Richard Bruton (Dublin North Central, Fine Gael)

Deputy McHugh went a good deal further in his statement than the content of the joint consultation paper issued by the British Treasury. There is an unduly defensive approach to the idea of Northern Ireland developing a stronger private sector and a fear that it will be an entirely negative story. The truth is that a stronger growing economy North and South would create mutual gains. We have to consider this issue in a more positive manner than simply asking how we can defend ourselves from a more competitive Northern economy, in terms of tax and other policy instruments.

That is at the heart of our programme for Government, in terms of how we can improve and develop our sectors. As the Deputy knows, the programme contains proposals to improve our tax mix and to reduce our rate of VAT and PRSI to strengthen the hands of companies competing at home and abroad. We have to be conscious that there is now a deliberate policy of developing a stronger domestic set of policy instruments in Northern Ireland which will have an impact. Competition is good for trade. We have to be aware of the issue but our overall strategy is to see the common development of the North and South.

Many of our efforts concern how the two Governments have co-operated under the Good Friday Agreement on a win-win basis. I agree that we need to monitor this matter closely and that there are areas where we are uncompetitive. There is a continuous debate about the flow North and South. We have to be conscious in framing our excise policy, VAT policy and so on of the potential for an impact on those who are living in Border areas and are vulnerable to swings from the currency and tax mix.

The view of the Deputy is one upon which I will reflect. We need to attune our strategy to a changed environment. It is a more positive opportunity than one about which I would be defensive. There are mutual gains in a stronger Northern economy with a stronger private sector where we can build mutual strengths. We need a sector which is growing strongly on our doorstep because our recovery will be export led. The more activity being developed by independent and strong economic policies in Northern Ireland, the better for all of us.

I welcome that the Deputy raised this issue. It is good that it was flagged. I may not have been briefed enough to respond to all of the issues he raised. I will reflect on what he said and respond in a fuller way directly to some of the issues which are not addressed in the reply provided to me.

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