Phil Hogan (Carlow-Kilkenny, Fine Gael)

I welcome the opportunity to debate this motion tabled by the Independent Deputies. I was surprised at the innocuous content of the amendment to the motion tabled by the Government, and given the reasonable nature of the motion, I was surprised the Government could not agree with its contents. There is very little difference between the motion and the amendment. The motion would have been a strong declaration of intent on behalf of Dáil Éireann to say to the European Commission and Parliament that Ireland was at one with regard to the amendments required and changes necessary to the present drafting of the EU services directive.

The EU services directive is very important legislation currently going before the European Parliament. At its heart is the nature of our common market, one which has served this country exceptionally well. It seeks to provide consumers with choice, to root out inefficiency and to promote competition. For all those reasons, Fine Gael supports the need for a common position on EU services. Unfortunately, its needless country of origin principle makes the directive unacceptable in its current form. There is much to be welcomed in the directive. We believe the country of origin principle will be removed in time and that the directive will, in a new form, become law.

Many in this House and outside are using one part of the directive, which has no hope of being passed, to overlook some of its positive elements. The draft services directive will be of great benefit to Europe and Ireland. It will help boost economic growth and sustainable jobs. Since 1993 the Internal Market has created much prosperity and employment in this jurisdiction. It can deliver much more if we can create a real internal market for services. It will make it easier for businesses, especially small and medium size businesses, to provide services throughout the EU. This will increase cross-border competition in service markets, bringing down prices and improving quality and choice for consumers.

Some time ago, to reduce prices and create greater competition in the insurance market, Fine Gael proposed to the Government that we should bring about a situation where the completion of the Internal Market would allow Irish consumers to shop around the European Union to get cheaper prices at a time when they had increased enormously between 1999 and 2005.

The proposed EU services directive would also remove pointless red tape, by simplifying the authorisation and licensing regimes with which businesses must comply. Business would be able to complete any necessary formalities electronically and through one point of contact. It would improve co-operation between national authorities in different member states to protect and inform consumers and to combat rogue operators or illegal work. It would help stop discrimination against consumers on grounds of nationality. For example, different entry fees to museums or cultural events could not be imposed on tourists on the basis of their nationality.

It would clarify the conditions under which patients are entitled to reimbursement for medical care obtained in another member state to ensure that patients can benefit from a better choice of high-quality treatment. We would also see better exchange of information and closer co-operation would replace the current wasteful duplication of national regulations and controls.

Some things would not happen if the directive were introduced. It would not force member states to liberalise or privatise public services or open them up to competition. The directive would not affect the freedom of member states to define what they consider to be public services or services of general economic interest, or to decide how they should be organised and financed. The directive would not change the way member states choose to organise health and social security systems. It would not allow companies to bring in cheap workers from other member states. The proposal leaves unchanged the rule that a service company posting workers to another member state applies that member state's employment conditions, including minimum wages, to avoid social dumping. It would not endanger the protection of health and safety conditions or social security we have in this jurisdiction. National governments would continue to have sovereignty over a range of issues that would not be included in the draft EU services directive.

However, Fine Gael has a difficulty with the country of origin principle. The Deputies in the Technical Group have clearly set out how this would have an impact on Irish conditions. We do not want to end up with two tiers of workers. Either we have a minimum wage or we do not. Either we have health and safety regulations or we do not. With the country of origin principle, I am not sure whether that situation arises. We cannot say that we are in the business of equality if we allow for one worker doing the same work to be paid twice as much simply on the basis of where he or she grew up.

I note that SIPTU has stated that the European Trade Union Confederation has protested that the directive would allow companies registered in EU member states with minimum labour standards to undercut the higher standards, including pay and conditions, secured by workers in other member states. The directive would also allow an Irish company to re-establish itself in a low-standards member state and then return to operate in Ireland with these lower standards. Worse still, any checks to ensure that the workers employed by these service companies even complied with the low legal standards required by the country of origin would be the responsibility of the country of origin rather than the member state in which the service company was operating. Even the enforcement of these minimal standards would be practically impossible.

I am in favour of competition and in our various campaigns, particularly since November 2003, Fine Gael has advocated the importance of having the free movement of goods services and labour in the context of the completion of the Single Market. I already referred to insurance and in many other service areas, Irish consumers, because of our geographical location and our small market, are not able to benefit from the possible savings we could make across a wide range of goods and services by the completion of that market. During campaigning for the referenda on many treaties, the Irish consumer was promised on many occasions that savings would accrue from the larger Union of 450 million people. Through the completion of the Internal Market it should be possible to make progress and achieve savings in many of these services on which small businesses and consumers feel they are being ripped off.

This part of the directive which seeks to engage in the country of origin principle is not the way forward and it needs to be changed. On behalf of Fine Gael, through its membership of the largest grouping in the European Parliament, the European People's Party, I will play my part to make the views of this House known and we will use our political influence in that context to ensure that changes and amendments are made to the draft services directive. It will require clout at that level to implement such changes.

The motion is right to contextualise this issue in terms of the recent disgraceful goings on at Irish Ferries and Gama. That a former State company in the shape of Irish Ferries would resort to such Dickensian tactics to cut costs without the slightest concern for Irish workers whose livelihoods it was destroying is nothing short of scandalous and whatever captains of industry decided that this was a good idea should be ashamed of themselves. The developments in Irish Ferries were significant not just because of those whom they directly affected. Every employee in the country was looking at Irish Ferries and saying that it could have been him or her.

I am particularly pleased that the recent agreement worked out by Irish Ferries and the trade union movement through the Labour Court intervention ensured that situation was averted. It was not appropriate, through the country of origin principle, for Irish workers to be displaced by foreign workers who would be abused and exploited by not being paid Irish rates of pay. I accept that maritime law played a major part in this case. However, clarification of the Irish Ferries dispute was important for many workers who felt undermined and hopeless if such a situation took hold. We, in this House, have a duty to ensure that situation does not recur.

In May 2005 it became known that Irish Ferries was one of the main beneficiaries of the so-called tonnage tax scheme. It saved an estimated €3 million in tax payments in 2003, the first year of the scheme's operation. When a company is getting such considerable support from the taxpayer, it should have respect for Irish workers and not treat them in the manner it did. I hope the new social partnership agreement, negotiations on which will begin soon, will play a part in ensuring we have proper employment standards.

Similarly with Gama Construction, revelations regarding foreign workers are shameful. I sincerely hope that the labour inspectorate of the Department of Enterprise, Trade and Employment will investigate, prosecute and punish those responsible for any impropriety, exploitation and fraud that may have taken place. Such companies should be brought to heel by the laws to ensure that we have an even playing pitch for all companies and the highest level of worker standards.

The finding of a recent survey indicating a majority of voters claimed they supported the reintroduction of work permits for eastern European workers is hardly surprising. There is an inherent prejudice and racism inbuilt in the Irish psyche, which is regrettable, misplaced and unfair. We require information campaigns and education to deal with this problem. Fine Gael believes the country should be upfront and honest about the need for immigration, the benefits it can bring and the repercussions for our economy of not welcoming inward migration.

Ireland will need to import the skills needed to ensure that we remain a world-class player. The economy has the potential to post cumulative growth of 45% in the next ten years, which will require more labour. We will not be able to sustain that economic development ourselves and based on a Goodbody Stockbrokers assessment, I do not believe the birth rate will increase the population to the extent that we can supply all those workers ourselves. I do not see us reverting to pre-television days and having very large families again. We undoubtedly need more immigrant workers. To those who say otherwise, I ask how we will find people to staff our public services and service industries without those people. We must ensure that we integrate these people into Irish society.

We all know people or have family members, perhaps ourselves, who were directly affected by the fact that we are former emigrants. The last people in the world who should be afraid of globalisation are the Irish. At a time when our economic conditions were not good, our people were beneficiaries in terms of economic and social well being by the fact that we had the United Kingdom or United States willing to absorb our family members, who played a major part in building those economies. Ireland has been enriched by many of these people who have returned, established small and major businesses and have had a considerable influence externally on foreign direct investment in this country. We should also ensure that we take a societal view of our migrants, not just an economic view. This is where we may have been falling down over the past number of years.

The services directive as it stands will act as a disincentive for outside labour to come here, which is why some changes are required. The very reason that many EU nationals view Ireland as an attractive place to work and live is the high rate of pay. We are going up the value chain in the view of Mr. Seán Dorgan, who regularly mentions it. Some people going up the value chain are doing so due to enhanced educational provision. We should be mindful that not everyone participates in the educational process. Too many people drop out of the education system and have poor literacy skills. State intervention is required to ensure that people stay longer in the education system and benefit from going up the value chain.

The high cost of living here cancels many of the positive factors in many cases but Ireland's minimum wage, which I fully support, is certainly a pull factor when it comes to attracting people here. We have very little hope of continuing to attract the necessary supply of, for example,Polish workers if all we have to offer them are the same wages and conditions they get at home. I sincerely doubt many of them will come here simply for the Guinness.

The motion refers to "the need to promote social solidarity as a core value between EU citizens". As a European and as a member of a pro-European party that has always supported the value of the European Union, even when others in this House were portraying it as some sort of bogeyman, I fully subscribe to that view.

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