Neale Richmond (Fine Gael)
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Apologies have been received from Senator Craughwell, who is being substituted by Senator Boyhan, from Senator O'Reilly, who is being substituted by Senator Reilly; and from Senator Mulherin, who is being substituted by Senator Noone. Senators McDowell and Ó Donnghaile have given notice they will unfortunately be arriving a little late. I remind members and those in the Gallery to ensure all mobile phones are switched off or put on airplane mode as they interfere with the sound system.

On behalf of the committee, I warmly welcome Mr. John Bruton to the committee today. I do not really know where to start in terms of an introduction because it is fair to say that Mr. Bruton is someone who probably does not need and introduction to this particular audience. As a former Minister, former Taoiseach, former ambassador of the EU to the US and former negotiator of the draft European constitution, he has a depth of knowledge and understanding of the EU and how it works, of interacting with our European partners at different levels, and of the intricacies of the relationship with the United Kingdom. As a result, he has an understanding of many of the issues at play and the challenges that Brexit presents, which are considerable. We very much welcome Mr. Bruton's willingness to share his insights and analysis. A number of us followed his extremely impressive appearance before the House of Lords committee quite recently and we took great solace from it.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. However, if they are directed by the committee to cease giving evidence relating to a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of the proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

With all that out of the way, I ask Mr. Bruton to make his opening remarks.

Mr. John Bruton:

I welcome the opportunity to speak here today and I commend the committee on its work. I would also like to commend the Government on the way it has ensured, through effective diplomacy, that the particular problems of Ireland have been publicly recognised in the negotiating positions of both the EU 27 and the United Kingdom.

I will go into some of the difficulties that will arise in the Brexit negotiations. It is important to say that Brexit is a British initiative, for whose consequences Britain must take primary responsibility. It was not forced upon them. In fact, as I will show, numerous concessions have been made by its EU partners to keep the United Kingdom within the EU treaties, which it freely adhered to in 1973 and which its people overwhelmingly endorsed by referendum in 1975. The context of the Brexit negotiation is changing all the time. In recent weeks, the EU economy has been improving. Election results in the Netherlands and France are more positive than many feared. Even the Trump administration is beginning to see value in doing business with the European Union. The EU has remained united in its response to Brexit, a matter for which the Irish Government can take particular credit.

While it may seem impossibly naive or optimistic today, I believe conditions can be envisaged in which, eventually, UK voters decide either not to leave the EU at all or, after it has left, to rejoin. Ireland should try to keep that possibility alive. The terms for Brexit, as set out so far by Mrs. May, will do incalculable damage to this island, politically, emotionally and economically. We cannot simply wait for this to happen. While seeking to mitigate the effects of Mrs. May's chosen hard Brexit, we must also do everything we can to ensure that, at the end of the day, there is no Brexit.

Apart from a few open questions, Mrs. May has said what she wants. She wants to be out of the Single Market, to be out of the customs union and have control over immigration

The open questions she has avoided so far are about the financial terms of the divorce, the status of EU citizens living in the UK and vice versa, and two aspects of a future trade agreement, if there ever is one, namely, arbitrating disputes and third-country imports getting into the EU via the UK. The Article 50 letter, sent to Donald Tusk, did not tell us much more about the UK negotiating position than the Lancaster House speech did, although it does not repeat the pledge to leave the customs union.

How the EU will respond to Mrs. May's letter? The European Council is meeting this week to agree the orientation it will give to the EU negotiators for the discussions with the UK that will start formally in June and in earnest after a new German government is formed in September. As these orientations will be agreed by consensus, each EU Head of Government will have to be satisfied. In working out the orientation to be given to the negotiators, it will be crucial for the European Council to have in mind its best alternative to a negotiated agreement - BATNA for short. It is important to have such an alternative ready because there is every possibility that no agreement will be reached within the two-year timeframe for negotiation and ratification of a withdrawal agreement.

Mrs. May has said that, for her, no deal at all preferable to a bad deal. Her BATNA, so to speak, is no deal at all. No deal would mean the UK simply crashing out of the EU overnight, sometime before the end of March 2019. This no-deal scenario could lead to an overnight halt to flights, to trade and to commerce. There would be immediate, massive currency instability. As pure negotiating tactics, maybe it not surprising that Mrs. May would pretend that no deal would be better than what she would call a bad deal but she is hardly serious. No deal is something the UK simply cannot afford. This no-deal scenario put forward by Mrs. May will, I expect, be probed during the UK election campaign to discover what it actually means. The fact that it was put forward by the Prime Minister vindicates Tony Blair's description of the UK Government, at the time of the Lancaster House speech, as not driving the Brexit bus, but rather being driven by partisan and ideological forces it had not tried to control.

The EU country that would be worst affected by the UK crashing out of the EU with no deal would, of course, be Ireland. Ireland, along with its EU partners, must use all its imagination and ingenuity to ensure that a better alternative to no deal is available in the event of a deal not being agreed.

If, because of domestic politics, the UK Government is unable or unwilling to work out a responsible best available alternative to a negotiated agreement, BATNA, then the EU side should do so for it. It should adopt it, alongside its line-by-line response the UK's negotiating demands its own best alternative to a negotiated agreement. Having such a BATNA would also strengthen the EU's negotiating position. It would provide something with which an emerging deal could be compared. It would also provide a basis on which the UK electorate could reconsider its decision of 23 June 2016, if it ever wants to do that.

As Tony Blair said, UK voters have a right to change their minds. After all, politicians are allowed to change their minds, so why not voters? If it was the UK voters who, in a referendum, sent their government on a mission towards Brexit, it would be reasonable that the same voters, rather than Parliament, should adjudicate on what will or will not have been achieved by their delegates. However, if UK voters ever do change their minds about Brexit, it will happen slowly and incrementally.

Parts of the Brexit scenario, obscured during the referendum campaign, will become clearer during the negotiation. The unavoidable interconnections between EU freedoms and EU rules will emerge. For this to happen, it will be in the EU side's interest to ensure that there is maximum public understanding of the unfolding negotiation at every stage. Transparency will work in the EU's interest. A running commentary is exactly what is needed in the interest of public education. When the UK public comes to see that the alternative to a single set of EU rules is either no rules at all or multiple sets of contradictory rules for different jurisdictions, citizens in both the EU countries and the UK may come see EU membership in a different and better light. They may, for the first time in many cases, see the EU as something that actually simplifies their lives, rather than the reverse.

In my view, the best available alternative to a negotiated agreement, BATNA, that the EU side should adopt is an offer of continuing UK membership of the EU broadly on the basis that the UK was a member in 2015 before David Cameron's ill-fated renegotiation. The terms obtaining then were generous to the UK. They allowed it to opt out of the euro, of Schengen, of justice and policing co-operation, of the Stability and Growth Pact, and of the justiciability in the UK of the European Convention. Furthermore, the UK itself had also decided, without Brexit, that it would have a referendum of any new EU powers. In that sense, the UK was already having its cake while eating it before it ever decided on Brexit. These pre-2015 terms should be left on the table by the EU side but without the unjustifiable UK budget rebate.

The President of the European Parliament, Mr. Tajani, made such an offer when he met the UK Prime Minister recently. That was a very important initiative and underlined how central the European Parliament will be in this whole process. Of course, at this stage, the UK would reject such an offer out of hand. However, as the inevitable consequences of Brexit become clearer, UK public opinion might begin to see merit in it, particularly when it is compared with the costs of simply crashing out of the EU overnight with no deal at all, which is supposedly still Mrs. May's fall-back negotiating scenario as compared with what she calls a bad deal.

The resistance to keeping such an offer on the table is more likely to come from some existing EU member states. Some of them will point to the UK's insatiable demands when it was a member for opt-outs, rebates and exceptions. Arlene Foster's analogy about feeding crocodiles may come to their minds if they are well informed about Irish politics. They will also recall General de Gaulle's original veto of UK membership and his foresight that the UK would never settle in as a member. They might also argue that offering the UK a way back after it has triggered Article 50 might encourage others to try it on too.

However, if they sit back and think about it, they will, I believe, conclude that a UK inside the EU is better for the EU than a UK outside it even with a trade deal with the EU. Keeping the offer of resumed UK membership on the table would be good politics and good economics for the EU.

I mention, in passing, that Article 6.8 of the Vienna Convention, which sets out the general international law on treaties, explicitly allows revocation of a notice of intention to withdraw from a treaty.

A political declaration by the EU Heads of Government at some stage in the coming months, along the lines of what the President of the European Parliament, Mr. Tajani, said, in favour of facilitating an eventual UK resumption of EU membership on its pre-2015 terms minus the budget rebate would create a realistic yardstick against which UK citizens could compare the terms of Brexit as negotiated by their Government at the end of the process.

I do not propose to go into detail about how the EU side should conduct negotiations with the UK. Obviously, it will keep the 27 member states informed at every stage. Ireland will need to ensure that any deal guarantees the UK will not engage in unfair or environmentally harmful trading practices, that there will be no unfair subsidisation of UK enterprises competing with Irish enterprises and that assurances will be received that the EU will take immediate action if either of those things happen. Ireland will have a special interest in the post-2020 agricultural policies of the UK and in ensuring that they do not introduce production subsidies that disadvantage Irish exporters, that the UK adheres to reasonable climate change emission standards and, further, that it does not permit third country imports that would undermine traditional Irish exports to the UK. We will need to protect our electricity and energy supplies after the UK has left the EU's common energy policy. Ireland's network is entangled with the UK's, and it is through the UK that we can access the rest of the EU network. The EU has agreements on this with other countries, including Switzerland, which, although not EU members, contribute to the EU budget. The EU will have difficulty offering the UK a better deal than it is giving Switzerland on this or any other matter.

It is important to remember that Westminster politicians have never taken much interest in how the EU actually works, its procedures and rules and the compromises that underlie its very existence. They have this in common with many politicians in larger European countries who treat the EU as a sideshow to national politics. Even though the Conservative Party sponsored the idea of holding a referendum on leaving the EU, it did not give much thought in advance to what leaving the EU might mean in practice. In a sense, it is now finding out about how the EU works for the first time - just as the UK is leaving it. Mrs. May's first priority immediately after the referendum was party unity. This may be why she told the Conservative conference last year that she would go beyond the mere terms of the referendum. She would not just leave the EU. She would also refuse to join the European Economic Area, unlike non-EU member Norway. She would also refuse to join the EU customs union, unlike non-EU member Turkey. She would reject the jurisdiction of the European Court of Justice. This has kept her party quiet for the time being. However, now come the actual negotiations. This is where Mrs. May's rhetoric at the Conservative Party conference meets the reality of a rules-based international trading system.

In a rules-based international trading system, unpleasant compromises are essential if one is to persuade others to open up their markets to one's exporters, bankers, planes and people. In a rules-based international trading system, one cannot unilaterally make, amend, interpret and enforce the agreed rules in ways that only suit one's own state. There must be a common system, which involves some concession of sovereignty. One often has to accept an external enforcer such as the European Commission or an international court. This is a concession of sovereignty. One often has to accept an external body, such as the European Court of Justice or a disputes panel of the WTO, interpreting the meaning of the rules one has agreed. This is another concession of sovereignty. This is unacceptable to those who have made a religion of national sovereignty. It is unacceptable to some of Mrs. May's euro-hostile MPs and some supporters of Donald Trump.

Some have argued that if Ireland is in the EU and the UK is out of it, a special "bespoke deal" for the island of Ireland, or for the UK and Ireland, could be envisaged. I do not see how this could work as far as trading standards and tariffs are concerned. The European Court of Justice, ECJ, would be the final arbiter of Irish standards, while the UK Supreme Court would make the final arbitrations as far as UK and Northern Ireland standards would be concerned - a recipe for divergence. Ireland would be obliged to collect EU tariffs and enforce EU standards on any goods entering the EU through Ireland, and to do so at the Irish Border, unless we wanted to exclude ourselves from the EU Single Market. Any precedent established for the UK and Ireland in this matter will be examined by the countries in EFTA and the EEA. They will want to be sure that their existing deal is better than anything offered to the UK, which has refused to join either EFTA or the EEA. This will be the case especially if those EFTA and EEA countries are, as they now are, contributing to EU funds on an ongoing basis and the UK is not doing so.

The EU side in the negotiations will also have to respect the long-standing "Interlaken principles" of 1987 which state that, in negotiating privileged relations with non-EU states, the EU will prioritise integration between its own members over relations with non-members and will safeguard its own decision-making autonomy. This reference to decision-making autonomy may mean that EU rules and the ECJ must take precedence over decisions by any joint bodies the EU might agree to set up with the UK.

I have been reading publications of Conservative-supporting think tanks such as the Bruges Group and Leave Means Leave. They are discovering now how much extra bureaucracy will be involved in the UK decision to leave the EU customs union and the Single Market. The UK will have to introduce customs controls on the goods bought and sold between the UK and the EU. This will involve checking where the goods came from, whether they are properly labelled, whether they are safe and whether the tariffs due have been paid on all components included in those goods. The delays will be substantial - at the Border in Ireland and at ports in the UK, in Ireland and on the Continent. Customs clearance alone, without tariffs, will add 8% to the cost of goods arriving in the UK by sea from Ireland or the rest of the EU. At present, 90 million customs declarations must be checked in the UK for goods arriving from outside the EU. Once the UK leaves the EU customs union, UK customs officials will have to check 390 million documents.

Some may think the UK could reduce these difficulties by being in the customs union for some goods but not others. This is impossible under WTO rules. A customs union restricted to some countries is a departure from the WTO norm of non-discriminatory trade policy among all WTO members, the most-favoured-nation principle. A customs union is allowed by the WTO rules only if it covers substantially all trade. If the UK were to seek to have a customs union with the EU on some but not all of its trade, that would breach this rule. I do not expect, given that the UK will have to try to join the WTO with the agreement of all its existing members, that it will start by breaking the WTO rules. At least, if it does, it would not be acting wisely.

Even if the UK eventually decides to stay in the customs union but leaves the Single Market and tariffs no longer have to be collected, the origin of goods will still have to be checked, as will compliance with EU safety and labelling rules.

This will take a lot of time regardless of whether it is done at the border or in a depot, electronically or on paper. The cost of doing business will increase, but for no productive or constructive purpose.

By leaving the EU customs union, the UK will not only exclude itself from duty free access to the EU market, which represents more than 50% of UK trade, but it will also lose the benefit of trade agreements that the EU has negotiated with 60 other countries, which account for a further 17% of UK exports. For example, since the EU negotiated a trade agreement with Korea ten years ago, UK exports to that country have increased by 110%. Leaving the EU means giving that up temporarily, perhaps permanently. There may be opportunities for Ireland to replace some of that UK trade with Korea. Japan has more investment in the UK than it has in the rest of the EU combined but a great deal of that is there to get access to the Single Market. Again, this is an opportunity for Ireland.

Mrs. May is also beginning to discover that her hard line on immigration will have costs. A total of 20% of employees on UK farms and 29% of employees in UK food processing plants are EU nationals who will lose their right to live and work in the UK. When the UK tries to negotiate trade deals with countries outside the EU, for example India, it will find that it will face demands for more Indian migration to the UK, as Commissioner Hogan pointed out earlier this week.

UK airports will find themselves losing business when the UK has to leave the EU open skies agreement with the United States. More transit traffic will be routed through Dublin in that situation. The UK will also have to try to join the European common aviation agreement as a separate member if UK-owned airlines are to have the right to fly passengers between EU airports. Rival airlines anxious for that business will not make it easy for them to join. A sudden "no deal" Brexit would leave the UK outside the European Aviation Safety Agency's jurisdiction without a ready replacement.

After Brexit, the UK will have to set up and staff 34 new national regulatory bodies to do work now being done for the UK by EU agencies, from which the UK will have excluded itself because those agencies fall under the jurisdiction of the European Court of Justice, ECJ. An example of this is EURATOM, a body confined to EU members that regulates nuclear safety, which is not a trivial matter for some of us who have represented the east coast of Ireland.

UK farmers and food producers will find themselves facing tariffs of 35% on dairy exports, 25% on confectionery and 15% on cereals. UK lamb production will be hard hit. These tariffs will have to be collected at the Irish Border and in Irish ports trading with Britain. This foreseeable consequence will be the direct result of the sovereign UK decision, not any EU position.

If Mrs. May wants to be able to make deals to extricate herself from some of these bad outcomes, she will need much more negotiating flexibility. Much will depend on what the Conservative manifesto says. If it repeats the promise of a low cap on immigration, then Mrs. May will have less negotiating flexibility after the election than she has now.

Even if the UK decides to stay in the customs union, additional barriers to trade will go up at the Border in Ireland and between Ireland and Britain. Ireland must use every legal means available to prevent this damage, including making full use of the institutions set up in the Good Friday Agreement, to persuade the UK to continue to adhere fully to EU standards within the UK even after it has left the EU. For example, were the UK to decide as part of its agenda of taking back control to develop new British standards for packaging, plant safety, pharmaceutical safety or food safety, the disruption to North-South trade and to trade between Ireland and the UK would be immense. Even slight differences in product or packaging standards can add significantly to costs and can require expensive duplication of testing and production lines. This will be the case even if there are no tariffs. Similar regulatory barriers could arise for the provision of services sold between Ireland and the UK. Increasingly, international trade agreements are about standards rather than tariffs. As the only EU country with a land border with the UK, keeping harmony between EU and UK standards will be disproportionately important for Ireland. Since 1973, both parts of the island have been following identical rules interpreted identically by the ECJ. All of this may change on the day the UK leaves.

The UK Prime Minister has announced that she will, later this year, introduce what she calls a great repeal Bill to repeal the European Communities Act 1972, under which EU laws automatically apply in the UK and are given primacy over UK law. This great repeal Bill would come into full force on the day the UK left the EU. This proposed Bill is misnamed because it will not actually repeal the EU laws, but simply declare these same laws to be sovereign and UK laws, independent of the EU but without altering a single comma. What happens after that? The great repeal Bill will go on to provide a mechanism whereby the UK can then quietly repeal or amend these laws one by one without reference to the EU or anyone else. This will be done by ministerial orders, which cannot be amended and are rarely even debated. If these orders unilaterally change the standards to be met in the UK market, this could overnight erect a new barrier to trade with Ireland and across the Border. The same will happen if a UK Supreme Court decision interprets a rule the UK has inherited from the EU in a manner that differs from the interpretation of the same rule by the ECJ. Overnight, we would have another new trade barrier.

It will take many years for UK Ministers to go through every inherited EU directive and regulation, every amendment to them and every court judgment interpreting them and then to decide which to keep, amend or replace. All of that will be done behind closed doors and under pressure from special interests. It could happen with no discussion with Ireland or other EU countries. That is the logic of the Brexit rhetoric about taking back control.

Ms May has promised that this process will be subject to full scrutiny and parliamentary debate, but that seems impractical, given that many EU laws are involved. Scrutiny and debate, if there is any, will be confined to Westminster. She said nothing about scrutiny in the Parliament in Edinburgh or in the assemblies in Belfast or Cardiff, let alone any consultation with Dublin. This problem will get more severe as time goes on and the UK seeks to justify its decision to leave the EU by introducing new rules and regulations of its own.

The British-Irish Intergovernmental Conference, set up under the Good Friday Agreement, must make this possible divergence a permanent agenda item. It will have to meet much more often than it now does to keep up with the rapidly moving EU and UK regulatory agenda and to spot divergences that might create new trade barriers. It will need a substantially enhanced secretariat and, as the initiator of Brexit, the UK Government should make concrete proposals on this.

Some of the laws being repatriated from the EU by the UK will deal with matters that fall within the competence of the devolved assemblies. These assemblies would theoretically be able to make new rules of their own that differ from one another, which raises the possibility of new barriers to commerce within the UK itself. The exact same former EU regulation could be interpreted in one way north of the border and in another way south of it.

What can do to prevent these disruptive and costly trends? In my testimony to the House of Lords, I suggested that the proposed great repeal Bill contain a special Ireland clause. This clause would require any UK Minister or devolved UK assembly that was contemplating making any unilateral amendment to inherited EU-UK law to give public notice of its intention to do so and to consult the Irish Government and the Northern Ireland Assembly.

Such an Ireland clause should also provide for the monitoring of any divergences between the interpretations by the ECJ and the UK courts. In this way, one could identify anything that might cause a problem for any part of Ireland or for Anglo-Irish relations. This would help the work of the British-Irish Intergovernmental Conference, to which I referred earlier. It would not avoid all the problems that will arise from Brexit, but it should ensure that every step is taken with proper deliberation and foresight and that further damage is not inflicted by accident.

Another aspect of Brexit to which I must refer is its impact on the Good Friday Agreement. The consent principle in the Good Friday Agreement provides that the constitutional status of Northern Ireland - defined as its status as either part of the UK or part of a united Ireland - could not be altered without the consent of the people of Northern Ireland. This is not affected by Brexit, but it is arguable that Brexit changes the constitutional status of Northern Ireland in another sense by taking it out of the EU. This type of constitutional change was not envisaged at the time the agreement was being negotiated. Had Brexit been on the cards then, I am sure the negotiators would have attempted to deal with this matter in the original agreement. Brexit will impact living standards in Northern Ireland. The CAP provides 60% of the cash income of Northern Ireland farmers. The 57% of exports from Northern Ireland, which go to the EU, will suffer. The per hectare support of farmers in Northern Ireland by the EU is the highest in the entire Union. Strand Two of the Good Friday Agreement covers North-South relations. A strong North-South dimension was important in ensuring the overall balance of the Agreement. The three-stranded approach is the key to the Agreement.

One of the key elements of Strand Two is the Special EU Programmes Body, which helps spend EU moneys on projects that promote closer North-South relations. When the UK takes Northern Ireland out of the EU, all this will change and, in the absence of EU moneys, Strand Two will lose an important part of its content. The UK Government, which is the initiator of Brexit, must take responsibility for all of these issues and propose alternative ways forward to strengthen Strand Two and Strand Three of the Agreement. This will require the continued use of the review procedures in the Good Friday Agreement and the St. Andrews Agreement as Brexit evolves. This is a matter the committee might wish to explore.

In making its preparations, Ireland should act on the assumption that the UK will leave the customs union and the Single Market. While it should work for the best, it should prepare for the worst. In our efforts to get the best outcome, and, indeed, to help the UK, we will only get the support we deserve from the other EU states if we show that we are fully committed to keeping the EU together. We cannot allow a perception to develop that we are half-hearted about preserving and strengthening the EU. As a member of the euro, we are necessarily in the EU for the long haul.

Acting on the assumption of a hard Brexit, Ireland should adopt an aggressive strategy to improve its overall competitiveness - in other words, to improve its ability to survive the worst outcome. To deal with a bad Brexit outcome, Ireland must become hyper-competitive. The right action agenda is to be found in theIreland's Competitiveness Challenge, a report presented to the Government by the National Competitiveness Council. As the report points out, we start from a good position. Ireland has the fifth highest productivity in the OECD, after Luxembourg, Norway, the US and Belgium. In terms of ease of doing business, Ireland is in fifth place in the EU after Denmark, Finland, Sweden and Germany. It should aim now to be in first place in both of those tables. The National Competitiveness Council shows exactly where there is room for improvement. Our immediate competitor in many areas will still be the UK. Comparing Ireland with the UK, using the World Bank rankings measures of ease of doing business, the National Competitiveness Council report shows that: in regard to a business wanting to obtain electricity, Ireland is in 33rd place, while the UK is in 17th; in the context of obtaining construction permits, Ireland is in 38th place, while the UK is in 17th; and in the area of enforcement of contracts, Ireland is in 90th place in the world, while the UK is in 31st. The case clearance rate in our courts is the worst in the EU. In respect of trade across borders, Ireland is in 27th place, while the UK is in 13th. In terms of businesses obtaining credit, Ireland is in 32nd place, while the UK is in 20th. The remedy to each of these problems will be different and will require action by several Departments. A whole-of-Government approach will be needed, with a narrow focus on dramatically improving Ireland’s competitiveness position. From my experience, the Taoiseach's office is in an ideal position to get all Departments working on this issue.

If our aim is to be is to hyper-competitive, that must influence our policy on public sector pay. This strengthens the case for a rainy day fund to meet unexpected fiscal eventualities and that for a strong independent parliamentary budget office in the Houses of the Oireachtas. We should not spend today what we are unsure we will earn tomorrow. As our population ages and the retired population inevitably expands, costs in this area will increase and we will not be able to afford any work disincentives. We cannot afford to have so many households where no one is working, an area in respect of which Ireland is apparently worse than any other EU country. We will also not be able to afford to narrow our tax base, as some propose. In fact we should be broadening it.

Ireland must work to make the EU more effective and more visibly democratic. It must help the EU to shake off its pessimism and defend it from unfair criticism. However, Ireland must also come forward with ideas for the reform and improvement of the EU. There is no doubt that there was a risk that Brexit would lead to individual countries pursuing separate agendas within the EU but thanks, in particular, to Ireland this has not happened. EU states must now work hard to strengthen both EU-wide democracy and the effectiveness of the EU. As a first step, the EU's ability to conclude trade agreements must be improved. As matters stand, the parliament of one country - the Walloon Parliament in Belgium - could block a trade agreement. This should be changed. If the EU does not have the ability to conclude and ratify trade agreements, others will make trade agreements to our disadvantage. Likewise, we must ensure that the EU becomes more visibly democratic. This could be done by having the President of the European Commission elected directly in a two-round election by the entire electorate of the EU; having the president of the Eurogroup similarly elected by the eurozone countries and by giving national parliaments of the EU, if a minimum number of them agree, a power to require the Commission to put forward for consideration a legislative proposal within the EU competences in the treaties. National parliaments can already delay EU legislation so why not allow them to make positive proposals in respect of such legislation? It is vital that EU rules are respected by all countries. I was shocked to learn that France had said it would not enforce the postal workers directive if an amendment it proposed was not conceded. It is an existential threat to the EU if countries threaten to act in that way. I was surprised that the Prime Minister of a founding member state of the European Union made such a threat.

Likewise, we must not accept that the EU treaties cannot be amended, which seems to be the political consensus at present in the Union. A club that does not have the ability to change any rules will fossilise and die. The EU must accept that treaty changes to make it easier to conclude trade agreements, allow for democratic elections of EU leaders and permit national parliaments to urge proposals on the Commission would be supported by the public and should be entertained.

Neale Richmond (Fine Gael)
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I thank Mr. Bruton for his extensive, informative and enlightening address which is greatly appreciated. A number of Senators have indicated their desire to speak, the first of whom is Senator Catherine Noone.

Catherine Noone (Fine Gael)
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I thank Mr. Bruton for attending today and for providing a very insightful, detailed and interesting presentation which shows his wide knowledge of and interest in the issues at hand. I am interested to know Mr. Bruton's feelings about the UK election. Who knows how it will play out? I believe that Prime Minister May feels very confident that she will come back with a larger majority which will strengthen her hand, which is understandable, given what opinion polls are showing. What does Mr. Bruton think about that situation and how it might impact?

Mr. Bruton said earlier that if they were to sit back and think about it, they would conclude that " a UK inside the EU is better for the EU than a UK outside it", even with a trade deal. While I understand Mr. Bruton's optimism, and I would also tend to be optimistic by nature, I get no sense from what I am hearing from the UK that is realistic. I ask Mr. Bruton to enlighten me further on that point.

How does Mr. Bruton think the evolving situation with regard to Brexit will affect Scotland? Does he think Scotland freeing itself from the United Kingdom is inevitable or likely, once the UK formally leaves the EU? On Northern Ireland many people, including the Taoiseach, have commented that if the UK leaves the EU, which it is on target to do, we could see a united Ireland in the future. I ask Mr. Bruton to give his opinion on that matter.

Mark Daly (Fianna Fail)
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I thank Mr. Bruton for appearing before this committee and sharing his insights, not only on domestic matters but also on matters related to the EU and further afield. I particularly welcome his insights on competitiveness, which is one of the areas over which we have some control. There is much we can do to limit the effects of Brexit, which will grow and worsen over time. Brexit is an issue that only gets worse because the more one learns about it, the more one realises how difficult it is for us to address.

My colleague, Senator Noone, has spoken about the issue of a united Ireland and the Taoiseach has said that the EU needs to prepare for a united Ireland. What does Mr. Bruton think we should seek to have included in the final agreement between the EU and UK on the issue of Northern Ireland? Do we require a protocol to be inserted to the effect that if the people of Northern Ireland vote for a united Ireland, that would become automatic? Is it Mr. Bruton's view that it would be like the precedent set by East and West Germany? What does he believe we should do now to prepare for the issue in terms of a referendum on the question of unification?

Paul Daly (Fianna Fail)
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I welcome Mr. Bruton and thank him for his very comprehensive report which clearly demonstrates his vast experience. I would like to tease out a number of issues with him. If he was the plane on Saturday morning, what approach would he be taking on our behalf? We sent Mr. Bruton out to bat for us on many occasions, successfully, I might add. I am seeking his opinion here and do not seek to undermine the negotiating position of those who will be representing us. There is a feeling or a perception out there among the remaining EU member states that our efforts to get the deal we need because of our unique position mean we are looking for a softer Brexit for the UK. They are interpreting our endeavours on our own behalf as working to the advantage of the UK in terms of achieving a softer Brexit than some of them would like to see. When Mrs. May said it would be a hard Brexit, many of our European partners formed the view that if she wanted a hard Brexit, she would get one. Then we came knocking on the door, quite genuinely because of our situation, and some of our EU partners now think that we are working more on the side of the British, albeit for our own benefit.

Mr. Bruton began his contribution by complimenting the Government on the work that has been done to date. Given the importance of this issue, which is possibly the most pressing faced by the State since its foundation, does Mr. Bruton think that we should have a Department and a Minister for Brexit to deal with the negotiations and to prepare for the potential outcomes? While we are all hoping for the best, as Mr. Bruton said, we must prepare for the worst. If Mr. Bruton was Taoiseach when this happened, would he have considered appointing a dedicated Minister for Brexit?

Neale Richmond (Fine Gael)
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Senator Paul Daly stole one of my questions but that is fine; we are all working together here.

Paul Daly (Fianna Fail)
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Great minds think alike.

Victor Boyhan (Independent)
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I thank Mr. Bruton. Clearly, he has vast experience in this area. When I was coming in this morning, someone said "he does go on, you know" but, as I said, he has much to say and a lot to offer. As I was reading this presentation, I was reminded yet again of the number of people who have asked about a simpleton's guide to Brexit. How can the punters understand it? I spoke to a number of people on the DART earlier today who expressed the view that Brexit is going to happen, that there is an inevitability about it and we should stop resisting it. We must accept that it is going to happen in some shape or form and determine how we can best protect ourselves. Several speakers referred to the impact on Northern Ireland but Brexit will have a devastating and catastrophic impact on the Republic of Ireland and indeed, on the island of Ireland. I spoke to an Ulster farmer the other day who said that he was not sure if he was loyal to the crown at all anymore. He said, "I am loyal to that crown; not the Majesty's crown". I thought that was a simple but strong and clear message. Money divides people but it can also unite people. The economy brings people together. Prosperity brings people together. We prosper in a safe, prosperous economy and country.

I am someone who never envisaged the possibility of a united Ireland but I think it poses great possibilities and opportunities for this country. When we look at Northern Ireland, the Good Friday Agreement and the commitments that have been made, if Britain pulls Northern Ireland out of the EU, it changes Northern Ireland's constitutional position. That has a huge impact in terms of the Good Friday Agreement. We know that we will have the land border between the EU and the UK, but there are complications to all of that. Look at Scotland. Scotland chose to remain in the EU. That is going to gather momentum because the economy focuses people. Funds and money focus people. The majority of the people of Northern Ireland voted to remain in the EU. That is really important. Some people may call that narrow nationalism or whatever, but at the end of the day it is about their lives and their families.

We have to keep this whole Brexit debate simple. We must have brevity and keep it simple. How is it going to impact on people's lives, their families, their economy and their business? That is really important. Sinn Féin is not here today, but it is interesting that its members have talked about a new Border poll. I think we are going to move towards that, which is no surprise. Mr. Bruton might be shocked at this, but I think there is a greater momentum for all of that. It could be argued, as the British Government of course will, that there is no tangible evidence that the people of Northern Ireland want that to happen, but I think it is coming closer and that is possibly a good thing. Mr. Bruton talks about opportunities. I see that as a real opportunity. I do not want to dwell on that point but I think it is important. Brexit threatens the key principles and objectives of the Good Friday Agreement. I want Mr. Bruton to talk about that and how he sees it. Does he accept or agree that it will have a serious impact on the constitutional position of Northern Ireland? With his experience I know he would have very strong views on that. I would like to hear them.

We also have to recognise that there has always been what I like to term a porous border between Northern Ireland and the Republic of Ireland. Some of that has not been regulated and there are other arguments about that. They are for another day. There is however a transfer of money, business and economy through the porous border between Northern Ireland and the Republic of Ireland and that needs to be recognised and understood.

The Taoiseach outlined four key areas at the beginning of this process. He talked about minimising the impact on trade and economy, protecting the Northern Ireland peace process, maintaining the common travel area and influencing the future of the European Union. I want to start with that last one. Mr. Bruton talks about greater democracy within the Union. Why is France in this situation at the moment? Why is Britain in this situation? Mr. Bruton accepts, and has clearly outlined, the need for greater power, functions and engagement with national parliaments. That is a problem that has arisen. We need greater democracy within the European Union. I would nearly make a bet with Mr. Bruton that the next European elections in this country will throw up some very interesting results. There will be resistance, anger, discontent with the standard parties and also reactionary responses, which are not always good in politics, in respect of the European Union and the European institutions. I would like Mr. Bruton's comments on that.

Mr. Bruton's document was not numbered, but it has 22 pages in it. I see my colleague, Senator Reilly, is similarly numbering the pages. I want to reference two points in the document for Mr. Bruton.

Mr. John Bruton:

Now we are all counting.

Victor Boyhan (Independent)
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Does Mr. Bruton have the numbers himself?

Mr. John Bruton:

I have no numbers on it at all. I am afraid I am my own secretary.

Victor Boyhan (Independent)
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That is the joy of being one's own secretary, is it not? On page five, Mr. Bruton talks about how keeping the offer of resuming UK membership on the table would be good for politics, the economy and the EU. That is really interesting. It is something that is not being pushed out there as an option. I would really like Mr. Bruton to tease that out more and speak about how he would envisage it.

People do not clearly understand enough about the revocation of the notice of withdrawal and that the UK can revoke a decision of withdrawal from the EU. That may perhaps be a very lengthy process. I do not know a lot about it. It is all news to me so I am glad to be here to listen to what Mr. Bruton had to say about it. Will Mr. Bruton tease out the revocation process? That is really important.

On page eight, Mr. Bruton states that "Some have argued that if Ireland is inside the EU and the UK is out of it, a special "bespoke deal" for the island of Ireland, or for the UK and Ireland, could be envisaged". He says "I do not see how this could work as far as trading standards and tariffs are concerned." He goes on to explain that, but he might tease it out for us.

In concluding I again thank Mr. Bruton. The big message for us all in this forum is that we must make this Brexit message very simple. Yesterday, we saw Donald Trump's new arrangements for taxation. There are huge, enormous challenges facing the island of Ireland as regards the economy and our new road to recovery. These times present major challenges for us and they are not unlinked. They are all interconnected. I thank Mr. Bruton for his very comprehensive paper. I would appreciate it if he would touch on some of the issues I have raised.

James Reilly (Fine Gael)
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I welcome Mr. Bruton who, as others have pointed out, has huge experience. I thank him for all his service to the country in all of the different roles that he has played, and indeed his service to the EU when he was ambassador to the US. He mentioned competitiveness. It is really important that we discuss that a bit further and address the issues that are affecting our competitiveness. Mr. Bruton has been very fair in showing that, overall, we are much better than the UK in terms of competitiveness but that there are areas such as legal costs where we are weaker, not just in terms of the fees charged but the duration of the process. I have seen deals fall asunder. People in America can close a house sale in two weeks, very often on the Internet. They come over here and are just flabbergasted at the amount of time it takes and they become very suspicious that something is awry. That is certainly something we have to look at.

Mr. Bruton mentioned the Good Friday Agreement, how there will clearly be implications for it and how it is going to sit within any deal done. It has to be respected as an international agreement.

I agree with Mr. Bruton entirely when he talks about the need for the EU to be dynamic, able to change and, therefore, able to bring in new rules, regulations and treaties. At the same time however, that cannot be done at the expense of minority views. Smaller countries such as ours must not be made to feel that we would be sidelined by a number of bigger countries who would make decisions without regard to our concerns. I am not saying that is the case, but it is a delicate balance to strike. I would warrant that Mr. Bruton would know more about that than anyone in this room.

I am absolutely delighted to hear Mr. Bruton talking about rules being enforced equally. I do not mind putting some comments on the record here. If one wants to set up a small food outlet in this country there are all sorts of rules and regulations imposed by the EU, yet I had an experience where I passed through France and Monaco and into Italy. I stopped in the third village down the coast for lunch. It was a lovely lunch and very reasonably priced. I thanked the staff and asked where the toilet was. I was told to go the train station as the restaurant did not have one. One just could not do that here. Mr. Bruton is absolutely right when he talks about the big things, but it is the little things that drive people mad as well. Enforcement does not seem to be equal across the EU. Let us call a spade a spade. As Mr. Bruton quite rightly implies, that is what undermines people's faith in Europe. In fairness, politicians in this country too are guilty of blaming the EU for things they do not like and then expecting people to have a love of the EU, when in fact much of what we heap blame on the EU for is our own fault, due to the way we have imposed and interpreted certain rules.

I really welcome Mr. Bruton's proposal to the House of Lords. It is really important that there would be some sort of heads-up arrangement before any legislation is passed so that it does not cause untoward or unintended consequences. It was really useful to hear him point out many of the problems. If we had any doubt about how a change in law can impact hugely on businesses, we should look at an amendment that was recently discussed in the Joint Committee on Jobs, Enterprise and Innovation, the Seanad and Dáil. It was an amendment to a Bill to allow for a further extension of a derogation for international companies under accountancy rules that apply here in Europe and accountancy rules that apply in the United States. The sums of money that it was going to cost companies ran to the hundreds of millions, purely because of a rule. In fairness to her, the Minister took immediate action and extended that so that companies can now relax, but the impact it was going to have was just astonishing.

That is going to be multiplied a thousand times over through the course of Brexit if great care is not taken. Mr. Bruton spoke about leaving open the possibility of revoking the decision. I imagine he will agree it is far too early to be making noise like that. As he has rightly demonstrated, the longer this goes on, the more people will realise what the impact of it is and understand the negative effects it will have. In such circumstances, the slightly gung ho approach that has been adopted might diminish and a different view on this matter might be taken in the UK.

I think we will find out this weekend, when we see what comes out of the meeting, just how effective the Government team has been in making Ireland's case. I would like to congratulate all of those involved because they have done an excellent job. As Mr. Bruton has pointed out, there are many problems and many opportunities in this context. As a country, we need to deal with the problems we know of, anticipate the problems we know about in part and be prepared for problems that have not been thrown up yet. We need to take every opportunity we can, including those highlighted by Mr. Bruton in his paper. I refer, for example, to the possibility of bringing the European Medicines Agency to Ireland, and to Dublin in particular. There are many opportunities in our capital city, especially in the area around the airport. There are many other opportunities out there for Ireland. Many countries, including Brazil, Russia, India and China, see Ireland as a wonderful place where they can access the EU market of almost 500 million people. That market will decrease when the UK leaves the Union. As Mr. Bruton has pointed out, many companies are based in the UK so that they can access the EU market. Obviously, that will change. I thank Mr. Bruton again and ask him to expand on how he envisages that the option of the UK revoking its decision might be retained. How would that work in real terms? Will Mr. Bruton set out the timelines within which that might happen?

Neale Richmond (Fine Gael)
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I will ask one or two questions before I hand back to Mr. Bruton. I would like to build on what Senator Reilly has said about the opportunities presented by Brexit. Mr. Bruton mentioned the positive impact of the recent EU trade deal with South Korea, which has been beneficial to the UK and is presenting opportunities for Ireland. There is a need for Ireland to diversify its economy and create options beyond Brexit. What regions or areas present the next best opportunities? I refer not only to areas with which the EU does not currently have trade deals, but also to existing trade deals, such as the Mercosur deal, that need to be improved and brought up to speed.

Many of the questions I had intended to ask have been asked by my colleagues. I would like to ask about the scope and role of Anglo-Irish relations after Brexit has happened. Obviously, we are tied through the EU and we will negotiate as one of 27 member states. I fully agree that this Saturday's meeting will be extremely important. We are able to work with the UK outside the structures of the EU through existing bodies like the British-Irish Parliamentary Assembly and the British-Irish Council, even if they do not meet as often as they could. Does Mr. Bruton believe the potential exists for those two bodies to further strengthen Anglo-Irish relations and to facilitate new forms of access? I thank all Senators for their contributions and invite Mr. Bruton to respond to the questions that have been asked.

Mr. John Bruton:

The EU is negotiating a number of trade agreements at the moment. I do not have a list of them in my head. We have had difficult experiences in ratifying agreements with Canada and Ukraine. In the latter case, a relatively small number of people in the Netherlands were able to bring about a referendum in which a relatively small number of people rejected by a narrow margin a treaty that had been negotiated on behalf of all 28 member states with Ukraine, which was under threat from Russia at the time. The ability of the EU to negotiate trade agreements, and conclude and ratify such agreements, is weakened by this sort of eventuality. This needs to be remedied.

Some people might argue that the rights of minorities have to be protected in a situation like this. That view has been reflected in some of the questions that have been asked by Senators. I suggest that the interests and rights of majorities also need to be protected. I believe that the EU, by its very nature as an organisation based on rules that apply equally stringently to big and small countries, to the rich and the poor and to the economically powerful and the economically weak, is the best organisation for a smaller country. The over-riding reason I believe it is in Ireland's interests to be at the heart of the EU is that the relationships of power within the Union are mitigated by the existence of rules. If the EU were to break up and we were to revert to pure power politics in Europe, the smaller countries would be the big losers and the bigger countries would be unrestrained. That is why it is so important for us to remain not just in the EU, but in the lead in the EU along with other countries that have similar interests. It is a great support for us that the biggest country in the EU - Germany - is so committed to the European ideal and indeed to the rights of smaller countries within the EU. Germany is the great bulwark for the preservation of peace in Europe, partially as a result of its bad conduct in the past. That has now been turned into a tremendous asset in terms of German political support for Europe. I think that is a very positive thing to reflect on.

I will respond to the specific questions that have been asked by the members of the committee. I agree with the Chairman that the British-Irish Intergovernmental Conference has a great deal of work to do. It should probably meet once a month as soon as Brexit occurs, if it occurs. The conference should monitor court judgments and regulatory changes that are being made to identify anything that could add, however infinitesimally, to the burdens faced by those who do business between this island and Britain and across the Border on this island. It is fortunate that the Good Friday Agreement has an east-west dimension as well as a North-South dimension. The east-west dimension was originally included in the Agreement to reassure Unionists, but it is now in our interests to make it very strong because it has the potential to protect our interests in the context of Brexit. On the other hand, the North-South strand was what was important for Nationalists when the original agreement was being put in place. That has been partially mitigated by the doubt that has been put over the continuance of EU funds. It is up to the British Government to come forward with proposals to strengthen the North-South and east-west strands in a way that maintains the balance of the Good Friday Agreement, which from the outset was a balance between varying interests.

On the points made by Senator Reilly, it is interesting that one of the areas of competitiveness in which Ireland is among the worst performers in Europe is legal delays. I do not know the reason for this. I am not a Member of the House anymore. I think the experience in Europe generally is that vested interests in the professions are better than their counterparts in the trades at resisting change. Vested interests in trade and manufacturing find it less easy to resist harmonisation and competition. Resistance to putting the consumer first is easier in some professions, perhaps because the changes involved are so complex.

That means that legislators have to do more work in the professions than other areas.

With reference to Senator Victor Boyhan's suggestion that we try to make Brexit simple and easy to understand, by their nature some things are complex and any attempt to simplify them can lead one into great error. For example, Boris Johnson tried to simplify the Brexit issue by saying the British people could have their cake and eat it. It was a memorable phrase, but it irresponsibly misled people in Britain. In the context of referenda, there is a very big obligation on citizens as citizen legislators not to look for simple explanations but to attempt to understand complexity because this is a complex issue. The United Kingdom got itself into its current position because it oversimplified what the European Union was about. It has not studied it in the way smaller countries like Ireland have had to do because of the nature of our position. We understand the European Union because we have to. Until now, the United Kingdom felt it did not have to understand the European Union but that it could make a simple decision to leave and that the consequences would be light. It will find that they will not be. That is the price it is paying for the search for too much simplicity in the description of complex issues.

I was invited to speculate on what Scotland might do. I am tempted to say we have enough problems of our own without worrying about Scotland. As the Scots are probably quite good at looking after their own interests, I will not address them.

In 2015 a poll showed that only 32% of Northern Irish Catholics and 14% of the total population wanted a united Ireland. Those figures would now be somewhat different but not radically so. For the past 200 years Irish nationalists, both constitutional nationalists and nationalists who also entertained the use of other means, have tended to wish away the substantial resistance to a united Ireland among a significant, concentrated and deeply convinced section of the Unionist community in Northern Ireland. Asking Unionists to change their position on this issue is akin to asking them to change the way in which they have defined their identity. We may not define our identity in that way, but they have defined theirs as including allegiance to the Crown. It is not something they will easily change and that a 51% majority in a Border poll in Northern Ireland would change. The financial and security practicalities of imposing the wish for a united Ireland of a 51% majority on a recalcitrant 49% would fall entirely on the shoulders of this state. The British would no longer have any part to play and we would have to shoulder the burden on our own. It is important that we be honest with ourselves about this.

I may be wrong, but I do not believe there is a need for provision to be made in EU law to facilitate a united Ireland. As Senator Mark Daly pointed out, Germany was reunified without any change to the treaties. If both communities in Northern Ireland were to decide that it was in their interests to have a united Ireland, the European Union would facilitate that overnight, as would we. It would cost us money, but if that is what both communities wanted, we would have no difficulty in paying for it. However, it is more difficult to try to do it when only one community or a narrow majority of one community and an overwhelming majority of the other want it. Members will probably be glad to know that I am no longer a practising politician. How to work this out is now an issue for current Members who should not underestimate the difficulties involved.

To keep the option open of Britain resuming membership of the European Union at some stage in the future, all we need to do is what the President of the European Parliament, Mr. Antonio Tajani, has done and say that option is open. It does not have to be discussed any further than that. Should the British Parliament come to consider the outcome of the Brexit negotiations, it will look at this and might consider that that option might be better than what has been offered to it. That is all that is needed. No further elaboration is required.

Senator Paul Daly asked about having a Minister with responsibility for Brexit. As I indicated in the section on competitiveness, meeting the Brexit challenge involves every Minister. There is no part of government which is exempt from the responsibility for meeting the challenge. It is a collective challenge for the entire Government. Having been a line Minister, there is always a risk that one can become completely immersed in one's own agenda. A Minister may attend Cabinet meetings but not become involved and perhaps not even encourage himself or herself to become involved in the affairs of other Departments. I fear that if there were to be a Minister with responsibility for Brexit who would be the bag carrier in dealing with all of the problems, the rest of the members of the Government would sit back, consider that issues were for the Minister with responsibility for Brexit and leave him or her to deal with them. It is better for Ministers to have collective responsibility. However, I acknowledge that the suggestion of a Minister with responsibility for Brexit was put forward in good faith and with the best intentions in terms of the interests of the country. I do not criticise anyone for putting it forward. It shows seriousness, but I do not think it would be the right thing to do at this point. However, again, that is for others to decide.

I share Senator Mark Daly's concern on the issue of a vote in the House of Commons on the Good Friday Agreement. The UK Government has approached Brexit with little active interest in the impact in Northern Ireland, Scotland or Wales. It is being dealt with with the English electorate in mind, which is a pity. There is an interesting contrast between the European Union and the United Kingdom. In the European Union no treaty change can be made and no new member can be admitted without every existing member agreeing to it. However, in the United Kingdom of Great Britain and Northern Ireland two of the four constituting nations can decide for the other two.

That shows the difference between the two unions.

Neale Richmond (Fine Gael)
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We have covered a great deal and are very appreciative and grateful to Mr. Bruton for giving us so much of his time and the benefit of his insight and experience. I thank all Senators for their engagement.