Dominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

We have a quorum and the committee is now in public session. I remind members and visitors that they must switch off their mobile telephones. It is not sufficient to put them in silent mode. They need to be switched off otherwise they will interfere with our recording equipment and we will not be able to broadcast the proceedings as a result.

The first item on our agenda today is the United Kingdom and the European Union and we are delighted to welcome Mr. David Lidington, M.P., the UK Minister for Europe. Members are aware that this is Europe week which is being celebrated by several meetings and debates in the House. There was a debate in the Dáil last evening attended by An Taoiseach, the Tánaiste, party leaders and the Minister of State at the Department of Foreign Affairs and Trade with responsibility for Europe, Deputy Lucinda Creighton.

The committee has been closely following the changing approach of the United Kingdom to the European Union in recent months. We are all aware of the Prime Minister, Mr. David Cameron's indication of his desire to renegotiate part of the relationship with the European Union. That has been the subject of some debate at this committee in recent months. Any change in the relationship of our closest neighbour with the European Union has profound implications for Ireland. That is one of the topics we look forward to exploring here today. Mr. Lidington can spend approximately one hour with us. I invite him to make some opening comments and then I will invite questions from the floor.

Mr. David Lidington:

I thank the Chairman for the invitation and opportunity to come to give evidence to the committee. It is hard to overstate how collaborative and productive the relationship between the UK and Ireland has now become.

Bilaterally, we are working more closely than ever before across a whole range of issues, from a joint visa arrangement for the common travel area to an agreement on trading renewable energy. British and Irish trainers are working side by side in Mali in support of the EU training mission. Our common membership of the EU is, of course, one of the cornerstones of that relationship.

I congratulate the Irish Presidency for the smooth and effective running of the EU’s affairs during its six months in the chair. I want to focus my comments today on the future and talk about EU reform. I hope, also, to dispel some of the misconceptions which have arisen about what the British Government is and is not seeking in Europe.

In January, as the Chairman said, the Prime Minister, David Cameron, set out what he and the coalition Government in London sees as the greatest challenges facing the EU. These include the crisis in the eurozone; enhancing competitiveness; and the need to address the EU’s lack of democratic accountability. We think that to meet these challenges will require the EU to demonstrate greater flexibility, to raise its game on competitiveness and to address the disconnection so many Europeans feel from the EU, its decisions and its institutions. I will say a few words about each principle.

On flexibility, we believe the eurozone needs to take the steps it needs to have the right governance and structures to secure a successful currency for the long term. The UK is not part of the eurozone and will not join it, but we share its interest in finding a sustainable solution to the crisis as quickly as possible. One only has to look at the importance of our economies to one another to see why that should need to be the case. Ireland’s 4.5 million consumers constitute the fifth largest export market for British goods and, in return, the UK remains Ireland’s largest export destination. We reckon some €50 billion of goods and services flow across the Irish Sea each year.

It is also important that, as the eurozone integrates more closely in terms of its fiscal and economic policy arrangements, we ensure the rights and interests of those member states of the European Union which remain outside the eurozone are properly protected. For as far ahead as I can see, there will be some EU states which are part of the single currency and others, not just the UK, which will remain outside. That means eurozone integration needs to go hand in hand with preserving the integrity of the Single Market and ensuring the institutions continue to represent the interests of all member states, not just a particular subsection. This requires a flexible solution to accommodate the needs and interests of all.

All countries are different and EU member states are no exception. It is through flexibility that the EU reflects the diversity of Europe and stands the best chance of retaining the support of its citizens. A more effective EU does not have to mean a more expensive or centralised EU. Too many people feel the EU is a one-way process and more and more decision making is being taken from national parliaments to the European level and everything is decided in Brussels. That needs to change. If we cannot show that decision making can also flow back to national parliaments, the system will become democratically unsustainable.

On competitiveness, the European economy faces unprecedented competition from across the world. We are seeing an historic shift of economic power to the emerging economies of Asia and Latin America. At the same time, we are seeing the United States open up a gap which had appeared to be closing and becoming more competitive, relatively speaking, than the EU.

I will be frank with the committee. Unless Europe can raise its game, and do so fairly dramatically, the next generation of European citizens will not be able to afford the living standards, social protection or public services we have come to take for granted today. That means we need to stimulate growth by expanding and deepening the Single Market in services, digital technology and energy. I hope the UK and Ireland can continue to work together to enhance the potential of those sectors.

The EU should also accelerate progress in concluding free trade agreements. Our estimate is that if we completed all the negotiations on the agreements currently on the table, it would be worth an additional €60 billion for the EU every year. Those figures come from the European Commission. We look forward, in particular, to the launch of EU-US trade negotiations by the end of the Irish Presidency. It is as important a goal for us as for Ireland and has the possibility to be a game changer in terms of global economic advantage.

On the question of democratic accountability, we have seen declining public consent for Europe demonstrated in different ways at different times, from “No” votes in referendums, to unrest on the streets, to pitifully low turnouts in elections for the European Parliament. Britain has much to learn from Ireland’s experience of referendums and about the centrality of allowing citizens the chance to have their say on significant developments such as treaty changes.

We want to ensure voters can, and feel they can, hold to account those who make the decisions. Our belief is that national parliaments should play a bigger role in EU decision making, which is something we might want to explore in a little more detail. It is not something which is being discussed in the UK alone, rather, I have found from talking to Europe committees in a number of national parliaments that it is an agenda in which they are very interested.

I welcome the Oireachtas inquiry into the future of Europe, including the focus on Britain’s relationship with the EU. The House of Commons foreign affairs committee is conducting a similar inquiry. I would like to see the interest of national parliaments in EU-related issues mirrored by a greater role for national parliaments in the Brussels process.

The response to the speech by my Prime Minister has been extensive. It resonated and we saw an intensive and very interesting debate sparked across the EU. I want to put straight a couple of misunderstandings. The Prime Minister made clear that the next Conservative Party manifesto in 2015 would include a commitment to a referendum on staying in a reformed EU or leaving. He was also very clear that he believed membership of a reformed EU was and is in the national interest of the UK, and explicitly rejected the Norwegian and Swiss models as attractive alternatives.

I want to address the rather tired, hackneyed phrase “cherry picking”. We in the EU need to embrace and mobilise the huge cultural, political and economic diversity of 27, soon to be 28, different countries. Our objective is not special exceptions, rather it is reform of the EU for the benefit of every member state. In Britain we also need to understand what EU membership actually means for us at the moment.

That is why last summer we launched the balance of competencies review to give us an informed and evidence-based analysis of the impact of EU membership on the UK. Officials will produce 32 reports over the next two years, looking at everything the EU does and how it affects the UK, from the environment, to education, to enlargement policy. To do this as thoroughly as possible we are seeking evidence from the widest possible range of experts and interests groups in the UK and beyond, from business, think-tanks, civil society groups and others.

The purpose of the review is not to make specific policy recommendations, rather, it will provide, through its reports, a summary of what we expect to be a wealth of evidence and objective analysis to inform a constructive and serious debate in the UK and Europe. From that evidence and those reports, the individual UK political parties will, no doubt, wish to adopt particular proposals to include in their respective election platforms.

We want constructive and serious debate in the UK and in Europe as a whole and are keen to hear about these issues from others in the EU. Addressing the challenges we all face in this century and coming up with solutions that work for all will call for the sharpest analysis we can muster.

I am aware of the concerns in Ireland over the 2014 decision on pre-Lisbon justice and home affairs measures on which under the Lisbon treaty we are required to take a decision by the deadline of 2014. There is understandable concern about the possible impact of that decision on North-South Border co-operation. The United Kingdom Home Secretary, Justice Secretary, Immigration Minister and Security Minister, have all met their Irish counterparts on numerous occasions to discuss this decision. The Prime Minister and the Taoiseach discussed the matter at their meeting in March this year. We will continue to work very closely with Ireland on this matter.

Finally, there have been questions about what role treaty change will play in our reform agenda. Before we talk about re-opening the treaties, there is a great deal that we want to do, that we can do and that we are getting on with now. Recent examples such as finalising a deal on a unified Patent Court, the long-overdue reforms of the Common Fisheries Policy, to what is now being proposed on competitiveness, the Single Market, trade and regulation, these all demonstrate the UK's commitment to a positive spirit of European reform. Many around Europe, including my Prime Minister, but also the European Commission President, have highlighted the need for treaty change at some stage in the next few years to take forward the establishment of a genuine economic and monetary union. This is not going to happen tomorrow and there is much we can do to reform the EU for the better in the meantime. However, in my view, it seems sensible to have laid the ground for that future review and re-opening of the treaties by thorough and informed discussions before that time actually arrives.

Dominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

I ask members to limit their comments to three minutes to ensure everyone has an opportunity to speak.

Terry Leyden (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I agree entirely. I welcome Mr. Lidington and his staff to Ireland. Ceád míle fáilte. It is great to have them here and to meet another Minister with responsibility for European affairs. I agree completely with his assessment of the situation. The bilateral arrangement between Britain and Ireland has been advanced and enhanced by the arrangement in Northern Ireland and the peace settlement negotiated between the British and Irish Governments and others. The financial support from the UK during the difficult period is very much appreciated. It was a good investment because Ireland is Britain's fifth largest customer. There is not a house in Ireland that does not use British products daily. Our export trade with the UK is also very significant and is much appreciated. I speak as a former Minister with responsibility for trade. When Ireland was negotiating the Single European Act, we never had a disagreement with the British representative, the Minister for Trade at the time. I presume this has been the experience of Mr. Lidington with regard to the Irish Government and the Minister for Foreign Affairs and Trade. It is a healthy relationship.

We are concerned about the uncertainty caused by the proposals. We understand it is a political decision. We have held many referendums. We had to have a repeat referendum on many occasions in order to get a decision on the Lisbon treaty and other treaties. It is a difficult matter. I believe there is pressure on the British Government to hold a referendum prior to the European elections in 2014, in particular, since the by-election defeat in England and the strength of the other parties. These are matters of great concern.

We must bear in mind the benefits to Britain of being in the European Union which is a market of 500 million customers. Surely ordinary people will realise the benefits of staying within and being part of the European Union. One gets the impression sometimes that Britain, somehow, is not connected to the Commission and its Commissioner. We have an excellent Commissioner in Máire Geoghegan-Quinn. She visited the Seanad yesterday and gave an outline of her vision and views. We are more committed and connected to Europe than some people in Britain but that is a matter for the British Government. We have to plan for the future to ensure that whatever decision is made, Ireland will stay within the European Union. We will negotiate a relationship with Britain if it decides to leave. We have to get on with business but in the meantime, we have to be pragmatic. We will appeal to our friends, supporters and family members in the United Kingdom to vote against leaving the European Union. Those are issues for another day. Today is a day to welcome Mr. Lidington and his team and to have an exchange of views. I hope we can make a reciprocal visit to Mr. Lidington's committee in London in the near future.

Fidelma Healy Eames (Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. Lidington and his staff are very welcome. He spoke about democratic accountability and national parliaments having a bigger role in decision-making. Despite what we do in Ireland, Irish citizens often feel removed from the EU. I am presuming from what Mr. Lidington said that this is also the case in the UK. Are there adequate opportunities for citizens to engage in decision-making? I refer to the second Lisbon treaty and the red card-green card system. How often has the UK Parliament referred back EU legislation and directives?

Mr. Lidington stated that the next generation in Europe may not be able to afford the levels of social protection. We agree completely. As a member of this committee I have attended a number of conferences in Europe. I learned at one meeting that if the EU services directive were implemented, it would increase growth by at least 2% across the Union. It was at 2% approximately, in Ireland. What is Mr. Lidington doing to ensure this directive will be implemented? Its implementation is a no-brainer, so to speak. It would remove legal and administrative barriers to trade and it would introduce something as simple as an e-signature, an electronic signature. This directive was agreed in 2006 and it still has not been implemented.

Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I welcome the Minister to the committee. I note his comments on the degree of co-operation between the two Governments. There is considerable scope for even greater improvement in that area as time goes by, particularly in the all-island of Ireland context. Significant benefits can accrue to both sides of this island and also to the UK.

Mr. Lidington referred to the implications for Ireland and the UK and also flexibility and the Single Market. Flexibility has a different meaning for different people. I have read extensively about the extent to which some member states - not exclusively the UK - regard flexibility as a one-way ticket. That is not the way, of course, as it must work in both directions. I would advise against reverting to the old-fashioned trade agreements as opposed to the integrated European project. I refer to the degree to which individual European countries wish to go in a direction of their own choosing. That is not in concert with the European project nor is it in concert with good management of an amalgamation of nations, physically, politically, socially or economically. In particular, in the current economic climate, it is hugely important that each member state both inside and outside the eurozone, recognises the importance for each state, individually and collectively, of staying in the one direction, keeping the emphasis and the focus in one area and utilising for the benefit of Europe and the people of Europe the huge market influence which the population of 500 million can have. To what extent does Mr. Lidington and his colleagues in the European Union regard themselves as capitalising on the power and influence of the European consumer market while balancing that against the competitiveness to which he referred in the context of competing with the new developing countries?

My final point is about my old hobby horse of the currency.

I am and always have been strongly of the view that the European Union will not succeed unless and until the single currency is adopted by all member states. In this context, I point to the example of the United States, as others and I have done on many occasions. If that country did not have a single currency in the current economic climate, its position would be much worse. By the same token, our situation in Europe would be much better if we did not have a multiplicity of currencies within the Union. I returned last weekend from a visit to one of the EU countries which has retained its own currency. The lack of uniformity does not work for business, tourism or the exchange of goods and services. It works for nothing. Instead, it imposes an additional burden on those participating in the economy. I could talk about this issue all day, but the Chairman will be pleased to hear that I do not intend to do so.

Eric Byrne (Dublin South Central, Labour)
Link to this: Individually | In context | Oireachtas source

I warmly welcome the Minister, Mr. Lidington. We are delighted to extend the hand of friendship and a heartfelt céad míle fáilte. As politicians, regardless of whether we have differing views on the current course and future direction of the European Union, we know that our two nations are bound together almost in an umbilical way. Our fantastic trade relations are only one aspect of our mutual dependence. Given that the northern part of the island is administered from Westminster, the prospect of an in-out referendum in the United Kingdom is of great concern to many in this country. If the UK electorate chooses to opt out of the European Union, the Republic will remain within it and using the euro, while our neighbours north of the Border will be outside it and continuing to use sterling.

The European Union is of huge importance to us in Ireland. Notwithstanding a difficult political relationship in the past, the close bond between our two countries is reflected in such issues as our shared position on the Schengen agreement. That very important agreement means we have a particular relationship on the movement of peoples. For these and many other reasons, we are saddened at the prospect of the British Government choosing at some point in the future to adopt an out-of-European Union strategy. Members of the Oireachtas constantly debate European issues, including the benefits to Ireland of its membership of the Union, in both Houses and committees. As politicians in a republic with a written constitution, we are fortunate to have had the opportunity to engage with the electorate on very complex issues. When one has to engage with the common man and woman on the intricacies of the fiscal treaty or the treaties of Maastricht, Lisbon or Nice, sometimes on more than one occasion in each case, there is an opportunity to develop a level of discourse on these matters which our counterparts in Great Britain may not have enjoyed.

I am surprised and disappointed that Britain, as a former imperial nation with a hugely diverse population that has arisen, at least in part, from its obligation to accommodate so many people, whether they be Indians from Uganda or others, should express such grave concerns about the implications of the accession of Bulgaria and Romania.

Deputy Eric Byrne: I warmly welcome the Minister, Mr. Lidington, to the committee. We are delighted to extend the hand of friendship and a céad míle failte to him. Regardless of whether we differ politically in terms of the current course and future direction of the European Union, our two nations remain bound together by an umbilical together. Our fantastic trade relations and the fact that the northern part of our island is administered by Westminster. The in-out referendum is of great concern to many of us

Dominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

I ask the Deputy to conclude as there are other members who wish to speak.

Eric Byrne (Dublin South Central, Labour)
Link to this: Individually | In context | Oireachtas source

I will take the liberty of asking Mr. Lidington a very direct question. The decision to reduce rather than increase funding under the multi-annual financial framework has been hailed as something of a victory by the British Government. To what extent is the Conservative Party's position in this debate motivated by the perceived electoral threat presented by the United Kingdom Independence Party? Several UKIP representatives visited this country in an attempt to influence the outcome of the referendum on the fiscal treaty. We did not particularly welcome their intervention, but the people ultimately endorsed the treaty by a margin of three to two.

Terry Leyden (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

We gave them short shrift.

Dominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

Given that a vote is due to be called in the Seanad shortly, will Mr. Lidington oblige Senators Fidelma Healy Eames and Terry Leyden by responding to their points at this stage?

Mr. David Lidington:

Certainly. I thank Senator Leyden for his kind remarks, particularly on the bilateral loan which the United Kingdom extended to Ireland.

On the issue of referenda, it is important to note the evolving British political context. We have not had many referenda, but in the past 15 years the tradition under the Blair and Brown Governments has been that major and even quite minor constitutional changes should be put to the people in a referendum. We had, for example, referenda on the issues of Scottish and Welsh devolution, two referenda on the Northern Ireland peace settlement, a referendum on whether there should be a directly elected mayor for the greater London area and another on the establishment of an elected regional assembly for north-east England. Last year we had a referendum on whether we should change the voting system in the House of Commons to the alternative vote.

The establishment in recent years of that referendum habit strengthens the genuine public concern that we have not been allowed to make a decision about the European Union in the same way, despite the fact that in the past 20 years we have had a succession of treaties - the treaties of Maastricht, Amsterdam, Nice and Lisbon - which have effectively altered our constitutional arrangements. We could argue about the pros and cons of their provisions, but we, the people, have never had our say. That is why a referendum is needed to settle this issue for a generation in British politics. The question mark to which Deputy Durkan referred, namely, the uncertainty as to whether the United Kingdom might actually leave the European Union, is undoubtedly there. The Prime Minister's view is that one does not simply ignore that reality and hope it will go away. Rather, one should seek to shape the debate, aim for a point of decision and then argue one's case to the people.

Members have asked why British people are upset with the European Union. First, I agree that there are huge benefits to the United Kingdom from EU membership. Access to the Single Market of 500 million people is certainly one such benefit.

Terry Leyden (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I apologise for interrupting Mr. Lidington, but my colleague and I must attend the Seanad vote. We will return thereafter for the remainder of the meeting.

Mr. David Lidington:

Absolutely, I understand.

Another factor is that we receive some 26% - the largest share of any member state - of third country foreign direct investment in the European Union. In addition, my view is that we have a greater chance of achieving important bilateral free trade deals within the Union, in the absence of a Doha process, than if we were operating on our own. One cannot, therefore, deny that there are definite advantages to the United Kingdom in being part of the European project. At the same time, I could talk about foreign policy aspects where we are helping to shape and lead issues, including the European response to changes in the Arab world and the common European approach to the Iranian nuclear programme.

Where British citizens bridle is when they contrast the lack of financial self-discipline in the European institutions with what people are having to endure at home. From talking to Irish politicians, it seems that what Ireland has had to go through is worse than what the United Kingdom has endured in terms of austerity. In addition, we can look at particular examples where, to use European language, the principles of subsidiarity and proportionality which are supposed to lie at the heart of the treaties and the European political process are simply not being followed in practice. It is crazy, for instance, that the number of hours British hospital doctors work is determined by rules set in Brussels. We are now seeing, at the edges of the freedom of movement debate, the Commission sometimes seeking to interpret its role as edging towards competence in social security matters, even though they are very much matters for individual member states and reflect the different conditions therein. We would like to see the Commission being less meddlesome. There should not always be a requirement for harmonisation; mutual recognition is sometimes adequate and preferable. That was the principle underlying the Cassis de Dijon judgment in the European Court of Justice many years ago.

Senator Healy Eames made a number of points about having a greater parliamentary role. There are many ideas in this regard that we are keen to discuss and develop further. For example, should COSAC have the power to summon Commissioners rather than merely requesting their presence? Should the yellow card procedure be available for use in cases where a draft proposal breaches proportionality as well as subsidiarity? Should the yellow card, in certain circumstances, be turned into an outright red card, with a given number of national parliaments having the power to block a Commission initiative rather than simply triggering the need for a review? There are many ways in which we could seek to strengthen the role of national parliaments.

The Senator also inquired about the services directive. We welcome Commissioner Barnier's initiative to take three countries to the European Court of Justice for failure to implement properly. We continue to raise this issue at meetings of the European Council, COREPER, etc. One of Britain's frustrations with regard to where the European Union stands relates to the way in which the euro crisis has absorbed so much top-level political energy, attention and time for the past three years or more. Everything else is squeezed into the time left over and we are being obliged to continue to work hard to have the issues of competitiveness, the Single Market, trade and smarter regulation pushed up the agenda and not just reflected in conclusions but also delivered in practice. The Prime Minister, Mr. Cameron, feels frustration in this matter.

On Deputy Durkan's other point, flexibility means getting the relationship between the 17 member states of the eurozone and that between the 27 member states of the European Union right. It also means accepting that differentiated integration is here to stay. I disagree with the Deputy on his assertion that the European Union is about the amalgamation of nations. I simply do not see it in that way at all. It is about a way in which nation states can work more closely together and, in some respects, integrate their policies for mutual advantage. We could engage in a long discussion on the single currency. It is not just in the United Kingdom that there is enormous public opposition to a member state entering the eurozone, there is enormous public opposition even in countries where it is a requirement of the relevant accession treaty. Public opinion is an immovable obstacle. I simply note - without further comment - that it took a civil war for the United States to put in place a proper single currency and fiscal union.

The issue which worries me most about the eurozone is the tension between the economic logic of greater fiscal and economic integration and what is happening politically. If one is to integrate such policies, the question arises as to how these decisions and the people making them can be held democratically accountable. This touches on deeply sensitive issues. We have seen tensions reflected in countries with a triple A rating and programme countries. It is not for a British politician to give lectures on how those matters should be addressed; I will merely state there are hugely sensitive political questions which arise from the creation of a stable currency union.

Deputy Eric Byrne inquired about the impact on our relationship and about engagement with citizens. Regardless of whether the United Kingdom is inside or outside the European Union, the currency difference within the island of Ireland remains. At various times, this has meant a trading advantage for companies on one or other side of the Border. In practice, retailers have adapted their tills and can accept either currency. The balance of competencies review is one way of trying to engage with citizens. Detailed evidence will be assembled and all of this material will be published and made available to particular businesses. Instead, therefore, of having a debate conducted by means of sloganeering and people shouting through megaphones, we will start to develop an informed assessment of where the balance of advantage and disadvantage lies, the areas in which people believe we have major advantages and whether we can change particular directives or treaty articles. That will be a valuable step in increasing public understanding.

The Deputy also inquired about the position on Bulgaria and Romania. The reason there is public concern relates to the precedent set in 2004 when the previous British Government - it was almost alone in this regard - did not introduce transitional controls in respect of what were known as the A8 countries. Its' estimate of the number of people who would come to the United Kingdom proved to be a woeful underestimate. The British public was then shocked by the number came to the United Kingdom from Poland, Lithuania and elsewhere. This was because that number was very much at odds with what the then Government had led it to expect. In the past ten years there has been a very large increase in EU and non-EU migration into the United Kingdom. This has had an impact, for example, on schools, many of which have been obliged to deal with large numbers of children whose first language is not English. This is a real political issue.

It is very interesting that polling of UKIP voters shows that the European Union is not the prime issue in determining their votes. It is, in part, a protest vote because for the past 40 years the Liberal Democrats have been the protest vehicle when the Conservative Party has been in office. On this occasion, for obvious reasons, the Liberal Democrats cannot play that role; therefore, the protest vehicle had to come from somewhere else. The UKIP vote reflects public anxiety about economic difficulties, the consequences of austerity, uncertainty about career prospects and living standards and concerns about immigration. These concerns about immigration came through very strongly on the doorsteps.

Dominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

I thank the Minister. The fact that a vote was called in the Dáil explains why a number of members have departed the meeting. However, those of us who remain will not be leaving and we have decided not to suspend proceedings.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I welcome the Minister, Mr. Lidington, MP, and thank him for his presentation. There is one point I wish to make and two questions I wish to pose.

I am convinced that the European Union will be a far stronger, more credible and valuable entity in the future if the United Kingdom continues to be a strong member and play the type of role it played in the past. I hope that at the end of the journey on which it has embarked it will affirm its membership of the European Union and that the issue will finally be settled within British politics. I read Prime Minister Cameron's speech which was much more nuanced and supportive of the European Union than a great deal of the commentary on it would indicate. The Prime Minister stated, "Let’s stop all this talk of two-speed Europe, of fast lanes and slow lanes, of countries missing trains and buses, and consign the whole weary caravan of metaphors to a permanent siding." It is very much hoped we can do so.

There are two questions I wish to put to the Minister. First, is there a contradiction between the understanding of the need for further economic integration with the eurozone in order for the currency to survive and prosper and the stance of the British Government on when that integration should take place? I refer, for example, to its stance on the fiscal compact. That is the classic type of fiscal integration required to facilitate the development of the architecture needed to allow the euro to remain intact and prosper. The British Government's position in this regard resulted in the fiscal compact taking the form of an intergovernmental treaty as opposed to a treaty of the European Union.

Its position on a banking union, an incredibly important component of a successful monetary union for the future, and some of its stances on how that would be put together have been at odds with the support for further integration. Specifically, it accepts the need for further integration within the eurozone but when it begins to happen, its support is not as strong as it could be. I offer the examples of its position on banking union and the fiscal compact treaty.

My second question relates to the type of change the British Government is seeking. I hope that at the end of this journey the positive outcome that we seek, and which I described, will come to pass. What kind change will the Conservative Party need to achieve in order for it to campaign for a "Yes" vote in an "in-out" referendum? I want my country to accommodate the kind of change that Mr. Lidington is seeking because I want Britain to continue to be in the European Union, but I would like to understand what is the kind of change he is seeking in order for that campaign to be led by the Conservative Party.

Seán Kyne (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I welcome the Minister and the members of the delegation. I acknowledge the large and important connections between our two countries. I have three questions. Does Mr. Lidington believe that pushing out a referendum possibly to 2017, if the Conservative Party is returned to power in 2015, leads to uncertainty which is not good for the UK economy and the European economy as a whole? He mentioned the disconnection with Europe. Is the role played by Members of the European Parliament visible within British society? Are they seen as being somewhat removed? Does Mr. Lidington think that immigration will play too significant a role in any referendum that would be planned, particularly when there is a sluggish economy and, as I saw on an item on Sky News yesterday, British tradesmen have stated that the reason they voted UKIP was that they felt immigrants were able to undercut them in terms of securing jobs? Does he believe that, unfortunately, immigration will play too significant a role in any future referendum?

Ms Phil Prendergast:

I welcome Mr. Lidington to the Irish Parliament. I sit on Committee on the Internal Market and Consumer Protection in Europe, excellently chaired by Malcolm Harbour who does a huge amount of work, and there is very good integration among the different countries in getting directives through and preparing legislation. I am currently shadow rapporteur on the e-signatures directive which is moving apace and we expect to vote on it in committee next month. It will then go to plenary session. There is probably a skewed interpretation of UKIP because it gets many of the soundbites in the plenary sessions and it always appears as if the MEPs from the UK that are involved are very anti-everything which is absolutely not the case. I work with many of the UK MEPs and we work very hard in difficult circumstances.

One of the issues that concerns us, in terms of European Affairs Ministers meeting with the Council and the Commission, is that parliament has repeatedly voted for a single seat. Despite having had several votes in plenary session, we continue to incur a cost €180 million with the decanting of the entire service to Strasbourg once a month. It is an issue that will come much more to fore because we are going to make it a platform issue for next year's European elections. Does Mr. Lidington have any comment to make on that?

Dominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

I thank Ms Prendergast for that.

Ms Phil Prendergast:

I advise the Chairman that airplane mode works.

Dominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

Airplane mode works on the iPad?

Ms Phil Prendergast:

Yes.

Dominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

That is good know for the future. We have had some problems with the iPad. I call Mr. Lidington to respond.

Mr. David Lidington:

I will try to deal with those points in sequence. As Deputy Donohoe alluded to, the Prime Minister's speech stated that the UK is stronger through being part of a strong European Union and he went on to say that our friends in Washington and the Commonwealth tell us that this is the case. The Deputy is right in saying that there is a tension - I would say it is a tension rather than a contradictory matter or a conflict - between, on the one hand, the dynamic within the currency union to move towards closer integration over a timescale in a way that is for eurozone members to determine and, on the other, the need to uphold the integrity of institutional and legal arrangements for a bigger group of member states. The Prime Minister went into the December 2011 European Council hoping that agreement could be reached by everybody on something that would then led to a surgical treaty change on the lines that Chancellor Merkel and others were seeking and what came out of that was something that was second best. The Prime Minister's position was that while we could agree to what our eurozone friends wanted, we would need at that time to have something written into the treaties which protected the integrity of the Single Market and the Single Market in financial services in particular. Quite a number of member states around the table were willing to accept that or at least to discuss it further, others were not and that is why the possibility of a deal then fell apart.

What we have seen with the single supervisory mechanism is a more constructive way of approaching this relationship between the 17 and 27 member states. There was a good deal of hard, detailed and complicated negotiation but what we came out with was a compromise, which included things like an explicit commitment against discrimination on the ground of currency, which meant that we were able to say: "Yes, this is something we could live with, we think it is fair to 'ins' and 'outs' alike and we can all move forward on that." I think that progress on a banking union and closer eurozone integration will throw a number of other specific examples where that type of detailed complicated negotiation to get the 17-27 relationship right will be necessary. We have seen some bumps on the road. We have seen some European Central Bank decisions on locations policy, on clearing houses, for example, which we contend is a flagrant breach of Single Market rules and which we are challenging in the European Court of Justice. This is a discussion that will continue and it is important to us not just on the grounds of principle, but because of the questions thrown up by closer integration within a currency union on issues such as banking regulation that touch upon financial services regulation and the Single Market in financial services, which, as the committee knows, is a key national interest for the UK just as much as agriculture is for France.

I would argue, although it is a matter for a separate debate, that having a global financial services centre in the UK is of immense value to Europe as a whole. Due to the proximity of currency union issues to a Single Market in financial services, getting that boundary line right, getting 17-27 relationship right, will require a great deal of political attention and hard work. I draw attention to what other countries are doing, for example, Germany's efforts to ensure that Sparkasse was kept outside the single supervisory mechanism.

If one looks at the way in which some of the Basel requirements in CRD IV were watered down, then I would argue that there are other countries around the table who are pressing their national interests and no one should be surprised if we are doing the same within the European context.

I will give a disappointing answer on what is our shopping list because we are not publishing that, partly because the objective treaty change in the referendum is, as is acknowledged in the question, a Conservative Party commitment, whereas the broader commitment to European reform and to the principles of competitiveness, flexibility and democratic accountability is a coalition government platform. It will depend in part upon how Europe develops and, in particular, what is happening within the eurozone over the next couple of years. I could paint a very optimistic scenario at one end of the spectrum which is that we see the completion of the Single Market in digital, energy and further developments in services. In a scenario where we see the free trade deal is done; a reality made of the efforts to cut European regulatory costs on businesses, in particular SMEs; the 17:27 relationship being sorted out in a way that all sides accept as fair; and budgets being controlled and financial discipline being applied, then to a British audience that will start to look quite attractive. On the other hand, one could paint a black scenario whereby all these things go awry and on top of that one has the eurozone after 2014 exercising its numerical strength to construct qualified majorities and acting as a caucus on Single Market issues and excluding everybody else’s interests. I do not see evidence of that happening. I do not see my Greek and Dutch colleagues coming into the room and voting together automatically because they are both members of the eurozone. That, if one likes, is the nightmare at the other end of the spectrum. Where we end up on the spectrum and how successful we are in achieving reforms that make Europe more democratic, flexible, competitive and wealth-creating will colour the British debate to a considerable extent.

In response to Deputy Kyne’s question on whether the referendum will lead to economic uncertainty, that debate is out there among British public opinion anyway but not just in the United Kingdom. It is worth reminding ourselves that a third of French voters supported Mrs. Le Pen or Mr. Mélenchon in the presidential election last year. Mr. Grillo has held the balance of power in the Italian Parliament. Polls shows Syriza would be the leading party if there were a new Greek election tomorrow. The True Finns are on approximately 20%. The Sweden Democrats are on 10% at the moment. If one looks at Golden Dawn or Jobbick one sees some really dark forces emerging that we had hoped had been banished. Whether they are democratic populists or neo-fascists, they are building support on the basis of what are genuine public grievances not invented ones. The challenge for the mainstream democratic parties throughout Europe is how we ensure we are seen to address what are real and legitimate worries of the electorate.

On the question of whether MEPs are visible, the straight answer is “No”. People like Malcolm Harbour and Sharon Bowles are incredibly influential and most of our MEPs of all parties from the UK are hard-working in what they do but they have a very low profile in British politics and they find that incredibly frustrating. I do not have a magic wand to provide an answer for that.

On the role immigration would play in a referendum campaign, that would be determined in large part by both where the UK is economically – because if one sees economic growth it makes people more optimistic anyway – but also how successful the government has been in bringing down net migration. We brought it down by a third since the general election but we need to go further. Having a situation in which net migration was running into hundreds of thousands every year is simply not politically sustainable.

In response to Ms Prendergast’s question on UKIP, it is not just in the UK, we are seeing a similar populist political phenomenon at work in many other countries. I very much wish her well on the digital signatures initiative. It is crazy that last year roughly 40% of EU citizens bought something online but only about one in ten transactions crossed a national frontier because we do not have a common framework for digital signatures, digital copyright, payments systems or consumer protection.

Ms Phil Prendergast:

We need a qualified trust mark as well. I believe it will be a pan-European trust mark that will be recognised.

Mr. David Lidington:

A lot of different individual elements would make up the Digital Single Market but the United States has already got it. China, Brazil and India are going to have it pretty quickly and it seems that given the opportunities for business to business trade as well as retail trade we are crazy to be hobbling ourselves by not getting on with this urgently.

I will cheer on the proposal for a single seat for the European Parliament. Both government parties in the United Kingdom have a very strong commitment to seeking a single seat for the European Parliament. The caravan is an absurdity and a costly one in terms of time and money. As Ms Prendergast knows, it will need treaty change to put that right, in particular after the European Court of Justice, ECJ, decision. I can genuinely say that the UK Government is on the side of the European Parliament when it comes to this matter.

Dominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Lidington. On behalf of the committee I wish to express our gratitude for his coming before us today. I know he has a very busy schedule while he is in the country. We appreciate his giving of his time and answering all of our questions. For the benefit of the committee, we will have some proposals on how we can improve the role of national parliaments in the European semester to put before COSAC’s plenary session in Dublin in June. Mr. Lidington referred to initiatives such as the yellow card. There are also initiatives to allow member states to put forward their own proposals for legislation. That will be put before COSAC and the Commission in the coming months.

The COSAC schedule will be issued this week. There is one session on the future of Europe, which will be attended by Mr. Jacques Delors, former President of the Commission and renowned federalist as well as Ms Viviane Reding, who as we all know wants to see further political union and treaty change. We have also asked Mr. Lidington’s colleague, Mr. Bill Cash, who is my equivalent Chair in the UK.

Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

He is very much committed to the European project.

Dominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

We have invited him to respond to Mr. Jacques Delors and Ms Viviane Reding. It should be a full and frank debate.

Mr. David Lidington:

Who is the referee?

Dominic Hannigan (Meath East, Labour)
Link to this: Individually | In context | Oireachtas source

I will be referee that day, for my sins. It should be a useful debate. Once again I thank Mr. Lidington for attending. We very much appreciate his presence and we wish him the best of luck for the rest of his visit to this country.

Mr. David Lidington:

Thank you very much indeed, Chairman.