Martin Mansergh (Tipperary South, Fianna Fail)
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I move: "That the Bill be now read a Second Time."

As this Bill addresses matters related to Ireland's representation in the European Parliament, I will begin by sincerely congratulating the 15 MEPs elected to represent Ireland North and South at the recent election, including Pat the Cope Gallagher, until recently a Deputy in this House. I also extend my sympathy to the unsuccessful candidates and compliment all candidates, successful or otherwise, on the extensive campaigns undertaken by them in seeking election to represent Ireland in the European Parliament. It is only through the willingness of candidates of all political persuasions to put themselves forward for election by the people that a true democratic mandate is provided for elected representatives at local, national and European level.

I also express satisfaction that 11 out of the 12 MEPs elected in this jurisdiction belong to mainstream groups in the European Parliament - the Christian democrat, liberal and socialist groups - and are committed to supporting the ratification of the Lisbon treaty, now augmented by the decision of the European Council containing the legal guarantees and assurances plus declarations which the Irish Government had been seeking. They should put to rest genuine fears about the impact of the Lisbon treaty on Ireland. With regard to the group that my party will now be joining, I look forward to the development of a liberal republican philosophy.

The introduction of this short Bill which was passed by the Seanad without amendment on 16 June reflects a further step in the development of the European Parliament, which is, along with the Council and the Commission, among the key institutions of the European Union. With its members directly elected every five years throughout the 27 member states of the European Union, it is a unique institution: a multinational, multilingual Parliament of 785 members and 23 languages.

The principal function of the European Parliament is to provide for and support the democratic accountability of EU decisions to ensure the right decisions are taken in respect of the European Union as a whole and in respect of specific national and regional concerns. The role of the European Parliament does not usurp the role of national parliaments but is complementary to it. This complementary role has evolved steadily since the first direct elections in 1979 when it was still essentially a consultative body. It now has a range of real powers which enhance the democratic accountability of the European Union.

The Parliament's role with regard to legislation and budgetary matters is particularly important. The European Parliament shares European legislative powers with the Council and examines, modifies and occasionally rejects European proposals from the Commission. The influence and role of Parliament has developed and it now has a significant impact on the daily lives of European citizens in important areas of policy, including environment, transport, social policy and food safety, where it has full powers of co-decision. The services directive and the chemicals regulation, REACH, directive are two recent examples of major European legislation which the European Parliament played a decisive role in shaping.

The Parliament also shares budgetary powers with the Council. It has a powerful role in adopting or rejecting the annual EU budget and helping to distribute financial resources between different community programmes, which has a significant impact on the daily lives of European citizens. The Lisbon treaty increases the number of areas in which the European Parliament will share the task of law-making with the Council of Ministers through co-decision, and the budgetary role of the Parliament will be also strengthened.

The current legislative provision for the payment of MEPs in Ireland, the European Assembly (Irish Representatives) Act 1979, provides that Irish MEPs should be paid an allowance equal to that paid to Members of Dáil Éireann out of moneys provided by the Oireachtas. During the passage of that legislation through the Oireachtas, the view was expressed by some Members that it was not appropriate for one Parliament, the Oireachtas, to make provision for the payment of Members of another Parliament. It was also pointed out that the European Parliament was expected shortly to develop and adopt proposals for a unitary system for the payment of all MEPs. However, it was not until December 2003 that the European Parliament finally addressed the issue by voting in favour of a formula establishing, inter alia, the principle of the independence of MEPs and parity of treatment between them.

Implementation arrangements were developed by the European Parliament having regard to the opinion of the Commission. These were approved by the Council of Ministers in July 2005. Accordingly, the proposals developed have the full agreement of all member states and the expressed agreement of the three major institutions of the European Union. The agreed implementation arrangements are set out in the decision of the European Parliament, 2005/684/EC, adopting the Statute for Members of the European Parliament, and will come into effect later this month. The legal position in regard to the statute is that the terms of the statute, in so far as it is addressed to member states, are binding by virtue of European law. Legislation at national level is required to give effect to certain provisions of the statute. The European Parliament (Irish Constituency Members) Bill 2009 addresses this requirement.

The purpose of the Bill, as set out in the explanatory memorandum, is to change the current statutory provisions providing for the payment of Irish MEPs by the Oireachtas by revoking the European Assembly (Irish Representatives) Act 1979; make statutory provision for current MEPs who are re-elected and wish to continue to be paid by the Oireachtas; confirm that the existing pension scheme, the European Assembly (Irish Representatives) Pensions Scheme 1979, SI 387 of 1979, made under the 1979 Act remains in force to discharge existing and preserved benefits; and provide a statutory basis for certain tax, pension, administrative and conflict of interest issues.

Section 1 is a standard provision setting out the definitions of terms used in the Bill for interpretation and other purposes. The overall thrust of the statute adopted by the European Parliament is to apply a single system of payment for all MEPs with effect from the new parliamentary term beginning later this July. However, the measures adopted by the Parliament facilitate a period of transition for existing MEPs who were re-elected in the recent elections. Section 2 provides for current MEPs who are re-elected and exercise the option available to them under the statute to continue to be paid under the Irish national system. The salary paid will continue, as at present, to be the same rate as a salary for a Member of Dáil Éireann.

Section 3 empowers the Minister to make, amend or revoke a contributory pension scheme for Members and former Members of the European Parliament. It provides continuity for the existing scheme established under the 1979 Act by confirming it remains in force. Continuation of the existing scheme is required to enable the discharge of existing liabilities due to former MEPs and to preserve accrued benefits for current MEPs.

Section 5 of the 1979 Act provides for the disqualification of Irish MEPs for membership of or employment by certain bodies. The relevant bodies are detailed in the Schedule to the Act. Section 4 of the new Bill makes similar provision. Section 5 of the 1979 Act sought to extend the then existing limitations in the individual statutory provisions for each of the bodies which generally were designed to ensure a person should not, at the same time, be a Member of the Oireachtas and a member of a board or staff of a State sponsored body. It would not have been practical at the time to seek to amend each of the individual statutory provisions for each of the bodies to deal with the issue of membership of the European Parliament. Therefore, the matter was addressed in the 1979 Act by section 5 and the associated Schedule.

The opportunity was taken in the new Bill to review and update the Schedule. The outcome of this review is that changes in circumstance, legislation and status affecting the bodies require that only ten of the 41 listed in the Schedule to the 1979 Act be included in the Schedule to this Bill. One additional body has been proposed by the Minister for Communications, Energy and Natural Resources for inclusion. The Irish National Petroleum Corporation Limited, INPC, is a legacy State company established under the Companies Act by the Government for oil trading purposes during the oil crises in the late 1970s. The memorandum and articles of association for the company exclude membership in the Oireachtas for directors but do not include a similar exclusion in respect of membership of the European Parliament. To maintain consistency, the opportunity is being taken to include this in the Schedule to the Bill.

Section 5 inserts a new section 127 A in the Taxes Consolidation Act 1997. This section makes provision for the application of national taxation provisions to the salary paid by the European Parliament, subject to avoidance of double taxation of the salary. It provides for the granting of a credit against Irish tax due on an MEP's salary of an amount equal to the tax paid by the MEP for the benefit of the European Union in respect of that salary. The section also clarifies under which income tax schedule an MEP's salary is taxable.

Section 6 is a technical amendment of the Ministerial, Parliamentary and Judicial Offices and Oireachtas Members (Miscellaneous Provisions) Act 2001. For the avoidance of doubt, it confirms that service as an MEP for which the Member obtains preserved or paid pension benefits from the European Parliament cannot be treated as pensionable service that can be also transferred and reckonable for the purposes of the Oireachtas pensions scheme or the European Assembly (Irish Representatives) Pension Scheme 1979. In practical terms, it affirms the principle that service can be utilised only once for pension credit purposes.

Section 7 provides for a legislative basis to enable the Houses of the Oireachtas Commission to conclude a service agreement with the European Parliament to act, on a recoupment basis, as a paying agent in respect of certain costs. The European Parliament has sought the agreement of all national parliaments to act as paying agents. The proposal from the European Parliament relates only to the costs of parliamentary assistants to MEPs, that is, the cost of a contract of employment and the cost of a contract for services provided locally. The proposal requires that the Houses of the Oireachtas Commission will act simply as an agent for making certain payments on behalf of the European Parliament. Funding, rates, liability for costs and so on remain a matter for the European Parliament. The Houses of the Oireachtas Commission is amenable to the request made by the European Parliament, and enabling legislation is required to facilitate the conclusion of a service agreement.

Sections 8 to 10, inclusive, are standard provisions providing for the repeal of the 1979 Act, expenses incurred in the administration of the Act to be paid out of moneys provided by Oireachtas, the Short Title of the Act, and designating when the Act comes into force.

The current annual cost to the Exchequer of funding salaries for MEPs is €1.2 million. The implementation of the European Parliament decision will involve the Parliament assuming the cost of funding of salaries for MEPs from July 2009. This will potentially provide a maximum €1.2 million per annum reduction in costs to the Exchequer, but this sum may be reduced somewhat depending on the number of MEPs who qualify for and avail of the option to maintain their existing salary provisions from the new parliamentary term beginning this month. Current funding of pensions for former MEPs, which amounted to €0.6 million per annum, will continue in the short term but will reduce over time as existing liabilities under the pension scheme are discharged and future liabilities for MEP pensions are met by the European Parliament.

I remind Members of the need to give legislative authority to the provisions of this Bill in compliance with our European obligations before the beginning of the 2009 European Parliament term commencing on 14 July. Accordingly, I commend the Bill to the House.

Richard Bruton (Dublin North Central, Fine Gael)
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Although this Bill does not represent a dramatic step forward in the development of the European Union, it is nevertheless welcome. The establishment of the principle that the European Parliament is independent, has the authority to set its own pay levels and that there should be equal treatment of Members from different member states represents important progress. It marks a certain coming of age of the European Parliament as an institution that organises its own affairs and acts without fear or favour.

It is ironic that the Lisbon treaty raised the ire of many people. In the aftermath of the difficulties experienced with the Nice treaty, the purpose of the Lisbon treaty was to try to make the system of decision-making more democratic, open and transparent. For example, the treaty introduces initiatives such as the right of ordinary people to petition for changes in European policy and the right of domestic parliaments to wave yellow cards in the face of actions from Europe.

It proved extraordinarily difficult in the campaign on the Lisbon treaty referendum to convince people that, rather than being a conspiracy to grab powers to the European Union, the treaty constituted an attempt by a unique body to make itself more democratic. The ideas in the Lisbon treaty could not have been developed in a more democratic manner. People from the "Yes" and "No" sides in all parliaments participated in the debates on how the European institutions could be made more democratic and open. It was a pity, therefore, that these efforts were rejected.

We need to take a step back and explain to ourselves and members of the public what a unique and wonderful institution is the European Union. We have never had its like in the history of world affairs. The EU is a body which seeks not only to resolve issues peacefully but to do so in a democratic manner. The European Parliament holds to account other institutions and every country is given a say in the system through a fair and balanced weighting mechanism. Would we not die for an opportunity to have the United Nations develop in a such an open, democratic and accountable manner and have the interests of its members taken into account and fairly represented? Instead, the UN has vetoes, insiders and second class members.

As a unique experiment in the history of mankind, we should cherish the uniqueness of the European Union and the value of what it has done, specifically for Ireland. We face problems which domestic action alone will not resolve. Many of the most alarming crises confronting us, whether financial, humanitarian or in the areas of climate change and crime, have developed dimensions that reach far beyond our borders. It is not possible for the Irish Government or people to wield influence over the forces arraigned against us unless we work together with other countries. We can achieve much more by working together on these major issues than we can separately.

The wonderful feature of the European Union is that it can achieve great things but only in areas where we, the people, choose to give it authority. The EU has developed in perfect balance. It does not attempt to use the old ultra vires rule that one can stray into any area one chooses. We protect the powers we do not delegate to the European Union to be shared. The Union's strength is that it can act only in areas over which we have given it authority. Many of the red herrings raised during the debate on the Lisbon treaty referendum showed a lack of understanding of this basic principle underpinning the European Union.

We cannot approach the forthcoming debate by lecturing people because we believe they should know better. The problem is that we, who see the benefits of the treaty, have not been successful in selling it and encouraging people to understand what is being done. We must learn from this. I welcome the efforts of this Parliament and the Government since the Lisbon treaty referendum to broaden understanding and to deal with some of the canards which emerged during the campaign on the treaty.

While I believe we are in a position to go to the people with a better understanding than previously, I worry that time will be needed to mount an effective campaign. We are entering into the silly season when opportunities to plan and develop a campaign could slip from agendas. It is important, therefore, that we get to grips with this issue and hit the ground running when the House returns following what many people regard as a well earned break.

I welcome the Bill which will, I am sure, receive broad support. I will raise one or two issues on Committee Stage and seek clarification of several points arising from its sections.

Joe Costello (Dublin Central, Labour)
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I, too, welcome the Bill, which is timely given that a new set of Members of the European Parliament was recently elected and a new Commission will soon be appointed. I congratulate all the MEPs who were duly elected, in particular, the three members of the Labour Party. An increase of a couple of hundred percent is welcome in any election. In addition, after many years, Proinsias De Rossa will no longer be on his own.

I also extend my sympathies to the losing candidates. It is no mean challenge to contest a European election. It is difficult enough to contest a local election, not to speak of a Dáil election, but in European elections each constituency has hundreds of thousands of people and, with the exception of Dublin, is spread over a number of counties. In such circumstances, it is extremely difficult to get one's message across and extremely challenging for anyone who puts forward his or her name. It is commendable and enhances our democracy that many individuals chose to do so.

I welcome the process and outcome of the European election. It is difficult to believe that the first election to the European Parliament was held just 30 years ago in 1979. At that time, the Parliament was a mere consultative body rather than a real parliament but it has rapidly developed into a fully fledged parliament. The changes in the Lisbon treaty will give it virtually 100% participation in all decisions made in the European Union, while the extension of qualified majority voting gives it a partnership role with the Council of Ministers. This is the way forward. The three great institutions, the Commission, Parliament and Council of Ministers, are to be joined by the Heads of State, which will become an institution in the European architecture in their own right, if the Lisbon treaty is ratified.

The Bill before us further enhances the independence of the European Parliament, moving it a step away from national parliaments to which salaries and payments are now tied. While the payment will continue to be tied to national parliaments, the paymaster will be the European Parliament. In addition, the system whereby salaries had parity with salaries in the national parliament was out of kilter because one had 27 different salaries for Members of the European Parliament. Under the provisions of the Bill, we will have parity of treatment and all MEPs will be paid the same salary. This is the correct approach, one which establishes the independence of the European Parliament, and the sooner it is implemented, the better.

This is an opportune time to restructure the payment, eliminate the current anomaly and create parity. It is a bonus that the €1.8 million Ireland pays on salaries and pensions will now be paid by the European Parliament. The other side of the coin is parity of treatment for each member state. This will increase the cohesion among Members of the European Parliament. Previously, there was a large disparity between Members from the former Eastern Bloc states and, for example, Ireland.

The extra powers conferred by the Lisbon treaty will significantly strengthen the European Parliament as a legislative assembly and payments for MEPs will now be more transparent. After 50 years of existence, the complex architecture behind the European Union, including the Council of Ministers, the Commission and the Parliament, are finally beginning to settle into a recognised and semi-permanent state. It is unlikely there will be much more institutional tinkering because the Lisbon treaty is dedicated to creating structures which can accommodate further enlargement. Only time will tell if the reversion to one Commissioner per member state is a good idea.

Now that we are moving down the road towards moulding the structures of the European Union, it is time we paid more attention to the role of national parliaments. Since we joined the EEC in 1973, the Oireachtas has scarcely progressed its structures to take account of membership. Given that approximately 75% of legislation comes from the European Union, the Oireachtas plays an important part in transposing European directives. Where we do not confer competence, however, Europe has no entitlement to interfere in our affairs. We have not moved with the times in this regard. Nearly 30 years after the establishment of the Joint Committee on European Affairs we finally established the Sub-Committee on European Scrutiny. The Labour Party proposed the establishment of the sub-committee in the aftermath of the rejection of the Nice Treaty in 2001 so that the Oireachtas could be made aware of what went on in the European Union. Our entire involvement with the EU comprises two committees which seldom see the light of day. Plenary discussions are virtually never held on EU matters. The Taoiseach returned from Europe with a set of guarantees which we discussed for 80 minutes. The only members allowed to contribute were the party spokespersons on Europe. This is a serious matter and we need to address it. We have spent an inordinate amount of time on the development of EU institutions and if we vote for the Lisbon treaty we will put in place the final stage of this process. However, we have spent no time on reforming our own House or responding meaningfully to our participation in the EU.

In the Lisbon treaty, the EU is telling national parliaments they should play a more significant role at every level of decision making. The work programme is not proposed by the bureaucrats in the Commission. They are entitled to be involved in its drafting but so are national parliaments. We can demand that the programme includes serious issues such as transport, climate change and agriculture.

Brendan Howlin (Wexford, Labour)
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I am loathe to interrupt the Deputy but we are debating a narrow finance Bill which pertains to the pay of Members of the European Parliament.

Joe Costello (Dublin Central, Labour)
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This is how Members earn their money. Europe is pushing parliaments towards a more central role but we are not taking a similar initiative to avail of the opportunities that now exist. We can establish a stronger link with EU institutions and, in particular, with our MEPs so that important issues are raised at the outset, when we are composing legislation, rather than at the end, when we are transposing it. That is one way by which MEPs can earn their salaries. The Government operates at the Council of Europe but elected representatives can player a bigger role in the activities of the EU.

The German constitutional court recently decided that the Lisbon treaty does not undermine the German constitution but that parliamentary mechanisms were required to ensure maximum participation in the treaty's provisions. The German courts told legislators what they needed to do before they could fully ratify the treaty. More than anything else, this legislation is about the principle of payment, how it will take place and the type of payment. It is also about whether the payment of new members of the European Parliament will be struck not at the level of Members of the Oireachtas or any other EU national parliament, but at 38.5% of the basic pay of a judge of the European Court of Justice. Courts of justice are certainly not on their uppers at present; they are doing quite well in that respect. Most judges could volunteer to take a little cut in their payments, as we have seen in our own case. I acknowledge, however, that the principle is important.

I seek clarification on the national taxation side of it. As I understand it, provision is made for the salary to be paid by the European Parliament and the Irish Government or the Oireachtas will act as the agent for payment. The European Parliament will be the paymaster, but the Bill states that there will be no double taxation. That seems to suggest the taxation that will take place is national taxation. If the national taxation is the only one that takes place, we are reintroducing a new principle which will not be along the principle of parity of treatment. It will undermine that if all national tax codes of the 27 member states will kick into place for that payment. I would like some clarification on that matter to see if there is a common taxation of all MEPs' salaries. Otherwise, it would seem that by simply applying national tax codes of member states one will be reintroducing the flaw that was there when the salary was tagged on to the salary of each national parliament.

I suppose we will have to accept the idea that MEPs are barred from membership of certain bodies. Members of the Oireachtas have been disbarred from membership of a range of bodies, including quangos, but in some cases one wonders why that situation is required. If it is now established that members of parliament are to be disbarred by virtue of being members of parliament, then I would be inclined to agree that the principle should also extend to the European Parliament.

I welcome the legislation and hope that it will prompt a wider debate in this House along the lines I have suggested. We need a full-scale debate on our entire relationship to the European Union, not just concerning MEPs salaries. The debate should include how that relationship has developed over the decades and what structures are pertinent to our present and future participation. Maybe the time to do it is when, hopefully, the Lisbon treaty has been passed. That will be the time for a broad-ranging discussion on the implications of the Lisbon treaty, the enhancement of EU structures and how the Oireachtas can maximise and optimise our involvement in the EU.

Martin Mansergh (Tipperary South, Fianna Fail)
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I wish to thank the spokespersons of the principal Opposition parties for their support for this Bill. I strongly agree with most of the points that have been made. Deputy Bruton was quite right to underline the point that the Lisbon treaty is intended to bring in more democracy at European level and not to take powers away from people or states. I regard the EU as the greatest peace process in history at a regional level. It seems utterly perverse that it should be misrepresented as an organisation in danger of becoming militaristic and aggressive. I cannot for the life of me understand why the president of the Czech Republic, who lived under Soviet domination, should represent the EU as being in some way a reincarnation of the Soviet system. I find it very hard to get into that mindset.

Deputy Costello made the point that the Bill strengthens the independence of the European Parliament. I believe the institutional balance is broadly a good one with some fine-tuning that is being provided in the Lisbon treaty. There are opportunities for greater intervention and scrutiny by our own Parliament. At the same time, however, I sometimes think that some of the things said on this topic may not always be completely realistic. There is a mass of legislation and decision-making going on in the EU, so there must be a certain division of functions for things that are done at European level and those done at national level. Given the complexity of the issues involved, I am not sure it is always realistic to think that we can monitor everything that is going on. We must be prepared to delegate some of it, but we should certainly keep a close eye on the more important issues and, if necessary, make an input into them.

Deputy Costello raised the issue of taxation of salaries. Article 12.3 of the statute provides that it is a matter for each member state to consider whether national taxation provisions should be applied to the MEP's salary paid by the parliament, subject to the proviso that double taxation is avoided. In the statute, the European Parliament considered that it would be appropriate to allow member states to apply national taxation provisions on MEPs' salaries if it so wished. It is a discretionary provision and it is considered appropriate that as the current MEP salary at national level is subject to national taxation provisions, the latter should also be applied to the European Parliament salary.

Section 5 inserts a new section 127A in the Taxes Consolidation Act. To avoid double taxation this new section provides for the granting of a credit against Irish tax due on an MEP's salary of an amount equal to the tax paid by the MEP for the benefit of the communities in respect to that salary. The section also clarifies under which income tax schedule an MEP's salary is taxable.

Section 5(1) outlines the income tax schedule under which an MEP's salary falls to be charged to income tax of the State, and section 5(2) outlines that where a tax for the benefit of the European Communities is in respect of the salary of an MEP, such tax will be allowed as a credit against Irish tax due on that income.

This legislation makes the necessary provision for the transitional elements of the statute adopted by the European institutions in July 2005. The statute is the culmination of many years of discussion and negotiation among MEPs and similar discussions among and between the principal institutions of the European Union. As a result, it represents the views and considerations of all member states and for the first time establishes a single and transparent system for remuneration of MEPs throughout the European Union. The statute on which this Bill is based forms a single, universal and transparent set of terms and conditions under which all European parliamentarians will work. It fulfils a long-standing ambition of the Parliament and reflects the growing role of the Parliament in the affairs of the European Union.

The important and increasing role of the European Parliament is again reflected and enhanced by the Lisbon treaty. The treaty increases the number of areas in which the European Parliament will share the task of law-making with the Council of Ministers through co-decision, and the Parliament's budgetary role will also be strengthened. One of the key trends in the Lisbon treaty is the strengthened role it gives to both national parliaments and the European Parliament. The European Parliament, directly elected by EU citizens, gets important new powers in the EU legislative process, where in many areas it is placed on an equal footing with the Council, representing the governments of the member states.

Under the treaty, the usual method of legislating will be the "ordinary legislative procedure" contained in Article 294 TFEU, which involves co-decision between the Council of Ministers and the European Parliament. The move to the ordinary legislative procedure as the standard decision-making process for Union legislation represents a substantial democratisation of the EU legislative process, by virtue of the broader range of areas in which the role of the European Parliament is increased. These include agriculture, fisheries, Structural Funds, transport and the entirety of what we now call justice and home affairs, which is the third pillar of the Union. Ireland's opt-in arrangement for justice and home affairs adds an extra layer of parliamentary scrutiny to this, in that our participation in justice and home affairs measures is subject to the prior approval of both Houses of the Oireachtas.

The treaty also proposes to introduce new budgetary provisions to increase the role of the European Parliament in respect of the Union's budget. The current distinction between "compulsory", that is, predominantly agricultural, and "non-compulsory" expenditure will be abolished. Under the existing treaties, the European Parliament has only an advisory role in respect of compulsory expenditure. Under the Lisbon treaty, the agreement of the European Parliament will be required in respect of the whole budget, including agricultural spending as contained in Article 314 TFEU. These are important developments and emphasise the increasingly significant role which our recently elected MEPs will play on behalf of Ireland and the European Union. I am sure the House will join me in wishing those MEPs all the best in delivering their mandate for the Irish and European citizen in the years ahead.

Brendan Howlin (Wexford, Labour)
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In accordance with the orders of the House, we now move to Committee Stage.