Pearse Doherty (Donegal South West, Sinn Fein)

The Minister of State is getting uptight because a Department of Finance report sets out the options available to the State if the CCCTB is introduced. Given that he informed the House his Government will not allow the CCCTB to be introduced, there is no reason for him to become uptight.

The Ernst & Young report was commissioned long before Ireland entered into an austerity pact with the European Union and International Monetary Fund and the scorched earth policy of cuts was implemented. Given that states such as Ireland will lose corporate tax revenues, to balance their budgets they must either decrease transfers to households which, according to the report, means reducing social welfare transfers and payments to the sick, vulnerable, blind and incapacitated, or increase the corporate tax rate. We know from reports that this has a negative impact on the economy in terms of unemployment rates. I am sure we are all agreed that the unemployment rate in this State, which stands at 14.7%, is too high. Many people are choosing to leave this State because they cannot find work here. The Department of Finance report shows that voluntary acceptance of the CCCTB will increase unemployment by a further 0.5%. It is hypocritical of the Government to sign up to a pact that is supposed to increase employment but which will further exacerbate the problem in struggling economies such as Ireland.

The Taoiseach told this House a few hours ago that he, on behalf of the State, would be supporting the pact for the euro which would be before the European Council this week. The pact is set out in the statement made by the Heads of State and Government in the euro area on 11 March. The Taoiseach signed up to that pact from which I will quote a statement for the benefit of the Minister of State. It reads: "Developing a common corporate tax base could be a revenue neutral way forward to ensure consistency among national tax systems while respecting national tax strategies and to contribute to fiscal sustainability and the competitiveness of European business." That is what the Taoiseach on behalf of this State signed up to.

I listened with interest to the Minister of State's contribution. Obviously, we do not what happened because we were not at the meeting. However, the public document issued following that meeting sets out the conclusions of the meeting to which the Taoiseach was party. The question that must be asked is how the common consolidated corporate tax base will be revenue neutral when, as I mentioned, it will drive down employment, force more people onto the dole and further decrease our GDP. It is estimated in other reports that the decrease in GDP to this State would be of the magnitude of 3%.

The Minister of State may say the Government is opposed to the introduction of the CCCTB. The Fianna Fáil motion before the House states that we are opposed to any Irish participation in proposals to introduce a consolidated corporate tax base within the eurozone or the European Union as a whole. This does not prevent the Government from involving itself in discussions with European partners on the matter. It is a fixed position by the Dáil that we are opposed to such a move. However, the Government has not accepted the motion. It does not want unanimity on this matter. The Government has proposed an amendment to the motion which deletes the section which states we are opposed to the CCCTB and inserts instead wishy-washy words to the effect that we will deal with this with our European partners through negotiation. If we are opposed to this then let us in our vote on the matter, given the Government's overwhelming majority, be as clear and categorical on it as the Government wishes us to be on the retention of our 12.5% corporation tax rate. If not, the message that will be sent from this Chamber tomorrow night following the vote on this motion will be that the CCCTB issue is up for grabs. That is clear not alone from the amendment to this motion but from the conclusions reached at the meeting which took place on 11 March to which the Taoiseach was party. There are other reasons to be sceptical about all of this, to which I will come in due course.

Sinn Féin does not accept Ireland being dictated to by the IMF or EU on taxation or other aspects of domestic economic policy. This includes being asked or forced to increase our corporation tax rate. Sinn Féin, unlike the proposers of the original motion and the two Government parties, is consistent on these matters. We have stated that we will reject, and call on the Government to reject, the financial conditions attached to the IMF-EU assistance package. As I stated earlier, the Lisbon treaty, which surrendered further control of this State to Brussels, plays a part in all of this because it has removed us from the position of having had a second veto on corporation tax. Our European partners know this all too well. That conceding of sovereignty now appears irrelevant in the context of the abject surrender to the EU-IMF.

There is an element of hypocrisy in terms of the "wrap the green flag around me" approach to our corporation tax. It is a serious issue, one on which we should not be dictated to by Brussels or anyone else. As stated by Sinn Féin when this motion was tabled by Fine Gael during the last term in office of the previous Government, there are many other evils that have been or will be visited upon us as a consequence of the bank bailout. As I said earlier, this motion, which deals with a hugely important issue for the Irish economy, will be debated in the House for six hours. The social welfare Bill, which crippled ordinary people who are dependant on support from the State, was rushed through this House. The finance Bill, which introduced the universal social charge was also rushed through with little debate in the House yet the priority of parties is to continue to raise this issue. I accept their right to do so in their own time.

The question that must be asked, following examination of the assistance package is whether it is now the position of Fianna Fáil, Fine Gael and the Labour Party that it is all right for the IMF and EU to dictate economic policy; to insist that we sack thousands of public sector workers and that we sell off State assets but that they are not allowed to ask us to raise our corporation tax rate. From Sinn Féin's point of view, none of these is acceptable. The IMF-EU should not be allowed to dictate in any way, shape or form our economic policy.

I pose the following question to the Labour Party. Does it now agree with Fianna Fáil and Fine Gael that the State's economic policy, apart from corporation tax, should be dictated by Europe or will it continue to use the excuse that it has been placed in a straitjacket and has no choice but to do the horrible things to which it objected when on this side of the House only a few short weeks ago?

What we should be doing here tonight is expressing with the same vigour as we do our objection to bullying by other members states on increasing our corporation tax, our opposition to the destruction of our public services and the sale of Coillte, Bord na Móna and the ESB. In that at least Sinn Féin is consistent. Being forced to raise our corporation tax at the present time would constitute another turning of the screw by our friends in Europe, the same friends who Fianna Fáil, Fine Gael and the Labour Party assured us during the referendum on Lisbon had our best interests at heart. We now know from the interest rate applied that that is not the case. It is apparent, in terms of the bank bailout and the strong arming in respect of our corporation tax, that depending on our friends in Europe is a little like befriending Tony Soprano, namely, they may have interesting cuisine and wear sharp suits but when it comes to the bottomline they are only interested in their own selfish strategic interests.

That this issue has been before this House twice in the past couple of months emphasises the importance of our being able to attract overseas investment and the fact that we do not have a properly resourced or developed indigenous sector. It is for this reason, we over-rely on foreign direct investment. Foreign direct investment is always welcome. I would like if there was some of it in my constituency of Donegal. However, we may have to wait a while before that happens. This policy was pursued by former Taoiseach, Seán Lemass at a time when those in Ireland with wealth refused to invest in our structural development.

The common consolidated corporate tax base is the Trojan horse. It is one on which this Government should not concede because to do so will severely damage our economic fortunes.

Earlier, I stated that I was sceptical of this Government's intentions with regard to the common consolidated corporate tax base for several reasons. These include the statement of the Heads of State which the Taoiseach signed up to on 11 March. The Government has tabled an amendment stating that we are opposed to the CCCTB and because MEPs from Fine Gael and the Labour Party voted for the Bersani report which dealt with the issue of CCCTB. This issue has been discussed in Europe since the early 1990s and there have been several reports on the matter, including the Bersani report. The motion stated that the European Parliament:

[R]egrets that some member states still reject the need for greater co-operation on tax matters, in particular with regard to the tax bases applicable to companies, bearing in mind the fact that co-ordination between the member states with regard to company taxation is one of the instruments laid down in the integrated guidelines.

It goes on to state that the Parliament "stresses the importance of adopting a common consolidated tax base which will fulfil the requirement of greater integration in the internal market". This is what Fine Gael MEPs voted for at European level along with Proinsias de Rossa, MEP, and others within the Labour Party. This Government will allow the Trojan horse of the CCCTB to enter the fray and this will cause serious financial pressures on the State which, in turn, will result in one of the three options which I outlined earlier and which were outlined to me by the Department of Finance.

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