Mr. Pat Cox:

We have free movement which I think everybody wants to keep. I point out to the committee that the common travel area was mentioned in a protocol to the Amsterdam treaty. That was because Britain had opted out of the Schengen agreement and then we pragmatically opted out of it so as not to have to have a Schengen border of the island of Ireland. That opt-out was in a protocol to the Treaty of Amsterdam.

As a protocol attached to a treaty has the equivalent weight of being an article of the treaty, the common travel area has already been recognised in EU law by virtue of that protocol.

I have always felt, from day one, that we had much standing on that. The complexity arises in a different case. What happens when EU nationals use their right to come to Ireland from locations such as Bulgaria or Romania, for example, and we have a common travel area with the UK? How we cover the issues of work permits, residency and travel is not yet clear. The more it is open on an all-island basis North-South, perhaps the more rigorous will be the checking east-west. This is no grave problem necessarily for the Republic of Ireland but it might create issues for some people in the community in Northern Ireland who regard east-west passage as a birthright as it is a constitutional reality. Northern Ireland needs its voice to express itself in those matters.

I do not want to give the figure on the budget as although I have it, I do not recall it. The British net contribution is substantial as Britain is one of the four largest member states of the European Union. It will leave a hole in the budget. The exit payment is not designed as some kind of punishment. Britain has already entered into commitments under existing rules. If one reads the Commission's paper on financial arrangements, no figure is mentioned. There are many figures and much speculation in the media and good academics have done many sums but the Commission does not list a number in its document. It states that one matter that must be discussed is the "methodology" to work through the calculation of this. The first debate will be about what is included or excluded, and to what degree elements are included. What is clear is that in the medium term, the absence of Britain would reduce the overall spend in the European Union budget. There is a second question that must be asked about the European Union budget. If we want more secure borders and to have a proper humanitarian system to help rescue the lives of migrants in the Mediterranean, and if we want to have some kind of stabilisation instrument - a fund to cope with economic shock, which we do not have and which is a serious missing ingredient in economic and monetary union - they will cost money. They will cost more than the less than 1% of gross domestic product, GDP, in today's EU budget. Whether EU member states are prepared to have that debate, I do not know, as every time we come to budgets, they are strong on ideas but very weak in ponying up resources.

We are at a crossroads. Do we value this Union that we have built and its capacity to act in a meaningful way when collective action is more effective than separate action? I have given some examples. If we do, we must invest in it. It would not be a runaway investment but a recognition that something that matters has a cost. As I stated, there is a counterpart in that the cost of failure is much more demanding than trying to build a cost of success.

For the next medium term financial framework debate, the documents will be published early in 2019 if not sooner, and that will need to be adopted by 2020 because it will come into play in 2021. In principle, Britain will not be part of that, although if it is to go through a transition period of several years where it retains access to the Single Market and the Common Agricultural Policy, for example, it may well be that there would be transition costs to be negotiated as part of the settlement. That is speculation on my part as we do not know the nature or substance of that transition.