Micheál Martin (Cork South Central, Fianna Fail)
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I propose to share time with Deputy O'Dea.

Ciarán Lynch (Cork South Central, Labour)
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That is agreed.

Micheál Martin (Cork South Central, Fianna Fail)
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I move:

That Dáil Éireann:

— confirms its absolute commitment to the maintenance of the 12.5% rate of corporation tax;

— is opposed to any Irish participation in proposals to introduce a consolidated corporate tax base within either the eurozone or the European Union as a whole;

— notes the clear evidence that investment attracted to Ireland by our policy on corporation tax is largely won against non-European Union countries and is therefore a net benefit to the EU; and

— believes that any move away from these established policies would undermine Irish employment and prospects for a strong recovery with serious implications for the wider European economy.

Fianna Fáil has introduced this motion in order that the new Dáil can reaffirm the broad political consensus that has obtained for many years concerning the need to retain Ireland's current corporation tax regime. At a time when a small number of people in certain countries have become obsessed with our corporation tax rate, Dáil Éireann should demonstrate that this is not a point on which Ireland can or will make any gestures to satisfy the foolish and ill founded negotiating positions of a handful of countries. Following the Taoiseach's comments last week and our vote in favour of the then Opposition's motion last year, we hope and expect that this motion will be supported without amendment by the Government parties.

There is not one shred of evidence that Ireland's corporation tax rate is a major issue for the economic future of any other European country, but there is overwhelming evidence that it is vital for the economic future of Ireland. It is not just about the rate but about the manner in which it is administered in a fully clear and transparent way, giving investors the long-term security which helps them to plan for growth and job creation. At a time when the challenge facing Ireland and Europe is to stimulate the economy and create jobs, pressure to increase the tax to be paid by investors and innovators shows a detachment from the reality of the situation in Ireland. It also serves to undermine the core principles of the great European project which has, up to this point, earned it strong popular legitimacy.

The background to Ireland's corporation tax policies is often misrepresented and this House regularly hears false claims about when and how the 12.5% rate was implemented. It is not the case that we have had a low single unified rate for decades. For many years we had a low 10% rate for the manufacturing sector which was particularly designed to attract inward investment, alongside a much higher rate for all other activity. This higher rate stood at 36% in 1996. In the mid-1990s it was correctly held in Europe that this system of dual rates represented a discriminatory approach towards one sector of the economy. Therefore, it was agreed to move to a unified rate.

Following a series of detailed studies by officials, the then Minister for Finance, Deputy Quinn, announced the then Government's intention to unify the rate at 12.5%. It is a gross distortion of history to say, therefore, that the 12.5% rate was introduced in early 1997. There was no formal agreement with the European Union; there was no legislative provision and, critically, no financing provided. As the record shows, in the following year the new Government, led by Fianna Fáil, carried out negotiations with the European Commission and reached an agreement, the enactment of which was provided for in the Finance Act 1999. In 2003 the move to the 12.5% rate was completed.

This is not the lowest corporation tax rate in either Europe or the world. Unlike in many European Union countries, it is implemented fully in order that the effective tax rate is very close to the nominal tax rate. The inward investment authority in France advertises its rate as being just over 8%, while the effective rate in Germany is also lower than ours. There are places in Europe where it is possible to get close to a zero corporate tax rate, together with investment incentives which we can never match.

What makes our corporation tax regime an effective attractor of investment is that it is reliable. It is administered fairly and transparently. A company setting up here knows exactly what its tax liabilities will be, not only during the start-up phase but also in the long term. I held many meetings during my time as Minister for Enterprise, Trade and Employment with prospective investors in Ireland. Time and again they said they were getting better offers from other countries on corporation tax rates. In addition to our skilled workforce and investment policies, we won those investments because of the strong political consensus behind maintaining the corporation tax rate.

It is also the case that the overwhelming majority of investment projects we have won have been against non-EU countries. In winning technological investments, for example, our main competitors were Singapore, Switzerland and Israel. In the case of medical devices, Puerto Rico was until recently a major competitor. Ireland has won facilities of global, rather than just European, significance. Our ability to compete and win in these areas should be a source of European pride, not envy.

A major aspect of our corporation tax rate that has been missed by those who complain about it is that every relevant authority which has reviewed it has confirmed that it does not represent a distortion of the Single Market. It fully adheres to our legal commitments to the European Union. This volume of analysis allows us to conclude that the moves being made against the policy are purely political. Any fair review of the many clearly identified distortions of free trade and fair competition within the Union, many of which remain in place in spite of Commission findings, will conclude that our corporation tax regime is utterly marginal.

There is no doubt that some countries have developed a deep antipathy towards our corporation tax policies. It has become almost a fetish for representatives of these states to get excited about them. I had many debates with ministerial colleagues from other countries about this and the former Taoiseach, former Deputy Brian Cowen, had a major disagreement with the French President, Mr. Sarkozy, at his last Council meeting which was both colourful and passionate. What is amazing about this is that not one shred of evidence has been produced to show that our corporation tax rate is anything other than a minuscule part of broader European economic performance. Our economy is 1% of the size of the European economy. Our policies have an impact on the French and German economies which is close to zero.

Ill founded as it clearly is, there is no doubting the strength of German and French desires to force us to increase the rate of corporation tax. Equally, they have no doubt as to the strength of our resistance to their pressure. As time has passed, a strategy has evolved to secure a forced harmonisation of corporate tax rates by the back door. The motivation behind the push for a consolidated corporate tax base, CCTB, has only ever been to raise the level of corporation tax paid by companies based here and in other countries with low rates. From its inception, CCTB has been a solution in search of a credible problem to address. The justification behind it at the point of its conception was explicitly harmonisation but growing resistance from many countries forced this to be changed to "reducing the costs of compliance". The reality is that the benefit would be at best marginal and is itself an item low on the agenda of European industry. CCTB is a priority only for governments which want to increase revenue. Nobody who actually runs competitive and job-creating enterprises is demanding it.

An independent academic study was published last Monday of the likely impact of the Commission's latest CCTB proposal. It states clearly that the measure, if implemented in full, would likely be of no net benefit to the European economy as a whole. It would also be of negligible, if any, benefit to France and Germany. There would, however, be a direct and potentially devastating impact on Ireland's economy. The only independent study of the CCTB proposal before the Council shows it would reduce our national income by more than 3%. That would be a quick and permanent reduction in GNP of more than 3%. In this circumstance we can say, with apologies to no one, that agreeing to CCTB would not be a "gesture" but would in fact destroy jobs, further undermine the public finances and cripple our fragile recovery.

While the Taoiseach has been clear on CCTB, this has not been the case with all of his Ministers, some of whom appeared this weekend to suggest we should find a way of engaging with the issue. There is no current or even theoretical model of CCTB that does anything other than offer a destructive impact for Ireland. We must be clear that we will not participate in CCTB. No subtlety and no fudge will work in this case. There are no potential benefits but only devastating costs to CCTB and this will not change with negotiation.

Our commitment to reconstructing the financial system in such a way as to respect the interests of the entire eurozone is a major "gesture" by any standards. We can and should offer to introduce new fiscal rules designed to prevent unsustainable spending. Equally, we can and should participate with the European Central Bank in reforming financial regulation. These are responsible and relevant measures which should more than meet the concerns of fellow member states if they remain genuinely committed to the core European Union principles of solidarity and collective action. We should also insist that our partners acknowledge the importance of the whole Lisbon treaty process. Tax harmonisation was explicitly excluded from the competencies of the Union. The first referendum was, in part, lost because of scare stories about our corporation tax being in danger. The second referendum was also, in part, won because we received detailed reassurances and legal guarantees that our right to set our own policy would be fully respected.

I have no doubt that the only way we can read the Lisbon treaty results is to say that the people have already had their say on this issue. This is not some abstract political or elite economic issue. The Irish public understands and supports public policy on corporate taxation. No Irish Government or Parliament has the legitimate right to make any change whatsoever to this policy without the people's consent through either a referendum or a clear electoral mandate.

Both Labour and Fine Gael stood on unambiguous manifestoes opposing both a rate rise and CCCTB. This commitment was included in the programme for Government which was endorsed by both parties, as well as by the Dáil. No wriggle-room or clever wording is possible to enable a negotiation. If Ireland wants to have a future then Ireland cannot compromise on this, and this should be accepted by any country which genuinely wishes us to recover and for us to do so within the euro.

This motion is designed as a positive statement, not a defensive one. We are a small nation on the edge of Europe. We do not have available to us large numbers of policy instruments to help us to be prosperous in a globalised world. Through our membership of the Union and eurozone we accept many constraints on our action. To try to force us to abandon a vital economic and employment policy would mark a betrayal of the spirit of solidarity of the Union we joined. It would mark an abandonment of the strategy for integration adopted by a previous generation of visionary leaders. That lack of vision at the heart of the leadership of the European Union gives rise to fundamental concerns about the future of the Union and its capacity to deal comprehensively with the issues Europe faces related to the euro and monetary union. Any attempts to undermine our corporate taxation would put ill-founded national prejudice ahead of clear evidence. For the sake of a gesture which would be of no significant benefit to the countries demanding it or to Europe as a whole, Ireland would have its recovery hopes fatally undermined.

This is an issue which demands political unity from us. Ireland is a responsible member of the European Union but no one has the right to ask us to undermine our own economic future. I commend the motion to the House.

Willie O'Dea (Limerick City, Fianna Fail)
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I second the motion. It is regrettable that we feel it necessary to have this debate to reiterate our opposition to any change in our corporate tax regime. I was recently involved, along with colleagues from all sides, in trying to persuade the people of the country to support the Lisbon treaty and I did that on the basis that our income tax and corporate tax regimes were inviolable; they were matters for Ireland alone and nothing could ever happen to change that. President Sarkozy himself came to Dublin during the recent Lisbon treaty referendum and gave the same assurance in unambiguous terms.

It is also regrettable because everyone is aware, and none more so than Chancellor Merkel and President Sarkozy, that this country is in an economic crisis of the first magnitude. They are aware that the country is disproportionately dependent on foreign direct investment. Foreign direct investment has been the generator of a great deal of Ireland's wealth. They also know that the foreign direct investment that has flowed into the country, particularly from the United States, is inextricably linked to our single, simple rate of corporation tax. The regime, which has been in place for 14 years, has become a brand; it is administratively simple and it is certain.

I regret that moves in Europe enjoy support from some in this country. An article by a journalist in a leading national newspaper asked, "Are the multinationals really that economically shallow that if we bumped up the rate from 12.5% to 15% or so, that they would up sticks and leave? What companies like that really want is certainty". I quote that as a typical example of someone who is incapable of even taking his own side in an argument. Simplicity is the attraction of the Irish corporation tax regime. If the rate was increased, or even decreased, that certainty would be removed and that is the attraction of the scheme.

The effective rate of tax in France is 8.2%, the effective rate in Luxemburg is 4.1% and in other countries, the effective rate is almost 0%. In Ireland, the effective rate is 11.9% but in those other countries, the rate depends on allowances that can be claimed and on the activity engaged in. Anyone applying for the allowances must plough through legalese and employ lawyers and tax accountants while the central attraction of the Irish system is its simplicity. Furthermore, recent studies by the Organisation for Economic Cooperation and Development have shown a 1% increase in corporation tax in this country would lead to a 3.7% decline in foreign direct investment. We are into the law of diminishing returns.

If an attempt to raise the rate of corporation tax from 12.5% is the direct assault on Ireland, CCCTB is the Trojan horse. Time does not permit me to go into the technicalities but it means any company that locates its headquarters here with a view to selling overseas, instead of being able to attribute its profits to Ireland, and pay tax to the Irish Exchequer at 12.5%, will see its income allocated to the other countries in which it trades. The rules for allocation will be drawn up by the EU and if there is a problem with interpretation, they will be interpreted by the EU court. It does not require the wisdom of Solomon or a degree in economics from Harvard to conclude that this will fundamentally and fatally undermine the attractiveness of Ireland's corporation tax regime. There would be no point in fighting for a 12.5% rate; the rate would be irrelevant because there will be no profits to apply the rate to.

In its submissions on behalf of CCCTB, the European bureaucracy has advanced two arguments. The bureaucrats tell us it will bring simplicity and reduce compliance costs and that it will involve a lower rate of tax. No one seriously believes that at a time when the corporation tax take in Europe is dropping, the European bureaucracy really intends this convoluted system to result in an actual reduction in tax rates. Ernst and Young has studied the matter by applying CCCTB to business in the real world and it reached the conclusion that:

CCCTB would, in the opinion of the businesses surveyed, lead to an increase in compliance costs. In addition to the average increase of 13% in compliance costs, businesses would also incur substantial once-off costs in the transition to a new system.

Ernst and Young's report also indicates:

The majority of businesses found that their corporate income tax burden would actually increase under a CCCTB. This was largely because the apportionment mechanism meant that a greater proportion of income would be apportioned to, and taxed in, Member States with higher corporate tax rates. Only one business ... was found to have a lower corporate tax burden under a CCCTB, and this occurred as a result of benefiting from the current year cross-border loss relief.

That it the position and it could not be simpler.

There is a major level of foreign direct investment, FDI, in the mid-west reason. On foot of my long career as a politician, I am aware that, in practice, multinationals establish headquarters in Ireland and then proceed to sell their products to other, richer European countries. Under what is proposed, the profits on which these companies pay tax to the Exchequer will be allocated to those countries to which I refer and the tax will be then paid in those jurisdictions. In other words, the tax will move directly out of our coffers and into those of these richer states. As a result, the balance between rich and poor will be redressed in reverse.

Peripheral and poorer states are more than entitled to argue that the best way to redress the balance between them and other states is through the proper use of their competitive tax advantage. After all, is that not what the EU is all about? Is that not what was intended in the case of the Cohesion Fund and Structural Funds? Studies have found that countries such as Poland, the Czech Republic and Slovakia would lose most revenue under a CCCTB. They also found that Ireland would lose most of all.

I am slightly confused. The Taoiseach made an unambiguous statement with regard to a CCCTB representing tax harmonisation via the back door. However, I heard other members of the Government make different statements. I do not want the Taoiseach to return from the forthcoming summit and state that, as a result of some miserly concession he obtained from the Franco-German axis, we are going to engage constructively with the concept of a CCCTB. How can one engage constructively with something that will deliver a potentially lethal blow to the heart of the economy? When he returns from the summit, I want the Taoiseach to state that he has spurned any attempt to draw Ireland into supporting a common consolidated corporate tax regime. To paraphrase the words of a well-known music hall performer, France and Germany's attempts at conversation in this matter should remain unanswered.

We persuaded the Irish people to vote in favour of a number of referenda on foot of assurances to the effect that our tax system would remain within our control. The people kept their side of the bargain and it is now time for others to do likewise.

Michael Kitt (Galway East, Fianna Fail)
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I wish to share time with Deputy Calleary.

Ciarán Lynch (Cork South Central, Labour)
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There are 15 minutes remaining in the slot. Do the Deputies propose to share them equally?

Michael Kitt (Galway East, Fianna Fail)
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Yes. I welcome the opportunity to contribute to the debate on this motion. Earlier, my party leader clearly affirmed our absolute commitment to the maintenance of our 12.5% rate of corporation tax. I welcome the fact that the programme for Government contains a commitment relating to the retention of this rate. Most parties agree that our rate of corporation tax is essential in the context of the country's economic recovery.

Chartered Accountants Ireland has pointed out that competition - including tax competition - is an essential component of the single market. There is also clear evidence that investment attracted to Ireland by our policy on corporation tax is largely won against non-European Union countries and is, therefore, a net benefit to the EU. I have seen evidence of this type of investment in Galway, where companies involved in the medicare-pharmaceutical industry have established very good track records. We cannot move away from the important employment created by these companies and thereby undermine a strong national recovery.

There are serious implications for the wider European economy. Ireland's corporation tax regime is undoubtedly under attack from other EU member states. These attacks are extremely unfair because Ireland collects a significant share of its taxes from companies. EU member states, particularly those in the eurozone, must retain their tax sovereignty as an important lever of fiscal control. The Irish corporation tax system compares well with the systems that obtain in other EU member states in the context of achieving actual and relative yields. The bottom line is that global recession has robbed all European countries of tax revenues from all sources.

In view of the fact that expenditure has curtailed, there is an urgency in the context of raising taxes. We have been informed that there are firm proposals regarding the establishment of a common consolidated corporate tax base, CCCTB. I am of the view that the CCCTB is unwieldy and irrelevant and that its time has passed. The conventions and treaties underpinning the European institutions do not permit the EU to legislate for any direct tax such as corporation tax without the unanimous agreement of all 27 member states. An important attribute of the VAT system is that member states are not obliged to ask each other's permission in order to vary their rates. The European VAT system is stated by way of EU directive. There is no comparable directive in respect of direct taxes such as income tax, corporation tax, capital gains tax, etc.

For many European member states, monetary policy has already passed to the European Central Bank, ECB. Individual, sovereign member state Governments must retain the capacity for some control. Taxation policy remains the key tool available for domestic economic regulation.

It is interesting that the proposals relating to this matter were put forward by the French and German leaders. The normal pattern is that EU proposals are put forward by the Commission. The introduction of a CCCTB could help to complicate matters. I understand that no member state can be forced to accept a CCCTB. As Deputy Martin stated, during the referendum campaign on the Lisbon treaty the European Commission made it clear that corporation tax would not come under threat.

Questions have been raised with regard to whether European multinationals will pay the same amount or a smaller amount of tax under a CCCTB. I suggest that this idea is no longer relevant because it would serve to distort the distribution of taxes within the European Union. What may have been relevant ten years ago, is no longer relevant in 2011.

There has been some discussion with regard to a new policy regime. The Minister for Finance dropped a number of hints in this regard. I would like to be provided with further details in respect of this matter. The discussions taking place at European level are extremely important. Mr. Jean-Claude Trichet has spoken a great deal with regard to what is right for the European economy. It is important to stress that the recoveries of the European economy and the Irish economy are interlinked. Clarification is required with regard to what is occurring at the discussions to which I refer. I hope this matter will be debated further when the Taoiseach returns from the forthcoming summit.

During the recent general election campaign, every candidate referred to job creation. We must take this opportunity to stress that we are concerned with regard to creating and retaining jobs and that we will not walk away from the policies that have led to jobs being created in the past. Why should we undermine employment in this country or the prospects for economic recovery? The increase in exports and the level of investment on the part of multinationals are both welcome and positive developments. The introduction of a new system would reduce the attractiveness of member states which currently have in place low-tax regimes and would lead to FDI being diverted to countries outside the EU.

During a radio interview earlier today, the former Taoiseach, Mr. John Bruton, provided a very good history of corporation tax. He made the point that corporation tax is not new but that it has been in place for many years and is something we all value. I hope corporation tax will remain the cornerstone of this country's industrial policy. Is it right that we should lose out to competitors outside the EU, particularly in the context of the medicare-pharmaceutical industry?

I support the motion tabled by the Fianna Fáil Party. I welcome the fact that there is all-party support for it. I hope we will obtain a good outcome from the summit the Taoiseach is due to attend later in the week.

Dara Calleary (Mayo, Fianna Fail)
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I welcome the chance to speak once again on the question of corporation tax. I wish the Minister of State, Deputy Brian Hayes, well in his new brief. I wish him many nights of providing Front Bench cover. He might even take the odd Adjournment debate matter, if he really misbehaves. I wish him well in his new post in this realm and in the realm of public sector transformation. I will be happy to give him any assistance he requires.

It is only a few months since the 30th Dáil passed a similar motion in complete support of Ireland's corporation tax rate, ahead of the last challenge to it. It is fitting that the 31st Dáil should do so again. We are merely reaffirming the views of those who elected us in the recent general election and who spoke in 2009 during the second referendum on the Lisbon treaty. At the time, the legal guarantees of our corporation tax rate were fully supported by President Sarkozy and Chancellor Merkel. Very little has changed since in our relationship with France and Germany or in the importance of our corporation tax rate, not just to Ireland but to the European Union as a whole. Many of the companies which locate in Ireland make a choice between locating in Ireland or outside the European Union. The loss of employment to Ireland would be a loss to the entire European Union.

This morning I heard a report on "Morning Ireland" on next weekend's elections in Baden-Württemberg in Germany where Chancellor Merkel's party is on the verge of losing power after 40 years. Apart from feeling some affinity with her political travails, I found the report interesting when business people, as opposed to politicians, were interviewed. One business person interviewed was a manufacturer and he mentioned our corporation tax regime as an issue. However, it was mentioned in a way that made it clear that it was not having an impact on his business. What was having an impact on his business and ability to trade in foreign markets was the high labour rate in Germany and the costs associated with the various rates. We have had to make huge sacrifices in the past three years in adjusting our labour costs, in both the private and public sectors. To hear someone in another country which has not made these sacrifices try to use our corporation tax rate as a reason to push more sacrifices on us was slightly frustrating.

Our corporation tax rate only opens doors for us. We have to prove on so many other fronts that in Ireland we are able to attract the kinds of industries to which Deputy Kitt referred. We are not the leading player in the pharmaceutical sector purely by dint of a 12.5% corporation tax rate. We are the leading player because of the strength of our education system, the flexibility of employment law, our infrastructure and the level of investment in third and fourth level education. Our strength in the food sector owes much to the traditions of the agricultural community, the investment it has made in its products and research into new products. It is not the 12.5% corporation tax rate that maintains Kerrygold, Avonmore or other food multinationals. If they were not trading out of Ireland, they would not be trading out of any EU post.

This weekend, no matter how much pressure the Taoiseach is put under by his friends, there must be absolutely no doubt that our 12.5% rate will remain. If we even commit to a review or some political compromise, we will place a question mark against the rate and put at risk investment that has been hard won in recent years by the IDA and the Irish teams in many countries throughout the world.

One of the best decisions of the new Government is to incorporate the trade function of the old Department of Enterprise, Trade and Innovation with those of the Department of Foreign Affairs. We are blessed with top class officials representing Ireland abroad, whether in the Department of Foreign Affairs, Tourism Ireland, Enterprise Ireland or any of our other agencies. We bandy the word "quango" about, but we ignore the very good work undertaken. It is their work that attracts companies to Ireland and entices them to come through the door, but to open the door we need firm commitments and clarity regarding the 12.5% rate.

Let us not fool ourselves. There are forces at work to reduce our reliance on this rate. What will be next if these forces get their way on corporation tax? As someone who has been very supportive of the European project for many years, I find it difficult to ask that question, but it must be asked. It is clear that our cost model does not suit the European cost model. The sacrifices this country has made to reduce costs and increase competitiveness, particularly in the past three years, do not suit a model that has not made these sacrifices. If we give way on corporation tax, we may be opening the gates to other changes that will be to the detriment of the economy.

The last election was about jobs and stemming the flow of emigration which is haunting the country again. It was about responding to the fears of parents and grandparents who were seeing the next generation leave, having made huge sacrifices for their education. We must do everything to protect the 250,000 jobs in our multinational companies and the hundreds of thousands of other jobs dependent on them. We must do everything to create and protect the conditions to attract more jobs, while ensuring we have a sufficiently robust domestic economy to support the creation of homegrown jobs that will survive in that economy.

Any give-in, in whatever circumstance, on our corporation tax rate will immediately impact on employment, market sentiment and domestic consumption which is already at a very weak rate. We must be resolute this weekend. The Taoiseach, the Tánaiste and the Minister of State, Deputy Creighton, must be absolutely resolute that there will be no give on corporation tax or any of the conditions we have created to attract inward investment. In a European Union focused response to the debt crisis faced by the European Community, we must emphasise the fact that Ireland's corporation tax regime creates employment in Europe as a whole that otherwise might not be created. Our corporation tax rate opens the door for Ireland. It is the other things we provide that lead to the creation of jobs. If the doors are not opened, jobs will be lost to Europe.

This is not a time for optics or false fights. This is a real fight. We give the Government every support in its fight this weekend, for all the reasons I have outlined and that will be outlined by other Deputies. Ministers must not come back with any sense of compromise or doubt over the corporation tax rate. To do so would damage our economic prospects even further.

Brian Hayes (Dublin South West, Fine Gael)
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I move amendment No. 2:

To delete all words after "Dáil Éireann" and substitute the following:

"— recognises that the Programme for Government clearly states that the Government will "Keep the corporate tax rate at 12.5%";

— recognises that the 12.5% corporation tax rate will support Irish economic recovery and employment growth by attracting foreign investment;

— recognises that the Government, alongside other European member states, remains highly sceptical about many aspects of the Common Consolidated Corporate Tax Base proposal (CCCTB) but that the Government believes that a constructive and forthright engagement with all of our European partners on this issue will result in the best outcome for Ireland and for the European Union as a whole; and

— notes that, in particular, as confirmed in the Pact for the Euro, direct taxation is a matter of national competence and, more generally, that unanimity is required in respect of decisions on tax issues."

With the permission of the House, I will share my time with Deputies Peter Mathews, Joe McHugh and Joe Costello.

I thank Deputy Calleary for his kind remarks concerning my appointment and recognise the work he did in the previous Government, particularly on the issue of public service reform.

This discussion affords the House the opportunity once again to send a clear signal to our European partners and business that there is consensus on Ireland's corporation tax policy. Deputies opposite will recall that when in opposition Fine Gael tabled a Private Members' motion last November calling for cross-party support for the maintenance of the 12.5% rate of corporation tax as an indispensable tool for growth, job creation and economic recovery. The overall message is clear and unambiguous. Our commitment in the programme for Government to the 12.5% rate will be upheld. That is not to say, however, that we will not live up to our responsibilities and engage with our European partners on any tax proposals brought forward by the European Commission. The CCCTB proposal has been brewing for some time and the publication of the directive will, if anything, finally enable a constructive and forthright engagement to begin on the issue. The Member for Limerick East, Deputy Willie O'Dea, said earlier that he did not want to hear from the Government that it would engage constructively on the common consolidated corporate tax base, CCCTB, proposal. As Members are aware, the Commission can make a proposal and it is then a matter for the member states to engage with that. Not to engage with that matter would be a gross act of betrayal of national sovereignty. As a State, we have solid vested interests in ensuring this position is upheld and in ensuring that our case is put. To actively disengage from a process that is under way, at least in terms of the discussion that will occur, would not be in our national interest and would not serve the interests of this Parliament or of the Government that has been elected by it. We need to be mindful of this as the debate continues.

We have very solid data to support our scepticism of the proposal. With that data, we will ensure all of the arguments are brought to the table on what is a key issue, not just for Ireland but for Europe as a whole. Were engagement to occur, it might well be positive in that a very bright light could be shone on this matter in all of the member states, particularly in the eurozone countries, which would show the fundamental difference between the headline tax rate and the effective tax rate that applies in those states. The debate around tax harmonisation in Europe has been around for decades and we can anticipate many more years of debate before any final positions will emerge.

Since the 1950s, Ireland has used its corporate tax strategy to encourage the growth of domestic business and attract foreign direct investment. The 12.5% tax rate is critical to supporting our economic recovery and employment growth. Any move towards converging or harmonising the rate of company tax would substantially damage Ireland's ability to attract foreign direct investment and hence our ability to grow our way to economic recovery. Furthermore, certainty is a key element desired by investors and to abandon the commitment to the 12.5% rate would be seen as a major change in policy.

Estimating the behavioural effects of a corporation tax rate change is difficult but they are significant. An OECD multi-country study found a 1% increase in the corporate tax rate reduces inward investment by 3.7% on average, a point referred to by other Deputies. Research by the OECD also points to the importance of low corporate tax rates to encourage growth. In ranking taxes by their impact on economic growth, corporate tax was found to be most harmful.

It is important to remember that Ireland is geographically and historically a peripheral country in Europe. A low corporate tax rate is a tool to address the economic limitations that come with being a peripheral country as compared to a core country within the heart of Europe. Based on discussions with multinational corporations, it is likely that if much of the foreign direct investment that comes to Ireland went elsewhere, it would be lost to Europe entirely. Ireland's 12.5% corporate tax rate is critical to supporting our economic recovery and employment growth. It is central to our industrial policy and is an integral part of our international brand.

While much has been said concerning the fairness of the 12.5% rate, Ireland's corporate tax system is open and transparent. The clear headline rates of 12.5% for trading income and 25% for non-trading income make our corporate tax system extremely transparent to those international companies wishing to establish here. Ireland's low corporate tax system does not discriminate based on company size or ownership, and it features a low tax rate applied to a wide base. While the effective rate of corporate tax is difficult to calculate or compare across countries, studies indicate that Ireland is one of the few countries in the European Union with an effective rate in or around the statutory corporate tax rate. This cannot be said for other countries within the Union.

It is also important to note that the level of corporate tax revenue raised in Ireland is similar to other EU countries. Corporate tax revenue in Ireland in 2008 was equal to 2.9% of GDP, just above the average of 2.7% for the EU as a whole, and has been consistently higher over the past decade.

Ireland is a small open economy with a heavy concentration of foreign direct investment. There are many reasons foreign multinationals decide to locate to Ireland, with which we are all familiar. There is the access to mainland Europe, our well-educated young population and the cultural and economic links with our key trading partners. Our tax regime is crucial, as it gives certainty and confidence to business. This is why we need to get the message out, now more than ever, that there is nothing on the table that threatens our corporate tax regime.

We are committed to doing everything possible to attract and assist foreign direct investment to Ireland. Foreign direct investment in the corporate sector in Ireland is significant and substantial. Despite a relative decline since the beginning of the recession in 2008, Ireland was ranked fifth in the OECD in terms of inward investment stock as a percentage of GDP. Equally important, Ireland ranked seventh in OECD in terms of the relative size of its outward investment.

Foreign investment in Ireland is substantial in nature. A recent report ranked Ireland as the top creator of employment from foreign direct investment, relative to population size. IDA supported companies alone sustain more than 135,000 jobs in the economy. Multinational businesses, Irish and foreign owned, account for around 75% of corporate tax revenue paid in Ireland and this share has been rising during the recession as the domestic focused companies are more severely affected by economic conditions in Ireland.

In 2010, the foreign owned sector was the key growth engine of the economy. Real exports jumped by 9% year-on-year in the first three quarters of 2010. Data from Forfás show that 90% of exports from agency supported firms are from foreign owned companies, which also directly employ around 140,000 workers on a full-time basis.

We have made it clear that we would not accept any reference to the harmonisation of corporate tax rates or agree to any range of rates or minimum rate level being included in the pact for the euro which would necessitate or imply any movement away from the 12.5% corporation tax rate. Ireland could not accept any agreement or commitment in the pact to the introduction of an EU CCCTB, as this would effectively negate the value of Ireland's 12.5% rate given it would lead to effective harmonisation of rates. We would also be highly sceptical of any proposal for a common tax base without consolidation, as it cuts across national sovereignty in taxation matters, could impact negatively on certain specific sectors of the economy and would severely limit national discretion in terms of being able to change the tax base at any future date.

However, it is important, for several reasons, that our response to the publication of the CCCTB proposal would be measured. The European Commission has the right of initiative for bringing legislative proposals to the European Council and there is nothing in the treaties that precludes the Commission from coming forward with such a proposal. The proposal has been flagged for some time in the Commission's legislative proposals. In addition, the publication of the draft directive is only the beginning of a very long process. The question of harmonising company tax in the EU has been around for decades and we can anticipate many more years of work before any final proposals will fall for consideration.

The current policy environment on the issue is fluid. Many member states have become increasingly sceptical of the proposal, with very few apparently in favour of a consolidated corporate tax base where corporate profits are combined in a single pot and re-allocated based on a formula. A further key policy consideration for the Government is that we want to ensure there is a full and frank debate on the proposal among all 27 member states, as required under the treaties, before there is any suggestion of the proposal proceeding by way of enhanced co-operation among a group of nine or more member states. Accordingly, we propose to make it clear that while we are very sceptical about many aspects of the CCCTB, we are willing to work constructively with the Commission and other member states on the issue so long as the principle of unanimity on tax matters is fully respected and understood. Regarding the CCCTB proposal, we have always been aware of the Commission's intention to bring forward a proposal of this type so it came as no surprise when it published its proposal last week. A CCCTB would essentially introduce new common rules for calculating company taxation across the EU and replace the universally accepted separate accounting with arm's length pricing method for allocating group profits across borders with a rule of thumb based on each member state's share of the assets, payroll, employees and sales of any group. Each member state's share of the profits would be taxed at national tax rates, thereby preserving national sovereignty over the rate of taxation.

Although common rules across the EU would impinge on national sovereignty in taxation, it is the consolidation element of the proposal that presents the greatest threat. It proposes that the individual taxable profit or base of each company within an international group would be aggregated or pooled to form a consolidated tax base and that consolidated tax base would be reattributed to those same companies based on their presence in any member state, that presence being measured by the scale of assets, employees, payroll and sales in other member states compared to the group as a whole. This is referred to as the shared mechanism under a system known as formulary apportionment.

The proposal, as drafted, insists that each member state would preserve its right to tax that part of the tax base allocated to companies within its jurisdiction by applying its own tax rate and consequently it does not infringe national sovereignty over the tax rate. However, maintaining sovereignty over the tax rate would be rendered meaningless should our tax base be depleted under the new shared mechanism proposal. Furthermore, the proposed shared mechanism would lead to the effective harmonisation of rates as the group's total taxable profits would be subject to a basket of EU tax rates based on the locations of its operations.

Our strategy for the future will be to seek to express our scepticism of this proposal. Our arguments will be based on the results of our economic impact assessment which points to an overall reduction in employment and foreign direct investment in the EU under both a voluntary and mandatory proposal the Commission might bring forward. This Government's corporate tax strategy was given an overwhelming mandate by the Irish people in the recent general election. The Irish are clued in enough to know the importance of that strategy to our economic development and recovery. They also appreciate the need for us to engage with our European partners to address the massive challenges that confront not just Ireland, but Europe as a whole. For that reason our Taoiseach's message in Brussels at the last summit was clear and unambiguous as will be his message this week. Corporation tax remains a national competence and although we will engage in structured discussions on tax policy issues, we expect our national sovereignty will be fully respected.

I look forward to a constructive debate in the House on this issue which should serve as a useful addition to the Taoiseach's armoury in his discussion with colleagues later this week.

Jack Wall (Kildare South, Labour)
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Deputy Joe McHugh has five minutes.

Joe McHugh (Donegal North East, Fine Gael)
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I formally second amendment No. 2. I congratulate the Minister for Finance, Deputy Michael Noonan, and the Taoiseach, Deputy Enda Kenny, for being proactive in ensuring we hold on to our 12.5% corporation tax rate.

By being proactive we are sending a very strong signal that we intend to create certainty and that we are very committed to the foreign direct investment already in the country. We are also looking to ensure we can be in a strong position to attract further foreign direct investment.

Initially we should separate two issues. The debate at a European level has introduced some confusion as the common consolidated corporate tax base, CCCTB, debate has been mixed with the corporation tax rate debate. If a gentleman by the name of Mr. Sarkozy speaks about increasing our corporation tax rate and simultaneously changing our CCCTB model at a European level, confusion will come about. This will also blinker the real debate. There are different percentages of tax write-offs from France and the United Kingdom, for example, and to use accounting terminology, the books are done in different ways. We must be very clear about the CCCTB debate and separate it from the discussion concerning corporation tax.

I have been in contact with numerous people concerned with foreign direct investment in this country in the past six months, and what they require now is certainty. The Minister for Finance is trying to create that certainty. Any company, either a small or medium enterprise or one concerned with foreign direct investment, in planning or looking to expand or invest, will require a five-year plan. With all this uncertainty, such scope does not exist. It is an important point in the debate.

President Sarkozy is speaking about our corporation tax rate and at the same time there is an issue with our fishing territory, specifically relating to the different percentages of fisheries catch among the French and Spanish, for example. I am calling for us in the House to lead a more proactive engagement with MEPs across the political divide and across Europe. There must be a constructive process as a priority as the electorate is looking for something different, which was reflected in this general election. The electorate does not just demand something different on the basis of optics or pedantics; it wants a constructive conversation with European counterparts. Currently there is uncertainty regarding the euro and the further expansion of the EU so we must engage more constructively with MEPs at a European level.

The Taoiseach and members of my parliamentary party will continue with this dialogue. A colleague and Minister, Deputy Simon Coveney, has already started that debate because he had the opportunity of being an MEP and being in this House as a member of the Opposition. He is now in a ministerial portfolio but has rich experience which we should tap into. We must be a country which leads. We are already doing it at a ministerial level through Deputy Michael Noonan and the Taoiseach and we must continue it through with our colleagues across Europe. It is important for this to contribute to certainty that is needed as currently, companies involved in foreign direct investment and multinationals are unable to have a proactive and positive outlook for the future.

Joe Costello (Dublin Central, Labour)
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I welcome the opportunity to speak to the motion and compliment Fianna Fáil on proposing it tonight. We have a new Government with new priorities; the two fundamental priorities articulated in the Government's joint manifesto are to ensure that we renegotiate the bailout - a dismal piece of negotiation where no Minister was involved - and the creation of a budget for job creation within the first 100 days of the Government. Those two pillars of the joint manifesto are linked; we must renegotiate the bailout deal and ensure there is domestic growth in the economy.

The negotiation to date has been something of a standoff in that there is an offer of a 1% discount if we give up our 12.5% corporation tax rate. That is not a negotiation. Some of the people who strongly favour a change to the 12.5% corporation tax rate, including Mr. Sarkozy and Ms Merkel, are seeking a gesture in the process. That is unsatisfactory. We all remember the Lisbon treaty and legal assurances and guarantees given to Ireland at the time. They were very specific in wording, which was that: "Nothing in the Treaty of Lisbon makes any change of any kind for any member state to the extent or operation of the competence of the European Union with regard to taxation."

The European Union has no specific competence regarding taxation and any changes which may take place must come about unanimously. It was clearly understood that the competence relating to taxation rested solely in each individual member state, and that remains the case. We must ensure that is the outcome of any negotiations and that any reference to our corporate tax rate is not used as a bargaining tool relating to the items discussed. The current Government parties in the 1990s articulated for the first time a 12.5% corporation tax rate and the current Government must stand firm on the matter.

The sooner we begin to move the issue from the nitty-gritty to the broader issue, which is the relationship between this country and the European Union, the better. This country does not stand on its own but is an integral member of the European Union. There is solidarity and that is the basis on which the European Union was founded; it should also be the basis on which we move forward but we have departed from this in recent times, particularly in our financial relationships. The mission statement was both a social and economic common market statement in its initial formulation and it is now time for us to begin the process of establishing relationships in the European Union which have been neglected over the years. As a result we have found ourselves isolated in many ways and that process must change. Diplomatic relationships must be repaired and ordinary neighbourliness and good friendships must be established. Our Ministers, rather than officials, must go to Council meetings and we should change the way we do business relating to the European Union here.

We must ensure that the European Union takes responsibility for the position of the number of countries in the European Union and here. It cannot simply wash its hands and argue that our current position is purely the responsibility of individual member countries. It has been responsible as an entity for much of the difficulty seen in the economies of several countries. It is time for us to broaden the debate into a dialogue. A new environment must be created to deal with the economic crisis and address again the single currency, an issue that needs to be reviewed and revisited and for which new structures need to be established.

Pearse Doherty (Donegal South West, Sinn Fein)
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Tá mé buíoch go bhfuil deis chainte agam ar an ábhar seo anocht. I dtús báire, ní cóir dúinn bheith san áit ina bhfuilimid anocht ar chor ar bith. Táimid anseo siocar go bhfuil polasaí lochtach glactha ag an Rialtas deireanach ó thaobh an phacáiste a fuair muid ón AE agus an IMF agus an polasaí lochtach a bhí ag an Rialtas sin agus páirtithe atá san Rialtas nua ó thaobh Chonradh Liospóin. Tá an bheirt acusan ceangailte le chéile ó thaobh an bhrú atá an tAontas Eorpach, ná go leor tíortha san Aontas, ábalta a chur anois ar an tír seo agus sinn ag déileáil le cáin chorparáide agus le CCCTB.

Táimid in áit níos laige ná mar a bhímid in am a chuaigh thart mar go bhfuil a fhios ag an Aontas Eorpach cúpla rud. Tá a fhios aige, mar gheall ar chonradh Liospóin, go bhfuil athruithe ar na rialacha agus gur féidir an cháin chorparáide a bhogadh ó áit a raibh cros againn ann go dtí QMV. Tá a fhios aige gur chaill pobal na tíre seo an deis cur ina éadan sin i reifreann mar gur thug muid cead dó sin a tharlú i gconradh Liospóin. Tá a fhios ag an Aontas fosta go bhfuilimid i ndrochdhóigh ó thaobh cúrsaí eacnamaíochta de agus go bhfuil an tír briste maidir le hioncam agus caiteachas agus go bhfuilimid anois ag lorg an tacaíochta agus nach féidir déanamh gan an tacaíocht sin atá ag teacht ón taobh amuigh. Tá a fhios ag an Aontas nach bhfuil an Taoiseach agus an Rialtas sásta seasamh go láidir agus iad ag déileáil leis na comhráití sin, cé go ndeir siad go bhfuil siad ag seasamh an fhóid, ag rá go gcuirfidh siad an t-ualach sin ar na daoine ag a bhfuil na bannaí sna bainc. Mar gheall air sin, tá a fhios ag lucht an Aontais gur féidir leo níos mó tharraingt as an Rialtas seo agus an rud atá ar an tábla ná an cháin chorparáide agus an CCCTB.

Cé nach raibh mé sa Dáil nuair a pléadh an cheist seo cúpla mí ó shin, cuireann sé in iúl dúinn na tosaíochta atá ag na páirtithe eile nuair atá an rún seo le plé sa Dáil don dara huair taobh istigh de sé mhí. Tá sé uaire díospóireachta caite againn ag plé cánach corparáide do ghnóanna móra. Tá tábhacht faoi leith ag baint leis an cheist seo, níl dabht ar bith faoi sin, agus dá mbeadh orainn an cháin sin a ardú, chaillfaí poist agus FDI agus bheadh laghdú ann sa GDP agus a leithéid.

Léiríonn sé fosta an tábhacht atá ag baint leis an cheist seo nuair a chuirtear i gcomparáid leis an méid ama a bhí againn ceisteanna móra tábhachtacha eile atá ag daoine mar an universal social charge, an Bille Airgeadais nó an Bille Leasa Shóisialaigh. Bhí mise sa Teach nuair a rith muid an Bille Leasa Shóisialaigh laistigh de chúpla uair an chloig. Caithfear níos mó ama ag déileáil le ceist chánach nach bhfuil fiú ar an tábla ag an phointe seo, dar leis an Rialtas.

É sin ráite, cuirim fáilte roimh an deis agam cúpla focal a rá. The position in which Ireland finds itself regarding corporation tax should not have arisen in the first instance. Our European partners are trying to bully us into increasing our corporation tax. As a quid pro quo, they will reduce the amount by which they are fleecing us under the European Union's portion of the bailout fund. They are aware, for a number of reasons, that Ireland is in a weakened position. They know, for instance, that the Government could allow corporation tax to be set at an EU wide level through the process of qualified majority voting. This option was not available prior to the passing of the Lisbon treaty as such a move previously required the consent of citizens in a referendum.

During the campaign on the Lisbon treaty, it was claimed that attempts were being made to muddle the issue of corporation tax. We, on this side, who successfully campaigned against the first Lisbon treaty referendum, know that Ireland retains a veto, one which lies in the hands of the Government, however. Before the Lisbon treaty was passed Ireland held two vetoes. At present, the Government may give up its veto by allowing the issue of corporation tax to be decided by a qualified majority vote. Before the passing of the Lisbon treaty, however, the Government was required to seek, in a referendum, the consent of the Irish people to take any such step.

Our European partners also know that the State is hovering on the brink of insolvency. The refusal of the Government to categorically state it will put the interests of Irish people first, including by means of enforced burden sharing on bondholders, has left our partners in Europe in no doubt that our position is weakened. As a result, they will try to force more concessions from us. Like any back street lender who offers cash up front, our partners will ensure the financial cost will be severe in the long term. This is evident in the proposals we have seen on corporation tax and in the interest rate applied to the bailout fund.

Last but not least, our partners have the mother of all Trojan horses in the form of the common consolidated corporate tax base, CCCTB. Much of the debate has focused on Ireland's refusal to increase our corporation tax rate of 12.5%. Sinn Féin will support the Government in its efforts to resist attempts to pressurise and bully us into ceding sovereignty on this issue. However, while the Government is battening down the hatches and securing the perimeter to prevent our EU partners from coming in and forcing us to increase our corporation tax rate, we forget that the Trojan horse - the common consolidated corporate tax base - is right in front of us. If the CCCTB comes into effect, one of the options available to Ireland will be to voluntarily increase our corporation tax rate in response to a significant decline in revenue from corporation tax.

The Minister of State indicated that the Taoiseach would not allow any reference to the common consolidated corporate tax base to be included in the pact for the euro. Having read the conclusions from the meeting of Heads of Government, it is clear the Taoiseach has signed up to issues related to the CCCTB.

The common consolidated corporate tax base will have a severe impact on certain countries. While there will be winners and losers, it is clear that Ireland will fall into the latter category and will probably be one of the biggest losers. This view is also expressed in a study done by Ernst & Young and commissioned by the Department of Finance. It found that some member states will be faced with difficult political choices if they participate in the CCCTB. The three choices facing Ireland if it were to decide to participate would be to reduce public expenditure - this is already the case and God forbid we would have to make further reductions - increase corporate tax rates or increase tax on households, as is also being done. These are the three stark choices a report commissioned by the Department of Finance-----

Brian Hayes (Dublin South West, Fine Gael)
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Sinn Féin wants to increase tax rates.

Pearse Doherty (Donegal South West, Sinn Fein)
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No, we do not.

Brian Hayes (Dublin South West, Fine Gael)
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It did.

Pearse Doherty (Donegal South West, Sinn Fein)
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That is not the case.

Brian Hayes (Dublin South West, Fine Gael)
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It campaigned on the issue of increasing corporation tax in a previous general election.

Pearse Doherty (Donegal South West, Sinn Fein)
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No, we did not. I ask the Minister of State to show some manners and listen to the debate. He should check the Official Report to ascertain which way Sinn Féin voted on the issue.

Brian Hayes (Dublin South West, Fine Gael)
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It is in the Sinn Féin manifesto.

Pearse Doherty (Donegal South West, Sinn Fein)
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It is not in our manifesto. I can discuss the matter with the Minister of State later.

Brian Hayes (Dublin South West, Fine Gael)
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It was in the party's 2007 manifesto.

Pearse Doherty (Donegal South West, Sinn Fein)
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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.