Joint Committee on Foreign Affairs and Trade debate -
Wednesday, 20 Feb 2013

Trade Promotion: Discussion (Resumed) with British Irish Chamber of Commerce

Chairman

I have received apologies from Senator Jim Walsh, who is unable to be with us. Draft minutes of the meeting of 13 February have been circulated to all members. Are the minutes of 13 February agreed? Agreed. Unless there are any matters arising from the minutes we will proceed with the main business of the meeting.

The main reason we are here this afternoon is to consider the matter of trade promotion and the role the Department of Foreign Affairs and Trade in economic recovery. We will hear a presentation by the British Irish Chamber of Commerce. We are joined by two representatives of the British Irish Chamber of Commerce, Mr. Steve Aiken, chief executive, and Ms Emily Glen, research associate. You are both very welcome. Mr. Aiken and Ms Glen are here to offer the views of the British Irish Chamber of Commerce on trade promotion. This meeting is in the context of a series of meetings and other activities that the committee will be undertaking in respect of trade promotion and the role of the Department of Foreign Affairs and Trade in economic recovery.

The organisation represents the interests of a broad range of businesses on both sides of the Irish Sea focused on Ireland and Britain and the joint economic space within the islands. Its broadly-based membership allied with a comprehensive approach seeks to understand the influence of the wider environment in which its members operate. This puts the organisation in a good position to reflect on how official Ireland and the Department of Foreign Affairs and Trade in particular can help to improve our trading relationship with one of our most important export markets.

The British Irish Chamber of Commerce is a relatively new organisation. This is rather surprising; I had thought such a chamber of commerce would have been in existence for many years. It has the ambition of becoming the main focal point for British-Irish business and the associated economic community.

The inaugural annual conference took place last month and was a successful step in the right direction. Since the British Irish Chamber of Commerce is a young organisation we hope it can bring some new perspectives on the matters the committee is examining. The aim of the committee's examination is to prepare and publish a report on the strategy and response of the Department of Foreign Affairs and Trade to the economic crisis, to the Department's newly-recognised responsibilities in trade promotion and to the programme for Government in terms of trade promotion and economic recovery, and how well the Department is performing in these respects.

Before I invite our witnesses to make their presentation I wish to advise them that they are protected by absolute privilege in respect of utterances at this committee. However, if you are directed by the committee to cease making remarks on a particular issue and you continue to so do, you are entitled thereafter only to a qualified privilege in respect of your remarks. You are directed that only comments and evidence in respect of the subject matter of this meeting is to be given and you are asked to respect the parliamentary practice to the effect that, where possible, you should not criticise or make charges against a Member of either Houses of the Oireachtas, a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

Without further ado I call on Steve Aiken to make a presentation on behalf of the British Irish Chamber of Commerce. You are very welcome.

Mr. Steve Aiken

I thank the Joint Committee on Foreign Affairs and Trade for inviting the British Irish Chamber of Commerce to address it. The economic relationship between our islands has never been stronger or more central. The British Irish Chamber of Commerce is a unique business grouping that represents its members' interests on either side of the Irish Sea and the increasingly joint perspectives that span all these islands. In the two years since our formation we have grown from a small 22-member organisation to a broad-based chamber with approximately 200 members, representing companies from one or two-person high technology start-ups up to FTSE 100 quoted corporations. We continue to expand and we expect to double our membership by 2016. Our companies have a turnover of approximately €38 billion and employ approximately 54,000 people on either side of the Irish Sea in sectors as diverse as renewable energy, the arts, agribusiness, financial services, construction, transportation, manufacturing and academia among others.

Our chamber already has more than 70 of the top 100 companies among its members. This should be seen against a backdrop of a trading relationship between Ireland and the United Kingdom worth an estimated €54 billion. This economic output and activity makes Ireland the fifth largest market for UK goods and services, while the United Kingdom is Ireland’s third largest market.

As a relatively youthful organisation, we have also had the opportunity to develop into non-traditional sectors such as renewable energy, interactive business support services and new media. We can look at the business space in new and innovative ways and have been able to capitalise on the growing interest of the two Governments in making the economic and commercial links which are central to the future relationship among these Islands. Furthermore, we see a great opportunity for further growth on either side of the Irish Sea as our companies and the State and semi-State bodies with which we co-operate continue to develop and expand in existing markets by using the joint space as a gateway to wider international opportunities. We see our combined joint business space as becoming more integrated, interconnected and interdependent to our mutual advantage. It is important to emphasise that we feel fortunate our respective Governments and State and semi-State agencies have already done so much to support business, especially in the light of the current economic crisis and the tight constraints on budgets. Furthermore, it is noteworthy, as highlighted by last year’s joint statement between the Taoiseach and the British Prime Minister, that the relationship between these Islands is no longer defined by our culture, history and geography but also by economic links that are important for all of us.

With the majority of UK businesses and business organisations, we are strong advocates of the United Kingdom staying within the Single European Market. We believe our economies abhor uncertainty. Many of our companies are looking intently at making long-term investments, but the uncertainty about UK membership of the European Union could have significant consequences for that process. We believe the Government and the Department of Foreign Affairs and Trade, in particular, will play a major role publicly and in the background to assuage doubts within Britain, reinforce the need for the United Kingdom to remain committed to the European Union and help to interpret the British perspective for our European compatriots. We consider that Britain remaining within the Single European Market is vital for Irish long-term interests, as well as those of the United Kingdom.

The chamber would like the opportunity to discuss three key points covering Ireland, the United Kingdom and the recent output from our conference entitled, Gathering for Action. On the success of Ireland plc, the chamber welcomes the commitment of the Government to trade and business. We note the importance attached to these issues by the Tánaiste and Minister for Foreign Affairs and Trade, particularly as set out in his Department's statement of strategy for the period 2011 to 2014. Our experience with the Department in Dublin, the Irish Embassy in London, Enterprise Ireland, IDA Ireland and Bord Bia has been very positive and their assistance to us has been first rate. In particular, we express our members’ appreciation of the efforts of the ambassador, Mr. Bobby McDonagh, and the counsellor, Mr. Eugene Forde, in the embassy in London to support the chamber and our members’ interests. They should be congratulated for their dedication and commitment to Ireland. The role of the Irish Embassy in London is pivotal to Irish companies in gaining access and support in one of the world’s toughest global marketplaces. The embassy regularly hosts events on our behalf, acts as a conduit for Irish companies and provides a venue for events hosted by Enterprise Ireland, IDA Ireland and Bord Bia. However, as a valuable and heavily utilised resource, it needs to be adequately funded and staffed. After the embassy in Washington, the Irish Embassy in London is our most important diplomatic outpost and should receive the most emphasis, especially in view of the forthcoming debate on the United Kingdom in the European Union.

We are conscious that Ireland has taken the route of supporting trade, inward investment and economic promotion by utilising the very effective organisations of Enterprise Ireland, IDA Ireland and Bord Bia. Clearly, this is a winning and much admired formula. However, in the UK-Irish context this sometimes leaves some of our smaller businesses dealing with a plethora of agencies rather than being able to work with a single point of contact. The United Kingdom takes a different approach through UK Trade and Investment, UKTI, and the British Embassy network. British embassies and UKTI are now generally fully integrated and act as an empowered and unified authority for the business community, whether those wishing to export from the United Kingdom or those looking to set up business or gain market access in Britain. In Dublin the embassy is fully focused on growing trade and works very closely with us, the local chambers and regional chambers in the United Kingdom. Interestingly, its unified nature also allows it acts as a link for Irish companies with UK subsidiaries or looking to expand into the United Kingdom or further afield. Several Irish companies have been able to link directly with initiatives such as the 2012 UK national infrastructure plan which is looking specifically at transport, energy, communications, water and waste. This is facilitated by UKTI. As with the Irish Embassy in London, the British ambassador in Dublin has been a great asset in promoting UK plc. Through the fully integrated UKTI staff, the embassy has been very effective in targeting new business opportunities.

UKTI covers the full range of businesses and while some of our members believe the Irish agencies place their focus on larger and medium companies, our experience of UKTI in Ireland suggests it is committed to supporting all sectors. UKTI and the embassy also work closely with the chambers movement. In the European context, this includes working with the Council of British Chambers of Europe to more closely align UK Government efforts with those of the local business community. At regional level, the Welsh, Northern Ireland and Scottish Governments work to promote a fully integrated and interconnected approach to business within our all islands dimension.

The British-Irish Chamber of Commerce held its inaugural annual conference recently in the Aviva Stadium in Dublin. The event was attended by 300 delegates and addressed by high ranking politicians from both sides of the water, with leading business and industry figures. The subtext of the conference was how business could help the two Governments to deliver on the joint statement and pursue an agenda of jobs, innovation and growth. To facilitate debate, the chamber focused on four key areas, namely, the energy sector, food and agribusiness, culture, arts, sports and tourism and the SME sector. We would like certain deliverables to be incorporated within both Governments’ future agendas and updates to the joint statement. In the food and agribusiness sector we call for further co-operation in terms of knowledge and innovation in higher education, research and business, the promotion of the sharing of best practice in regulation by improving ties with both the FSA and the FSAI and promoting co-operation on the issues of sustainability and food security. There may also be opportunities for combined UK-Irish trade missions but only where they make sense and in sectors that are complementary. In the CAST sector we are asking for the establishment of a detailed databank to build on the array of information services that enable good decision-making and the provision of support. This is a theme that runs across all sectors and we welcome the joint evaluation study being conducted by PA Consulting. The second deliverable is on the theme of joining the dots, with a commitment to create the infrastructure to maximise cross-sectoral awareness of important initiatives and opportunities or, in short, what we call festivalisation. We want initiatives such as The Gathering and major sports and cultural events to provide opportunities to boost business across the entire Irish dimension. The third deliverable concerns Northern Ireland and an acknowledgement of the valuable contribution to community engagement, reconciliation and equality of access and opportunity that can be made through the arts and business.

The break-out session on closer integration of the energy sector culminated in the signing of a memorandum of understanding on renewable energy by the Minister for Communications, Energy and Natural Resources and the UK Secretary of State for Energy and Climate Change. The intra-island co-operation the document demonstrates is a prime example of the two countries’ new relationship and was a fitting highlight of our first conference. We are calling for the memorandum of understanding to be brought to fruition by turning it into an inter-governmental agreement at the earliest opportunity in order to pump prime investment in this key area. We also want to see a greater commitment to promoting energy efficiency and the introduction of the necessary regulatory framework to promote an all-island energy market. The development of a joint energy strategy across the islands would reduce costs for consumers, allow for greater investment in intelligent technologies and be beneficial for our energy security. The SME sector seeks to make the agencies more SME-friendly by taking a leaf from UKTI’s play book and welcomed the establishment of Connect Ireland as going some of the way towards addressing the issue of marketing Ireland to the SME sector.

In preparing for our submission we canvassed our members who have stated clearly that they believe the Department of Foreign Affairs and Trade has been proactive and innovative in helping Ireland to stem the effects of the global economic crisis. While trade promotion may not have sat naturally within the Department in the past, in common with the approach developed in the United Kingdom, it has adapted quickly. We would like to develop the idea of Team Ireland plc.

We would like to explore the idea of a one-stop shop for inward and outward investment, and partnering of all the agencies, the Department and the chambers may be an area for future exploration. Indeed, Ireland could look at working together with the UK and this could act as a test bed. However, we would advise caution with regard to tampering with the agencies on a wider scale. We have a winning formula, and while we could probably make our approach more efficient and cost-effective, we need to retain our hard-won expertise, networks and global reputation. We would also recommend a continued emphasis on making sure our embassy and agencies in the UK are suitably resourced, in whatever way they are organised.

We also have the opportunity, with the anniversary of the Downing Street statement next month, to continue to progress our economic relationship. Specifically, we recommend the following: that the memorandum of understanding on energy be moved towards an inter-governmental agreement by 2014, thereby releasing significant investment opportunity; that there be a commitment to further co-operation between our islands on innovation and knowledge, joining the parts of the triangle of industry, government and academia across all relevant sectors, not just agri-business; that we align regulation and best practice and co-operate on business opportunities where that makes sense; and that we fully map out our business space, identify the growth areas and understand the constraints and impediments to bringing our economic potential to the fore.

We are also conscious of seeming to present a continuous wish list to the Government. We, as a chamber, represent some of the most dynamic, globally innovative, entrepreneurial and robust companies on these islands, and we have an equal part to play in restoring our economic health. We wish to work in partnership with the Government, the Department of Foreign Affairs, embassies, the agencies, politicians and all other stakeholders to our mutual benefit.

Finally, I thank the Chairman for giving the British Irish Chamber of Commerce the opportunity to make a submission to the committee. I will be happy to answer any questions members may have.

Chairman

I thank Mr. Aiken for a comprehensive report that will be very helpful to us. I am sure members will have questions similar to the one I am about to ask. Our trade with the United Kingdom is worth approximately €14 billion a year. The recent horsemeat controversy is not just an Irish or European issue, but a worldwide one. What damage has been done to Ireland in this regard, or are there opportunities for us to increase our beef exports to the United Kingdom? Currently, we export approximately 1,000 tonnes of beef a year to the United Kingdom. Are there opportunities for Ireland, given that it was our forensic expertise that brought the horsemeat issue to light?

Deputy Brendan Smith

I welcome Mr. Aiken and Ms Glen to this meeting. They represent important players in the business of trade between our two countries. Will they elaborate on the announcement by the British Prime Minister, David Cameron, that a referendum will be held in Britain on EU membership? What does the chamber or its constituent bodies hear on the ground in regard to that proposal? I am glad Mr. Aiken mentioned the work of our embassy, Enterprise Ireland, Bord Bia and others. The embassy has always been a good resource. Not only does it deal with political issues, which have taken up much of the agenda between Britain and Ireland over the years, but it has always been used as a resource for trade promotion.

Over the past number of years we have been very fortunate to have currency stability. However, the fact that we are in a different currency zone from that of our main trading partner has proved a huge headache at times. Just a week ago, for example, I mentioned the difficulties we had at the end of 2008, when in the last quarter of that year sterling depreciated by approximately 23%. This caused particular difficulties for our exporters, but thankfully we have not seen such currency fluctuations recently. Just as Chambers Ireland did last week, Mr. Aiken mentioned the need for the authorities here - particularly the Department - to develop a website comparable to that of the British Trade and Investment Office to help with trading issues.

An issue that is topical currently is that of food and food security. One thing often forgotten about in the public discourse is the importance of the Common Agricultural Policy in providing Europe with food security and sustainability. Too often the commentary on the CAP is that it is concerned with the transfer of resources to the farming community. It is much more than that and has ensured stability and food security in Europe. Regardless of who has been in government here or in Britain over the years, we have had contrary views on the CAP. Perhaps when Mr. Aiken is talking to decision makers in Britain, he will try to get the message across that an adequately and properly resourced CAP is of the utmost importance to food security and sustainability. These are important issues throughout the world, and in Europe in particular. Policy on this should be at the base of the CAP and funding for it should not be reduced. However, this issue is often not given the attention it deserves.

Chairman

I invite Mr. Aiken to respond on those few points.

Mr. Steve Aiken

First, I will talk about the issue of food security, which is tied in with the CAP, and the importance of Ireland as a market and a producer of food for the United Kingdom. The statistics, which are interesting, indicate that Tesco alone takes 20% of all Irish agricultural output for its supermarkets and distribution system. Ireland is essential to the UK's food distribution system for both supermarkets and consumers, and Irish beef and agricultural produce have a high value and standard for British consumers. It is interesting that most produce in British supermarkets is marked as coming from Britain and Ireland or Britain or Ireland.

There are opportunities for Ireland. Not only is there an opportunity now, but Britain will continue to look to Ireland to provide a significant amount of its food as the population there grows and agricultural land comes out of production to cater for these growing populations, as well as for various other reasons. One factor we see as important is that agri-business is beginning to look to the future to see how various developments in beef, dairy and other areas are likely to progress.

With regard to the CAP, the British Irish Chamber of Commerce is a chamber of all of these islands and we spend significant amounts of time talking to the Scottish Government, the Welsh Government and the Northern Ireland Government. We understand the issues facing the CAP and we understand that the UK focuses more on what it sees as perceived problems with mountains of various produce. This is something that is very much in the past and has not been the case for some considerable time. As with many areas, there is no informed debate in the UK on what the EU has been doing. We as a chamber are fully involved in talking about what the EU is likely to do for the UK and the importance of that.

This leads to how we will deal with the EU question in the UK and the EU. The feeling on the ground in the UK is very mixed. Within the City of London, the senior financiers we talk to are keen to see the United Kingdom remain within the Single Market. In the regions, particularly those which have had significant EU funding, people again see it as important that the UK remains within the European Union. However, it would be wrong to dismiss the fact that in some respects there seems to be a visceral anti-European feeling in some parts of England. The business community needs to get out and talk about the importance of the European Union, what it means for business, how it is likely to help the United Kingdom and the benefits it has brought. That debate has not happened yet. We want to be part of that debate and to help inform the process.

As a chamber, we are an apolitical organisation and are not involved in any political lobbying in particular areas. However, we want to be part of this informed debate. We are a membership organisation.

The last time we sampled our members, 97% of them clearly said that the UK should remain part of the single European market and engage with it. The other 3% did not respond. I would take that as a fairly clear indication that our membership is pro-Europe. If one examines what our companies are doing and why they are trying to do it, one will find they are ascertaining how they can get leverage. They see the UK as part of Europe. They are conscious of the importance of the link between Ireland, the UK and Europe. That is one of the things we need to be articulating. The chamber will ask the Government, the Department of Foreign Affairs and Trade and all interested parties to transmit the message that the UK needs to understand the benefits and opportunities associated with Europe.

The Deputy also spoke about currency stability. It is interesting that the exchange rate has moved from €1.28 to €1.14 this afternoon. The Bank of England seems to be pushing to devalue sterling in order to improve export opportunities. I do not know whether that is a policy the bank has been given, or just something it is allowing to happen, but it is being welcomed by British exporters. It is something we need to keep a careful eye on because we export so much to the United Kingdom and import a considerable amount from that country. We need to examine how the currency fluctuations are likely to work and where they are likely to go.

We work very closely with Chambers Ireland and many chambers of commerce. When I took over as CEO of the British Irish Chamber of Commerce, I said we would not be in competition with anybody, we would be co-operative and we would work closely with a broad range of people, including those involved in Cork Chamber of Commerce, South Dublin Chamber of Commerce, Dublin Chamber of Commerce, Northern Ireland Chamber of Commerce and British chambers of commerce. We would welcome the idea of a one-stop shop, whereby a person who wants to do anything with Ireland plc will have an opportunity to avail of a single gateway or portal and link into whatever he or she needs to do. It is not beyond where we need to go to. I thank Deputy Smith for mentioning that Chambers Ireland has reported on how good the British Trade and Investment Office website is. Given that Ireland has some of the best web designers in the world, there is no reason we cannot do something much more interactive - something to which we can react as well.

Deputy Seán Crowe

The Chairman has already spoken about the horsemeat scandal. In that context, I would like to refer to the disparaging anti-Irish comments that were recently made by the CEO of the Iceland chain, Malcolm Walker. Does Mr. Aiken believe that Mr. Walker's view of the research done by the Food Safety Authority of Ireland is widespread among British food corporations? It seemed like a throwback to some of the things of the past. It did not seem appropriate in the context of the discovery of horsemeat all around Europe, a process led by Ireland. Was Mr. Aiken surprised by Mr. Walker's comments? What impact has the horsemeat crisis had? Has the chamber received any feedback on it? Are people worried about Irish food as a result of the crisis, or is there an appreciation of the fact that horsemeat has been found all over Europe?

(Interruptions).

Chairman

A mobile phone seems to be causing some interference.

Deputy Seán Crowe

It is not mine because it is switched off.

Chairman

Okay. Work away.

Deputy Seán Crowe

No problem. Perhaps it belongs to one of my colleagues.

Senator David Norris

It could not be mine because I do not have one.

Deputy Seán Crowe

I wish to return to what Mr. Aiken said about Ireland's involvement in the single European market. Is there a danger that the debate in Britain could backfire? The same anti-EU feeling does not seem to exist in Scotland, Wales or the North. The problem in Britain seems to be caused by the Tories looking over their shoulders. I wonder whether it would be helpful if the Department of Foreign Affairs and Trade or Irish politicians got involved in this. Perhaps that would get their backs up.

How does the British Irish Chamber of Commerce tie in with the Irish diaspora in Britain? Mr. Aiken mentioned the positive relationships between the British and Irish embassies. Many of the diaspora hold important high positions in major corporations. What is the chamber's link with them? Does it get together with them, etc.?

Mr. Steve Aiken

I thank the Deputy. His first question related to anti-Irish feeling. We do not perceive that at all. That is not the feeling we get. We think the CEO of Iceland was badly briefed. The main thing that has emerged is that this is a cross-European issue. It is not a question of bad produce coming from Ireland. One of the most significant things to happen in the UK was that abattoirs in Yorkshire and Wales were raided, because it indicated that this is a much broader problem, rather than merely a one-off problem. That is very much the informed debate.

The question of where our food comes from has arisen as a result of the horsemeat crisis. Many people in Britain want their food to come from secure sources, such as companies in countries that have known agricultural standards. Ireland has a good reputation in that context. We were worried that Ireland's reputation might be damaged, but the reality is that it seems it is being maintained. That is quite important.

The Deputy also asked whether the debate in Britain could backfire. It could, to a degree. We need to tell people what is important for us. We need to talk about the Irish dimension of the debate. When people have an informed debate about Britain in Europe, we need to make sure they understand the full implications of it. As the Deputy rightly pointed out, Nicola Sturgeon in Edinburgh, to whom I spoke recently, and Carwyn Jones in Cardiff are very pro-European. Parts of the UK like Cornwall and Devon have a pro-Europe agenda as well. The problem is that not enough people are saying what the benefits of the EU are. We can say how Ireland benefits from the EU. The UK is our gateway and major link to Europe. We need to have the UK connected to Europe because we need the opportunities associated with that. That is a very legitimate position for us to hold. As a business community, we would say that perspective needs to be represented.

I wish to respond to the Deputy's question about the Irish diaspora. We spend a great deal of time meeting the fantastic Irish diaspora, which is one of the really good things we have going for us. The networking opportunities that exist in this regard are underlined by a figure that has been mentioned, which is that approximately 42,000 people at senior management level in British companies are from Ireland. We regularly speak to a broad range of people with an Irish background or extraction who work at some of the top companies in the City of London, the midlands and the rest of the UK. It is interesting that nobody talks about the British diaspora here, which is equally as strong. The young people who are working in Google and in the IFSC constitute another resource that we need to tap into. We need to work with those people. The chamber is putting together a group of people who will look at how we can link with the young executives who are working on either side of the Irish Sea. We think that will be fairly successful. The embassy has been fantastic in this respect. We have had a tremendous opportunity to link into various networks. As the embassy is relatively small, anything that political parties, sporting groups and arts bodies can do to link with the wider diaspora is important. That is one of the things to which the chamber refers when it talks about partnerships. We can help in that process, which will be quite useful as we work towards an island plc or one-stop shop approach. We would welcome any support in that area.

Deputy Olivia Mitchell

I thank Mr. Aiken for his presentation. It is good to hear that he feels he is getting a positive response from the Department of Foreign Affairs and Trade. That is borne out by my own experience of dealing with our embassies. They have embraced their new trade responsibilities.

I reiterate the concerns expressed by other speakers about Britain's future in the EU. I am particularly interested in the financial services sector. Mr. Aiken said he hopes the Department and Irish business will help to assuage doubts among the British population. I am sure they will. British business will have the real job of persuading the people of Britain that EU membership is in their interests. This is particularly important in the financial services sector.

Mr. Aiken says markets hate uncertainty and no market hates it more than the money markets. London is such a driver of the British economy that it plays a role in persuading the British population to stay in the EU and to overcome that visceral antipathy mentioned by Mr. Aiken. At present, as I am sure the witnesses are aware, there are various EU proposals about tightening up on banking and bankers' bonuses, which are going down very badly in the City of London, where it is maintained this will drive banking and financial services out of London altogether - of course, if it does that, it will drive them out of Dublin also. Does Mr. Aiken think the financial services sector will play the role that is required to keep Britain in the EU if it sees the City of London itself is really threatened by proposals coming from the EU?

Mr. Steve Aiken

We had a breakfast meeting one and a half months ago at which the Lord Mayor of London came over to talk to us. He spoke specifically about this sense of why the City of London wants the UK to remain within the EU. It is because London is a global gateway. The reason London is so successful is that it is linked to Europe as well as being linked to North America, China or anywhere else. If one considers the huge amount of money that is pouring into London at present, particularly from emerging markets such as Russia, India and all parts of Africa, the reason it is coming in is not just that London is a secure financial centre but also that there is a great opportunity for linking into another global market, and that global market is the EU. That is very much the message we are hearing behind the scenes from the senior banking community and also the insurance community. Yes, they are unhappy that they are being criticised about bankers' bonuses and potential taxation, but they are getting that as much from the British press as they are getting it from a European perspective.

One of the things that it is moving on with Basel II or Basel III - I apologise if I have the wrong number of Basels - is the importance the banking community sees in regard to improvements in regulation and how regulation works. We are aware of the conversations we see between Dublin and London and we see a lot of synergy between the two. Many of our members are looking to see how we can swap functions and make functions work, and how that can continue to grow. We believe that is very significant. We see that the City of London in particular will be a continual driver to push Britain towards remaining within the EU. As the Minister, Mr. Vince Cable, MP, said at our conference, he considered it to be very unlikely that Britain would exit from the EU. That was one thing, but the Lord Mayor of London, Mr. Boris Johnson, said exactly the same thing at Davos. There are two key points.

Deputy Eric Byrne

I thank Mr. Aiken for his complimentary words about the Department of Foreign Affairs and Trade. The trade link is only two years old and I am interested in Mr. Aiken's comments on how he feels this is developing. He made a comparison between the structures in England and those elsewhere, and argued not just for a one-stop shop but also for an effective restructuring of Irish embassies so that Enterprise Ireland, IDA Ireland and Bord Bia might be more integrated into the embassy structure. He then went on to warn that we should not undermine the established and successful systems we have acquired down through the years. He might further elaborate on that. All of us around this table want more embassies opened with increased resources and we want the BRIC countries to be targeted and so on. However, the economic crisis is not permitting us to do that.

I and most members would concur with Mr. Aiken's views, which are strongly stated, that business abhors lack of certainty. Mr. Cameron suggested there would be a plebiscite. We are well used to plebiscites and not only have we have proven to Europe and the world that we are the poster boy of Europe but we have proven time and again with our referendums that we are very much integrated into and supportive of Europe. This was seen most recently in regard to the fiscal treaty, for which we gave 60% support. We are well used to these things. Given that we are speaking with the British Irish Chamber of Commerce, and having recently visited Northern Ireland, I think it disgusting that the Border that exists seems to be manned by terrorists and criminal elements, and there is abuse of legal trade and businesses, with the laundering of fuel, the smuggling of cigarettes and the culture of the Border country. Does the British Irish Chamber of Commerce have much of a relationship with InterTradeIreland? In talking about the bigger Ireland-England-Scotland-Wales relationship, what about our miserable Border that is so fluid and is creating havoc?

I thank the witnesses for attending. We are talking about huge sums of money here - €38 billion, €54 billion and then €14 billion in exports. Wearing our foreign affairs hat, we had the British Ambassador before us recently. Mr. Aiken spoke about the potential for UK and Irish trade missions in particular areas. We thought it interesting the British ambassador should mention his belief that there could be greater co-operation between Irish construction companies and the skills base that exists, given the downturn, and the British construction industry in targeting Arab or oil-wealthy cities which have huge capital infrastructure programmes. Does Mr. Aiken see anything coming from that suggestion?

Mr. Steve Aiken

The last question raises an interesting point. The British Prime Minister was in India yesterday, where he spoke about the development of the Mumbai-Bangalore corridor. This is one of, I think, 100 potential strategic investment opportunities UKTI has been talking about, but British business realises it cannot do it on its own. How many of those present are aware that the top of the Shard building, the tallest building in London, was built by an Irish company? How many people are aware, when they look around Crossrail, which is a huge construction site deep in the bowels of London, that the number of Irish engineers and contractors working on that is significant? How many people realise that those responsible for HS2, the high-speed rail link that will eventually go to Birmingham and beyond, are actively looking for Irish construction companies to go into partnership because they have the skill sets to make that work? These British companies are specifically looking for Irish companies because they have worked with British companies before, they understand how the process works, they have a similar mindset and they have a project development set of skills that are capable of delivering. Speaking from my own experience, it came as a bit of a shock to me to discover that UK plc managed to finish the London Olympics on time, on cost and on budget. However, it did that by being able to reach out to an international network, and a very important part of that international network comes from Ireland. That is likely to continue to grow.

I spend a lot of time on early morning flights into London and meet people around London at the Institute of Directors of the Confederation of British Industry or at various meetings, and I know the number of Irish construction companies, specialist engineers and engineering teams talking and working with British companies is very impressive. That is something that is likely to continue to grow. They have a success story and they are going to make it happen. It is an area we, as a chamber, are fairly light on at the moment but we will be doing a lot of work on developing the construction sector over the next year.

On the question about Northern Ireland, as members can probably work out from my accent, I am from that neck of the woods. In particular, we want to see an improvement in relationships across the island. We are an all-islands organisation. We are helping to encourage Northern Ireland to institute a corporation tax rate of 12.5%. Why? It is because we want Northern Ireland to move from its current economic model to a much more entrepreneurial and innovative model. We welcome organisations such as InterTradeIreland and are trying to improve that aspect. We want to be part of the bandwagon that is looking at this joint business space and how we can improve it. We are looking at all-islands markets and these are the kind of things we need to make it work.

I am quite lucky because I am on this side of the table and can say things like "one-stop shop" and then say something quite contradictory. It is as if we were going to consider using a different model. There could be an option to do it in the UK because our membership and our companies understand that UK model and how it works, so it might be an idea.

However, the one thing we must emphasise is that Enterprise Ireland, the IDA and Bord Bia are world-class organisations. They have done an awful lot for Ireland plc, are working very hard and can make that happen. The fact that they are directly linked with a powerful organisation such as the Department of Foreign Affairs and Trade gives them a great opportunity to move that on, which we fully welcome.

Chairman

There are five speakers who want to contribute to the debate so, obviously, the delegation's answers must be very good. I call Senator Daly.

Senator Mark Daly

Some issues have already been touched on. I thank the delegation for coming before the committee. For anyone who gets an opportunity to talk to Mr. Aiken afterwards, his previous life is almost more exciting than his current one.

Referendums are coming down the line, including the one in the UK on EU membership, which this committee would regard as having more to do with UK politics than any desire to get the opinions of people in the UK about their long-term relationship with the EU. Scottish independence is coming down the line and is part of the issue. I know the British Irish Chamber of Commerce does not have an active view on politics but North Sea oil, the Royal Bank of Scotland and the question of who owns that particular basket case when the poll is held, and Scotland's relationship with the EU are all issues. We know that what the delegation is talking about in terms of UKTI is the correct model. Ireland opened a new consulate in Atlanta, which the Chairman and I visited. It is a small version of what we are talking about, with the trade element and the consulate in the one building. We do that in New York as well, and it works. Bord Bia and the like are world-class organisations but they tend to be all over the place. When one has cross-sectoral trade or companies, they do not know to whom they are supposed to go. Do they go to Bord Bia or the IDA? That becomes a problem.

I know the British Irish Chamber of Commerce does not get involved on a political level, but the delegation answered the question on the EU referendum. What is their view on Scottish independence? What effect do they think that would have on Ireland's trade with Scotland? There is the North-South element to deal with as well. Does the British Irish Chamber of Commerce have many members from Northern Ireland?

Chairman

I will bring in Senator Norris as well because I know he is anxious to get back to the Seanad Chamber.

Senator David Norris

I have only been here for the past 50 minutes and will have to go because I am involved in the Bill going through the Seanad in Private Members' time. The members of the delegation are extremely welcome, as I am sure they have been made feel. The answers I heard were very clear and succinct, and what they have said to us is valuable.

I am slightly concerned by the fact that this is the third meeting in a row that has concentrated entirely on economic matters. Although they are important, we must balance them with human rights, because it is my interest, I suppose. There is an interplay which is sometimes very positive but sometimes very negative. For example, I gather the Government has again dismissed the international report on extraordinary rendition as not having any relevance for Ireland. This report clearly implicates Ireland. I remember statements being made that this would affect trade. I did not believe it at the time but I am putting that in context principally for the benefit of fellow members of the committee so that we can continue to have some degree of focus on human rights. This is not in any sense to minimise the delegation's contribution, which is extremely valuable, particularly in this economic situation.

I wish to express my admiration for the British Irish Chamber of Commerce because to grow tenfold in two years is quite extraordinary. The financial figures quoted by the delegation are remarkable. What surprises me is that it is only two years old. I would have thought the economic, cultural and political ties between these two islands were so close that it would have been a natural thing. I am glad this group has been formed.

I would not bat an eyelid over the remarks made by the chief executive of the retailer Iceland. It is exactly the kind of thing that is said off the cuff. Who cares? The man is a nincompoop. Albert Reynolds said the same kind of thing when he said "This is women now," for which he was lambasted. It does not bother me as a patriotic Irishman.

Chairman

Senator Norris should be careful not to mention anybody outside the House because they are not here to defend themselves.

Senator David Norris

But Albert Reynolds-----

Chairman

I am not talking about Albert Reynolds. I am referring to the chief executive of Iceland.

Senator David Norris

I do not mind. That is an affectionate term of derision and not actionable. I am very careful about that because I am litigious myself.

We should be pushing the idea that our health and safety authorities are superb. They were the first ones to spot it. Europe should be down on its knees thanking us. That is the positive angle we should put on it. We were the first to discover it - well done to our scientists in that agency. We should laugh off such remarks. I was not the slightest bit upset and thought people got far too excited over it.

The recent opinion survey suggested that the desire for a united Ireland had dwindled significantly. Does the delegation believe there is an economic aspect to that? Our Northern counterparts have a reputation for being hard-headed, practical and realistic. I am not sure if this is always true but they have that reputation. I wonder if they look down and say "Well, they are in a bit of a mess - not much point in joining with them." Does the delegation think there is a financial angle to that?

Irish workers now include engineers and architects in many of these railway and engineering projects - the tradition has been that described in "McAlpine's Fusiliers". They did remarkable work. I only regret that they are not here in Dublin building the metro. I hope that when we present a plan for a budget-neutral, rejigged metro to the Government, which I have been involved in, it will go ahead with it because it missed the boat with the Matsui Corporation, which would have put it in for nothing. The Government just lost its nerve, which was appalling. Does the delegation think the metro with the spur out to the airport would be of any significance in terms of good relations? There are people who want to come across for a day to attend business meetings and so on.

Chairman

Senator Norris said there had been three meetings in a row on economic matters. There will be lots of meetings for him in respect of human rights.

Senator David Norris

Good.

Chairman

The EU special representative on human rights appeared before us two weeks ago. The Pakistani ambassador will appear before us tomorrow to discuss drones, while the Moroccan Secretary General will appear before us on 26 February to deal with Western Sahara. Amnesty International will be coming on 27 February, while the UN representative on human rights in Iran will appear before us on 5 March. There will be plenty of topics and issues for Senator Norris to debate.

Senator David Norris

I just want to keep the Chairman on his toes.

Chairman

I wanted to keep Senator Norris on his toes as well.

Senator David Norris

I knew he would do that. I am also meeting a lady from the French Senate to talk about human rights tomorrow. I am one of a small number of people who responded to her with the ambassador.

Chairman

Perhaps the delegation could answer Senator Norris's questions first, because Senator Daly is not present.

Mr. Steve Aiken

The simple answer to the first question about infrastructure is "Yes". We would definitely support improvements in infrastructure. We support improvements in infrastructure across the board, particularly on the island of Ireland. We talk to our business community fairly closely and have sold Ireland plc as a great place to come and do business because of our various attributes, including corporation tax, our educated workforce and our infrastructure. Some of our people keep talking about the fact that if one goes to Dublin Airport, one has to take a taxi. It is timing. We have elements of a world-class infrastructure but the bits do not seem to join up and that is one of the things we would advocate.

In respect of high-speed trains and high street links, we work very closely with the Cork Chamber of Commerce. I did not really understand the statement by John Mullins about travelling by train and how we need to do something about level crossings until I walked up the train and realised that we did need to do something about them. There is an opportunity there for infrastructure improvements to make us a world-class economy for the 21st century.

As time progresses and resources are made available, we should be in a position to progress on that issue also.

The second question is related to Northern Ireland and how we can help to develop understanding, etc. As stated, ours is an apolitical organisation. However, we regularly discuss matters with the Northern Ireland Chamber of Commerce and political parties across the island of Ireland and elsewhere. It is interesting that one of the issues which emerged from our research is that which relates to costs. For example, the services provided by the National Health Service are free at the point of delivery. However, it seems to be a disincentive that people in Northern Ireland are obliged to deal with health service costs. There is a considerable economic argument in this regard. As we look towards the future and where we are going, that is one of the matters which will form part of the debate.

As a cricket fan like Senator David Norris, I will bat the question on rendition into the long grass.

Senator Deirdre Clune

I thank Mr. Aiken for his presentation. He referred to the four areas to which, in the context of the upcoming anniversary of the Downing Street statement, he would like consideration to be given. One of these is the commitment to further co-operation between the islands on innovation and knowledge in the context of joining industry, government and academia across all relevant sectors. Will Mr. Aiken elaborate further on this aspect? Is it already happening? We are engaged in a debate on how to pool knowledge and information in the third level sector and a great deal is taking place in that regard. This is particularly important in the context of the European Union's overall budget and also the budget of the Commissioner for Research, Innovation and Science, Ms Máire Geoghegan-Quinn. I acknowledge the conversation which took place earlier on the United Kingdom's relationship with the European Union. If Mr. Aiken could provide further information on this matter, it would be welcome. I am sure there is a great deal happening in the third level sector in the United Kingdom and the context of industry supporting relevant research.

Senator Lorraine Higgins

I welcome Mr. Aiken and Ms Glen. It is great that they have given such forthright answers.

The question I wish to pose relates to the banking industry. As our guests will be aware, economic activity in Ireland has been greatly affected in recent times as a result of austerity and on foot of the lack of lending to SMEs. Some 99% of businesses in Ireland are SMEs. The Government has taken a huge step towards addressing the lack of lending to which I refer by earmarking €3.6 billion to be lent to the SME sector by Bank of Ireland and AIB, two of the banks we bailed out. There have been complaints to the effect that this money has only been used to restructure existing loans or turn overdrafts into term loans. The latter has given rise to major difficulties. In recent times the UK Government, through the Treasury, granted a licence to Metro Bank and I understand a considerable amount of this institution's lending is targeted at the SME sector. Are our guests of the opinion that Ireland could benefit from a similar arrangement? If any of their members has acquired loans from this bank, perhaps they might be in a position to impart some information on their experience.

Mr. Steve Aiken

To deal with Senator Deirdre Clune's point, this conversation started in the agribusiness sector in the context of how the United Kingdom and Ireland might tap into existing and future EU funding. The idea was that there would be a link between food and agribusiness in academia, agribusiness and the Government and that these entities would work in a tripartite fashion in order to try to progress matters. A number of questions on this matter emerged at our conference. For example, if this is going to work in agribusiness, could it not work in other sectors also? Why can we not tap into likely centres of technology, academia and business in order to make this work and grow? We understand a great deal of work is being done in making the case for an agribusiness cluster or triangle.

We are also advocating that particular consideration be given to the area of renewable energy because it is going to be of significance. As we move towards opening up the markets to renewable energy resources, this will provide an opportunity to take action on the supply side aspect on the island of Ireland. It will also create opportunities for industrial development. We must consider how we can take some of the cutting-edge renewable energy technologies being developed in academia, transform them into business opportunities and then make the two work together as a partnership. In the all-island perspective, that would be another good avenue to pursue.

Other questions have also arisen. Ours is a relatively small organisation, but it has very vibrant and innovative members who are asking why research cannot be carried out in the cultural, arts, sport, new media and other areas. This is another sector of growth to which we are going to continue to give consideration, as it is very important to do so. It is also important that Britain and Ireland have a success story in order that we can go to the European Union and say, "This is an area in respect of which we could consider providing funding in order to allow it to develop." That is what we are trying to do.

Senator Lorraine Higgins referred to banking. Some 5,100 companies are members of the British Irish Chamber of Commerce and they range from large operations all the way down to one or two-people start-ups. The reality is that, to some degree, they have all had issues with obtaining funding from the banks, innovative funding and how this issue is dealt with. We have not really seen much evidence of what Metro Bank is doing. We have attended the briefings, one of which was addressed by Vince Cable. We have listened to what has been said and know what the idea is behind what the bank is trying to do. However, we have not yet seen any evidence on the ground, but it is early days in this regard. We need to keep a watching brief during the next six to nine months in order that we might see what is going to happen. What is happening here ties in with the fact that RBS and Lloyds are very much Government owned. As a result, there is a wider question with regard to how these funds are released and how what is proposed is going to work.

Senator Lorraine Higgins

Is there a difficulty in that we are continuing to adhere to the traditional way of assessing applications for credit, that is, in the context of bricks and mortar and other forms of security, as opposed to considering the business plans being put forward by companies which are trying to access loans?

Mr. Steve Aiken

It is difficult because there are lots of banks that are members of our organisation. Therefore, I listen to the views of many groups on both sides of the argument. People are willing to try innovative approaches in the context of collateral and the provision of funding. However, we are in a different scenario and need to take ourselves back, not to 2007 but to the 1990s in order to see how we viewed matters then. We probably need a new model and to understand how this can be capitalised. Our members - I refer to everyone from senior banking officials to those involved in small start-up companies - are considering how these things can work. We have a banking and regulation committee which is specifically examining this matter in order to discover what can be done. It is also looking at the practices which obtain across Europe and elsewhere in order to try to further its work.

Deputy Bernard J. Durkan

I thank Mr. Aiken and Ms Glen for attending. The concept of an all-island market is a good one and could only be beneficial from the point of view of both the North and the South. There are considerable economies of scale which can be achieved and a great deal of interaction can take place, both of which would be mutually beneficial. To what extent do our guests see room for growth in this area?

Like previous speakers, I am concerned about the potential for the United Kingdom to move away from the concept of the European Union. I am particularly concerned that the proposed referendum will be lost. In the period between now and the holding of that referendum, the markets may take account of what is likely to happen and find their own method to deal with the situation. That could be either beneficial or detrimental to the interests of Ireland and the United Kingdom.

I cite the possibility that the referendum might go wrong from all our points of view. To what extent could the UK become involved with other similarly inclined EU countries with considerable numbers of eurosceptics in their political systems? To what extent can provision be made by way of damage limitation in the event of that happening?

We have very considerable trade links with the UK. Half of Ireland's business is with the UK and we are the UK's biggest customer. We both need to give serious thought to what might happen in the event of a decision by referendum that the UK would leave the European Union. While other countries such as Norway and Switzerland have a relationship with the EU which is quite beneficial to both sides, there is a danger that in this situation, the exit of a major player like the UK could have a detrimental effect on its own economy as well as on the economies of its neighbours.

Mr. Steve Aiken

I will answer the question on Scotland first. It is interesting because I do not think anyone - particularly in the business community - really thinks that Scotland will vote to leave the UK. What we think will happen in the longer term is that Scotland will have more devolution, that it will look for many more powers and greater repatriation of powers. That has an interesting dynamic. If Northern Ireland had a corporation tax at 12.5% - which we would like to see - Scotland could set its own corporation tax rate, as could Wales. It means that across these islands we would potentially have a future menu for people who wished to invest and grow high foreign direct investment in these islands. That is one aspect. On the other hand, we talk about these islands becoming much more interdependent, more integrated and more interconnected. The energy sector is moving not so much to an all-island energy market but to an all-islands energy market. We need to do that because of the benefits of scale, because of geography, and, frankly, because of how the wind blows. Those are the kind of things that we need to consider and to develop.

I apologise for the fact that I am answering questions together. We are also looking towards a much closer integration of our retail markets and our food distribution markets. We see ourselves moving towards a much greater reliance on a common food distribution system. We also consider that as we move we will be looking towards a much more integrated communications market. There are already moves in those areas. In one sphere we are moving towards a more deregulated set of islands and in another sphere we are moving closer. How does this fit within the view of the UK and the EU? We know from experiences of referenda that they do not always give us the answer we want. However, in the UK this will be a one-off referendum. I refer to what Vince Cable and the Prime Minister have said. I consider the UK is most likely to remain within the Single European Market. No matter what happens, I think there will be a degree of negotiation. I consider that the UK will regard remaining in the EU as being to its advantage and in its interest. However, we need to consider the "what if?" aspect. I ask the Government and the Department of Foreign Affairs to be part of the debate with the UK. We need to know what it will mean to us if the UK is not part of the EU. It is also useful for the UK to understand what it would mean to be outside the closer European body. The debate has already studied Switzerland and Norway. Norway is a classic example. It is the only country in Europe which seems to follow all the EU directives; it is the only country without a say in the EU directives. I hope I have clarified our views. We will devote a lot of time to considering and debating this matter over the next five years. The question of certainty is the key. Companies making long-term investment decisions are looking and thinking about where they will invest. That may potentially be very good news for Ireland and we need to be aware of that. Companies that may be looking at the UK may consider Ireland to be a better bet. If that comes to pass, we need to ensure that Ireland is in the best possible place to take advantage. Infrastructure and education are key areas which business and industry will be looking for.

Deputy Bernard J. Durkan

We will be most anxious that the UK stays within the European Union, for many reasons. If agricultural land is being decommissioned for food production, how is it to be used consequently?

Mr. Steve Aiken

It is not so much a question of land being taken out of use; it is a question of the location of the land. In the south east of England, the corridors of the M11, the M4, the M40 leading down to the M3, are areas of considerable economic growth. The south east of England area, the Birmingham and Manchester areas are experiencing considerable economic growth. They are not in recession. Many Irish companies are tapping into those areas. This economic growth means there is a shortage of building land with the result that land is being rezoned. There is also a policy for bio-fuels and land is needed for production. Future changes in the Common Agricultural Policy and milk subsidies means that farming in the UK is changing shape.

There has been a significant move towards artisan and organic foods in the British market. This is an opportunity for Irish farmers. Speaking as a farmer, organic land is not as productive as heavily farmed land and this is having a significant effect.

Chairman

Mr. Aiken mentioned that the British Prime Minister, David Cameron, is taking part in a large trade mission to India. As the anniversary of the joint statement by the Taoiseach and David Cameron about greater economic ties, approaches in a few weeks time, what is the likelihood of a trade-focused visit by the Prime Minister to Ireland in the near future?

Mr. Steve Aiken

He said he will be doing it. In my view there is every probability that he will be coming. He is very seriously committed to Ireland. The Downing Street statement has the personal commitments of both the Taoiseach and the Prime Minister. They want to make it work. When David Cameron became Prime Minister he studied the overall trade figures. His predecessor as Prime Minister stated that Britain traded more with Ireland than with the BRIC countries. This was an admonition to British industry. David Cameron recognises Ireland as one of Britain's major trading partners. A visit is very likely, in my view and we would fully welcome it.

Chairman

I thank Mr. Aiken and Ms Glen for a very interesting and thought-provoking presentation and discussion. The British Irish Chamber of Commerce is in safe hands with them at the helm. I wish them and the chamber's members every success in their work. That trade increased by 2% last year between the UK and Ireland shows the great potential for trade between us and I wish them well in assisting in that task. We look forward to keeping in touch and working with them in the future.

The joint committee went into private session at 5.20 p.m. and adjourned at 5.25 p.m. until 2.30 p.m. on Wednesday, 27 February 2013.