Dáil Éireann debate -
Wednesday, 20 Jul 2016

Vol. 919 No. 1

Standing Order 149: Motion

Minister of State at the Department of Finance (Deputy Eoghan Murphy)

I move:

That, in accordance with the recommendation of the sub-Committee on Dáil Reform under Standing Order 107(1)(a), the Standing Orders of Dáil Éireann relative to Public Business be amended in Standing Order 149 by the insertion of the following paragraphs:

‘(3) The Committee Stage consideration of any Bill which falls within Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union (in this Standing Order referred to as a “relevant” Bill), shall not be taken by Dáil Éireann, or any Committee thereof, unless and until the outcome of consultation with the European Central Bank, as outlined in this Standing Order, has been reported to the Dáil.

(4) In the case of a relevant private member’s Bill, the relevant Select Committee under Standing Order 84A, shall–

(a) consult the European Central Bank and in so doing shall specify a time limit for submission of the Bank’s opinion to the Committee as provided for in Council Decision 98/415/EC (in this Standing Order referred to as “the relevant Council Decision”), and

(b) consider any advisory opinions received from the European Central Bank and report on such consideration to Dáil Éireann.

(5) In the case of relevant Government Bills, the outcome of the consultation shall be reported to the Dáil in the course of the Second Stage speech of the relevant Minister: Provided that if the report is not made in the course of that speech, the Minister may lay a report before the Dáil with the outcome of the consultation.

(6) Where the European Central Bank requests an extension of the time limit specified by a Select Committee, as provided for in the relevant Council Decision, the Select Committee shall give the request due consideration.

(7) Where the time limit specified by a Select Committee for submission of the opinion of the European Central Bank (or any extension of time granted by the Committee under paragraph (6)) has expired, the absence of an opinion from the Bank on the expiry of such time limit shall not prevent the Committee from proceeding with its consideration of the Bill: Provided that any opinion received thereafter shall be brought to the attention of the Committee and shall be laid before the Dáil by the Chairman of the Select Committee.’

I welcome the opportunity to speak on the motion this evening. It is fair to say that the need for it arises because of the nature of the Oireachtas since the last election. We all accept that we are operating in a new politics and Standing Orders must evolve to deal with situations which would not have arisen in the past. The particular issue being addressed in this motion arose in the context of the Central Bank (Variable Rate Mortgages) Bill 2016 put forward by Deputy Michael McGrath and the obligation to consult the European Central Bank, ECB, on legislation of this nature. The House will recall that the Minister for Finance undertook to consult with the Attorney General on the topic. The Minister subsequently wrote to the Ceann Comhairle regarding the matter and this motion to amend Standing Orders is the outcome.

In summary, the Treaty on the Functioning of the European Union confers an advisory function on the ECB with regard to draft legislative provisions within its fields of competence and an obligation on legislators to consult the ECB. The relevant articles of the treaty are clear. Among other things, Article 127(4) provides, “The European Central Bank shall be consulted by national authorities regarding any draft legislative provision in its fields of competence, but within the limits and under the conditions set out by the Council in accordance with the procedure laid down in Article 129(4).” Article 282(5) provides, “Within the areas falling within its responsibilities, the European Central Bank shall be consulted on all proposed Union acts, and all proposals for regulation at national level, and may give an opinion.”

The ECB has issued a useful guide on the topic which is available on its website. The guide makes it clear that national parliaments have to decide on the basis of their own rules of procedure how to comply with the obligation to submit for the ECB’s prior opinion on draft legislative provisions which have been proposed by one or more of their members and which fall within the ECB’s fields of competence. This motion provides for an amendment to Standing Orders which will ensure parliamentary consultation with the ECB as obliged under the EU treaties. The ECB guide notes that the obligation to consult is designed to operate as a preventative system to forestall problems of potentially incompatible or inconsistent national legislation with EU treaties or the European System of Central Banks Statute. However, it should be noted that ECB opinions do not have binding force. Nevertheless, the consultation must take place when the legislative provision is still at a draft stage and, more particularly, at a stage when the ECB’s opinion can usefully be taken into consideration by national authorities involved in the preparation and adoption of legislation. Accordingly, it is considered that prior to Committee Stage is the appropriate stage to consult with the ECB.

As Deputies are aware, usually with a Government Bill the consultation will take place when the Bill is being prepared and section (5) acknowledges this. However, in the case of a Private Members' Bill, to date there has not been a process in place which would ensure that the ECB is consulted when appropriate. Therefore, the amendment sets out a process which ensures that a Bill which has passed Second Stage is not given Committee Stage consideration until the ECB has been consulted.

It ensures that the relevant committee will undertake this consultation and provides it will specify a time limit for the ECB response, preventing unnecessary delays in the consideration of the Bill. It should be remembered that the obligation is on the country and the national authorities to consult.

I consider that the motion is a proportionate response to the new political reality that Private Members' Bills have a greater chance of being passed into law. It puts in place a process to ensure that our obligations to consult with the ECB are met. When the ECB has responded to the committee, the committee will consider the opinion of the ECB and report on this consideration to the Dáil. Once this report has been made, Committee Stage of the Bill can proceed.

I consider that this amendment to Standing Orders should ensure that Bills are better developed and considered when they come to Committee Stage and that a broader perspective will have been achieved, as well as actually ensuring that our obligations are met. I commend the motion to the House.

Deputy Billy Kelleher

I am taking this on behalf of Deputy Michael McGrath, who is otherwise detained and sends his apologies. Fianna Fáil supports this motion but it is important to put it into context. The result of the general election, the minority government Administration and the unprecedented importance of Opposition legislation present fresh challenges on how we bring forward legislation and how it is dealt with. The Fianna Fáil Bill to address the variable mortgage interest rate rip-off has prompted this change to Standing Orders. It showed that we can have real influence from these benches on issues that affect people's lives on a day-to-day basis. That is our parliamentary duty and obligation as well.

The changes included in the Standing Order must not be allowed to act as an infringement on State sovereignty and we must make this clear. It is crucial to note that the opinion of the ECB must be considered but is not binding. This House, elected by the people, is the ultimate arbiter of the laws of this State. The ECB has a central role in setting out the monetary contexts of our decisions and helping to develop a coherent EU-wide strategy on fiscal policy but it should not become the source of inordinate delays or undue opposition to laws passed by the consent of the democratically elected Members of the Oireachtas. That would only serve to deepen the cynicism at EU level at a crucial time when we need to reconnect the European institutions and the ECB with the citizens of Europe.

In this light, I will highlight some concerns that should be taken on board. A series of measures around Dáil reform included a specific commitment to limiting to ten weeks the legislative time lapse between passing Second Stage and taking Committee Stage. This was intended to avoid scenarios where Bills would pass Second Stage and disappear into the administrative limbo of the Oireachtas, where they would be ignored by an uninterested Government or one that was hostile to the proposal. It is vital that the ECB referrals are not allowed to prolong that period and the ten-week deadline should be inclusive of any ECB time demands. The minimum deadline for the ECB's opinion is one month and we should use that as a maximum period, with extensions given where required. Following the inclusion of a Bill on the Order Paper, following the first stage of the process, the Department of Finance should make its opinion public on the issue of referral to the ECB for observation.

There are some concerns around whether the Standing Order will be sufficient to comply with the demands of EU law. There is a possible issue around the definition of "substance". Article 4 of the Council decision of 1998 states that the ECB opinion must be taken into account at an appropriate stage, prior to taking decisions on the substance. The principles of a Bill are generally agreed on Second Stage while Committee Stage tinkers with the Bill itself. The substance of the Bill is on Second Stage so we have to ensure the opinions of the ECB are sought in advance of Second Stage.

The EU can seek a time extension to that set out by the relevant authority and I have advocated that we restrict this to a minimum of one month to limit delays. However, there appears to be a potential clash between the Standing Order change and EU law in this regard. EU legislation states clearly that the time extension shall not be unreasonably granted while the Standing Order states that it should be given due consideration. This could become an issue if the committee refuses an extension and it should be borne in mind by the relevant committee.

We support this motion as we must ensure we adhere to our EU obligations. We have had a very major upheaval in the past couple of weeks with the Brexit vote in the UK, which has changed the dynamic and the views of many citizens across the UK and Europe. The ECB gives its opinions on legislation but we must make sure that, at the end of the day, the primary responsibility for setting legislation in this country lies with the Oireachtas. We have to redefine the relationship between the European institutions, including the ECB, and sovereign states because there is a democratic deficit and we do not want those who are opposed to Europe to use the referral of Bills to the ECB as another example of the latter infringing on our sovereignty and on that of other nation states. We agree with the motion but I urge the Minister to look at some of the points we have raised.

Deputy Pearse Doherty

Tagann an rún seo ón Rialtas agus é ag iarraidh cur isteach in Orduithe Buana an Tí seo go mbeadh slí iontu chun dul i dteagmháil leis an ECB ó thaobh reachtaíochta ar bith atáimid ag tabhairt chun tosaigh, agus é de chuid an Rialtais nó an Fhreasúra, a bhaineann leis na bainc nó leis an mBanc Ceannais. Níl dabht ar bith ó thaobh Shinn Féin de, agus é ina pháirtí a sheasann d'ardcheannas na tíre seo i ngach réimse, gurb é seo rud atá neart deacair glacadh leis. Le hachan bhliain a théann thart, cífimid go bhfuil an t-ardceannas sin ag sleamhnú uainn.

Chuala muid ó páirtithe áirithe, go háirithe na páirtithe a labhairt cheana féin san díospóireacht seo, nuair a bhí muid ag plé reifrinn difriúla agus na treaties difriúla a bhí ag teacht ón Aontas Eorpach, ná raibh seo ag tarlú agus nach mbeadh sé seo ag titim amach. Ach cífimid anois amach go bhfuil sé sin ag tarlú. Fiú amháin, nuair a amharctar ar gnéithe cáinaisnéise, nílimid ábalta fiú amháin infheistíocht a dhéanamh in ár ngeilleagar gan dul i dteagmháil leis an Ghearmáin agus cead a fháil é sin a dhéanamh.

The importance of sovereignty is a deeply held belief of Sinn Féin and we have argued for it on many occasions during referenda on treaties. This is not, however, the place to go over past referendum debates. Legally, it seems clear cut that the two paragraphs in the motion compel national authorities, including parliaments, to consult the ECB regarding proposals in its field. In fact, according to a reply from the Minister, the ECB has given 33 opinions at the request of the Ministers for Finance or Public Expenditure and Reform and that does not include the times the ECB gave an unsolicited opinion.

The guidelines are clear, though, that "National parliaments have to decide on the basis of their own rules of procedure how to comply with the obligation to submit for the ECB's prior opinion draft legislative provisions which have been proposed by one or more of their members and which fall within the ECB's fields of competence". That is what we are doing here today and I believe, as an Opposition finance spokesperson, that the approach taken is an attempt to make the best out of a bad situation. In this new political reality, where Opposition Deputies and motions can win support, that means a new system to consult the ECB is required. At least the motion before us today allows a committee to set its own timeline for the ECB to respond to it. The ECB has to be asked its opinion but by no means does it have to be listened to and nothing here today will change that. I disagree completely with the Fianna Fáil position that we should consult the ECB prior to Second Stage as that would prevent legislation being tabled by the Opposition. The consultation should take place after Second Stage.

As a member of the banking inquiry, I must contrast the cast-iron requirement of this Parliament to consult with the Central Bank on issues related to it with the ECB's absolute refusal, at first at least, to engage with the banking inquiry set up by this Parliament. When eventually it did co-operate it was in a tokenistic way and on its own terms.

When it eventually engaged with us it was very much on its terms.

As an institution, the European Central Bank is unaccountable and secretive in its operations. We know too that it played an important and extremely damaging role in this country's banking crisis. The ECB is no friend of this country. Let us be clear about that. It is one of the reasons bondholders were paid despite the fact that we are told that should never happen again.

Earlier this year I was in Brussels at a conference organised by my colleague Matt Carthy, MEP, and it was clear that it is not just Irish people who see the ECB as a problem institution. There is Europe-wide disillusionment with the seemingly untouchable nature of the ECB and its policies. It needs to be reformed and its mandate reviewed so that it takes employment and solidarity into consideration rather than having a pure focus on managing inflation. We should listen to what it has to say because we have to - that is what the law states - but that is where its role should end in terms of this country's lawmaking process. From that point of view, I have no problem supporting the motion because it is just a case of ticking the box and moving on.

Deputy Mick Barry

We are discussing a new Standing Order which would require that Opposition Bills relating to banking, Central Bank currency and suchlike would need to be referred to the European Central Bank for an opinion before proceeding through the various Stages in this House.

I will begin by registering our view of the body we are being asked to send Bills to, namely, the European Central Bank. The European Central Bank was part of the troika which implemented and forced austerity measures on this country. It was part of the most hardline wing of the troika when it came to implementing austerity here. It was involved in forcing 1% of the population of the European Union to carry the can for 42% of Europe's banking debt. When burden-sharing was put on the agenda - the idea of burning some bondholders - we were told by the head of the European Central Bank at the time that a financial bomb would go off in Dublin if that measure was to be taken. The ECB has an agenda; it is a neoliberal agenda.

This proposal is a control mechanism. I notice that both Deputy Kelleher and the Minister of State, Deputy Eoghan Murphy, were silent. They did not mention that a refusal to co-operate with this measure means that infringement proceedings against the State can be taken, which would mean fines being levied on the State. They did not mention either that if the recommendations and opinions of the ECB are ignored, if an individual takes a case to the courts against the State about the legislation, the ECB opinion that was ignored can be used as part of the evidence in that case.

We have been told that there must be consistency and that 33 items of Government legislation have been sent to the ECB already. It seems the ECB wants a control mechanism over Government Bills but now over Opposition Bills as well. We believe that is undemocratic and we will call a vote on this issue at the end of the debate.

What has brought us to this point? It was a Bill from Deputy Michael McGrath on variable mortgage rates, which would mean that the Central Bank might be in a position to give some measure of relief to 300,000 householders paying variable interest rates on their loans. We supported that Bill. We criticised it as well because we felt it was a very mild measure, but it aimed to turn the tables to some extent - instead of favouring the banks at the expense of ordinary people, it would have favoured ordinary people at the expense of the banks, although not nearly to the extent we would have liked. That is the Bill that caused the problem, and that is significant in and of itself. I would be interested to know if it was the Minister who contacted the Attorney General for a decision or if the ECB contacted the Minister - whether by phone or e-mail or in conversation - to ask that this be dealt with.

I am not surprised but I note that the mood in the Parliament has been that this is not a big deal; there has been a certain shrug of the shoulders. I have to say that criticism expressed by the Sinn Féin Deputy in the debate was very mild. In fact, he said they would be supporting the motion. That is out of step with the view of ordinary people regarding this issue. I believe that when ordinary people read and hear about this, they will be shocked at the level of surveillance we are talking about from the European Central Bank. The Deputies and the parties in the House underestimate the feelings of people on this issue. This is now about the reality of the capitalist European Union and surveillance of the budgets of member states. Only a few weeks ago our housing committee felt it could not propose that 50,000 houses be built from State funds for fear it would transgress European Union fiscal rules. Tonight we see a stifling and overbearing level of surveillance from the European Central Bank regarding not just Government Bills but Opposition Bills as well. We will be calling a vote on this measure.

Deputy Thomas Pringle

I welcome the opportunity to contribute to the debate on this amendment to Standing Orders. I would disagree with Deputy Barry on the reason this has come before the House tonight. He said it was because of the Fianna Fáil Bill that was introduced some weeks ago, but that is not the case. If we had had a functioning Parliament from 2009 onwards, this would have been in Standing Orders from that time after the Lisbon treaty was passed by the people in a referendum. Such a measure was not required in the past because of the reality that a Private Members' Bill would never have seen the light of day beyond Second Stage. It is happening now because it is possible for Private Members' Bills to move beyond Second Stage. That is a factor in view of the minority Government that we have in place.

Ordinary people are shocked and surprised by this measure. One of the characteristics of the European treaties we have been adopting here is that people do not actually know what they contain. It is only as years pass and the outworkings of what people voted on become clear that we see that the German Parliament sees our budget before we do and gets to consult on it and that the ECB, which is unaccountable to anybody within the European Union, has to see our Bills also before they come before these Houses. That is what shocks people, but they do not make the connection between the decision they made in voting for this treaty and what is happening now, namely, the undermining of our sovereignty across the board, which I always outlined in the past when European treaties came before the people in terms of their far-reaching effect. We saw it last year in the decision of our Minister for Foreign Affairs to go along with a European motion attacking the Palestinian Authority. We signed up to the Common Foreign and Security Policy so we went along with that decision and gave up our traditional independence in our foreign affairs dealings. These situations are the outworkings of the treaties we have passed, and that is what people find disturbing.

I welcome this debate in the House because it will widen the public view of the way the European Union has undermined this State's sovereignty. It might also make people more aware of this if a treaty ever comes before us again, because it seems the European Union will be working very hard to make sure that a democratic vote will not have to be taken on any future treaty changes. I am sure our Government and the establishment parties in this House will work to ensure that there is no risk that the people will be asked to make a decision on a treaty again. It is important in that it shows the undemocratic nature of the European Union and the unaccountable nature of the ECB.

It is something we are legally obliged to do but I do not believe we should do it willingly. More debate is needed on the implications and workings of European treaties and to bring that knowledge to the people so they can understand the true nature of the European Union when the time comes to make decisions in the future.

Deputy Mattie McGrath

I am glad to get some speaking time and I thank the Business Committee for allowing extra time to at least have some debate on this subject. It was going to go through the House without debate, which would have been a very retrograde step. I am not surprised by this action by the ECB and the EU because that is the way they have been behaving. As a man who campaigned over the years for various treaties - Nice, Lisbon one and Lisbon two - I certainly will be more aware, and I hope the public will be more aware, of the bully-boy tactics, the controls and the tentacles which are reaching into every aspect of Irish society. It is unwarranted, unnecessary and it is unhelpful. We saw where our friends were when we hit trouble. We saw the money they charged in terms of an interest rate for the so-called bailout, which was a clean-out. We got money from the International Monetary Fund at 2.67% and our so-called friends in the EU charged us almost 6%. With friends like that, I wonder who needs enemies - we certainly do not. It is a ridiculous state of affairs. How long are we going to have to wait? Are we going to have to go cap in hand in the context of Private Members' business if there is any item of expenditure? We did not last five years with the last Government. When any Bill was moved by the Opposition, when an amendment was proposed to legislation or when anything was asked for, we were told it would be a cost to the Exchequer and could not be accepted. Amendment after amendment was ruled out of order. Now we have big brother in Europe. Is it any wonder there was a Brexit? The people in the UK are not going to put up with that nonsense. This is why we have the mess now. Unelected bureaucrats are bringing in these laws but we go to Brussels and ask, "Where do we sign, how fast can we sign and can we sign three or four times?" We have been the good boys of Europe. I will not say the word but such and such is all the thanks we get, and Deputies know what I mean. It has the audacity to try to interfere in our democratic process. This is the centenary of 1916 and we should be celebrating gaining our freedom and our sovereignty but this is the kind of treatment we get. It is disrespectful and proves a disconnect. I wonder what our Irish MEPs are doing out there? I understand that it is a big Parliament and there are only a small number of Irish MEPs but they have a role to play, especially to stop this kind of nonsense. By its actions, the EU is saying that any Private Members' motion put down by a Deputy in this House could wreck the European project.

At our Business Committee meeting discussion on this matter, it was said that a timeline should be put on it. We are not going to wait until Christmas two years from now for a reply. If there is no reply by a prompt date, we will move on. I believe we should move on anyway and to hell or to Connacht with the ECB. We should tell it to go where the monkeys jump for sixpence.

This is supposed to be a sovereign State and we are supposed to be able to control our own destiny. The Proclamation is read in every school in the country and yet we are kowtowing to these mostly unelected people. We saw how they reacted to the outcome of the Brexit vote. Three or four of the big boys wanted to drive on and to hell with the Brits or anybody else. I think it is proper order that they have moved back from that position now. We are going to have to assert our position that this is a sovereign Parliament and we can do what we want or else we might as well close up the Parliament and go home. The Dáil is going into recess tomorrow, so why are we bothering to come back? We could have the Europeans ruling the roost with the aid of plenty of ready, willing and able officials from the Departments who add five or six statutory instruments to every piece of legislation that comes from the EU. Other countries do not do that. France is one country that does not listen to the rules telling it not to do this or that, especially regarding the environment and agriculture. I am not suggesting we should be reckless in the areas of environment or agriculture but consider the ridiculous situation in Northern Ireland where a railing can separate the boundary between the North and the South and one can spread slurry on one side but not on the other. We are overzealous in being good Europeans and our thanks is that we have to go down on our knees and pay homage to the masters in the EU.

The electorate in Ireland will have a wake-up call and any further treaties in the EU will not be passed easily. We will not be sold a pig in a poke. We will not be going back to vote a second time if a treaty fails to get the result the EU wants. People are waiting in the long grass as they waited for Fine Gael at the last election. Now they are waiting for the eurocrats to come back and they are ready to deal with the European bureaucrats.

Minister of State at the Department of Finance (Deputy Eoghan Murphy)

I thank Deputies for their contributions to the debate on this motion. In wrapping up the debate, it is essential that we acknowledge that the obligation to consult with the European Central Bank on matters in its field of competence is a legal requirement under the EU treaties. As legislators, we must abide by the laws of the land. In a wider sense, it is important that all draft legislation is properly considered to ensure that it achieves its objectives, with minimal adverse effects. This requires the proper drafting of legislation to ensure that it is consistent with wider national and EU legislation and also that the legislation is constitutional. Additionally, it is our responsibility, as legislators, to consider the potential unintended consequences of legislation and to ensure that we mitigate these consequences where we decide to proceed with draft legislation.

The consultation with the ECB is only one part of this wider necessary consideration of legislation. We must also consider the economic and social effects of legislation. Too often we consider the initial beneficiaries of a well-intended, targeted measure without considering the wider costs to citizens both as taxpayers and those reliant on public services. Particularly in banking matters, it is vital that we consider the costs of regulation to the economy and the cost of credit to all consumers of finance, personal consumers, business consumers and the SMEs that create the majority of jobs in our economy. It is a reality that the cost of credit directly feeds through to our international competitiveness in labour costs and capital costs. The Government is committed to supporting a financial system that strikes a fair balance between sustainably low-cost credit and necessary consumer protections.

Deputy Kelleher asked about consultation. The obligation on authorities of member states to consult the European Central Bank on matters in their field of competence is a legal requirement under the EU treaties. The draft legislative provisions within the ECB’s field of competence include: currency matters; means of payment; national central banks; the collection, compilation and distribution of monetary, financial, banking, payment systems and balance of payments statistics; payment and settlement systems; and rules applicable to financial institutions in so far as they materially influence the stability of financial institutions and markets.

If we do not consult the ECB on these matters, we will be in breach of the EU treaties and this could lead, as pointed out by Deputy Barry, to infringement proceedings being taken against Ireland as the member state. The ECB’s guide states:

In those member states in which individuals have the right to initiate proceedings to annul a national legislative provision on the grounds of a serious procedural defect, individuals should also have the right to seek to annul national legislative provisions adopted in breach of an essential procedural requirement of Union law, such as the prior consultation of the ECB.

In view of the serious consequences arising from a failing to consult with the ECB, it is important that we agree the proposed motion and its amendments to Dáil Standing Orders. The failure to consult the ECB is only relevant in a legal challenge if the State fails to consult the ECB. During the debate on Deputy Michael McGrath's Bill, the Minister for Finance raised the need to consult the ECB. The Minister then followed up the matter with a letter to the Ceann Comhairle.

Reference was made to interest rates. The IMF funds were closer to 6% and the EU funds were closer to 2% to 3%. That is why Ireland refinanced out of the IMF funds last year and why the Government reduced the rates. I would recommend that Deputy Mattie McGrath look at the banking inquiry report. The Deputy should also be careful when he casts such aspersions to scapegoat the authority of this Parliament, where there is such authority.

We can have this consultation without interfering with our own legislative timetable, authority or sovereignty. The ECB opinion is not binding. We are the primary makers of legislation and we should not be afraid to consult, where necessary, whether we are in government or not.

Question put.

Acting Chairman (Deputy Jim Daly)

In accordance with Standing Order 70(2), the division is postponed until the weekly division time on Thursday, 21 July 2016.