Tuesday, 5 February 2019
Ceisteanna (Atógáil) - Questions (Resumed)
World Economic Forum
6. To ask the Taoiseach if he met Chinese politicians or companies when in Davos; if they were concerned about the trade war; and if the matter was discussed. [3855/19]
I did not give the full answer to the question I was asked earlier. The total salary cost is €1.16 million and the average salary is a little under €50,000.
I propose to take Questions Nos. 5 to 14, inclusive, together.
I attended the 2019 annual meeting of the World Economic Forum in Davos from 23 to 25 January. The Minister for Finance, Deputy Donohoe, also attended. This annual event in Davos provides a unique opportunity to network informally with political leaders and senior decision-makers from civil society and the corporate world. I had extensive opportunities, formal and informal, to convey important messages about the strength of Ireland's economy, our perspectives on Brexit and on the future of Europe, our ambition to expand the scope and impact of Ireland's international presence as well as our approach to international challenges like climate action, sustainable development, migration, international trade and taxation.
I had numerous formal engagements. I did several media interviews with Irish and international media, including Euronews, Reuters and Bloomberg. I attended an event hosted by the Gates Foundation, which focused on international development issues. I had the opportunity there to discuss Ireland's approach to international development with Bill Gates and others in attendance and to inform them of the Government's increase in its overseas development aid budget for 2019 as well as our plans to focus on the education of girls, nutrition and some other matters. I participated in a plenary panel discussion on the future of Europe alongside the Prime Minister of Netherlands, Mr. Rutte, Poland's Prime Minister, Mr. Morawiecki, Commissioner Malmström and Ana Botin of Santander Group. I participated in a young leaders session, where I discussed Ireland's perspectives on current European challenges. I attended a lunchtime event with political, academic and business leaders where the challenges and opportunities of globalisation were discussed.
I also had the opportunity to speak bilaterally with a number of my European Council colleagues, including Chancellor Kurz of Austria, the Croatian Prime Minister, Andrej Plenković, the Prime Minister of Poland, the Prime Minister of Luxembourg, Mr. Xavier Bettel, and the Prime Minister of Belgium, Mr. Charles Michel. We discussed Brexit and other EU issues, including the multi-annual financial framework. I also had meetings with UK Chancellor of the Exchequer, Mr. Philip Hammond, briefly, with the UK Secretary of State for Health, Matt Hancock, with the former British Prime Minister, Tony Blair, and the executive director of the International Energy Agency, Fatih Birol. I did not meet any Chinese politicians or representatives of Chinese companies.
I had meetings with senior executives from US multinationals with operations in Ireland, including Tim Cook of Apple, Andy Jassy of Amazon, Chuck Robbins of Cisco, Sheryl Sandberg of Facebook, as well as Nick Clegg, and Mike Nally of MSD. My discussions focused on Ireland's perspectives on Brexit, trade and international taxation. The companies updated me on their operations in Ireland and their plans for future expansion.
I also spoke at the annual IDA Ireland Davos dinner event, which was attended by 50 senior executives of existing and prospective IDA Ireland client companies. I emphasised the strengths that underpin Ireland's success in attracting foreign direct investment. This is now a well-established feature of the annual Davos programme and an important element of IDA Ireland's client engagement strategy.
A few days before the Taoiseach went to Davos, the Minister for Transport, Tourism and Sport, Deputy Shane Ross, was publicly corrected by the Tánaiste and subsequently ridiculed by Fine Gael Ministers when he said that a no-deal Brexit would require extra checks at the Border. Despite this, in Davos, the Taoiseach not only said this but also went far further and started talking about the Army being sent to the Border and soldiers being at the Border. We have no need for another around-the-houses self-justification for what was a clearly and deliberately chosen set of words. I asked this last week. I am seeking some basic clarity.
Brexit is due to happen in 52 days unless the UK Parliament and the European Union adopt another legal mechanism to go into a transition period or delay Brexit. The Taoiseach has repeatedly said that the absence of a transitional period and something like the permanent backstop would inevitably lead to cross-Border disruption. No one is threatening Ireland with this. This has been our Government's position from day one and it was on this basis that the Taoiseach asked the European Union to adopt a particular strategy. This being so, it is well past time for a direct answer to the question. What will happen at the Border in 52 days if there is no deal? I asked the question last week and the week before and I received no answer. I suggest every community and business in the Border area deserves clarity on this. They need to know what they will be facing in 52 days if there is a no-deal scenario.
I thank the Taoiseach for his comprehensive reply. The Taoiseach held bilateral meetings with several EU Heads of Government. Discordant words were uttered by the Polish foreign minister. The Taoiseach tells us he held a bilateral meeting with the Polish Prime Minister. Did he share the views of his foreign minister? What was the nature of the discussions the Taoiseach had with him? In the other discussions with other EU Heads of Government, was there complete solidarity with the united EU 27 position to date? Did anyone share the concerns expressed by the Polish foreign minister publicly?
The Taoiseach made comments about Ireland closing tax loopholes. Does the Taoiseach accept that Ireland is still perceived by many as a place where corporate tax is not fairly levied? What was the nature of the Taoiseach's discussions on this? Was he able to reassure people that the closure of loopholes that existed in the past has changed fundamentally the tax structure in Ireland?
My last question relates to the entire experience and presence in Davos. Several leading politicians stayed away from Davos this year. What was the total cost of the Irish presence in Davos this year?
Yes. We famously remember how the Army was going to be guarding the ATMs such was the severity of the economic crisis. The Taoiseach decided to emulate the rather bizarre comments of the former Taoiseach with the claims that we would have the Army deployed on the Border in the event of a no-deal Brexit. This is despite the fact that the Taoiseach comes into the House and repeats the same answer week after week when we ask him whether he is considering erecting a border to protect the EU Single Market in the event of a no-deal scenario. The Taoiseach says "No" and claims it is not even being considered or dreamt of. Then, the Taoiseach goes on international television at the Davos gathering and says that he is thinking of sending the Army up to the Border. It is bizarre.
Could the Taoiseach please explain that? Could he also explain the remarkable comment that we are "forever closing tax loopholes" when he was challenged about Ireland's tax haven status?
Can we just deal with facts instead of spin? According to the last available figures, €144 billion in pre-tax profits are declared in this country. By the time the taxable profit is calculated it is half that at approximately €70 billion. There are, therefore, approximately €70 billion worth of loopholes in the tax code. There are research and development tax credits, inter-group transactions, group losses, and losses brought forward. If one goes through the list, there are myriad tax loopholes, which allow the largest corporations in the world to write down their tax liability to almost nothing. Everyone else in the world knows this and is saying it, yet the Taoiseach continues to claim it is untrue. Precisely what tax loopholes has the Taoiseach closed?
The British Prime Minister is in Belfast today. The word is that she is still in the grip of delusion. She is now saying that there will be no backstop but the Good Friday Agreement is entirely safe, and there will be no backstop but there will be no hard border. It is reminiscent of the earlier position to which she has returned, namely one of, "Don't worry Ireland, we will look after everything but we are out of the Single Market and out of the Customs Union." In over two years we have moved precisely nowhere with this Prime Minister or the government that she leads.
Our job is not to help Mrs. May from her deluded state; she will wallow in that if she wishes. Our collective job is to protect Irish interests. That means holding firm on the backstop, not blinking and not budging. The fact is that without an agreement or a backstop we will have a hard border unless there is an intervention and a contingency plan. That raises the possibility of soldiers, not necessarily Irish but British, at such an infrastructure. These are real possibilities. However, it is not the Taoiseach's job to conjure up the worst-case scenario and leave it hang; it is his job to deal with the realities and facts and offer a plan for the Irish national interest, for the Irish State and to protect the peace agreements and to protect our economy, and I could go on.
I have asked the Taoiseach consistently to identify for us the ultimate contingency in the event of no agreement, no backstop and the terrible vista which he has conjured into view. The obvious answer is to reach for the Good Friday Agreement, the very agreement that everyone has vowed to protect, and to look to the provisions within it to address the issue of the Border. If politics, the Tories or the negotiating process cannot mitigate or deal with the Border, it should be placed in the hands of the people through a democratic process to decide on the Border and to have the opportunity to remove it, which is the ultimate contingency plan, yet the Taoiseach has ducked and dived on this issue.
I believe the Taoiseach has a responsibility as Head of Government to begin planning for that ultimate contingency. We have said that he should convene a forum. He should do that. The Government must lead the conversation around Ireland post-Brexit and particularly Ireland post-crash Brexit. There will be no hard border on this island. It is not happening.
We should also convene the parties in the Northern Ireland Assembly to get them to represent their people during what could be a fraught period in Northern Ireland and in the South.
Returning to Davos, we have always placed our faith in the OECD in respect of corporate governance and new tax rules. I have always argued this should not be done through the EU but should wait for the OECD. There were attacks by the Polish Prime Minister and Spanish bankers but also comments by the head of the OECD which singled out the sweetheart deal which Ireland applied in the Apple tax case. Is the Taoiseach concerned that this is a signal, as mentioned in today's newspapers, that we are facing a different corporate tax regime, where the OECD itself and possibly America look to new tax laws where the profits would accrue at point of sale rather than in the home city of the multinational, in this case Dublin? Was there a shift this year in what the OECD said at Davos regarding corporate tax? Have the Taoiseach and the Minister for Finance, Deputy Donohoe, discussed the matter arising from what they heard there?
I do not have the exact costs for the delegation to Davos. There was a delegation of five. Accommodation costs were approximately €7,000. The Government jet was used so the only added cost was fuel and car transport from Zurich to Davos.
I like broadcast media because anyone interested can get to hear the question and answer in full and, therefore, know the context. In Davos, I was asked by an international journalist from Bloomberg to paint a picture of what a hard border could look like in a worst-case scenario. I am often accused of spin but I am more likely to give a straight answer to a straight question, which is exactly what I did. I painted a picture of what a hard border might look like in a worst-case scenario. I painted a picture of what hard borders look like all over the world and what the hard border used to look like when we had one in Ireland 30 years ago, although I may have incorrectly said 20 years.
Deputies will understand why I will avoid answering hypothetical questions in future. We have not made any preparations for physical infrastructure on the Border between Northern Ireland and Ireland. No matter what happens, deal or no deal, the European Union and Ireland will do everything that we can to avoid a hard border emerging on our island.
I am amused by Deputy Micheál Martin's many conspiracy theories; I should keep a small notebook of them. As always, his conspiracy theory on this is far off the mark.
I met the Polish Prime Minister who confirmed that the views expressed by the Polish Foreign Minister were not the views of the Polish Government, and that the foreign Minister had been trying to find a solution to the impasse we now face. Ireland and Poland are much closer on Brexit than some people may believe. Poland is very close to the UK and they have a very strong security relationship through NATO. There are also many Polish citizens living in the UK. Like us, they want the new relationship between the UK and the EU to be as close as possible after Brexit. Their efforts to be helpful to the UK come from that desire rather than any lack of solidarity with Ireland.
We have complete solidarity from all the other Prime Ministers whom I had the opportunity to meet in Davos. There is a growing concern about what will happen at the end of March and a growing desire to find solutions because no one wants to be the situation whereby Europe fails to find a solution to this at the end of March and into the period thereafter.
International corporate tax law is a matter that arises at many international meetings. It featured less at Davos this year than last year, probably because we are participating in the OECD base erosion and profit shifting, BEPS, process. The OECD does not designate Ireland as a tax haven. We are not on the EU's grey list of tax havens and "everyone in the world", as Deputy Boyd Barrett put it, does not include the European Union or the OECD, which is the expert body in this matter.
The Deputy's "everyone" does not include the two most relevant bodies in this regard, and it was probably less of a feature, in fact, this year precisely because we have collected the Apple tax claim in an escrow account and are now awaiting a judgment on that, we have abolished stateless corporations, we are phasing out the double Irish arrangement, and we are now one of the few countries that share revenue information with other revenue services so that we can compare how much tax different companies pay in different states.
It is very much our view that profit taxes should be applied where the profits are created. One applies a sales tax or VAT at the point of sale. One applies a profit tax where the profits are generated, and that is one of our objections to the proposed digital tax. Volkswagens are sold all over Europe, but the profit tax is paid in Germany. It does not get divvied out across the European Union. Airbuses are made in France and the profit is made in France, but they are sold all over the EU, and we do not get a cut of the profit taxes because Ryanair buys Airbus or because leasing companies buy Airbus. The profits are paid where the company is based and generates those profits, not where the sales are made.