been a significant change in the profile of investment. Five years ago, 10% of IDA-approved projects from the United States were in the area of research and development whereas 40% of the investments last year were in that category. This demonstrates the strong capital-intensive commitment being made by multinationals in Ireland on a continuing basis. They regard the location in Ireland of research and development facilities as deepening the roots of their activities in Ireland. By definition, the spin-off benefits from research and development are not immediately known but it is a good indication of their commitment to Ireland as an investment location that this is happening.

As Deputy Kenny observed, the broader competitiveness issues must be confronted and addressed by the Irish economy in the new economic situation that has now developed as a result of the worst financial and economic crisis we have seen in a long time. We have to try and address these issues in our domestic policy framework while at the same time continuing to be competitive in respect of international investment flows. Our main competitors for attracting foreign investment activities are places such as Singapore, Korea and Israel. It is very important that we continue to support and listen attentively to what IDA Ireland has to say about the evolving trends which become evident in the field. It is important to make the point that 40% of IDA investment last year was research and development related, a big change even in four or five years.

The matter of the location of the United States as a place for Ireland to do business is not only restricted to the IDA. I have attended or been involved with Enterprise Ireland related exercises and trade missions. Many businesses accompanied us during the St. Patrick's Day period. The successful business being done by Irish business people there is a timely reminder to all of us that while people have the right and entitlement to portray the difficulties through which the Irish economy is passing at the moment, many enterprising people, entrepreneurs, business people and Irish companies are getting business and ensuring they are diversifying and getting into other areas of activity. It was very heartening to see their demeanour, attitude and the can-do approach that epitomises everything they have been doing there and the resulting successful outcomes. In addition, the good word for Enterprise Ireland among native Irish business people is encouraging. We have seen a big reform of that organisation in recent years under the leadership of Mr. Ryan and others. It is very focused and those of us who have reason to be in touch with the business community through various positions acknowledge that both Enterprise Ireland and IDA Ireland serve us and the businesses community well. There is never room for complacency and no one could ever claim there is no room for improvement but I have been very heartened by what I have seen and heard from those for whom these agencies have been set up in the first place.

I refer to the Deputy Kenny's question about the tax haven situation. It was very clear from my discussions with President Obama when we visited the USA on St. Patrick's Day that Ireland is not being contemplated or categorised in respect of that aspect of policy under review within the Obama Administration. The level of economic activity here in respect of the investment made here is transparent and clear. We are in compliance with all international treaty obligations and there is a recognition that Ireland has a competitive corporation tax. It is applicable to all companies and we do not deal in any differentiated way with anyone. There are other countries which have nominally higher corporate tax rates, which on an ad hoc or individual basis provide various opportunities for investment or improved terms and conditions for those who locate in such countries but which are not as transparent or as open as Ireland. We should not have anything to fear in any way or suggest we have anything to hide; quite the contrary. We have one of the most transparent corporate taxation arrangements anywhere in the developed world. The move to 12.5% as a corporate tax rate generally was a very wise decision, the process was completed over a period, it serves the country well and we should be mindful of it.

I am not aware to what extent there has been any progress in the United States Congress in respect of the policy initiative getting legislative legs or to what extent legislation is being prepared. It is a longer process than people think. However, the US Treasury Secretary and others have referred to it. Obviously, our people are keeping a very close eye on developments. We are ensuring our situation is well understood and comprehended. My information is that the representations we continue to make confirm that Ireland is not in the sights of those who seek out certain jurisdictions the tax status of which is very preferential vis-À-vis American companies and what such companies pay in their own country. This must be examined in terms of where those profits are being decided upon in some of those locations.

The issue of illegal immigration was raised with US Secretary of State Clinton when she came here in another capacity regarding Northern Ireland. We have met members of the committee that deals with this issue. Some prominent members of the committee visited Ireland some months ago and I had the opportunity to meet them. This is a very sensitive issue in domestic politics in the United States for obvious reasons. A bipartisan approach provides the best prospect of success. Many prominent people on both sides of the aisle, like the late Senator Kennedy and Senator McCain, unfortunately were not successful in their efforts to propose comprehensive legislation on this issue.

It is obvious that it will not be dealt with on a country by country basis. An overall legislative response is envisaged in seeking to find out the realistic situation politically on Capitol Hill. Conveying the fact that we understand it is a difficult issue and that we seek to be accommodated under the overall umbrella is the best approach we can take. We must build support for the particular Irish issues that arise, recognising that we are not the only people with a problem in this regard. Other countries and other nationalities are involved and we must find a common solution.

The final supplementary question concerned the Copenhagen meeting. It is clear from the European Council conclusions on 29 and 30 October that the European Union is prepared to go further than it already has gone. It has taken a leadership role in this area but other parts of the world must come up front and see what contribution they can make. The conclusions confirm the commitment of the European Union but recognise that this is not something we can do alone.

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