Shane Ross (Dublin South, Independent)

Less than three years ago I went on a radio programme with the then Minister for Foreign Affairs, Deputy Martin, to discuss the Lisbon treaty mark one. I voted against the treaty because the French Government was showing signs of launching an attack on our corporate tax rate of 12.5% and introducing tax harmonisation. It is no credit to me that the Minister scoffed at me at the time and argued that such a prospect was impossible and the idea that we should be frightened of the French or that they had designs on our corporate tax rate was a conjuring trick I was using to oppose the treaty. Tonight, Deputy Martin, to his credit, is manning the barricades against the French.

Within weeks of the Lisbon treaty being defeated in the first referendum, President Sarkozy visited Ireland to reassure us that the 12.5% rate was not under threat and we should vote for the treaty the next time around because we had assurances from the French and European Union, of which France held the Presidency at the time. I was present in the room when Mr. Sarkozy gave assurances about harmonisation. Equipped with those assurances, as well as the assurances embodied in some type of protocol attached to the Lisbon treaty and the reassurance of the then Minister for Foreign Affairs that the treaty was not a threat to the 12.5% corporate tax rate, I voted for the treaty in the second referendum. Today, we stand in some danger of being taken on our corporation tax rate.

I note what the Government has said about the corporate tax base. I also note the weakness in its motion which states that it will stand fast on the 12.5% but believes constructive and forthright engagement is necessary on the issue of the tax base. This statement is code for engaging in preparation for a retreat on the issue.

Ireland should resist the considerable pressure it is under. There is no reason the Taoiseach should not tell the European Council that our corporate tax rate is of such importance to our economy that we will not give way and raise the rate but are instead prepared to lower it. If such a statement drives President Sarkozy and Chancellor Merkel mad, so be it because it is time the rest of Europe realised that the corporation tax rate is our business and not theirs and taxation is a matter for sovereign governments.

Regardless of what any Member may say about the corporation tax rate and however much speakers, for good ideological reasons, may dislike the presence of multinationals in this country, these companies provide employment and are both the engine and the most vibrant part of the economy. It may not be a popular statement for me to make but multinationals, most of which are US companies, come to Ireland for two reasons. Ask Google, Microsoft, Hewlett Packard, Facebook or any of the other multinationals the reason they locate here and one will find that they are our 12.5% corporate tax rate and educated workforce. It is an uncomfortable truth that throughout the period of the collapse of the Celtic tiger multinationals remained a very powerful and important ingredient of our economy.

If we concede on the issue of the corporation tax rate, it will send a message to multinationals and investors in the United States and elsewhere that Ireland is not open for their type of business. There is no shame in competing with other nations through tax cutting. Competitive tax cutting, one of the few weapons left in our economic armoury, creates employment and has beneficial effects on the economy. Foreign direct investment should not be resisted on grounds of prejudice.

Given its importance, we must tell the French, Germans and others to keep their hands off the corporate tax rate. The House must send out a message that we support the Taoiseach who must show economic muscle and be prepared to take on these forces. He must also show that despite our economic weaknesses, of which we have many, we have the strength to say "No" to external threats to any tax incentive which remains within our power. The corporation tax rate is one incentive which we must preserve. There must be a definite and final message that a reduction in the rate may be introduced if it is necessary to give a further boost to our economy and such a measure would be accompanied by a referendum seeking the view of Irish people on the deal that has been given to us by the same powers who are threatening to influence our tax regime to our detriment.

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