Derek McDowell (Labour)

I welcome the Minister. Senator Quinn summarised the Lisbon Agenda wonderfully when he said it was "motherhood and apple pie". It has always been that and in a sense it was designed to be that way. It was put together at a Council of the European Union comprising prime ministers of so many different political hues that to get them to agree to anything was difficult.

We ended up with a faintly compromised formula which, on the one hand, talks about employment, growth, competitiveness and so forth and, on the other, genuflects to the left by reference to maintaining social provision, increasing job protection and so forth. If that was not sufficiently compromised, a couple of years later in Stockholm the concept of environmental sustainability was added to the pot. We are left with a formula which, frankly, means either nothing or everything. What it means varies according to who one talks to or the perspective of the individual or government. All in all, it has not worked or brought about appreciable improvement in the economic performance of EU states. It has not secured improved social provision throughout the eurozone, the EU or the new member states.

The Government attempted during the Presidency last year to refocus the agenda, particularly on the issues of employment and growth. By and large, I agree with that. I accept the general proposition that one cannot have social provision if one does not have employment and growth. To that extent, therefore, prioritising employment and growth is good and healthy. Whether that will translate into meaningful policy agendas is a different matter. The Minister of State's relatively short speech today covered an astonishing menu of issues. That is positive proof of how broad the agenda can be if one wishes to make it so.

An interesting and useful spin-off of Lisbon has been the debate we have had in the past couple of years, generated in part by economic problems in France and Germany, about the European model, particularly the European social model. I read an interesting report earlier this summer by André Sapir, a member of a think tank in Brussels who, among others, is an adviser to the Commission on these issues. He produced a report to the ECOFIN in Manchester in June which has now become the consensus within the European Union and which states, in effect, that there is more than one European model.

That is hardly a surprise. There are three or four identifiable, separate models. Sapir pointed to the old Franco-German, so-called continental model where there are high levels of job protection matched with high levels of social provision, such as unemployment benefit, retirement benefit, old age pension and so forth. In northern Europe and Scandinavia, the countries Senator Quinn mentioned, there is, by and large, a lower level of job protection and more flexibility in the labour market but a higher level of social provision. If one loses one's job, therefore, one will get more unemployment benefit. In southern Europe, that is, Spain, Portugal and Greece, there is a low level of social provision. Unemployment benefit is relatively low and does not last long. These countries concentrate most of their social welfare provision on old age pensions. However, they still have a high level of inflexibility in terms of job protection.

Then there is the British and Irish model which is something of a mix. Welfare benefits are average. They are higher than in the United States but lower than in France or Germany. The level of job protection is also lower than in France and Germany but higher than in the United States. Mr. Sapir makes the point, and I am persuaded by it, that the determinant of high levels of employment is more the level of job protection than the level of unemployment benefit and benefits which sustain the labour market. To put it another way, flexibility in the labour market is more important in determining levels of employment than the level of social provision.

It is an interesting conclusion and one that is gaining ground. To my surprise, and slight horror, I read that Commissioner McCreevy endorsed this notion last week in the IEA. I always get slightly queasy when I find myself in agreement with Mr. McCreevy. There is substantial merit in the conclusion and if there can be a level of consensus on it, it represents a way forward.

One must ask, however, what this means for Ireland, where there are two different and parallel systems. I am not sure how healthy that is. In the private sector a certain set of rules applies while in parts of the commercial public sector a wholly different set of rules applies. I refer, for example, to work practices. The day is long gone in most of the private sector where one could expect disturbance money for an improved system of IT or moving to improved offices. The day is also long gone where uncertified sick leave is seen as just another holiday or where one would expect to get paid overtime for filling in for a colleague who is out sick. There are occasions where such work practices are appropriate but there are plenty where they are not.

Unfortunately, however, that is not the case in parts of our commercial public sector. Perhaps it is appropriate that it should be said on this side of the House but these work practices are not sustainable in the long run. I support giving people good conditions of work and good basic pay but we cannot sustain the type of inflexible work practices which, frankly, ultimately cost us jobs. I will not be more specific than that but it is something that should be borne in mind.

The mantra in Europe ten or 12 years ago was that we had to get the Single Market in place and then implement the single currency and everything that went with it. We have been reasonably successful in getting the Single Market in place where goods are concerned but spectacularly unsuccessful, particularly in recent years, where services are concerned. The real problem that has arisen is due to expansion and the accession of the new member states, where product prices and wage levels are so different and where the threats and, presumably, the opportunities are much greater. That has slowed down the process.

We saw it most recently in the famous case in Sweden with the Estonian builders. Frankly, it is easy to see both sides of the argument. It is good for consumers, who are paying the price of services, to have competition from the east which is based on lower wage rates. However, it was not good for local construction workers in Sweden. The same could conceivably be true in Ireland.

I listened with interest to the debate about rip-off Ireland. On one level, it is very superficial. We talk as if prices exist in a vacuum. Prices are high, for example, in the tourist sector, because people are paid half decent wages. That is the major, although not the sole reason, prices are high. We cannot simply say we want lower prices but we still want bar, restaurant and hotel workers to be paid at a high level.