JOINT COMMITTEE ON EUROPEAN AFFAIRS debate -
Thursday, 17 Jan 2008

Lisbon Treaty: Discussion with Chambers Ireland and ISME.

Chairman

Today's meeting is one of a series, the purpose of which is to generate discussion on the Lisbon treaty. Several meetings have already taken place and further meetings are proposed to follow, after which there will be a series of meetings in the regions. Our objective is to generate debate, inform the public and ensure we play a meaningful role in the discussions leading up to the referendum.

From Chambers Ireland, I welcome Mr. David Pierce, president; Mr. Sean Murphy, director of policy; and Mr. Michael Geary, Chambers Ireland nominee to the National Forum on Europe. From the Irish Small and Medium Enterprises Association, ISME, I welcome Mr. Mark Fielding, chief executive; and Mr. Jim Curran, head of research. I draw delegates' attention to the fact that committee members have absolute privilege but this same privilege does not apply to witnesses appearing before the committee. Members are reminded of the long-standing parliamentary practice that members should not comment on, criticise or make charges against any person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

I understand the Chambers Ireland delegation has limited time so I will ask it to begin. The normal procedure is that the delegates make a short presentation after which there is a question and answer session. We generally deal with a raft of questions together to avoid duplication.

Mr. David Pierce

I thank the Chairman, Vice Chairman and members of the joint committee for the invitation to appear before them. I am joined by Mr. Michael Geary, the Chambers Ireland nominee to the National Forum on Europe, and the Chambers Ireland director of policy, Mr. Seán Murphy. I will try to answer any questions raised after making a short address.

The Irish business community recognises fully the benefits of EU membership in the past 25 years. One can recall the queues of cars when crossing the Border to Northern Ireland. Similarly, the euro has made transacting business easier for people and the duties one was obliged to pay through various countries have all been alleviated. One should consider the psychological liberation brought to Ireland by membership of the wider European Union since the early 1970s. I do not believe many countries have progressed as far or as rapidly as Ireland in recent times.

In this context, it is worth pointing out that, to date, Ireland has always gained by being a highly active participant at the core of EU decision making. Moreover, the degree to which we have made effective use of the money we have received from the European Union has been recognised. The treaty revisions that took place in the past three decades have been of benefit to Ireland and business, in particular. In my day job I am a director in Ulster Bank with responsibility for overseas business. I assure members that the perception of Ireland as a core member of the European Union has been very important in winning much foreign investment in recent years, as has the perception of the country being one of the main gateways into the Union for overseas business, particularly from the United States and, I hope, India and China in the future.

We have been well served by political representatives from all sides of the Houses of the Oireachtas and our public service representatives who have represented Ireland with distinction in the period since accession. In this context, I should note that the Chambers Ireland network also plays its part at European level and is represented at the highest levels in Eurochambres, the pan-European chambers network. Ireland has successfully punched above its weight in EU affairs and I see no reason this should not continue, albeit within a larger European Union.

Turning to the Lisbon treaty, it is self-evident that it is a consolidation treaty and as such, is complex, as we found out previously. The Minister of State at the Department of Foreign Affairs, Deputy Roche, has promised a 50-page explanatory booklet on the treaty this month. It should be in the simplest possible language for the public's benefit and address any concerns people may have in order that they are fully aware of the issues involved. We urge the Minister of State to ensure the booklet is published without delay. It would constitute a considerable improvement on the treaty document of approximately 287 pages. The people need a more articulate and shorter version of greater simplicity in order that they can understand the key issues involved.

While we trust that the referendum commission's balanced public information campaign will inform the wider populace of the ramifications of the treaty, more is needed. A White Paper has been promised for February and the proposed referendum Bill's wording will follow. Chambers Ireland and its affiliated network of 60 chambers, representing some 13,000 businesses, need to see such information documents as soon as possible. The information will play a key role in the network debate, to which we foresee a conclusion in mid to late March, before Chambers Ireland makes its official position clear on the treaty on foot of submissions from the entire chamber movement.

Turning to the timing of the referendum and given its importance for Ireland, we strongly believe the referendum must be addressed in isolation. Accordingly, we urge the Government to ensure any other possible constitutional changes will be treated in a separate campaign at another time. This would avoid additional confusion arising in respect of what is a complex issue for people to address.

My colleague, Mr. Michael Geary, has informed me of the National Forum on Europe's plans to hold road shows in the major cities and towns to help as part of the wider information campaign, which is to be welcomed. We support the initiative, as we support the efforts of the forum to keep the people informed on EU issues. We believe that as the date of the referendum draws closer, such road shows will garner much additional interest.

We note the importance of political representatives in debating what are extremely complex issues for the people and wish them every success in their endeavours. I am sure they will achieve such success. Members should be assured that Chambers Ireland will make its decision based on the submissions it receives and will keep them informed of developments.

Deputy Joe Costello

I welcome the delegation from Chambers Ireland. I am pleased to hear it is supportive of the new Lisbon reform treaty. I wish to tease out one or two matters with the delegates.

Mr. Pierce has indicated that Chambers Ireland has 60 chambers affiliated to it and that it seeks information from the Government as quickly as possible to enable people to become aware of the issues involved. Does Chambers Ireland intend for its 60 individual units to become campaigning units in respect of the treaty? How does Mr. Pierce see Chambers Ireland, which is an umbrella group with various chambers throughout the country, operating in the context of the campaign for a "Yes" vote? Perhaps Mr. Pierce might give us some more detail on that because this committee is also having a roadshow, as is the National Forum for Europe. We will be going around the country with public meetings to bring the parliamentarians to the public. The National Forum for Europe will do something similar. We are interested in knowing whether Chambers Ireland has had the opportunity to tease it out at this point in time, how it envisages its organisations getting involved and what the nuts and bolts of a particular campaign on the part of Chambers Ireland would be.

In respect of the timing of the referendum, Mr. Pierce said that Chambers Ireland did not wish to have the children's rights referendum held on the same date. I presume the reason for this is that they involve two separate issues and that confusion would reign. Does Chambers Ireland have a preference for a time for the referendum? How does it expect it to pan out? Would it prefer to have it in the summer or autumn?

My third question relates to Chambers Ireland's essential activity, which is business activity. How does it see the terms of the reform treaty in terms of competition? Does it see any dilution of competition in the context of a very strong commitment in the treaty to the social agenda and social partnership? Is that the type of development which Chambers Ireland would welcome? There is a legal underpinning of social partnership and dialogue. What are Chambers Ireland's views on the question of tax harmonisation, which is rather hoary but which is always thrown up. Does it see any Trojan horse in this treaty in respect of a common corporate tax base and has it any concerns about it?

Deputy Pat Breen

I also welcome the delegation from Chambers Ireland to the meeting. Its presentation was very straightforward. It is endorsing the reform treaty. I believe chambers of commerce are very powerful bodies. We have three chambers of commerce in my county — Ennis, Shannon and Kilrush — who play a very active role throughout the year in respect of promoting their organisation and commerce and trade in their various towns.

My question relates to that of Deputy Costello in respect of Chambers Ireland's campaign and how the individual chambers of commerce will endorse the reform treaty. Chambers Ireland has a very important role to play in each county. Its bodies are quite powerful and their members are vocal on local radio and in the print media. Does Chambers Ireland intend distributing its own literature and information in respect of the reform treaty through the chambers of commerce in each county?

Does Chambers Ireland have contact with its colleagues in the 27 EU member states? Have they shown any interest in the reform treaty in Ireland? I do not want to repeat questions. As some of mine are similar to Deputy Costello's, I will leave them for the moment.

Deputy Noel Treacy

I welcome Mr. Pierce and his fellow officers from the Chambers of Commerce of Ireland. I thank them for their presence at this meeting and for their work on behalf of the business community in all parts of Ireland, from the capital to the provincial areas. My county has many chambers of commerce, including one of the best in the country in the city. We like collaborating with the chambers and we value their input, which is to the benefit of the country.

I was interested in Mr. Pierce's comments. He referred to the euro, an ingenious success story of the EU in recent times. Does Mr. Pierce find that having two currencies on the island creates a major impediment for North-South business? From his involvement with the Eurochambres, does he detect a mood among his business colleagues within the EU to the effect that the euro could be accepted in more countries and that the euro zone might be expanded?

Mr. Pierce has discussed value for money and the need for simple language in documentation. There is nothing simple about the language emanating from the Commission in particular or the directives with which we must all deal and transpose into domestic legislation. The document proposed to be accepted will have simple language.

We value the positive endorsement given to the treaty by the chambers of commerce. If possible, it is important that the efforts of the chambers, the National Forum on Europe and the Oireachtas do not clash irrespective of which side of the treaty we are. There should be a timescale to allow the maximum number of people to participate at different venues to avoid timing clashes. The Chambers of Commerce of Ireland should give this issue attention, as should we to ensure the maximum opportunity is given to as many people as possible to participate in a consensual debate on what is best for the country.

In light of Mr. Pierce's experience of the EU and the growth of Irish business, is he satisfied that the treaty will accelerate opportunities for the business community?

Senator Paschal Donohoe

I welcome the delegation to the meeting. I have two specific questions to put. First, do our guests believe that the passing or failure of the treaty would have an effect on our ability to attract inward investment? Second, what is their organisation's opinion regarding the Charter of Fundamental Rights and will it impact on the ability of our businesses to be competitive, particularly as regards the UK?

Deputy Barry Andrews

I have two questions. I have consulted with my colleague, Deputy Treacy, concerning the holding of two referenda on the same day. In 1959, we had a referendum on PR on the same day as a presidential election. At a time of limited dissemination of information, people were sophisticated enough to be able to distinguish between the two events and elected President de Valera while rejecting his proposal to abolish PR. Our guests may be underestimating the ability of people to understand the difference between today's issues. These matters are complex whereas those in 1959 were simple net points, namely, choosing one over the other, but what are our guests' justification for their opinion?

I will repeat my statement at the previous meeting, that is, the same number of people who voted against the Nice treaty on both occasions. The change was in the number who voted "Yes" on the second occasion. The difference was that people were energised and the complacency and apathy had evaporated. The delegation must convey to its members that they should not be complacent about this event which will require people to take steps over and above the usual press releases. We must consider how we can get the people out to vote if we are serious about having the treaty passed.

Senator Déirdre de Búrca

I apologise for my late arrival. Unfortunately, I missed the presentation but have ascertained from what others have said that there was an endorsement of the Lisbon treaty. I welcome this because the public views the European Union as being in the interests of big business. There is a perception that it is not as sympathetic or helpful to small or medium enterprises. Will the speakers comment on how Ireland's membership of the Union has been helpful to small and medium businesses and the aspects of the treaty that are helpful to such enterprises? It would be helpful if the organisations represented played an active role in promoting and endorsing the treaty. There can be no complacency about the levels of support it will receive among the public, unless all stakeholders, those who believe the treaty will advance their interests, endorse it and encourage the public to support it.

Deputy Lucinda Creighton

I also apologise for missing the presentation.

The benefits of our membership since 1973 are clear, particularly for the business community, including the framework established, the Common Market, the euro and competition. What clear benefits will be derived from this treaty and how will that message be communicated? There is indecision in the business community about the treaty. It does not help that prominent business people are joining the "No" side. What is the succinct argument in favour of how it will benefit the members of the chambers of commerce? What steps will the delegation take to ensure the referendum is passed and how will it co-operate with other groups and business interests?

Chairman

The point made by Deputy Andrews is that it is of critical importance to have a good turnout, which would augur well for democracy. The greater the turnout, the more broadly based the response. The public has the right to say no or yes and is sufficiently well read to be able to make a choice. Incidentally, the treaty has some constructive merit and is an improvement on past treaties. These matters were not addressed before and this is of considerable benefit.

On a lighter note, Europe has produced many things during the years. It started with the aristocrats, who were all over the Continent. They were followed by autocrats, plutocrats and technocrats. Now we have arrived at bureaucrats and eurocrats. It did produce the European Union, as it is now, which has achieved peaceful co-existence among the countries of Europe for the longest period in history. We should recognise this in future presentations.

The point has also been made, I believe by Deputy Treacy, that we should ensure we do not clash with each other during our tours around the country. Everybody will have ample opportunity and the more debates we have on the subject and the more informed the public is, the better, and the less chance we will see voter apathy. Does the delegation wish to comment?

Mr. Seán Murphy

I thank the Chairman for his time and the members of the committee for their considered questions which we discussed among ourselves. I will try to answer them in order. Mr. Pierce wishes to address the taxation issue, while Mr. Geary wishes to answer the question on Brussels bureaucracy which the Chairman raised at the beginning of the meeting.

It is important to state we have not come out definitively in favour of the reform treaty at this point. We will embark on a network consultation process during the coming weeks and which is likely to be completed in March. Part of the reason for this is that we have not agreed the wording on what the treaty means. We have not received a direction from the Department on its implications in simplified language.

The network has been sensitised to the issues involved owing to the good work of my colleague, Mr. Geary, and the extensive presentation at our meeting of CEOs last September on the implications of the treaty. As was alluded to by committee members, local CEOs typically tend to be the voice at local level and are key information gate-keepers for business on treaties such as this and other issues. Once the network consultation process is completed and formally agreed, we will embark on a formal campaign.

Deputy Costello asked a number of questions, including with regard to the timing of the referendum. We are not elected representatives. However, our suggestion is that May or June would be a rational time to hold it.

I argue that the treaty does not affect competition. The ongoing expansion of the European Union and the certainty with regard to the application of laws and rules have facilitated business in doing what it is best at, namely, creating wealth. As accession states come closer to European Union membership, businesses and business organisations feel more comfortable investing in them, knowing they have certainty.

The president will address the taxation issue but I may allude to it in due course. With regard to other impacts of the European Union, we have been actively involved in the debate on flexicurity at the National Economic and Social Council. We believe flexicurity is absolutely crucial, as it provides guarantees and piece of mind for those whose businesses are affected by globalisation, while also allowing them to upskill.

Deputy Breen raised the fact that there are three chambers in County Clare. However, two of them are affiliates. The chamber in Kilrush is not. They play a major role in defending the business representative organisations in the county.

I attend Eurochambre, the delegates' meeting held in Brussels on the first Tuesday of each month, on behalf of Chambers Ireland. More than the 27 EU member states are represented at Eurochambre. In the context of Eurochambres' presentation on the common consolidated corporate tax base, CCCTB, as part of the small businesses reform Act proposed by the Commission, we cannot affect a vote of 27 states but have been fighting the good fight on the impact of the CCCTB and in stating how bad it would be for Ireland. We are recognised at Eurochambre level in this context.

Deputy Treacy discussed the euro and the two currencies used on the island. Having two currencies will always have a transactional impact. The euro has been of major benefit to the people, particularly as this is an island economy. There are cheap flights with Ryanair and Aer Lingus, while we are sensitised to the cost of living in other countries through the certainty provided by the currency.

Our experience in the European Union to date has been extraordinarily positive. During the 1970s we experienced de-industrialisation with our protected businesses. However, this had to happen as part of the pain experienced in reforming the country and preparing the country as a carrier for future foreign direct investment. Psychologically, it has had more of an impact than other monetary measures in freeing us from a grim relationship with our British counterparts and showing we have common interests at European level. If one looks at the level of expansion in recent times, it has accelerated opportunities. One of our biggest banks is doing extremely good business in Poland and other countries in the east, arising from the opportunities stemming from their European Union membership. Inflation would probably have risen to extremely high levels had we not had access to the excellent pool of skilled migrants who came here following the accession of their countries to the European Union. The excellent migrants who came here in the past five years have been an absolute boon and positive for business and the wider community. That has been a very good development.

With regard to Senator Donohoe's argument on passing, or not passing, the reform treaty and its impact on foreign direct investment, our president, Mr. Pierce, made the point that our brand internationally had always been about being the only English-speaking economy at the core of the European Union. We have always played that role. I argue that since the 8th century we realised that if we were not at the core, we were not in control of our destiny. Therefore, it is extremely important that we maintain a presence, even if it is as a very light economy within the wider European behemoth. We have a voice and command respect in that regard.

Deputy Andrews asked about two referenda but it is a philosophical question as to whether the people are sensitised to it. We argue that it is a complex wording. Referenda do not present the ideal forum to discuss these complex issues. During the debate on the Nice treaty, when we campaigned strongly in favour, the "If you don't know, vote no" argument had resonance. The reform treaty is complex. As everyone knows, the referendum on children will also be complex and could serve to further blur the arguments. In that context, it might be better to treat the issues separately.

Senator de Búrca asked about the level of EU sympathy for small enterprises. We find access to the bureaucratic representatives of the Commission in Brussels very easy. The Commission typically has been very good at helping business. The Single European Act, the reduction in duties and the facilitation of trade have been incredibly positive developments. Obviously, we kick back on some of the social legislation and its impact, particularly the working time directive which causes difficulties, especially for start-up businesses. Anyone who has worked in a start-up business knows that if one only works 40 hours per week, the business will not be in existence within a few years. Typically, all staff must sign up to it, which makes the directive a real issue. However, in general, progressive legislation and change in this society have been driven by the European Union, which we must respect.

The Commission has also been very positive regarding the research agenda. Prior to the setting up of Science Foundation Ireland, the Commission was the only game in town in facilitating research undertaken on the island. It was absolutely crucial to maintaining a spine of learned scientists who have been part of the training culture and corps needed to man foreign direct investment facilities.

Deputy Creighton asked about the benefits of EU membership since 1973, which I believe are self-evident. In the context of the treaty which we have not definitively come out in favour of, it seems to be more of a technical improvement on processes and procedures. The changes are balanced, will enhance democracy, improve the democratic deficit and enforce and encourage more co-decision making between national parliaments, the European Parliament and the Commission. They are technical in nature, which makes them difficult to explain. On balance, the treaty seems to be a welcome development.

I will hand over to our president who will deal with the issue of corporation tax. Mr. Geary will then address the issue of Brussels bureaucracy.

Mr. David Pierce

Our corporation tax rate of 12.5% is vital to our success with overseas businesses investing in Ireland, particularly those from the United States, for which it has been the biggest attraction. There is much talk about the education system which is adequate for overseas companies but there is more we could do with regard to research and development in order to move the country up the value chain. However, I know from meeting representatives of overseas companies that our corporation tax rate is the big attraction and we cannot let it be taken away. I believe the common consolidated corporation tax base issue is off the agenda for the moment and I hope is something we can and will continue to veto. That is vital.

With regard to the new countries entering the eurozone, about which Deputy Treacy asked, once they meet the criteria that this and every other country had to meet to gain entry, they should be allowed in. The euro helps to equalise competition, improves trade and enhances the ability to conduct business. It has been very good for Ireland, although the low interest rates have caused some difficulties, and ultimately of major benefit to our growth. Having two currencies on the island is a problem for Irish exporters to the United Kingdom, especially given the 7% volatility in the sterling exchange rate in the past three or four months. It would be good to see the United Kingdom joining the eurozone and the resulting abolition of the two currencies on the island. Similarly, the rejection by the British Government of a common corporation tax rate of 12.5% on the island is causing difficulties for Northern Ireland businesses.

Mr. Michael Geary

I would like to refer briefly to the media discussions of Brussels bureaucracy and the lack of democracy. In the context of the so-called Brussels bureaucracy, it is unfortunate that terms such as "Big Brother" are carelessly used. I dare say politicians and the media fall within those brackets. All decisions on EU laws affecting our everyday lives, including employment, the environment, consumer protection, the Internal Market, transport, culture and customs, are taken on the basis of co-decision by the Council of Ministers and the European Parliament, often after a conciliation committee debate with the Commission. Through its Ministers and MEPs, Ireland participates in all such decision making, which at the very least ensures there are no surprises. It is, therefore, disingenuous to blame those involved in Brussels for decisions we do not like.

Contrary to the views expressed by opponents of the treaty, the functioning and decision making of the EU will become more democratic under the Lisbon treaty. National parliaments will have an important role to play in debating and commenting on all legislative proposals before decisions are made on their enactment. A petition signed by 1 million EU citizens can be sent directly to the Commission to invite it to take a legislative initiative. Under the treaty, decision making will require a double majority for all law making, which means that, starting from 2014, approval must be on the basis of 55% of member states with 65% of the population agreeing. This will make decision making much more efficient. In every area in which the treaty provides for a loss of a national veto, it expands the rights of MEPs to share in the legislative process through co-decision.

On Deputy Andrews's comments, the opposition was less vocal in the initial referendum but on this occasion it will be more formidable and better funded. The referendum should be held before the end of May or early June because otherwise it will lose momentum during the holiday period and the effect of all the efforts made in the campaign in the coming months will be lost.

Chairman

Our proposal to tour the country will depend on timing because there will be no sense in starting a tour in early spring if the referendum will not be held until the autumn. It may not be possible to hold it in May or June, depending on other factors involved. Everybody is conscious that the campaign will be hard fought. A robust and informative campaign will be necessary because otherwise members of the public will say, as they did after the first Nice treaty referendum, that they were not properly informed. This issue is too important to pass up any opportunity presented.

I thank the representatives for their submission and addressing the committee, particularly given that they represent a broad spectrum of business interests.

We move to ISME and the same procedure applies. The ISME representatives will make their opening statements, committee members will raise questions, followed by closing remarks from ISME.

Mr. Mark Fielding

I thank the Chairman and the committee for inviting us here. I am the chief executive of ISME and Mr. Jim Curran is head of research. ISME is an independent body representing owner-managers in small or medium businesses throughout the country. Our members constitute 98.5% of all businesses, numbering approximately 250,000, and employ just over 1 million people, which equates to approximately 62% of private sector employment and approximately 54% of total employees in the country. I stress the word "independent" as it is imperative committee members understand that when ISME speaks, it does so independently of big business, trade unions and Government. We represent the owner-managers' voice in the economy.

Small and medium businesses play an important role in the economy and society in general. Owner-manager entrepreneurs, as a group, are more interested in long-term development of the economy, while shareholders and managers in larger businesses are primarily concerned with short-term profit and boosting shareholder returns. In general owner-managers are more responsible towards their employees and integrated into local society. They play an important role in stabilising society and have a bridge-building role between workers and capital equity owners. However, small and medium businesses suffer the disadvantage of having limited human and financial resources and being locally bound. Being small has certain advantages, such as flexibility, innovation and a capacity to rapidly adjust to changing market conditions, which are all the hallmarks of a true entrepreneur.

In view of the importance of small and medium businesses in the national and EU economic and social fabric, the key objectives for any agenda for change must be to place entrepreneurs and their requirements at the centre of policy making. One of the concerns that ISME has is that small and medium businesses may become lost in the vastness of EU legislation and regulation, as we have experienced in the past. Legislators must consciously take a "think small first" approach when drawing up EU policies and legislation. That approach will have a direct benefit for 98.5% of businesses in greater productivity and job creation and leading to social improvements and advancements.

The Nice treaty has been mentioned and we all hear about the two referenda. The lack of information at the time, especially in 2001, was notable and it was highlighted by our survey in August 2002. Subsequent to that survey the then Minister for Foreign Affairs, Deputy Dick Roche, requested that he and other Ministers undertake a nationwide briefing of owner-managers through our ISME briefing sessions. That process was welcomed by ISME and by the SME community. It helped clarify many issues and, some would say, had a major impact on the eventual outcome of the Nice treaty referendum.

With this in mind and our attendance here today, we surveyed our members in the last number of days on their knowledge of the treaty and how they might vote based on their knowledge as of mid-January 2008. The results are as follows. Question: "Do you have enough information on the proposed EU reform treaty to make a considered judgement and vote?" Answer: "Yes", 4%; "No", 88%; "Do not know", 8%. So, 96% of small and medium business owners do not have a clue. Question: "Are you aware of the implications of the EU reform treaty on your business?" Some 87% do not, 5% say they do and 8% do not know. Question: "If you were to vote today based on your knowledge of the treaty, how would you vote?" Answer: "Yes", 12%; "No", 19%; "Abstain", 10%; "Do not know", 59%.

It is interesting to note that in August 2002, when asked about the impact of the Nice treaty on their business, 42% stated they did not know. The figures for 2008 show an extremely worrying 95% who do not know or would say "No". Added to this, in 2002 only 8% were satisfied with the information supplied and in the current survey that drops to 4%. This leaves 96% not having enough information on the proposed treaty. The resulting percentage of people who would vote for the treaty is therefore not surprising.

In summary, accurate and unbiased information must be delivered to small and medium business owner managers to allow them make up their minds and vote accordingly. No amount of lobbying, cajoling and telling these people how to vote by us in the executive at ISME or at national council level will make owner managers do anything one way or another. They must be informed.

The joint committee is to hold advertised public meetings across the country, which we are looking forward to. These will be an information exercise as the committee's role is not to promote a particular point of view or exert influence. I hope that will mean considerable knowledge and expertise within this committee will be put at the disposal of the public and small and medium business owners in particular.

I suggest specific emphasis be placed on the effects of the reform treaty on business in Ireland, particularly with regard to indigenous small and medium businesses and enterprises. As we know, and as the establishment sometimes acknowledges, the SMEs are the backbone of the economy, contributing to Irish wealth as distinct from Irish profits, which in many cases are repatriated to other lands.

We cannot achieve competitiveness, employment growth and innovation targets without dynamic SMEs and understanding the background within which they work. One of the most striking changes in the latest treaty and perhaps the biggest threat to acceptance is that in order to enable many governments to reassure their electorates the changes will have no constitutional implications, the idea of a new and simpler treaty containing all the provisions governing the union has been dropped in favour of a significant series of individual amendments to two existing treaties. As Dr. Garrett FitzGerald has stated, virtual incomprehensibility has thus replaced simplicity as the key approach to EU reform. That is the feedback we are getting from members.

A difficulty we have seen is the sheer magnitude of the treaty and the EU jargon contained in it. We have also voted twice since 2000 on the Nice treaty, and it is only two years since the Dutch and French rejected the previous treaty. There is also the different posts created, the position of the charter on fundamental rights, the changing of democratic representation, the opt-in and opt-out clauses and the lack of a clear and concise answer on the taxation harmonisation question, all of which lead to continuing uncertainty being felt by small and medium business owners throughout the country.

New words being used would confuse a saint, requiring a linguist and scholar to interpret and decipher. We have a new president of the European Council and a presidency of the Council of Ministers, which will provide a team of three member states working together. We will create a new post of almost Gilbert and Sullivan stature, entitled the high representative for foreign affairs and security policy. Small and medium business owners would be really knocking about that.

The charter of fundamental rights will be separate from the main body of the revised treaty but will be given legally binding treaty status. Is it part of the treaty? Confusion reigns in such matters. Certain words and phrases are used throughout the treaty, and although we understand "unanimity", there are other words such as "subsidiarity", "proportionality", "QMVs", "competencies" and "enhanced co-operation" that are less clear. We also have "yellow cards" and "red lines", "conferral", "exclusive competence" and "passerelle", which one of my members thought to be a posh umbrella. It continues to confuse, frighten and turn off the ordinary citizen and, to this end, the preparation and distribution of a clear and concise synopsis of the treaty, outlining pros and cons, is of vital importance to our citizens. There must be a facility that allows relevant questions be answered in an unbiased fashion and without jargon.

In June 2007 it was agreed that Ireland, on account of its legal system, could avail of special arrangements with regard to judicial co-operation on criminal matters and police co-operation. This option must be clarified as it creates a confusing Lanigan's ball scenario: are we in or out?

The shift in EU law making by the Council of Ministers to a population based voting system is to the benefit of bigger states and will reduce the relative voting weight of smaller countries like Ireland. The protection of the voting rights of smaller countries was one of the key arguments put forward by the "Yes" campaign in the approach to the Nice treaty referendum, together with the retention of our Commissioner. While the use of majority voting and co-decision making has been extended in some areas we still await a definite answer regarding the area of special interest to Ireland, taxation.

The members of our association have concerns about many issues, such as the democratic deficit in the EU, the slowing of free market economic policies, the one size fits all approach, the lack of transparency on international trade, labour law, energy, climate change and, again, most importantly, taxation. The small and medium sized business community is particularly concerned that the European Commission will push commonality, also known as harmonisation, when the time is right. This area is of greatest concern to the business community, as evidenced in the Nice treaty campaign. It is essential that there be total clarity in this area as it will be decisive in influencing how business votes regarding the reform treaty. This point cannot be over-emphasised. Until these questions are answered fully to the satisfaction of Irish business people and the public the EU reform treaty will be a non-event and an embarrassment to the country.

The positive side is that the treaty proposes to strengthen the EU's common commercial policy on trade in public services, such as health and education, and increases the probability that parts of these sectors will be opened to competition from the private sector. This would be of benefit to Irish business and could revitalise and modernise the public sector. Irish small and medium sized businesses currently have difficulties with the public procurement system and the proposals under the treaty could address this to allow such businesses greater access to the enlarged system. The only caveat is we currently find it difficult to get a fair deal on procurement from our own public service and I wonder whether it will be fairer under the treaty.

Many of our members are concerned by foreign interference as the most independent minded people in the country are owner-managers of small and medium sized businesses. They would greatly resent any unwanted interference in their decision making processes; they want information and education but they do not want interference. Interference or blatantly biased information will result in a backlash and with this in mind it is important to note the potential for and dangers of unwanted outside influence.

Pro and anti groups across Europe have already indicated that they intend to come to Ireland to campaign on the treaty. The French far-right leader, Jean-Marie le Pen is one of a number of prominent figures who have expressed a desire to get involved in the "No" campaign. Angela Merkel, Nicholas Sarkozy and a number of other leaders have stated their wish to get involved in the "Yes" campaign. All we need in Ireland, in the approach to a referendum, is for the country to become the cockpit of Europe, with Irish concerns relegated to the sidelines by disparate European ideologies. We ask the joint committee to exercise its influence in this matter and recommend that these visits be discouraged or, at best, stopped entirely.

We at ISME acknowledge that the EU has been the outstanding political achievement of our time. In Ireland, membership of the EU has been an important catalyst for change. Access to the Single Market, the European Structural and Cohesion Funds and the Common Agricultural Policy have played a significant role in our economic success story. ISME members, like the Irish public at large, will find it difficult to take a simple "Yes" or "No" position on a complex and wide-ranging treaty that contains both positive and negative elements. In many cases, the same treaty provision may be interpreted in a positive or negative way depending on the perspective taken and the timing of the intervention. It is the role of Government to lead; however, it is also its responsibility to educate citizens on their rights and thereby allow them to exercise their referendum vote with all the information available to them.

In addition to business concerns about which we have heard anecdotally, many voters remain confused about the treaty's contents. They are concerned about the direction of European integration and dissatisfied with the decision making procedures. They are also resentful about being asked to revisit an issue on which they feel they have already expressed their opinion. For this reason, we at ISME urge the joint committee to ensure that every effort is made to inform the public before they are asked to vote. As we have learned from previous referendums and the recent ISME survey, people will not vote for what they do not understand and, just as importantly, they will vote "No" where there is doubt, lack of knowledge or confusion. We at ISME will disseminate information to our members when it comes to hand and we will assist the joint committee in whatever way possible to ensure the information is available, as we did in the past with the Nice treaty. However, we need that information to allow our members and the electorate at large to make a considered choice on the EU reform treaty.

Ms Mary Lou McDonald, MEP

I apologise for arriving late and missing the first presentation. I will obtain a transcript of the proceedings.

I wish to make a point, which was echoed in the Chamber of the European Parliament yesterday, about the importance of small and medium-sized enterprises. I understand the frustrations of the sector with red tape, bureaucracy, regulations and so on, and I also understand that SMEs sometimes see themselves as the forgotten heroes of the piece in terms of job creation. However, my own experience is that there is a growing awareness of the importance of the sector.

Rather than asking a question, I want to make some observations which are pertinent to this discussion. The first is on the issue of taxation. I have gone to some lengths in terms of asking questions and pursuing this matter. For the purpose of clarity, it is now beyond question that the Commission has taxation — particularly, at this time, corporate taxation — in its sights. It has made that clear repeatedly. When proposals on a common consolidated tax base have come before the Parliament they have enjoyed majority support. The Commission has indicated that matters related to taxation will be put on the back burner with an eye to the Irish referendum campaign, which has caused considerable annoyance at EU level. Equally, it has made it clear that these matters will be back on the table.

If people are being lulled into thinking that this is simply not going to happen — that we can set this matter to rest by a veto — they are incorrect. I have heard directly from the Commission that notwithstanding the unanimity provision, there are back-door options, including, to use some jargon, the enhanced co-operation procedure. Commisioner Kovács has told me it is his intention to use this procedure. In political terms, that means that massive pressure would be put on Ireland, with our veto or otherwise, to come on board for this move on taxation. People are asking for a clear yes or no answer. Proponents of this treaty will say we have a veto, which is technically true but is not the whole story. It is only a matter of time before the Commission moves on corporate taxation and it has all taxation measures in its sights, which is the logical next step from controlling monetary policy. The trend in all integration treaties over the past 50 years has been for the Commission to gradually take more competences to itself. There is nothing to suggest that lines have been drawn in the sand or that there has been a change of heart in that regard. We will continue to pursue this issue.

Democracy and accountability are at the heart of the debate on this treaty. It is little wonder that people are nervous at the prospect of handing over more power to this huge bureaucracy — I do not use that term offensively but as a matter of fact. I interact with it all the time and sometimes it is efficient and sometimes it is not as in the debacle surrounding implementation of the framework water directive which had a significant impact on schools. The spectacle of buck-passing, wringing of hands and blaming Brussels when deplorable Government incompetence was at issue, was unedifying. I was shocked to find this week that the Government has not been in touch with the Commission about school water charges.

It is neither good for the people nor in the interests of business to sign up to such a messy, unclear and unaccountable system of governance. The bottom line has to be that we are involved in decision making and punch our weight and that there is a strand of political and democratic accountability for all decisions taken. Mr. Fielding referred to the loss of a commissioner, effective from 2014 if this treaty is ratified. We will also lose an MEP. Those who say Ireland will affect decisions and have a place and a voice must weigh these losses against the increased influence of the competence authority in Brussels. The cosmetic suggestions of citizens' petitions, which of themselves are good, the extension of some authority to the Parliament and the gimmicky proposals for national parliaments do not balance the equation which is worrying for all of us and especially for business. I subscribe to Mr. Fielding's view of outside interference.

It has been suggested again that Mr. Le Pen intends to visit Ireland where he will not be welcome. I agree we need to approach this debate with one eye on the past and the other on the future. We need to carefully weigh up what is in Ireland's best interests. I hope this committee's deliberations will be part of the information campaign that is being called for. When we talk about full and unbiased information, I hope we are all as one in that regard and reflect the diversity of viewpoints and different interpretations that often surround provisions. It is only when that type of information is provided that people are empowered to have the type of debate that is needed, judging from the results of the survey.

Deputy Michael Mulcahy

I thank Mr. Fielding and his colleague, and the earlier delegation. I offer my apologies for having been somewhat late, although I was watching proceedings on the monitor.

Mr. Fielding's presentation was very refreshing and interesting. Not that we needed it, but certainly the results of that survey amount to a type of wake-up call. If I can give him any comfort, the Chairman will agree that when we were in Brussels before Christmas, we were making many of the points he made. We were saying, in effect, that less is more and not to regulate us to death. We asked people to please stay away and let the Irish people make up their own minds. Mr. Le Pen is not welcome, but nobody is welcome, as far as I am concerned. This is an Irish vote and it is not a question of welcoming one person and not another. It should go out loud and clear from this committee, to bureaucrats, opinion makers, politicians and pundits from any other country, to please stay away and let the people of Ireland have their own debate on this issue in a free and calm atmosphere. The Irish people must make up their own minds.

The information issue was touched on by Mr. Fielding to a large extent, and that is a very important issue for this committee. Once a referendum is called, the electoral commission will kick in, with a public information campaign, including advertisements. It normally hires barristers, solicitors or lawyers of some type to argue for and against and publishes booklets illustrating yes and no positions, but I am not sure that is enough on this occasion. The Government will obviously be propagating a yes vote in line with its policy, but perhaps there is a role for this committee, even in advance of our tour of Ireland, to consider some information programme of its own. There is nothing to stop the Oireachtas as such, from communicating to all aspects of civic society a yes and no opinion, setting out all the facts.

One group had suggested the entire new treaty amendments should be sent to everybody in Ireland, and that is patently ridiculous. If anyone believes that people will spend hours or days pouring over technical documents such as this treaty, he or she is living in cloud cuckooland. What people want is honest, clear, incisive, unbiased information. There is a role for the Oireachtas. One of our forthcoming meetings should look at the communications and information roll-out for the Lisbon treaty campaign in a yes and no format and not just from the Government's perspective.

Mr. Fielding will be aware that one of the great advantages to the Lisbon treaty is the new role envisaged for national parliaments in subsidiarity. It effectively means national parliaments can have a veto on Commission proposals. Could he see any role for the business sector in participating in that subsidiarity process if the Lisbon treaty is passed?

Perhaps Mary Lou McDonald, MEP, will come back on this, but I think there are certain members of the Commission who have a bee in their bonnet about corporate taxation. However, the statement she made is basically inaccurate. First of all, it is a matter of law that Ireland and several other countries have a veto on any change in taxation policy. If there is a lawyer who says that is not the case, I would like to read his or her opinion. Second, I think Ms McDonald is out of date when she says it will happen. My information is that there is a clear majority of member states totally against any changes to taxation policy across Europe. If three or four countries want to join together in enhanced co-operation, then let it happen. Let there be competition in taxation policy. If three or four countries want a common tax base, six or seven may not want such a base. However, it is important to state that it is a matter of law that every country has the right to veto any such proposal in the future.

I thank the witnesses from ISME. We need much more thought on the information campaign we need to roll out to citizens and our civic partners throughout the country.

Deputy Lucinda Creighton

I thank Mr. Fielding and Mr. Curran for their presentation. Like Deputy Mulcahy, I want to mention this myth that is being propounded about a common consolidated tax base. I call it a myth for the simple reason that Ireland has and will continue to have a veto over any proposal for a common consolidated tax base. It is true that other member states would like to see it because they feel threatened by countries like Slovakia, Ireland and other members that have a distinctive taxation policy. They see the benefits we have reaped from that and they feel threatened by it. That is their right. While we maintain our veto on the issue, there is nothing to worry about. That is a reality. Many of the new member states are very much on our side on this issue. With an enlarged Union, we have supporters and cheerleaders for our taxation position, which is very important to note. The enlargement of the EU in 2004 and in 2007 has strengthened our position. It is very ironic that a representative of Sinn Féin, the party that has campaigned to raise corporation tax in this country, can sit here and tell us our unique corporate taxation policy is under threat from the European Union. It is under far greater threat from the prospect of Sinn Féin ever being in power.

Enhanced co-operation was introduced under the Nice treaty referendum and is available for any group of member states to work together. That applies to a whole raft of policy areas.There is nothing to stop a number of member states coming together to decide on a united position on corporation tax. As far as I am concerned, we should let them off. It is their right to do it. We in this country have our own policy and we will maintain it.

The ISME representatives referred to the concerns expressed by its membership. It is appropriate that we have a full and frank debate, not just in the committee because, frankly, there are probably not many people listening, but throughout the country. I hope these issues will be raised in ISME's dialogue with its members. There has been a disappointing lack of information from the Government in the past six or eight months. It would have been easy to begin the dissemination of information long before the treaty was signed. We are in the situation we are in, however, and we will certainly do our bit and try to promulgate the benefits of this treaty as we see them.

Irish small and medium-sized enterprises have benefitted greatly from our membership of the European Union, of which I hope ISME will be mindful. I do not know if it plans to take a particular position on the treaty, after consultation with its membership or otherwise, as I do not know its internal processes. However, I hope ISME, as a leader of business in Ireland and the representative of businesses with over 1 million employees, will show leadership in this regard. I understand the jargon. The fact this is not a consolidated constitutional treaty but rather a series of amendments does not lend it to being user-friendly or particularly digestible, but that is the task we have. I hope that as a leader of the business community, ISME will see it as its task to explain the treaty in as clear a way as possible and to promote its benefits.

Our continued participation, not just as peripheral members but at the very heart of the European project, will be beneficial for us long into the future. Ireland has continually punched above its weight within the European Union. We have always done better than other member states in terms of Structural Funds and investment in infrastructure, roads and other projects, as well as in terms of employment, education and particularly agriculture. There have been very significant benefits. We need to recognise this not just as something that happened in the past but as something we need to continue to promote to ensure Ireland remains at the heart of the EU as one of the key players and participating fully.

With regard to some of the concerns expressed by the witnesses, particularly given the energy and climate issues raised by ISME members, this treaty for the first time extends the qualified majority to that area and for the first time will put co-operation between member states on a treaty basis. This will give us a great opportunity. We must remember that the EU currently has a population of 490 million whereas we have a population of just over 4 million. There is little we in Ireland can achieve on our own with regard to climate change or energy concerns. It is about co-operation and the pooling of sovereignty. While I am a nationalist and a member of a nationalist party, I do not see the EU as a threat to our identity but rather an enhancement of that identity which also enhances the benefit of our partnerships with other member states. We have a great amount to gain.

The witnesses referred to the EU economic slowdown. We are under threat to a lesser extent from the United States but particularly from Asian countries such as China and Japan and the growing economies of the East. We cannot face those challenges alone. We must face them in co-operation with our European partners. It is only if the 27 member states work together within the euro zone, with a combined commercial policy and healthy competition among members, that we can face down these global challenges. From a business perspective, more so than for any other sector, this is something that must be borne in mind.

The treaty offers great benefits, even if it is not sexy. In referenda on previous treaties, there was usually one central point that "Yes" campaigners could sell. In the second referendum on the Nice treaty in 2002, for example, the focus was very much on enlargement and the benefits attendant on the accession of ten new member states. This treaty does not afford us such a single compelling argument. Rather, it is a case of crossing the t's and dotting the i's to ensure the EU can function more smoothly and in a more democratic fashion.

We must emphasise the elements of the treaty that enhance democracy within the Union. The "No" campaigners have always pointed to their dissatisfaction with the democratic deficit in Europe. This treaty offers the opportunity to solve some of those problems. No agreement that involves compromise between 27 states can be perfect, but it certainly goes some of the way to achieving its aim of enhancing democracy. I hope ISME will recognise that and will not merely disseminate information to members, important as that is. It should take a leadership role in promoting the benefits of the treaty. People will recognise those benefits when they are fully informed of them. Will ISME take a position on the referendum? If so, do the delegates anticipate it will be a positive one?

Deputy Joe Costello

I welcome the delegation. Like Deputy Mulcahy, I thank the delegates for a fresh, open and detailed presentation of their concerns. Our function as a committee is essentially to listen to and seek to address the concerns of the various groupings that come before us.

ISME is an influential organisation in our society and has a major role to play in this debate. The businesses it represents employ some 1 million people; that is a colossal number in the context of a population of 4 million. The first concern expressed by the delegates related to the findings of two surveys the organisation undertook, one in 2002 and the other in recent days. These surveys indicate that people are confused, lacking in information and concerned about the incomprehensibility of much of the debate on the treaty, particularly in respect of the use of jargon. That is the main issue for this committee. Unless people are informed, the likelihood is that they will go with their gut instinct which may well be to reject the referendum.

The committee should make the case that an early response is required from the Government in terms of the what, how and when of its campaign to have the referendum passed. The Government has indicated that a White Paper will be published by the end of the month. It is important that this deadline is met. The document must outline the main substance of the treaty in comprehensible form and must be widely available so that it can be debated in public fora as well as in the Oireachtas. It is only after this document is published that the legislation will be presented to the Oireachtas for debate. It is only when that legislation is subsequently passed that the Referendum Commission, which has an important role in raising awareness and disseminating information, can begin its work. We must set this process in train as quickly as possible to ensure the information is in the public arena. That is the key message that should come from this committee.

I have some specific questions about the nuts and bolts of the delegates' operation. ISME is an independent body whose members comprise many small business owners, including owner-managers and so on. Does ISME adhere to a defined decision-making process? Will it be in a position to state that its members are supporting either the "Yes" or "No" campaigns? Did ISME support publicly either of the two campaigns on the Nice treaty? Was it in a position to do so? If so, what is the process? Should ISME decide to support the treaty, will it put in place a mechanism to campaign for it? One million people is a colossal number and could sway the treaty one way or the other. I seek clarity on how this would work out.

While Ms Mary Lou McDonald, MEP, is no longer present, the point she made has been well answered by the previous speakers. However, it was unfair of her, during her contribution, never once to mention the veto. The veto constitutes the sovereign member state's authority to turn down tax harmonisation. It is as simple as that. While some within the European Union want us to join a European army, Ireland is a neutral country that has a veto on this issue and consequently will not so do. This point must be mentioned. In addition, as Deputy Creighton noted, Ms McDonald, MEP, should acknowledge that her party is in favour of increasing corporate taxation. Her argument that we may lose our present position in respect of the tax regime while simultaneously, her party is canvassing actively to increase it, appears contradictory. When individuals make party political statements before the joint committee, they should state from where they are coming.

I wish to make three further points. I refer to ISME's concerns about the loss of commissioners. While commissioners are being lost across the board, it is the same for everyone. Moreover, in 2004, the bigger states, which had two commissioners, lost their right to a permanent commissioner. The situation has improved dramatically as each tiny state will have a commissioner on exactly the same terms as the largest state, Germany, which has more than 80 million people.

As for the loss of MEPs, we lost a couple of MEPs on foot of the Nice treaty. The expansion of the Union in 2004 to include 12 new member states required a certain levelling. However, this does not form part of this treaty. I refer to the question on whether large states have too great an influence and whether matters are weighted in their favour. One should consider the co-decision making process, as well as the double majority voting system, which will require a combination of 55% of the member states and 65% of the population. The two combined constitute a good balance and it would be impossible for any member state to throw its weight around in such circumstances.

Senator John Hanafin

I will be brief. I thank Mr. Fielding for his positive contribution in providing members with information on the dangers inherent in the words used in the treaty. Some sections of the treaty will be quite technical. Within the Oireachtas, a procedure exists whereby Members are supplied with the purpose of any Bill that comes before them in an amended form. People who cannot discern clearly the issues on which they are voting are more inclined to vote "No" than "Yes". I thank Mr. Fielding for this insight because it is important from the perspective of members who, to judge from what they heard this morning, will be fighting shadows rather than facts. I want to deal with facts and members should be able to present them in clear and unambiguous terms.

A veto is a veto and while people may tell us that we will come under enormous pressure to get rid of the veto, such pressure does not matter. It is a legal veto, which will stand. From that perspective, it is incumbent on members to state clearly the purpose of all sections of the treaty, including its technical elements, in order that people are clear when they vote. Members of the Oireachtas should ensure that they will vote on something that is clear and straightforward and that they are not being met with shadows by those who oppose the treaty.

Senator Paschal Donohoe

I welcome Mr. Fielding and his colleague to our committee meeting. The people represented by ISME own their businesses. Of all the organisations that have appeared before us so far, ISME's members are under possibly the greatest pressure because they own and run businesses at the same time. In light of this, they are very lucky to have an organisation like ISME which is able to represent their interests so well and so clearly.

I have three specific questions in respect of ISME's presentation. The business and commercial agenda of this treaty is very much one of trying to drive competition. This has been termed a neo-liberal agenda by other participants in these meetings. Other people see the development of that agenda as a threat to a degree to which their attitude towards and enthusiasm for the treaty is lukewarm. I was surprised to hear that an organisation like ISME, which is such a vocal and able proponent of a competition agenda within Irish society, is not more supportive of a treaty like this which tries to institutionalise this, bring it across Europe and consolidate it more within Ireland. On balance, is not the development of a competition agenda in Ireland something that will represent a huge opportunity for ISME's members?

We have already discussed the tax point mark as being in clear need of clarification for ISME's members. If there were two other questions to which they wanted answers and two other pieces of information they wanted to allow them to vote in an informed manner on this treaty, what would they be? If there were three things we could address, including tax, what would the other two be?

Given the nature of the people represented by ISME, how could we communicate those three pieces to them in a manner that would best meet their needs? I suspect they do not want to come along to huge public meetings in town halls so how could we give that information to them in a way that would meet their needs and the needs identified in Mr. Fielding's presentation?

Deputy Noel Treacy

I welcome Mr. Fielding and Mr. Curran to the meeting and thank Mr. Fielding for his very detailed presentation. I listened with interest to much of the statistical data he gave us. Are any multinational companies members of his organisation?

Mention was made of innovation and research. I am sure ISME would accept that many companies — I am not certain if they are members of ISME — have benefited very much from Ireland's membership of the EU in being able to bid and compete for projects across the EU. This has given huge capacity to increase GDP here and to increase the net balance of success, particularly from a bottom line perspective, within many companies in this country. Could Mr. Fielding indicate whether any of ISME's member companies have benefited from the success of European framework programmes who have been major players in research and innovation across the EU over the years?

I was shocked somewhat by the results of ISME's survey. I could not believe that there would be such a dearth of information in modern times. While some people have commented that the Government should put more information into the marketplace sooner rather than later, we could not legally do so. If we were to put it in ahead of a decision and a signed document, we would be accused of driving an agenda that did not have any legality. We must be mindful of the fact that we have legal responsibilities, as well as a democratic mandate to do certain things. It can only be done when it should be done. Mr. Fielding might tell us how many documents or papers were issued by ISME for the survey and the percentage that were returned to see if there is any hope of possibly changing the mindset of people who at present seem to be very dubious about this reform treaty.

I would suggest that the evolution of the EU mirrors the evolution of ISME. In 1957, there were six countries. In 1973, there were nine countries. In 2007, there were 27 countries. From the point of view of member states and their populations, Europe could not have run an efficient operation with that type of massive change in membership if it had not made other changes. Considering the evolution and success of ISME over the years, it has changed its structures. It was small at the beginning and has brought many efficiencies into its operation. It has been supportive of and positively committed to the service of its member organisations. The EU has a similar responsibility to be supportive of and be of service to member states, their needs and the almost 500 million citizens. On this basis, there must be change, which is now before us in the reform treaty.

I listened with interest to the comments on proposals pertaining to the president. It is important that someone should speak for the 27 member states. The new president will be in office for two years and, to allow for a fresh leader, cannot be returned to office. The Presidency of the Commission has always existed and Ireland was honoured to hold it many times. While we are a small country, we are not the smallest in the modern EU. It is difficult to expect a small country of 1 million or 2 million people to carry the significant role that is the Presidency of a Union of 27 member states. On this basis and after much discussion, there should be a sharing of the burden. The Troika has always existed — the outgoing Presidency and the incoming Presidency assisting the current Presidency — and will be legitimised through a tripartite presidency that will be more active, supportive and engaged in running the EU. This will be to our advantage.

The High Representative was an ad hoc position without legal basis, which did not give Europe the necessary standing in global affairs when dealing with the Middle East question, the African aid situation or so on. We did not have a legal mandate to enforce our position at the table. We could only make our position known. Originally, it was proposed to have an EU Minister for Foreign Affairs, but this was opposed by all member states because it would impinge on the integrity of their Ministers. The High Representative will now reflect the consensus achieved by member states’ Ministers for Foreign Affairs at the General Affairs Committee. Once decisions have been made, it will be up to the High Representative to represent the opinions and implement and enforce the decisions across the world. This is positive progress and shows how the EU can assert its position more.

Successive Governments, MEPs and Irish officials at COREPER and various committees have been consistent on the taxation issue since joining the EU in 1973. Taxation is a vital national interest and we will never concede in that respect. Four elements of Irish policy have been consistent over the years, namely, taxation, the sustainability of the Common Agricultural Policy, the capacity of the island and the need for European assistance to grow Ireland's economy and the critical role played by the EU in Northern Ireland, which must be continued.

I endorse my colleagues' statements. The veto is a legal tool to protect our country. I am disappointed that Ms McDonald, MEP, needed to leave, but I cannot understand how someone who represents our capital city would have such a negative attitude towards a union that is a force for positivity and good in Ireland, Europe and the world. Some 600,000 people will vote "No" irrespective of what we do. Ms McDonald, MEP, represents a group that will promote the "No" campaign. If the European Commission, which she denigrated today, proposed to pave the streets of Dublin with gold, those 600,000 people would still say it should be silver. That is the difficulty and the hypocrisy with which we must deal. It is a sad situation and I am sorry she is not here to hear this.

We can refer to March 1987, when this country was on the verge of international bankruptcy. The IMF was about to intervene, in which case we would have had to abide by whatever it decided. Fortunately, with European support, and monetary and fiscal policy conforming to the views of the Commission, the Council and the Council of Ministers, we managed to bring about budget conformity, a debt to GDP ratio within the European parameter and work within the constraints, using the resources available and the cash transfers from Europe that helped restore the economy of the country and bring it to a new standard. That could never have happened without the European Union. For every euro we have given it, we have received six in return.

It is critically important to refine the EU, its architecture and structures to achieve new efficiencies and institutional changes that are vitally important for the future. I hope we can call on the support of ISME and, as my colleagues have stated, there is a massive membership and employee base through the owner manager operation. These people have a major role and interest as regards personal well-being, family well-being, community well-being and the country's well-being. We admire the contribution of ISME over the years and we are honoured to partner ISME in bringing about a more efficient European Union in the interests of all people on the island of Ireland.

Senator Déirdre de Búrca

I thank the speakers. I find it interesting that the members of ISME have such a low level of awareness of and information on the European treaty. I would have expected business people to have as good, if not better, knowledge than the average member of the public. It is worrying that levels of information are so low. We must all get involved in making sure the relevant information is provided. It seems that it may be useful to have a booklet that addresses the concerns of business people. The treaty is a large document containing many elements. The aspects that are of interest to the business community should be explained and clarified. I agree with Senator Donohue's comments on research already undertaken. This could be followed by asking members the key issues on which they seek clarification and providing it by means of an information booklet.

Corporation tax seems to be the crunch issue for the business community and whether the Lisbon treaty will undermine Ireland's ability to control its corporation tax rates. The unanimity requirement regarding corporation tax remains in the treaty. That is the strongest protection one can have. Those who oppose the treaty suggest the mood of certain commissioners is to change that but as long as the protection is there it remains at the same level as we have at present. Nothing changes with regard to Ireland's control of corporation tax.

Another speaker referred to the enhanced co-operation mechanism that a small group of countries might use to allow them to co-operate in taxation. That already exists and has done since the Nice treaty and could be used irrespective of ratification of the Lisbon treaty. Clarity on these issues is important. I hope the organisation promotes the treaty and encourages its members to support it.

Deputy Barry Andrews

The question of Europeans coming to Ireland during the campaign is important. I disagree with Deputy Mulcahy. We are all Europeans. It sends out a terribly bad message if we cannot accommodate opinions because of a person's nationality. What an irony it would be if we were to exclude Europeans from a debate on Ireland's future role in Europe. If any cultural static will exist it will be where Dublin south-siders such as me will go down to farmers in Kerry to tell them the benefits of the nitrates directive. This is where the problems will arise with our roadshow.

We suspended our concerns about these issues during the previous general election when former US President, Bill Clinton, endorsed the Taoiseach. Foreign interference in elections did not seem to be an issue then and we should be consistent in such matters.

Deputy Joe Costello

Hold on now.

Deputy Noel Treacy

President Merkel endorsed another leader and we did not have a problem with it.

Deputy Barry Andrews

We are all sophisticated enough to deal with it.

Chairman

This discussion has been particularly interesting. We have heard approximately 24 speakers during the past two hours which is good going as everybody got animated. I wish to make a number of points before calling on the delegation to reply. We attended 17 meetings in 24 hours during our recent visit to Brussels. I am opposed to bureaucracy and have dreaded it all my life. However, it was clearly recognised by everyone we met that it is necessary to deal with the issue of bureaucracy. This treaty is more positive in dealing with such issues than any other. It is ironic but this is the way it is.

Most committee members have quite an amount of political experience. I was first a member of this committee in 1981, which is neither today nor yesterday. Some Members of the House were just about born then. It is important that public campaigning and dissemination of information is done accurately and in an even and balanced way. It should be well-sourced and well-based and we have this available to us.

The committee proposes to have an interim report ready by the middle of February. This will be the chart on which we will operate during the course of the campaign. We agree with the delegation that this must be in simple language readily available and understandable. As Deputy Barry Andrews stated, there is no sense in speaking in "eurospeak".

We raised the taxation issue during meetings with five or six commissioners and several heads of departments. We were quite trenchant about it and received what we believe was an honest response. This response was as members stated, namely, that it is in our own hands and will only happen if we allow it to. We are masters of our own destinies. I am not being political when I state this country has always had a tendency to blame Brussels as an easy option which comes too readily to hand. This has damaged us, Brussels and the concept of the European project. I will not over-labour the point but it is important that we recognise it.

We can all instance cases where we were critical of decisions made in Brussels during the past two or three years. These decisions were not made by a bureaucrat in Brussels but by agreement. We had representatives at those tables making their cases. Sometimes the conclusions reached were wrong and not in the interest of our society. The commissioners we met agreed with us, including those who may not necessarily agree with our views. With regard to bureaucracy, Commissioner Charlie McCreevy in particular was anxious about the need for home countries to recognise their own importance and the role they play. The referendum and treaty are going further down the road in dealing with those issues and the minutiae than was the case previously. It may sound somewhat complicated, with majority voting and double balances but I believe it is a tremendous achievement. It has done something we thought impossible.

With regard to the loss of a commissioner, I fought very strongly to retain a commissioner for each country when I was a member of this committee previously. I also fought strongly for an enhanced role for COSAC but was defeated on the vote in Stockholm. However, it has now come to pass and the role of COSAC has been enhanced. The parliaments of member states have a greater role through the committee and the European Parliament. That has been addressed in a very meaningful way. In the last five or six years there was a danger of a commissioner being too readily identified with the member state from whence he or she came. That was detrimental to the workings of Europe and the European project. The current proposal will improve matters. The Commission was always regarded as being the engine of Europe and it became a place to which each member state could lobby. Depending on the size of the member state, it came to pass that the more powerful ones had more influence over the Commission. I do not have to remind members of some of the decisions that were made in that context in the last two or three years. That issue had to be addressed and the current proposal is an improvement. We will have the same influence, through the Commission, as any other country — no more and no less. It took much effort to deal with that matter.

The issue of taxation causes people's blood pressure to rise but we can make an argument to retain our position. We can argue that we are on the periphery of Europe and are one of the few remaining islands. If one goes to the United Kingdom, one can drive to almost all parts of Europe from there, but not to Ireland. There are differences and advantages for those countries that are on the European mainland. We are at a disadvantage in that regard and can make a strong case to maintain our current taxation position. That will be done. There were those who argued against us but we had our own views on the matter. There is a common interest rate across the eurozone and improvements can be made to that. There was a recognition by those involved that improvements could be made, including introducing credit controls and other mechanisms to monitor what happens in individual member states so that in cases of low interest rates, one does not find galloping inflation. That is something we must learn from.

This series of meetings has been more animated than any held to date. I thank the witnesses for lending to that animation and ask them to respond to the various points made by members.

Mr. Mark Fielding

I will do my best to deal with all of the points. Deputy Mulcahy asked about the role of the business sector. An important role for the business sector is in the area of regulatory impact assessments. We have not seen enough of such assessments in recent times. That is an area where ISME and other organisations can play an important role. The difficulty has been that while there is much talk about impact assessment, there has been very little action, especially with regard to small and medium businesses. There is no point in legislating for the likes of McDonalds, Nestle and so forth and then applying the same law to the artisan pudding maker in Clonakilty. There tends to be a difference, depending on scale, and there is certainly a role for the business sector in that area.

A number, if not all, of the members mentioned taxation and made reference to tax harmonisation. Our members have told us that they are not happy with what politicians, the Minister and the Commissioner are saying on this issue. The message has not been understood or accepted, namely, that the current situation will not change. Owner-managers will immediately see through the waffle, so they need to be able to put their fingers in the wound and see in black and white this is not for changing.

Deputy Michael Mulcahy

Who would convince them?

Mr. Mark Fielding

It needs to be stated by the Government that it is not going to change. The reasons there will be no change must also be explained. Everybody here is telling me the reasons.

Chairman

We can make that argument.

Mr. Mark Fielding

I am convinced by that argument but the members of ISME are not because they have not been provided with the requisite information.

Deputy Creighton asked whether we will be in a position to show leadership. Our members show leadership on a daily basis. I have been working in the small business sector since 1971 but not for the life of me would I tell a small business owner-manager what way to vote. I would set out the pros and cons and let him or her make the decision. Facts, not people like me, will lead owner-managers. We are here to tell the committee that our members do not have sufficient information to make their choice. We need to convince owner-managers one way or the other.

Deputy Costello asked about the decision-making process in ISME. We have a membership of approximately 5,000 owner-managers who elect on a biannual basis a national council of 14 to 16 members to dictate policy to the executive. The decision made in referendum on the Nice treaty was to provide information, which was why we conducted our survey and had various Ministers accompany us when we met members. There was no decision by the national council to say either yea or nay. The vote in the referendum, however, indicated how owner-managers felt at the time. We will hold a national council meeting on 5 February at which the treaty will be discussed. However, the council will not be able to take a lead at present because it does not have enough information to do so.

Senator Hanafin referred to the purpose of the Bill. It is good to dumb down a lot of this information so that it can be made more concise.

I mentioned the loss of a commissioner not because major concerns existed in that regard but because the opponents of the Nice treaty kept hammering on that issue. Several speakers suggested we are not losing in that sense but that needs to be brought home to voters.

Senator Donohoe spoke about competition and expressed surprise that we are not more supportive. We are certainly advocates of competition. As an organisation, we will not dictate to our members which way to vote. It is wrong to take what I am saying to imply that ISME is either supportive or unsupportive of the treaty. We are bringing information to the committee so it can inform our members.

Senator Donohoe asked what the top two issues are, after taxation. I could be smart and say the three key issues are taxation, taxation and taxation. However looking at the comments from our members on this survey in particular, one of the other two areas that need to be sorted is "thinking small first". This means ensuring when the laws and regulations are passed, regulatory assessments are done on how they impact on small and medium businesses. The other area is similar, namely ensuring we have a say at representative level on how the EU is run so our representatives in the EU know and liaise with business people when they return to Brussels.

Deputy Treacy asked if we have multinationals in the organisation. ISME is an organisation of small and medium businesses which employ between one and 250 people. While we have a number of companies that trade multinationally, they would not be regarded as multinationals. In our survey we would not have surveyed multinational companies, but small and medium businesses.

Have small and medium businesses availed of research? The answer is 95% no and 5% yes, mainly because the likes of RTI and framework 7 seemed to be a step too far for small and medium businesses, especially smaller ones. There is a gap and a bridge needs to be built. It is not about talking about research and development with a capital R and a capital D, but about innovation and trickle-down into small business. The recent vouchers are seen as effective and we look forward to an increase in that area. Although they avail of what is there at a lower level, committee members should not imagine that a small business will be able to avail of RTI because it takes forever to wade through the paperwork, and one needs consultants. The information we get from our members is that it is not worth it because one has a regular auditor, an auditor from Enterprise Ireland and one from the EU. The amount of paperwork and red tape involved can put off small and medium businesses. I take the point about being shocked by the statistics, but the statistics are there. Deputy Treacy mentioned that ISME's development is like that of the EU, and has built up over the years. That is correct, but he omitted the split. However, we will not mention that.

Chairman

This committee would not like to stir the pot.

Mr. Mark Fielding

We have had ours and we have got over it.

Talking about the President and the Troika, it is not that we are against it, but that there is a question over it. There is a President, but three people constitute the EU Presidency. We must get the information out on what exactly it is. Once it is explained it is easy.

Senator de Búrca mentioned putting a brochure out, and that is what we are looking for. We want something digestible, manageable and readable by owner-managers, taking into account what Senator Hanafin said about on the purpose of the Bill. As former Taoiseach, Albert Reynolds, might say, it should be one or two sides of an A4 page rather than a 740 page document explaining another 740 page document.

Deputy Barry Andrews mentioned inviting people in from Europe as part of the discussion. We do not have a problem with that as our business people are some of the most travelled in the world. I would not like to think people would not like us going to France, for example. I would take issue with people coming here with preconceived ideas. We cannot stop people coming in but the feedback from our members is that we would be better off if we could debate this ourselves rather than having people coming in from outside. It is not that we wish to put up barriers to people coming into the country.

The Chairman mentioned reductions in bureaucracy. Red tape is in our top four or five pet hates and major concerns of small business, and it features on a daily basis. It is good to hear that this treaty will go some way to reducing bureaucracy and we await this happening. The simple chart which is being proposed will be welcomed by ISME and our members.

We have a common interest rate across the Union but Irish small and medium businesses are paying higher interest rates than our European counterparts. We may have a common interest rate but we are caught somewhat on that. I hope I have answered the questions but I am free to answer queries further.

Deputy Noel Treacy

With regard to the survey, what percentage of members returned their answers?

Mr. Mark Fielding

We had a 32.8% return rate, which is quite good for a survey such as this.

Senator Paschal Donohoe

If the required information was supplied to ISME's members in the near future in a manner that met their needs, would it at that point reach an opinion on the treaty?

Mr. Mark Fielding

I will have to bring that back to my national council because the same thing occurred last time around with the Nice treaty. We were asked a question and the then Minister of State, Deputy Dick Roche, addressed our national council on that. It is up to my national council to decide the matter.

Senator Déirdre de Búrca

The delegation stated earlier that it would need to put fingers into the wound and convince the members it represents, as they will hear different arguments on the corporation tax issue. Rather than just taking a position on the treaty, ISME could provide its members with solid information. If the body decided to produce its own information leaflet, such a publication would have a certain authority. If members get Government literature and booklets from other sources that contradict each other, there may be a sense that the Government is trying to lead people up the garden path on issues such as corporation tax.

If an information leaflet were to come from ISME, the members would be more inclined to believe it. If the executive could reassure itself by considering the treaty, speaking to experts and seeing the aspects that clearly set out unanimity provisions of taxation matters, the organisation might be in a position to issue a short information brochure on how the Lisbon treaty is relevant to the business community. If some of ISME's members are not keen on being told what position to take on the treaty, they could at least be provided with information and the categorical view of the body on issues such as corporation or general tax matters.

Deputy Joe Costello

The witnesses have indicated ISME has 5,000 members, with 1 million people in the category it represents. The body also has a publication. Does ISME send out literature on a regular basis to members and is there a format for other people, who could be but are not members, to receive information, either electronically or through publications?

Mr. Mark Fielding

I will answer that first if I may. There is a monthly, members-only newsletter that we send out and it can be used to transmit information to members. I was asked whether those outside the organisation can access it and the answer is "Yes"; we have no difficulty sending information to such people. We have no difficulty passing on information on the treaty to our members, we did so for the Nice treaty. In the approach to the referendum on that treaty we had speakers address our national council and we intend to do so again to allow members be fully informed. We not only got information to members on the Nice treaty but we brought Ministers with us to briefing sessions at 14 or 15 different venues around the country to explain the treaty to our members. People who were against the Nice treaty also attended those meetings and we gave them the floor to ensure the issue was debated; this is the way to approach the matter with owner-managers.

Chairman

Exactly.

Mr. Mark Fielding

It is not a question of telling people what to think, it is a case of giving them the information. This is how we will approach this treaty; I must wait for the decision of the national council but I assume they will take a similar approach as that taken to the Nice treaty.

Chairman

That is a very good point. It is important that those in favour of the treaty and those against it gather in the same room to argue their points and those present can make up their minds based on how the argument goes. Cogent arguments have been put forward today and I have no fear of people coming to discuss this or any other issue. I have no doubt that we have the ability to defeat a negative argument because the information in favour of the treaty exists and it is merely a matter of us putting it in a digestible form.

We are great at generating bureaucracy, as committee members know. For example, the application form for a widow applying to a local authority for a house was once only two pages long. When I entered the Houses of the Oireachtas the return of tax form, F11, was 26 or 27 pages and raised widespread objections. That form was simplified and is now around two pages long but now the form for a widow applying to a local authority for a house runs to 28 pages. Local authorities have a policy that if a single box is not filled or if a document is not included, though it might not be available for some weeks, the entire application must be returned. That is bureaucracy.

Mr. Jim Curran

I will not go over the arguments again. I was involved in research for the survey and, as Mr. Fielding outlined, owner-managers will clearly state that uncertainty is the key issue. There are many uncertain matters relating to the treaty and where uncertainty exists people tend to lean towards the negative. The results of the survey show that 59% responded "Don't know". This was only an initial survey and we will carry out further studies as we get closer to the referendum. That figure of 59% represents a significant opportunity for both sides in the referendum debate. We must promote Europe and concentrate on these individuals as they are the ones to whom we must convey our message.

Chairman

I thank the witnesses for taking the time to engage in this informative meeting which is part of a process that will continue until the referendum takes place. I also thank the eminent members of the press who graced us with their presence as we can do and say what we like on this issue but it will be of no consequence without their help. We invite the members of the press to attend with us in Brussels. We were anxious during our last visit that members of the local and national press should attend so that they could find out at first hand the type of questions we were asking and the responses we were getting. That position still prevails. We look forward to working with you. I thank the witnesses from ISME and Chambers Ireland.