Timmy Dooley (Clare, Fianna Fail)

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.

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