Professor Christopher McCrudden:

I am delighted about the way in which the conversation has gone because it seems to be precisely the sort of conversation we should be having. It is about detail, workability and feasibility rather than simply identifying problems. We are now looking towards solutions and that seems to be absolutely the right thing to do. Our position is essentially to float this as an option, partly to tease out precisely these kinds of questions. Until now, as far as I can see, there has been no alternative plan against which one can set exactly the kinds of questions being raised. If we have succeeded in raising those issues, it has been at least a partial success but we can do more than that.

The Senators asked specifically about some implications. The paper I will send to the clerk spends a bit of time teasing out some of the legal issues we have spoken about. As to whether the EEA agreement is compatible with EU law in a broad sense, it is. That has been entirely settled and there is no question on whether it is compatible with EU law. That is a major plus as all the negotiations that had to take place to make it compatible with EU law have already been settled. We are coming back to the known quantity point. We have also been doing work on the details, for example, in terms of the financial contribution that states would need to make if they were to buy into the EEA agreement. We have been doing estimates of that. It is not in the paper but we can send separately some work that is exactly on the question raised about financial services. We have been trying to work out what the implications are for financial services.

Senator McDowell mentioned the distinction between services and goods and he is absolutely right. We already have a functioning EEA market in which precisely that problem has not arisen. We have not yet seen the flow of financial services to Norway, for example, so there are constraints in the EEA treaty meaning that some of the financial services issues are not quite as simple as might be supposed. I want to make Belfast a success and I would be happy for floods of financial services to come to Belfast but unfortunately, our estimate is that will not happen and the benefits are minimal for the financial services industry to move lock, stock and barrel to Belfast. I might send a note to the committee on that issue to explain the background rather than holding it back this morning.