Dáil debates
Wednesday, 25 January 2006
Private Members' Business.
EU Services Directive: Motion.
7:00 pm
Marian Harkin (Sligo-Leitrim, Independent)
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I propose to share time with Deputies Connolly, Finian McGrath and James Breen.
Dinny McGinley (Donegal South West, Fine Gael)
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Is that agreed? Agreed.
Marian Harkin (Sligo-Leitrim, Independent)
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I move:
That Dáil Éireann,
notes:
—that services within the European Union account for 56% of GDP and 70% of employment and are therefore crucial to growth and employment levels;
—the grave concern among citizens and trade union organisations within the European Union about the implications of the directive on services in the internal market, issued on behalf of the European Commission on 13 January 2004 by Commissioner Bolkestein;
—the analysis by the European Trade Union Confederation stating that the directive would allow companies registered in EU countries with minimal labour standards to operate their standards throughout the EU — the so-called "country of origin" principle;
—the well founded fears that the services directive would be used by some employers to undermine established rates of pay and safe and reasonable working conditions negotiated by workers through their trade unions, and also undermine the ability of other employers to compete in the future;
—that, if implemented, the services directive could legitimise exploitation such as that of the migrant Turkish workers by the multinational company, Gama, exposed during 2005, and the recent revelations concerning mushroom pickers in Kilnaleck, County Cavan;
—the attempt by Irish Ferries to replace permanent crews on trade union negotiated rates of pay and conditions with low waged eastern European labour;
and further notes:
—the need to promote social solidarity as a core value between EU citizens;
—the need to prevent any undermining of employment standards and health and safety standards in the services industry and to prevent the practice of social dumping;
—the desirability of developing a social model that has the trust and confidence of EU citizens and which promotes high quality public services, consumer protection and democratic accountability and workers' rights;
deplores the fact that the Government has supported the proposed services directive which would have damaging economic and social implications and, aware that the President of the European Commission, Mr. Barroso, has stated in the context of this directive that the concerns of the different sectors must be taken on board and also that the Austrian economic Minister, Mr. Martin Bartenstein, said in his statement that a precondition for the success of the services directive would be that it convincingly excludes wage and social dumping, calls on the Government to state that in the context of the next partnership negotiations, it will reject the proposed services directive and, in particular, the "country of origin" principle.
I am pleased to propose this motion on my behalf, on behalf of my Independent colleagues, Deputies James Breen, Connolly, Cowley, Gregory, Healy, Finian McGrath, McHugh and Catherine Murphy, and on behalf of Deputy Joe Higgins. The proposed directive on services is wide ranging and deals with everything from child care to car care, from mobile telephone contracts to mobile chip vans, from baby-sitters to dog-sitters, from the installation of a new kitchen to the fitting of dental crowns. This short list gives some idea of the scope of what we are discussing. We must also take into account that there are 25 — and soon will be 27 — countries with different regulatory regimes, legislation, standards, costs, incomes, cultures, expectations and languages. When we further consider that there is no harmonisation and no accepted and agreed overall standards for the provision of services across the EU, we get a fuller picture of the situation.
I do not contend that there should be no liberalisation of services. It is impossible, however, that one directive — a single piece of legislation — should be adequate to deal with all the different and complex issues, particularly when that legislation is firmly based on the country of origin principle. To quote a phrase circulating in Brussels, it is "Commission Impossible". A directive on services is required but not the directive as currently proposed. Commissioner McCreevy now accepts this. He has said he would not bet on the country of origin principle getting through as it stands.
The Government and our Commissioner have consistently backed the services directive as proposed. They are, however, becoming increasingly isolated in their stance. The President of the Commission, Mr. Barroso, has spoken of the need for a revised proposal and emphasised the need for balance, something blatantly missing from this directive. The President of the Council, Chancellor Schussel, has announced he will bring the social partners into the process so they may be part of the solution. The Austrian economic Minister, meanwhile, has said Austria will fight for a wholesale rewriting of the draft directive. His assertion that the directive should be seen as a driver's licence that allows companies to take their services across European borders while obliging them to abide by local speed limits and driving rules is the most sensible and reasonable suggestion I have heard.
I have no doubt we will hear during this debate that the posting of workers directive will deal with the various issues. This directive is not being implemented in this State, however, as seen in the inadequate resources and woefully inadequate number of labour inspectors. This directive will guarantee the minimum wage but that wage is approximately half the average industrial wage. Is this what we want? If there is a downturn in the economy, will we see a situation where those on the average industrial wage will be let go and those on the minimum wage, protected by the posting of workers directive, will be kept on? Furthermore, the latter directive will not deal with issues such as educational qualifications and training of service providers. The term "posted worker" refers to a worker who, for a limited period, carries out work in another member state. The posting of workers directive, therefore, provides no long-term solution.
Information about the services directive on the website of the Department of Enterprise, Trade and Employment tells us that Irish consumers will benefit from increased competition in different sectors of the economy. This sounds good but will the practice adhere to the theory? How will an Irish consumer make an accurate assessment of the quality and standard of a particular service? Will he or she be required to look up the relevant legislation in country A, consult the training requirements in country B, check the safety record in country C and compare the costs with countries, D, E, F, G and so on? When Bulgaria and Romania join the Union, probably next January, there will be 27 members and insufficient letters in the alphabet to deal with all this.
Liberalisation of services will benefit the EU economically but not as proposed in the current directive. Legislation must deliver for the ordinary person, for families and communities. It is not enough that it delivers merely for the economy. The Taoiseach should demonstrate his socialist credentials by joining with those calling for a balanced and equitable services directive that opens up the market while ensuring the rights of citizens, workers and consumers are fully protected.
Paudge Connolly (Cavan-Monaghan, Independent)
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The proposal for a new services directive, the brainchild of former EU Commissioner Bolkestein, is under attack from all sides. It has been called the "Frankenstein directive" and the "directive from hell". It even emerged as an issue in the French referendum campaign on the EU constitutional treaty. It represents a declaration of war on working men and women and their social, health care and educational provisions, which are the fruits of two centuries of struggle. Even the European Council has called for it to be profoundly revised to safeguard the European social model.
In January 1993, the Single Market was supposed to come into effect providing four basic freedoms, namely, of goods, capital, persons and services. One would have expected the services sector would have been opened up after more than 13 years and that there would be no need to liberalise trade and services at this point. Until now, free movement of services, which accounts for 70% of the EU's employment, has been strangled by a patchwork of legislation and red tape. Many EU member states continue to display a distinctly unco-operative attitude to foreigners who try to establish small businesses on their territory. The proposed directive is more than a hammer to break a nut since the nut is treated as if it were a weapon of mass destruction. It sends the legal equivalent of stealth bombers to hammer those responsible into submission. In its current form, the directive would expose all services to the cold draft of market-based competition. What will the exposure of essential services to pre-competition mean? The heart of the services directive, the country of origin principle, so beloved by Gama and Irish Ferries, is the most disturbing aspect of the proposal.
We need definitive clarification on a number of issues. Would it allow companies to provide services in any EU member state following the rules and laws not of the country where the services will be provided but of the country where it is established? Established does not necessarily mean that a firm has any real roots in a particular part of the world, since a US multinational could simply establish itself in Latvia or Lithuania, for example, by registering its presence there as a post box company. It could mean that it could trade in Ireland or any part of the EU by conforming only to the Latvian or Lithuanian law on matters like health and safety, workers' rights and environmental protection. Unscrupulous multinationals wishing to exploit fully the directive need only ascertain the various countries' strengths and weaknesses before deciding where to establish themselves.
It would not take long for Irish companies to cotton on. Irish Ferries amply demonstrated how quickly it could do so. As a result, labour relations would be soured and poisoned well into the future. Differences in standards of pay and social security must not be used to play one economy off against the other until the lowest level of social protection has been reached. Country of origin is the most dangerous and offensive aspect of the proposal, which is utterly unacceptable.
Recently, there was reference to the mushroom industry in Cavan and Monaghan. It is an important part of industry in that area but a wrong is a wrong regardless of where it happens. If a cleaner in a school is exploited, every school should not be tarred with the same brush. There is a feeling in the mushroom industry in Cavan and Monaghan, which is such a vital part of the economy in the area, that the industry is being singled out for criticism. More than 95% of growers in the area treat all workers, both national and non-nationals, the same. They are paid the same rates. It is a low wage industry but it is an important part of the economy in the area. It is worthwhile pointing out that there were 900 mushroom growers in the area just a few years ago. In the past 18 months, the area lost more than 50 growers and there are now just 150 growers in the Cavan and Monaghan area.
Finian McGrath (Dublin North Central, Independent)
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I am pleased to have an opportunity to speak to the motion on the proposed services directive which will have damaging economic and social implications. I thank and commend my Independent colleagues for working on the motion and showing the lead in this important issue in 2006.
Finian McGrath (Dublin North Central, Independent)
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The Independent Group in this House will always stand with working people, the weaker sections of society and for international solidarity with our immigrant workers. Before going into the details of the motion, I want to set down a few clear markers in the debate. Racism, like sectarianism, will never be tolerated in this debate. Those attempting to frighten our citizens with deliberate or populous ill-thought out views should be challenged. I am challenging them in this debate, regardless of who they are. Inequality, racism and low pay should never be tolerated in a wealthy country like Ireland. That is my bottom line whether one is a media person, a politician or a trade union official or when I hear a senior political figure, the Leader in the Seanad, using old colonial phrases like "working like blacks", a Labour Party leader speaking in a crude manner about 40 million or so Poles, a scriptwriter in "Fair City" using the phrase "Mongol" to describe a person with Down's syndrome or a serious newspaper like The Irish Times misrepresenting a report on educational disadvantage by using a misleading headline like "Lone parents' pupils read less well" when it was poor pupils who read less well.
I will challenge people in this House, no matter how unpopular it is. It is not just a matter of political correctness but a matter of decency and treating all people, creeds and races with respect and equality. These are the core issues in the debate and cheap and exploited labour should never be tolerated in Ireland or in any country. The way forward is for all of us to ensure that workers, particularly immigrant workers, are members of a trade union. So many are not and are open to abuse. I would like to challenge employers on this issue and raise the issue of social partnership because the services directive is being used by some employers to undermine established rates of pay and safe and reasonable working conditions negotiated by workers through their trades union.
Speaking of workers and trades union, I raise the case of Ms Joanne Delaney, a trade union member, who has been victimised in this country. An employee of Dunnes Stores in the Ashleaf Centre in Crumlin in Dublin, she has been sacked by the supermarket chain for wearing her union badge in the workplace. Ms Delaney, a shop steward at the store, recently received an indefinite suspension from work for wearing a badge identifying her as a member of MANDATE, the union which represents more than 40,000 workers in the retail sector and bar trade, including staff at Dunnes Stores. Joanne received a letter on 29 November 2005 informing her that she had been dismissed by the company.
Dunnes Stores has accused her of not complying with company policy on wearing her union badge on her uniform. The MANDATE member was suspended by a manager at the store on 18 October for refusing to remove the MANDATE trade union badge from her uniform. The suspended member was advised to attend a disciplinary meeting at 6 p.m. on Friday, 21 October. However, the meeting was cancelled owing to the fact that she was accompanied by her union representative. The company has continually denied her the right to be represented by a trade union official at meetings with management.
I welcome Joanne to the Dáil and ask the Minister to intervene in the matter. Joanne and the staff of MANDATE have our total support. The Independent Deputies in this House are behind them and we will highlight the issue both in the Dáil and other forums.
This motion is about the protection of workers' rights. It is about justice and equality for all workers. The motion, which is tabled by the Independent Deputies in this House, shows leadership on the racism issue. It is about building and embracing change with our citizens and putting their needs at the heart of society. I urge all Deputies to support the motion.
James Breen (Clare, Independent)
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The fight for workers' rights and good working conditions has been a long and arduous battle, championed by the trade union movement and strong political figures, both local and national, down through the decades. This country now attracts workers and employers on a world scale. In theory, these workers and our own labour force have had the security of our national licensing and monitoring bodies to safeguard their working conditions. However, there have been notable failures, including the case of Gama construction workers, on whose behalf my colleague, Deputy Joe Higgins, initiated the fight when no Government Deputy wanted to know about their plight. Other cases include the Irish Ferries employees and the mushroom pickers in Kilnaleck.
Domestically, we have also had the shameful work practices at the Leas Cross nursing home. No one should think there are not others whose operational levels are not up to the appropriate standards. As the nation recovers from these still deep wounds, we are asked to support the directive on services in the Internal Market, under the stewardship of Commissioner McCreevy. This will lead to the haemorrhaging of hard fought good work practices and a strong labour force.
The overriding theme of this directive is competition at the expense of quality. The case of the Leas Cross nursing home highlighted many serious flaws in our elderly care system. While the Minister, Deputy Harney, was quick to set up an inquiry, this was just after the whole country became aware of the situation through the national broadcaster. The services directive removes any monitoring or regulatory controls in the case of any elderly care service provider based in any other EU member state who decides to set up practice here. The service provider would only be subject to the regulations of their country of origin regardless of whether the regulations are good, bad or indifferent.
In the construction industry, the plight of the Gama workers could be repeated over and over, but this time with no form of redress available. On the other side of that coin, employers in this country would find it almost impossible to compete effectively here in future. The Health and Safety Authority has been ultra-critical of the lack of improvement in certain construction industry practices. Every year, instances of accidents resulting in serious injury or death are the norm. This directive would allow certain employers from states with less stringent health and safety standards to operate here without complying with any of our national authority's requirements.
For years, successive Governments have mooted improvements in the licensing and monitoring of those involved in security services. This Bill opens the door for any company providing security services, including cash transit security services in another member state, to operate here subject only to their country of origin controls. This could potentially put at risk or expose a large portion of the public.
A major by-product of this directive is the risk of marginalising or ghettoising foreign workers brought here to work in the services sector. These workers are often set up in satellite villages, similar to the Gama workforce, and, consequently, are not in a position to socially or financially integrate in a viable manner. Instead of gaining freedom of movement and improvement in living standards, this directive merely gives licence to further repress such individuals. Because of such employers' ability to undercut Irish-based industries, it puts at risk the jobs and livelihoods of Irish employers and their families where currently the service industry provides 70% of our employment.
In May of last year French voters said "No" to the EU constitution by a considerable majority. Some 70% of the electorate turned out to vote and 55% of them voted against the constitution. The no campaign used the services directive and its economic and social implications as a stick with which to hammer the yes campaign. In this Dáil term we hope to pass the Bill enabling the accession to the EU of Romania and Bulgaria. The House should protect our workers and safeguard the future of our labour force and employers not by seeking amendments to this directive but by urging its complete withdrawal.
Eamon Ryan (Dublin South, Green Party)
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The Green group in the European Parliament with their socialist colleagues have led the opposition to the services directive. During a meeting on 22 November of the committee in the Parliament that examines it, we opposed the votes by the conservative groups, the liberals, on the amendments they proposed. We must be careful in this debate to ascertain what people are doing rather than what they are saying. It is easy in these directives, complex as they are, to take a line in public but the outcome in terms of one's voting pattern in the European Parliament may lead to something completely different. This will be difficult to ascertain but I am confident about it. We are collectively supporters of our Green colleagues in Europe who have voted consistently and raised this issue. We as a party raised some of the issues involved when it was not fashionable or favourable to do so during the middle of the Nice treaty referendums when other parties questioned our European credentials and motives for doing so. It is welcome to hear the arguments we raised then, for which we got such stick, being raised again.
The issues in the services directive are complex and, to a certain extent, my colleagues have gone through them. I refer to concerns about the country of origin principle, as mentioned by Deputy Harkin, and the concern that services relating to our general economic interest will be included. These are the real issues and the meat of the discussion on which the debate will have to focus in the European Parliament. The debate here should focus on what our parties are doing and how they are voting in the European Parliament as that is where the real issue will be concluded.
In particular, there is an issue around the policing of labour standards in Europe under the guise of such a common European services directive. The Greens' campaign in Europe has been based on a strong argument for introducing a services directive and opening up services but stresses the need to protect the European social model. This is an issue on which we will take a stand. Proper policing of standards is required where transnational commerce is taking place.
I attended the SIPTU conference on the services directive last week, which was well organised and massively attended. One of the concerns that emerged from it was that the pay and conditions of workers would deteriorate under a further opening up of the European market. The response that we have minimum wage legislation is not an answer to people with that concern. While our minimum wage legislation is welcome it cannot become a standard wage. Furthermore, it should not be the case that the minimum wage applied is that which applies in the European member state with the lowest level of pay. That is a concern and is the detail that must be worked out in the negotiation of the services directive, namely, that the opening up of services does not lead to such a phenomenon occurring.
I wish to open up this debate which I welcome. Deputy Finian McGrath opened up the debate with his contribution. A debate commenced recently on the issue of workers from the east already here. It is appropriate for the Dáil to take a lead and show our nation the way forward in how we should treat foreign workers. The Green Party does not believe the lead we should show is to restrict access to this country by workers from fellow European member countries which joined recently. That is not the proper way to lead this country or the European Union. It is remarkable that some parties or we as a country appear to be considering such an approach when other countries in the European Union are opening up in the way that we did three years ago. How would the message be received in the European Union that a country with full employment and that supposedly is the embodiment of all the success of this neo-liberal economic model wants to restrict workers when other countries with higher unemployment rates want to open up to receiving them?
How would that be a sensible move for this country given that such a strategy could apply for only a limited time under the treaties we have signed? We would be able to negotiate the measure only for a period but those provisions would come to an end. How could we assure that such opening up to a permit system would eradicate the disadvantage and discrimination that is occurring? My understanding of the permit system was that it gave less control to people coming here. It put the control in the hands of the employer. I am uncertain as to how a proposal to return to such a permit system for people from the accession states would address the issue of discrimination, where it occurs, of European workers coming here.
The experience on a European level to date has been positive, even in a country, namely Sweden, that has gone further than us, although there is a need for concern about the cases taken there. Having examined the position in Sweden last week, we noticed that while that state has opened up not only to labour access but also to social welfare provisions, its experience was that a minimum number of people had travelled there and availed of the social welfare circumstances. To a certain extent the experience in this country has been similarly positive. We should not view it, as Fianna Fáil does, as yet another great cog in the engine of construction growth, which seems to be its sole arbiter of success or otherwise in an economy. We should not seek people to come here for the Progressive Democrats' purpose which is for nothing other than to ensure economic growth indicators grow in order that people at the top of society can accumulate massive wealth. In general, the experience has been a positive one for this country.
In terms of anecdotal evidence as to what is happening, separate from the debate that has commenced, our party carried out anecdotal research by questioning 500 business people in small businesses in my constituency on the south side of Dublin. Some 400 of these business people responded. We asked them what were the major concerns of their businesses and set out a number of possible issues, including transport problems, of which no doubt there are enough, building costs and difficulty in obtaining suitable employees. Of the 400 employers who responded, their number one difficulty and main concern was obtaining suitable employees. While this research is anecdotal it highlights a major concern. That is a remarkable finding in my constituency of the reality facing business people.
There are issues of discrimination. We have a shameful record in our lack of a proper labour inspectorate and proper implementation of working conditions. I welcome this debate if it brings about greater control and enforcement of existing legislation. However, we also need to examine the broader context of what is happening.
Like many other people, I am a former economic migrant. I worked illegally in the United States and Australia. I worked in London as a "Paddy" in the bars and elsewhere. My experience in those countries was that never once did I have a sense that I was not welcome. I was displacing another worker no doubt, I was taking a displacing job, so to speak, but never once was I made feel unwelcome or required to have a permit to work. In terms of the approach we should take, I argue that the experience in this context in Australia, with which we identify and connect, although there are certain bad aspects to it, is what we should repeat here. One of the attractive strategies that has worked in America is the way it has opened up its economy. We possibly need to follow that example, while ensuring it leads to the implementation of the highest social model here. We should take what is best from the European Union, while recognising that we can afford to open up.
Our identity is being brought into question. We have come out of a long period when we could identify ourselves only as green or as orange, or in terms of how we related to the neighbouring island. We are starting to stand on our own two feet as a country and to consider ourselves as part of the EU and the wider world. We are succeeding in that regard. This is a crucial debate, to a certain extent. I welcome it because we need to define ourselves in the broader context of how we see ourselves and how we see workers from other parts of the EU. If we approach this issue in a positive and constructive manner, it will lead to a more positive, constructive and creative economy. We need to ensure that we provide for the highest and best labour standards as part of that process. We will oppose the services directive at EU level because it does not do that. We propose and support the development of the EU on an equal and open basis.
Arthur Morgan (Louth, Sinn Fein)
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I suppose I had better not start outlining my illegal activities, because we would be here at least until tomorrow morning.
I commend the Independent Deputies who have brought this motion before the House. The services directive poses a grave threat to labour standards and existing rights. It is important the directive is discussed in the Dáil and that Deputies are given the opportunity to register their opposition to it. The onslaught on the rights of workers is under way. Their terms and conditions of employment are under attack. An increasing number of employers are attempting to displace their existing workforces and replace them with migrant workers on lower rates of pay and with diminished conditions. The services directive will bring this onslaught to a whole new level. It will attack the ability of the Government to protect and uphold the rights of workers within the State. Sinn Féin is vehemently opposed to the EU Directive on Services in the Internal Market. The Dáil must send a clear signal to the EU that it will not accept the directive or tolerate workers' standards and conditions being shredded at the whim of faceless bureaucrats in Brussels. Members must be unanimous in our opposition to the directive. It is vital that the public should be made aware of how the Government intends to vote on this issue at the Council of Ministers if the directive makes it through the European Parliament.
Arthur Morgan (Louth, Sinn Fein)
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I would love to respond to the comments of the Minister, Deputy Martin, but I cannot hear them.
If the people were given an opportunity to give their opinion on the directive, I am quite confident they would reject it in no uncertain terms. The directive will lead to widescale replication of the circumstances at Irish Ferries, to which the public demonstrated its opposition last month, when perhaps more than 100,000 people took to the streets of Dublin. Public awareness of the implications of the directive needs to be heightened. Some EU Governments, which understand the depth of their voters' opposition to the directive, have said they will not accept the proposal. I am calling on the Government to follow suit and to declare its outright opposition to any EU measure which will undermine the rights, pay and conditions of workers. When the Minister responds to this motion, I challenge him to state unequivocally the Government's precise position on this matter.
The directive includes the country of origin principle, to which my colleagues have alluded. The principle will allow companies which were established in one country to provide services in another country using the standards of the first country rather than those of the country in which they are operating. Under the directive, companies which establish themselves in the EU country with the lowest standards of workers' rights and environmental protection, which is also important, will benefit from such low standards, even when operating in an EU country with more advanced levels of workers' rights and employment legislation. This encourages a race to the bottom, with companies shopping around for the lowest standards in the EU. Member states will be under pressure to lower their standards in order to remain competitive.
The directive is the responsibility of the EU Commissioner, Mr. McCreevy, whose anti-worker agenda is well known in Ireland and increasingly recognised across Europe. In common with the European Trade Union Confederation, Sinn Féin believes the current text does not secure high-quality services and social progress in the EU. It recognises and acknowledges that the Internal Market committee made some improvements to the Commission's draft, for example by stating the objective of the directive does not involve dealing with labour law, collective agreements and industrial action. The committee accepted that some public services, such as health, should be excluded from the scope of the directive. Sinn Féin welcomes such improvements and will strive to uphold them.
In the vote in the European Parliament in a few weeks time, consideration will be given to some amendments which have been submitted and would improve the proposal. Sinn Féin will support any amendment that will help to protect workers' rights. It particularly supports stronger and unambiguous language to ensure the directive does not interfere with labour law, collective bargaining and industrial relations in member states. Such language should refer explicitly to the right to take industrial action, where necessary. Service activities should be regulated by the law of the country where the service is provided or carried out. Sinn Féin is totally opposed to the country of origin principle because it would lead to a risk of downward regulatory competition between member states. The host country must be entitled to impose supervisory measures for all services provided on its territory. Member states need to be able to impose prior declarations and notifications on foreign service providers and to oblige them to have a representative in the host country. All economic or non-economic services of general interest, which is EU-speak for public services, should be excluded from the scope of the directive. I refer in particular to social services and water. Member states should be able to maintain high protection for their workers, consumers and the environment.
As Sinn Féin remains opposed to the directive, its MEPs will vote to reject it in the European Parliament in February. The directive is a new and dramatic illustration of the chasm between much of the European political elite and the preoccupations of many EU citizens. There is widespread opposition to the directive among workers across the EU, many of whom are downright angry. The fury felt by workers and trade unions at the EU's attempts to undermine labour standards was evident during the recent rioting in Strasbourg by European dock workers who were protesting in opposition to the EU ports directive. Such protests are almost certain to be repeated when the services directive is voted on in February. The protests by 10,000 workers and the closure of ports by striking workers was followed by the rejection by the European Parliament of the directive, which would have liberalised port services throughout Europe. I commend the courage of the workers in question. The undemocratic nature of the EU does not allow citizens to register their opposition in any other way. If workers do not stand up and fight for their rights, such rights will be taken from them as part of the general shift to the right and the adoption of what is increasingly referred to as the neoliberal agenda of privatisation, deregulation and attacks on workers' rights. Large-scale public opposition to the directive can achieve results, for example by forcing the Irish Government and other governments to vote against the directive. The trade union movement must work with other interests to mobilise the public in opposition to the directive. If there is not a strong and clear public reaction to the directive over the next few weeks, we will run the risk of suffering a major defeat and a setback for millions of European workers, not only in Ireland but throughout Europe.
Micheál Martin (Cork South Central, Fianna Fail)
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I propose to share time with the Minister of State, Deputy Michael Ahern.
Dinny McGinley (Donegal South West, Fine Gael)
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Is that agreed? Agreed.
Micheál Martin (Cork South Central, Fianna Fail)
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I move amendment No. 1:
To delete all words after "Dáil Eireann" and substitute the following:
"notes:
—the importance of services as a component of GDP and employment in the European Union;
—that Ireland is now the 14th largest per capita exporter of services in the world, that our total share of world services has increased markedly from 0.38% in 1993 to 2.2% in 2004; and that both our employment and export growth in high value added internationally traded services activities has offset reductions in manufacturing;
—that it is very much in Ireland's interest that there should be an open single market in services in Europe in terms of employment prospects, trade opportunities, consumer choice and welfare enhancement;
—the analysis of various European economic institutes and the Forfás impact assessment of the benefits of opening the European services market, to the effect that there would be a welfare enhancement in Europe of the order of €40 billion and over 500,000 jobs and in the case of Ireland of some €400 million;
—the technical progress that has been made on aspects of the draft directive to date aimed at ensuring standards generally, and especially employment conditions, are protected while at the same time seeking to ensure that the benefits of opening the services market in Europe will be attainable;
—that the European Commission is expected, over the coming months, to introduce amendments to the draft directive and that these will be considered with an open mind, and in full consultation with stakeholders, with the objective of securing the optimum outcome for Ireland's and Europe's economic and welfare interests including the protection of employment standards."
I welcome the opportunity to discuss the services directive. Do I need to go through the entire amendment?
Dan Boyle (Cork South Central, Green Party)
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The Minister can take it as read.
Micheál Martin (Cork South Central, Fianna Fail)
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It notes the importance of services.
8:00 pm
Micheál Martin (Cork South Central, Fianna Fail)
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It is not. According to the amendment, services are important as a component of GDP and employment in the EU. It is worth noting that Ireland is the 14th largest per capita exporter of services in the world, that its share of world services increased significantly from 0.38% in 1993 to 2.2% in 2004 and that its employment and export growth in high value added internationally traded services activities has offset reductions in manufacturing. When one strips away the rhetoric from Deputy Harkin's remarks, one will find that she agrees it is in Ireland's interests, in areas like employment prospects, trade opportunities, consumer choice and welfare enhancement, that there should be an open Single Market in services in Europe. Various European economic institutes and Forfás, in its impact assessment, have highlighted the benefits of opening the EU services market. Technical progress has been made on some aspects of the draft directive, to ensure that standards, especially of employment conditions, are generally protected, while seeking to ensure that the benefits of opening the EU services market are attainable, which is more or less what Deputy Eamon Ryan said when he spoke about opening the market while protecting the social model. Over the coming months, the European Commission is expected to introduce amendments to the draft directive. The amendments will be considered with an open mind, in full consultation with stakeholders, with the objective of securing the optimum outcome for Ireland's and Europe's economic and welfare interests, including the protection of employment standards.
I welcome the opportunity afforded us to debate the proposed framework directive on services. It is just a proposed directive. Anybody who has been watching this in recent months knows it is work in progress and that there will be substantial change and amendments to the directive before it ever sees the light of day. Commissioner McCreevy reiterated that last week.
Brendan Howlin (Wexford, Labour)
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That was the first indication it would be changed.
Micheál Martin (Cork South Central, Fianna Fail)
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That was not the first indication that there would be change, and to suggest that is somewhat pathetic. There is much rhetoric taking place. In the motion tabled by the Deputies——
Joe Higgins (Dublin West, Socialist Party)
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Why was the motion tabled?
Micheál Martin (Cork South Central, Fianna Fail)
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——there are some sentiments with which we could agree but overall it lacks balance.
Marian Harkin (Sligo-Leitrim, Independent)
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It is a draft directive.
Micheál Martin (Cork South Central, Fianna Fail)
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It inadequately and inaccurately reflects the position of the Government on a number of important issues and it inadequately reflects what is in the draft directive. That is the reason I tabled the Government amendment. I regret it has been so difficult to have a reasoned and rational discussion around the services directive. There are some legitimate concerns to be raised about it. Using language such as the Frankenstein directive to describe it and trying to play on people's fears and emotions by attributing doomsday implications to it, or ascribing to it provisions which are manifestly inaccurate, does not promote real debate.
I challenge anyone in the House to demonstrate, for example, that the services directive, if implemented, would legitimise what occurred in the Gama episode or that it would lead to a replication of the Irish Ferries case, which is unique because of the particular international regulatory regime which applies to maritime commerce. These events happened without a services directive. Lets get real.
Kathleen Lynch (Cork North Central, Labour)
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Can we expect to stop it?
Micheál Martin (Cork South Central, Fianna Fail)
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They have happened without a services directive being in place.
Kathleen Lynch (Cork North Central, Labour)
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It did not need it because there was no inspector.
Micheál Martin (Cork South Central, Fianna Fail)
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Let us move away from the rational approach to trying to lump everything in, in the context of debating the directive. Let us debate the substance of the directive and work towards achieving a consensus and the changes we want to bring about in the directive that best suits the Irish position overall. At the very least what the directive is trying to do is to put a legal framework around the development of a single open European services market, which is already guaranteed under the EU treaties. It will have no impact on Turkish workers pending the entry of Turkey into the European Union.
Joe Higgins (Dublin West, Socialist Party)
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Turkey was just used as an example. The Minister is introducing red herrings.
Micheál Martin (Cork South Central, Fianna Fail)
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I am not but other Members have raised it wrongly. There are other issues to deal with that but let us not blame the services directive.
Joe Higgins (Dublin West, Socialist Party)
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In its original form, it would allow that carry on.
Micheál Martin (Cork South Central, Fianna Fail)
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Turkey is not in the European Union.
Micheál Martin (Cork South Central, Fianna Fail)
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There has been a disposition on the part of some people to try to confuse issues around immigration policy on the one hand and the services directive on the other.
Marian Harkin (Sligo-Leitrim, Independent)
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On this side of the House——
Micheál Martin (Cork South Central, Fianna Fail)
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Both are lumped together implicitly or explicitly as generating what is being referred to as a "race to the bottom". The irony is that this is happening at a time when the economy was never more successful. On the one hand migratory inflows have been an essential ingredient in meeting our labour supply needs which has helped generate the levels of economic growth we have been achieving. Every respected economic commentator recognises that such inflows will be needed into the foreseeable future, as Deputy Eamon Ryan and Deputy Finian McGrath have acknowledged. This is apart from the moral entitlement of the newly acceded member states to the freedom of movement provisions of the EU treaties.
On the other hand services are very much where our future lies, where the knowledge economy manifests itself and where human capital comes into its own. The enterprise strategy group identified the potential for Ireland to create a substantial number of new, quality jobs in sectors such as intellectual property, franchising, international marketing, creative services, shared and outsourced business processes, supply chain management, construction related services and consultancy services. We will not succeed in doing this on the basis of relying on our national market. We need to be able to develop and sell these services on a European and world platform.
The Government's commitment is a race to the top. The investments we are making in human capital, in our education system, in research and development, in attracting high value added inward investment, in our high-growth potential indigenous companies, are about putting in place the conditions for sustainable growth. The high-value services sector is an increasingly important part of that landscape.
It is ironic that this muddled thinking between immigration policy and the services directive is being identified with assertions of wage undercutting and displacement. The empirical evidence, such as we have it, does not back this up. Between 1998 and 2003 nominal compensation, or wages, in Ireland grew by 37%, in contrast to Germany where it grew by 8.7%. By 2004 gross annual average compensation in Ireland was just over €38,000 as against an EU average of €34,600. For 2005, the figure is €40,010. Employee costs in 2005 grew by 4.9%, the fourth highest among 16 countries benchmarked by the National Competitiveness Council. This is not a manifestation of an economy in which significant wage undercutting is taking place.
On the matter of displacement, we have the lowest unemployment rates in Europe. There is however some structural change taking place of which we need to be wary. Ironically it is not in the services sector but in the exposed and traded manufacturing sector where the pain is being felt most and competitive pressures apply. If there is a concern about potential displacement this is where it will be felt first. Our cost base, including our labour costs, are in danger of getting out of kilter. That is why it is essential, as we hopefully head into a new social partnership agreement, there must be moderation in wage demands.
Ireland, and this Government, has been a supporter of the objective of developing a single open market in services in Europe. I was glad to hear Deputy Harkin say more or less the same when she said we need a social services directive.
Marian Harkin (Sligo-Leitrim, Independent)
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That is not the whole story.
Micheál Martin (Cork South Central, Fianna Fail)
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I am not saying there should be no liberalisation of trade. This is what DeputyHarkin has put on the record. The distance between Deputy Harkin's position and the Government's position is by no means significant.
Marian Harkin (Sligo-Leitrim, Independent)
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It is significant where this directive is concerned.
Micheál Martin (Cork South Central, Fianna Fail)
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If one strips away the rhetoric that is what one will find in terms of the analysis of the debate so far. While the focus of public and political debate on the economy is often on manufacturing, most economic activity in Ireland revolves around the production of services, which includes everything from lawyers to libraries and software to stockbrokers. The services sector generates approximately 70% of GNP in the EU and in Ireland an even greater share of total employment.
Globally, Ireland is already punching above its weight in services trade. The Forfás international trade and investment survey indicates that Irish services exports have increased 167% since 1999 compared to a more modest 25% increase in the trade in goods in the same period. Ireland had a 2.2% share of world services exports in 2004, out of all proportion to our share in world economic output.
Despite these advances, many Irish services firms have not been able to take full advantage of some of the markets closest to us, as a true single market of services in Europe is still a pipe dream. Let us be honest, there has been much rhetoric this evening. We are a long way from a true single market of services in Europe
Arthur Morgan (Louth, Sinn Fein)
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We know services are an insurance for anything.
Micheál Martin (Cork South Central, Fianna Fail)
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The legacy of 25 different regulatory regimes from 25 different legal systems has prevented this being achieved, despite the fact that the free provision of services and the freedom of establishment are enshrined in the Treaty of Rome of 1957. For large companies which can afford in-house legal teams, this is problematic but manageable. For small and medium size companies and enterprises, having to deal with the language barriers that trading in Europe entails is hard enough, without being lumbered with complex and unnecessary regulations.
The rewards for Ireland and Europe of the successful negotiation of the services directive are huge. While consumers have benefited for years from a much greater choice of manufactured goods, the same cannot be said for many services. The entry by Bank of Scotland into the Irish banking market shows the potential gains for consumers in numerous other areas. Independent analyses conducted by European economic institutes suggest that a welfare gain of €40 billion and 500,000 jobs is attainable from opening up the European services market. An economic analysis undertaken by Forfás suggests gains in the order of €450 million for Ireland.
Many small and medium size Irish enterprises have the talent, energy and know-how to compete with the best in Europe. However, they are being constrained by onerous red tape or downright discriminatory regulations in other European countries, and would benefit significantly from the services directive, allowing access to a potential market of 450 million consumers.
Commentators who continually bemoan the so-called rip-off Ireland cannot now object to every measure that is taken to try to open up Irish services to international competition. Firms such as Aer Lingus have gone through this painful process of competition and now offer a quality, competitive service supporting sustainable jobs. This experience can be repeated many times over on a smaller scale if a true single market in services in Europe is created.
This is the context in which the services directive has emerged. Unfortunately, much confusion surrounds this directive because of its complexity. Its wide scope and complexity reflect the fact that it is rarely one regulation or law that dissuades companies from trading in other EU countries, but the cumulative effect of a plethora of regulations or red tape.
Joe Higgins (Dublin West, Socialist Party)
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So we are eejits. That is the problem.
Micheál Martin (Cork South Central, Fianna Fail)
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The directive proposes to remove red tape by three measures. First, it proposes to carry out a systematic trawl of existing regulations in all 25 European Union member states and weed out the regulations that are unduly restrictive or anti-competitive. Second, it aims to allow businesses to register as a business in another country electronically via a single point of contact.
Third, the directive, as initiated, includes the country of origin provision in respect of enterprises which seek to deliver services in other member states but which do not wish to establish in them. This principle, which is based on the principle of mutual recognition, is already a cornerstone of the Single Market for goods. Goods that are deemed safe by the German or Czech Governments for their citizens can be sold in Ireland without having to be subjected to an entirely separate battery of costly checks and tests here. Similarly, the country of origin principle proposes that for a limited array of regulations relating to services provision, we should recognise German or Czech law as having broadly the same protective effect as Irish law without having to subject service providers to a separate set of checks and tests in Ireland.
Various other provisions are included in the directive, in particular those concerning co-operation arrangements between supervisory authorities and consumer protection structures aimed at ensuring both good corporate governance and consumer protection standards. Somehow these provisions — on which I accept much work remains to be done — seem to be overlooked by the critics of the directive.
We can have a very agitated debate about the country of origin principle, although this would amount to a great deal of wasted energy and hot air. All the indications are — and have been so for some months now — that the Commission intends to amend significantly that aspect of the directive. This only seems now to be getting through to the Opposition——
Marian Harkin (Sligo-Leitrim, Independent)
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It is to be hoped we will do it in the European Parliament before then.
Micheál Martin (Cork South Central, Fianna Fail)
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——after getting themselves unnecessarily worked up about the matter.
Joe Higgins (Dublin West, Socialist Party)
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We had one document on which to work.
Dinny McGinley (Donegal South West, Fine Gael)
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The Minister should be allowed to speak without interruption.
Micheál Martin (Cork South Central, Fianna Fail)
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Even as the provision stood in the draft directive, many commentators — we were among them — and trade unions raised fears that the country of origin principle could lead to an erosion of standards, particularly in the matter of employment conditions and standards.
Micheál Martin (Cork South Central, Fianna Fail)
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This was not an accurate interpretation of what was in the directive. There is a specific derogation from the country of origin principle for the posting of workers directive. In other words it is specifically the case that any employee sent to this country to deliver a service would have to work under Irish labour market conditions, including the minimum wage or other registered agreements, conditions of annual leave, working time and all other protections we take for granted.
Marian Harkin (Sligo-Leitrim, Independent)
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What about the ones I mentioned?
Micheál Martin (Cork South Central, Fianna Fail)
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Furthermore, the country of origin principle would not apply to health and safety conditions in the workplace, to which Deputy Harkin referred. In this context, Irish law would apply.
Deputy Rabbitte said this would apply to the bogeyman company to which he constantly refers in public discourse by means of which Irish employers would set up a Latvian company with Latvian workers and send them over here to deliver a service. I should further add that if this mythical Latvian company were to open a branch or local office here — the majority of service companies which have ambitions to make inroads into the Irish market would almost certainly have to do so — then it would not be covered by the country of origin principle. To date, we have been active to ensure this is the case.
We acknowledge that more work remains to be done in terms of amending the country of origin principle. We are concerned about protecting workers' pay, conditions and living standards, which we have done so much to increase in this country. People like to refer to the Commissioner, Mr. McCreevy, as a bogeyman but as Minister for Finance he introduced policies which saw an unprecedented increase in jobs in this State.
Micheál Martin (Cork South Central, Fianna Fail)
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He is not anti-worker; he is pro-worker and the record exists for all to see.
Arthur Morgan (Louth, Sinn Fein)
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He was not responsible for the job creation.
Micheál Martin (Cork South Central, Fianna Fail)
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We are as concerned as anyone else in this House——
Joe Higgins (Dublin West, Socialist Party)
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Why is he supporting the cheap labour bosses in Sweden then?
Micheál Martin (Cork South Central, Fianna Fail)
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——with issues of standards, especially employment standards. This is why, for anyone who cares to look at the latest draft of the directive, one will see more than 300 footnotes of reservations, many of them from Ireland.
Micheál Martin (Cork South Central, Fianna Fail)
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There are 300 footnotes overall.
Dan Boyle (Cork South Central, Green Party)
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How many of them are Irish?
Micheál Martin (Cork South Central, Fianna Fail)
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May I continue?
Joe Higgins (Dublin West, Socialist Party)
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So the Minister agrees there is a problem. We are not idiots after all. There is a problem with the initial directive.
Dinny McGinley (Donegal South West, Fine Gael)
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Deputy Higgins should allow the Minister to speak without interruption.
Micheál Martin (Cork South Central, Fianna Fail)
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We have been saying that for a long time but without using the kind of rhetoric employed by the Deputy which he is deliberately using to appeal to constituents for electoral purposes.
Joe Higgins (Dublin West, Socialist Party)
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The Minister accused us of being fools.
Micheál Martin (Cork South Central, Fianna Fail)
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I assure the House that as we go through the negotiations we will embark on a consultative process with the stakeholders, a process which has been totally open and transparent, as anyone who has taken the trouble to visit my Department's website will see and as Deputy Harkin has done. I say this because we have been consistently posting on that site all the developments that have been taking place on the directive, as well as consistently calling for inputs from the stakeholders concerned. This is in addition to the numerous meetings my Department has had and will continue to have with stakeholders, including the social partners.
Reference to a greater trade in services often leads to hostility. In part, this is understandable given the sensitive nature of some services, especially public services, and the difficulty in controlling quality in service provision. However, the calls for opposing liberalisation in services often closely mirror the protectionist arguments against the creation of a single market in goods two decades ago.
We must be careful to draw a line between genuine fears of a lowering of standards on the one hand and short-sighted protectionism by a myriad of interest groups on the other. I encourage all involved to engage in an intelligent debate on the services directive that focuses on what it proposes to do rather than inaccurately fault it for every perceived ill of globalisation. As of now, nothing is agreed until everything is agreed. That is the position of every country involved in the process to date.
We are a small island nation that depends on trade to create our wealth and we export 85% of everything we produce. The same applies to services. We need access to markets in Europe and throughout the world. That has always been a bottom line in terms of Ireland's economic development, especially since we shed our protectionist attitude of earlier decades. From the 1960s onwards we have been outward looking and have sought to access markets. In the context of social partnership we have built up an extensive social protection model in this country. We have increased living standards dramatically over the past decade. The Government can be trusted to continue this twin-track approach in terms of expanding Irish wealth, improving living standards and improving conditions for Irish workers. The rewards in terms of improved standards of living for all Irish citizens will be significant if we succeed in building a true single market for services in Europe.
Michael Ahern (Cork East, Fianna Fail)
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The European Commission proposal for a directive on services in the Internal Market is one of the most ambitious proposals for regulatory reform undertaken in the European Union. It has the goal of creating a real and genuine internal market in services. Up to now, it has not been possible to exploit the great potential for economic growth and job creation afforded by the services sector because of the many obstacles obstructing the development of the sector across the 25 member states of the EU.
A study undertaken by Forfás shows that the annual benefit to Ireland of the directive could be greater than €400 million. This benefit would come in the form of savings to Irish consumers due to the fact that previously sheltered sectors would face competition from abroad. Further benefits would come from the opening of the markets of other EU member states to Irish service providers. This was a key theme in the report of the enterprise strategy group chaired by Eoin O'Driscoll. Potential growth sectors identified in the O'Driscoll report include private education, intellectual property, international sales and marketing, supply chain and management, and professional and consultancy services.
As Minister of State with responsibility for trade and commerce, I take encouragement from the work done by Forfás and the enterprise strategy group. As the Minister stated, Ireland is already punching above its weight in services trade and the adoption of a fair and balanced services directive would ensure that we would continue to do so by removing barriers to trade within the EU. The target now is to provide the legal certainty that will allow consumers and producers to take full advantage of the major opportunities opened up by the creation of free movement of services between member states, a principle already enshrined in the European treaty.
There have been two main aspects to the Government's approach to the consideration of the Commission proposal, both of equal importance. We want to see a regulatory framework that allows a services market without barriers to become a reality, as well as a regulatory framework that provides for the appropriate controls to be put in place to uphold the rights and obligations of all citizens. This is a major yet crucial task.
The history of this proposal is clouded in controversy, most of it undeserved but arising probably from poor presentation, inadequate examination and huge complexity but also, in some cases, deliberate misrepresentation, political opportunism and downright scaremongering.
Michael Ahern (Cork East, Fianna Fail)
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There is no doubt that this proposal offers great opportunity and that it raises major difficulties and complications.
Joe Higgins (Dublin West, Socialist Party)
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Who is scaremongering?
Michael Ahern (Cork East, Fianna Fail)
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The vast array of interests that could be affected by the proposal, the plethora of regulation and controls that need to be removed or amended, combine to ensure that its passage through the EU institutions will be lengthy and complicated. That is why the Government's approach to the draft directive has been cautious and careful. We want to see the benefits of a real internal market in services but we must have in place the appropriate standards, particularly employment standards, to regulate it.
Since the draft directive was tabled by the European Commission in 2004, during the last Irish Presidency of the EU, detailed work has been undertaken in the Council, examining in precise detail every aspect of the proposal, article by article. The Council working group met on a regular basis, sometimes as frequently as every other week, to consider different aspects of the proposal. On a regular basis over this period, Ministers meeting in the Competitiveness Council reviewed the work and issued guidelines for the ongoing examination. While this work was going on in Brussels, officials of my Department were engaging in detailed and widespread consultation with all interested parties in Ireland to gather their reaction to the proposal. The widest possible consultation was carried out among professional, trade, employer, employee and consumer organisations, and views were invited from all sources. The views and information gathered in this way were used to inform our input into work at EU level. The result of that work, as we await the outcome of the deliberations of the European Parliament, is a revised draft proposal which runs to 123 pages and contains 338 footnotes, indicating serious concerns of, and amendments sought by, member states, a significant number from Ireland.
We have raised issues relating to the scope of the directive and have requested clarification of the wording of the exclusion of public services. We have raised issues relating to the country of origin principle, how it would work and how consumers would benefit from its provisions. We have raised concerns about the rules under which service companies would be able to establish in other member states. We want to ensure that the procedures are workable and established over a reasonable timeframe.
We have concerns about the introduction of mandatory insurance for service providers, mainly because further work needs to be done to assess the practicality of this proposal. We also have concerns about the mechanisms by which member states would co-operate with each other to ensure adequate supervision of service providers who are availing of the Single Market.
I have dwelled at some length on the process which has been and is under way, at national and European levels, to stress the care which is being taken by all member states, including Ireland, to get this project right and to ensure that the end result is the correct one from every point of view. As I mentioned, the next step is a vote in the matter by the European Parliament next month. Depending on the result of that vote, it will then be a matter for the Commission to consider tabling a new proposal. In that situation, the Government will re-engage with the interested parties in Ireland to get their views on any new proposal. That exercise will be no less comprehensive than the one carried out so far and I hope it will be accompanied by as extensive a public debate as possible on the issues involved and how they affect our future.
The recent debate in Ireland on the draft services directive has become mixed up, in a somewhat confused way, with the whole question of labour standards and migrant workers. In his contribution, the Minister for Enterprise, Trade and Employment, Deputy Martin, dealt extensively with these issues, but I would like to say a few words about employment standards, compliance with them and their enforcement.
The rights of workers from overseas are established by legislation as being equal to those of Irish workers. The vast majority of overseas workers have an entirely satisfactory interaction with the Irish labour market, one that is beneficial to all sides and the economy in general. However, there are instances in which overseas workers have not been getting their entitlements in certain sectors and particularly in cases where they may be relatively isolated. It was for this reason that the Government increased the number of labour inspectors last March to an all-time high of 31. These inspectors are in place, have completed their initial training and are now conducting inspections. More needs to be done with regard to the promotion of employment rights entitlements to employers, to employees and to migrant workers in particular. I have no doubt that these issues will continue to be discussed by the Government and the social partners in the context of partnership talks and indeed subsequently. It is important therefore to separate issues of enforcement of our employment law from the creation of a single market in services. which will not impact on that law.
In the ten years since the completion of the Single Market programme in 1993, more than 2.5 million jobs have been created in the EU as a result of the removal of barriers to trade. The European Commission has calculated that the increase in wealth attributable to the Internal Market in those ten years is nearly €900 billion. Competition has increased, prices have converged and the range and quality of products available to consumers has increased. However, despite some progress in specific sectors, the internal market for services is not yet working as well as it should or as well as it can. Most of the benefit seen so far from the Internal Market has occurred in the goods market. The need to make a serious effort on the services sector front has been evident for some time. The proposal for a directive on services is the opportunity to do something about it and it is an opportunity we should not miss.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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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.
Éamon Ó Cuív (Galway West, Fianna Fail)
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The Deputy's partners in the Labour Party.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I am speaking about Deputies behind me also. The Minister often opposed issues, then turned around and told me to support them. I remember the Anglo-Irish Agreement very well.
Michael RingMichael Ahern (Cork East, Fianna Fail)
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I mean in the EU. That was a different context.
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The EU ensured that we were not all just a collection of workers toiling to feed an economy but were rather a collection of citizens whose economy worked for our society. It was Europe that dragged Ireland into line on issues such as workers' rights, health and safety protections, equality for women and a raft of other anti-discrimination measures. That is what makes the country of origin principle so disappointing.
The Minister will be aware that our international reputation took another hit last month when the Polish edition of Newsweek reported that Ireland was a "living hell" for some Poles who arrived expecting to be able to pick and choose jobs because of misinformation but instead found themselves sleeping rough and living on charity. The Polish Embassy has suggested that approximately 10,000 Polish people living in this country are experiencing difficulty. The country of origin principle will only make this situation worse.
That said, I hope that those who are using the country of origin principle as a stick with which to beat the EU will desist. I also appeal to those who rightly oppose the country of origin principle not to let it blind them to the very good aspects contained in the services directive. I hope the electorate will not be fooled by those who are ideologically opposed to the EU, to competition, to free markets and to consumers' rights into thinking that everything they say on this issue can be trusted.
Ireland is the very last country in the world that should be afraid of globalisation. Given our history, Ireland has nothing to fear. Open markets have given us jobs, prosperity and ended the twin scourges of unemployment and emigration. Ultimately, I am in favour of the harmonisation of EU labour law if we have proper minimum rates of pay, a properly resourced labour inspectorate and proper worker health and safety legislation in place. A harmonised labour law would end the misery of millions of workers in poorer countries where protections are minimal.
It is worth remembering that the country of origin principle is largely credited with defeating the European constitution in the referenda in France and the Netherlands. The repercussions are that important. It threatens to undermine support for the European Union in general and unless Europe and this Government listen to the people who have expressed fears in this regard, they will lose their trust and support.
I am heartened by the news that a substantial number of amendments have been tabled to the directive. I understand there are 1,500. However, I fear that the ongoing debate at the higher echelons of the Union is giving the distinct impression that the EU cares too much about the interests of big business and not enough about workers. We must attain the appropriate balance in order to bring the citizens of Europe with us on this particular issue to achieve the necessary savings for European consumers without damaging the standards we have all aspired to and ensuring that our protections for consumers and workers are in line with the motion's proposals.
I am disappointed the Minister did not feel it appropriate to accept the motion and send the unanimous message of the House to the European Parliament and to the Commission that Ireland is in favour of a services directive but that changes are necessary, particular in respect of the country of origin principle, if it is to meet Irish conditions.