Martin Mansergh (Tipperary South, Fianna Fail)

I am grateful for the facility offered by the Seanad and its Members to introduce the European Parliament (Irish Constituency Members) Bill 2009 and thank Senators sincerely for their co-operation.

Given the nature of the legislative proposal being made, I congratulate the 12 Members of the European Parliament elected to represent Ireland at the recent election in this jurisdiction. I compliment from this House, former Senator Alan Kelly from County Tipperary who represents the Labour Party, on his election. Equally, I 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. I am pleased turnout for and interest in the election were considerable.

Under the Lisbon treaty, the co-decision making powers of the European Parliament will be further enhanced. However, as far as Ireland is concerned, it would be a great exaggeration to claim that 80% of our primary legislation now comes from Europe. In my estimation, a figure of between 20% and 30% would be much more accurate. In regard to budgetary decisions, sovereignty remains for all intents and purposes with the member states in the areas of expenditure and taxation. The European Union budget accounts for less than 1% of public expenditure compared to national budgets which are 40 to 50 times greater. It has been said the European Union is a regulatory giant but a budgetary dwarf.

Across Europe, not only in Ireland and Britain, the pay and conditions of parliamentarians have come under intense scrutiny in recent times against the backdrop of an acute recession, the like of which has not been experienced for at least half a century. There is an insistent demand for greater transparency, an issue each national parliament must deal with separately in light of its own rules and circumstances. This, however, is relatively technical legislation, designed to achieve a greater uniformity between MEPs elected in different member states. This will, in turn, assist greater transparency.

In introducing this Bill it is relevant to look back to when existing legislative provisions providing for the payment of Members of the European Parliament were made. The Oireachtas debates which took place during the passage and enactment of the legislation in question, the European Assembly (Irish Representatives) Act 1979, make interesting reading. Many of the contributions espoused the view that it was not appropriate for one Parliament, namely, the Oireachtas, to make provision for the payment of members of another Parliament, different salary scales for MEPs based on the salary of the parliamentarian in their national state leading to different salaries for MEPs based on their nationality was cumbersome and a waste of parliamentary time, and the system then proposed was the result merely of a political compromise. More particularly, the view then put forward was that the European Parliament would shortly develop and adopt proposals for a unitary system for the payment of all MEPs. While the Parliament developed proposals for providing a unitary system for payment of MEPs, it took more than 20 years to do so.

In December 2003, the European Parliament voted in favour of a formula establishing, inter alia, the principle of independence of MEPs and parity of treatment between Members. Detailed implementation arrangements were developed by the European Parliament, having regard to the opinion of the Commission and approved by the Council of Ministers in July 2005. Accordingly, the proposals developed have the full 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 in July 2009. The legal position in relation to the statute is that its terms, in so far as they are addressed to member states, are binding by virtue of European law. National legislation is required to give effect to certain provisions of the statute.

The current legislative provision for the payment of MEPs in Ireland, the European Assembly (Irish Representatives) Act 1979, provides that Irish MEPs shall be paid an allowance equal to that paid to members of Dáil Éireann out of moneys provided by the Oireachtas. Payment of this allowance is effected by the Houses of the Oireachtas Commission. The statute provides that for newly elected MEPs beginning in the 2009 parliamentary term, salary provision will be made by the European Parliament directly to MEPs. However, it includes a transitional provision applicable to only those MEPs who were Members of Parliament in the previous term and who were elected to be Members for the term beginning in 2009 allowing them the option of electing to continue to be paid under national arrangements or move to payment under the European Parliament system.

The purpose of the Bill 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) Pension Scheme 1979 — Statutory Instrument No. 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 which I propose to set out in detail.

Section 1, which deals with definitions, is a standard type provision providing for the definition of terms used in the Bill for interpretation and other purposes. Section 2, which deals with the salaries of Irish Members, provides for current MEPs who are re-elected and exercise the option available to them to continue to be paid under the Irish national system. The salary paid will continue to be paid at the same rate as a salary for a Member of Dáil Éireann.

Section 3, which deals with the superannuation of Irish Members, provides powers to the Minister for Finance in relation to superannuation, similar to those contained in the 1979 Act. It empowers the Minister to make, amend, or revoke a contributory pension scheme for Members and former Members of the European Parliament and 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 preserve accrued benefits for current MEPs. Section 4 deals with disqualification of Members for membership of or employment by certain bodies.

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, and this section makes similar provision in the new Bill.

The purpose of section 5 in the 1979 Act was to avoid potential conflicts of interest arising for MEPs by having direct involvement in the affairs of State-sponsored bodies. It sought to extend the then existing limitations in the individual statutory provisions for each of the bodies, which generally were designed to ensure that 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, in 1979, 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, and the matter was addressed in the 1979 Act by section 5 and the associated Schedule.

The opportunity provided by the new Bill is being taken to update the Schedule. In this context, the individual legislative provisions applying to the bodies in the Schedule have been reviewed with a view to determining the bodies that may now be excluded from the schedule of bodies to which this provision will now apply. The outcome to the review undertaken is that changes in circumstance, legislation and status affecting the bodies require only ten of the 41 bodies listed in the Schedule to the 1979 Act to 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 in the Schedule to the Bill. The Irish National Petroleum Corporation Limited is a legacy State company, which was 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 from membership of the European Parliament. For consistency purposes, and as the opportunity exists under the Bill to address the issue, it is included now in the Schedule to the Bill.

Article 12 of the Statute makes provision for member states to apply national taxation provisions to the salary paid by the European Parliament to MEPs, subject to the avoidance of double taxation. Section 5 of the Bill inserts a new section 127A 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 a MEP's salary of an amount equal to the tax paid by the MEP for the benefit of the Communities in respect of that salary. The section also clarifies under which income tax schedule a 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 also be transferred and be reckonable for the purposes of the Oireachtas pensions scheme, or the European Assembly (Irish Representatives) Pension Scheme, 1979.

The purpose of section 7, amendment of the Houses of the Oireachtas Commission Act 2003, is to provide 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 the national parliaments to facilitate payments directly to local assistants or employees of MEPs, under a contract for services directly to a service provider, and make all necessary statutory and other contributions and deductions which apply in the member state concerned. Payments made will be recouped from the European Parliament and retained by the Oireachtas Commission. Accordingly, the Houses of the Oireachtas Commission will act simply as an agent for making certain payments on behalf of the European Parliament. Funding, rates and liability for costs etc. 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 type provisions providing for the repeal of the 1979 Act, in section 8; expenses incurred in the administration of the Act to be paid out of moneys provided by Oireachtas, in section 9; and the Short Title of the Act and designating when the Act comes into force, in section 10.

The current annual cost to the Exchequer for 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 decide to avail of the option to maintain their existing salary provisions from the new parliamentary term beginning in July 2009.

Current funding of pensions for former MEPs, which amount to €600,000 per annum, will continue in the short term, but will reduce over time as existing liabilities under the pension scheme are discharged and the future liabilities for MEP pensions are met by the European Parliament. Ultimately, over time, all liability for salary and pension benefits for Ireland's MEPs will fall on the European Parliament, amounting to a saving of €1.8 million in 2009 terms on costs to the national Exchequer.

I draw Members' attention to 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 in July next. Accordingly, I commend the Bill to this House.