We are pleased the trade union delegation was able to come today. The usual format in committee is a presentation by the delegation followed by a question and answer session. We like to get our business done as quickly as possible. We were anxious to talk to the constituent groups whose members' lives will impact on, and be impacted on by, the Amsterdam Treaty and EMU and thus it was agreed that we would hold a meeting with trade union officials.
Presentation by ICTU.
Mr Peter Cassells
I thank the committee for inviting us to make a presentation on our position regarding Europe, particularly the Amsterdam Treaty and EMU. I will put our views on these issues in context and then I will ask Ms Patricia O'Donovan to deal with the details as she has been involved in the background to the negotiations on the Amsterdam Treaty.
The Irish Congress of Trade Unions represents about 650,000 workers throughout the country. We have the unique distinction of nominating people from the Republic of Ireland and the North for bodies such as the Economic and Social Committee in Brussels. We will have the unique position of having some of our members in EMU and some outside the process.
We are also active members of the European Trade Union Confederation which is the trade union centre in Europe representing around 12 million members in all the member states and also Norway, Switzerland and the former Eastern European countries. That is significant as it enabled us to be involved in the discussions on enlargement, its implications for different countries and how the trade union centres in both the applicant countries and the existing member states feel about enlargement.
I am a member of the Executive Committee of the European Trade Union Confederation and Ms O'Donovan has been a member of their committee which has been involved in the negotiations leading to the Amsterdam Treaty.
Like all other trade union centres in Europe, for a number of years we have been strong supporters of the European Union and economic and social integration in Europe. A euro-barometer survey recently showed that 70 per cent of workers in Ireland believe their position is improved by Ireland being involved actively in Europe. We see Ireland's place in the future, economically and socially, as part of the European area rather than the alternative Anglo-American axis. It is crucial for the debate to be put in that format as the Anglo-American axis does not have the strong social model which underpins Europe. That is why we are in favour of Ireland continuing to play an active part in Europe.
The question which arose for us regarding the Amsterdam Treaty and EMU was the sort of Europe the people we represent want. It was clear to us from the outset that what some proponents in Europe wanted, Thatcher being the most obvious, was a common market with no economic, social or political controls on that market. Regardless of the detail of Maastricht or Amsterdam, we always looked at it in that context, that each development moved us a stage closer to putting economic, political and social controls on a European common market as opposed to those who wanted a common market with no rules. In that sense we supported the Maastricht Treaty and recommended to our members in the referendum that they should support it.
At the moment we are examining the Amsterdam Treaty, EMU, the future of the Structural Funds and social policy. The role we have been given negotiating social policy at European level with employers and other social groups is part of the development of a social market economy. Regarding Amsterdam, we were worried about two things. The Maastricht Treaty showed that Europe was too removed from the people we represent and that many of the fears about developments in Europe were not being addressed. It showed that the priorities people have in their daily lives were not being addressed. We were worried the Amsterdam negotiations originally were intended only to deal with institutional and security issues and external policy. We were strongly of the view that economic and social rights should be a crucial part of the agenda in the interests of the development of Europe and because they reflect the priorities of Irish workers and trade union members in other European countries.
Ms O'Donovan will now outline to you the issues we wanted taken on board in the negotiations on the Amsterdam Treaty in the employment and social areas and our assessment of whether those issues have been addressed. After that we will take some questions.
I would like to go back to how we approached the Amsterdam Treaty and what it meant for the trade union movement, not just at national level but also at European level. The starting point was the negative feeling and disillusionment present after Maastricht, the sense that citizens in Europe were not being listened to and that the issues they were concerned about had not been taken into account. The trade union movement is conscious of the sense in which EMU has become an overwhelming issue in terms of what is happening at European level. It is dominating people's thinking in terms of what Europe is about. If EMU happens in a way where people feel their jobs have been put at risk or their incomes devalued, then we are facing a situation where there will be a negative reaction, not just to EMU, but to the whole European project. In that context, the European trade union movement and we as an affiliate of it, approach the Amsterdam Treaty conscious that it will be on the table for ratification at the same time as steps are being taken towards monetary union. Trade unions made a detailed presentation to the Reflection Group which was set up by the Government and chaired by Deputy Gay Mitchell and we identified employment and social rights as issues which should be part of the agenda. We sought a commitment from the Government that they would support the inclusion of these issues on the agenda during the negotiating process. From an early stage, the trade union movement recognised the necessity to expand the agenda beyond technical and institutional issues to include the questions of employment and social rights. Our submission to the Committee includes a section headed Employment: A Long Road to Amsterdam.
After the ratification of the Maastricht Treaty a series of events pushed the employment issue up the agenda at European level. We have listed these events in our submission: the Commission's White Paper on Growth, Competitiveness and Employment which was published in 1993, the Essen Employment Guidelines which emerged out of the German Presidency in 1994, the Confidence Pact on Employment which was an initiative of President Santer and the Declaration on Employment during the Dublin Presidency in 1996. We have listed these because we want to convey to the committee that there was a consistent approach by the trade union movement and other groups interested in unemployment and that a strategy was in place to push the question of employment to the top of the agenda.
We have listed the key trade union demands which we argued should be included in the Amsterdam Treaty if we are serious about addressing employment as a key issue at European level. It is important for trade unions that employment is recognised as a legitimate area for European policy and co-ordination initiatives by the member states and that employment is no longer seen as a matter to be dealt with exclusively at national level. We were particularly anxious that the development of an employment policy would be seen as a European responsibility. We talked at length about the needs to set targets for reducing unemployment and for access to training and education. Member states should commit themselves, as they committed themselves to the convergence criteria, to criteria in relation to employment. It is important to put in place a mechanism for proper monitoring and surveillance of employment.
Does the Amsterdam Treaty meet these objectives? Trade unions in Ireland and in Europe believe that the fact that we have a Title on Employment in the Treaty is an important development. The explicit recognition of a high level of employment as an objective is also important. The kind of strategy which is set down in the Title — the need for reports from the member states, the need for employment proofing of EU policies and the establishment of a new Employment Committee — represents a significant change in approach and a significant step forward. Flesh must be put on the bones of these commitments. The developments at the Luxembourg summit in November 1997 which brought forward the operation of these guidelines is a welcome development and we are participating in that process.
Trade unions also had very clear priorities on the social rights front. We have listed these on page three of our submission. The key issues were the UK opt out, further development of anti-discrimination provisions, inclusion of the Charter of Fundamental Rights of Workers in the treaty and the strengthening of the role of the EU in combating social exclusion. The Amsterdam Treaty includes some significant changes by incorporating the Social Agreement into the treaty, expanding the references to discrimination and so on.
We do not believe the Amsterdam Treaty is a radical document. It will not change the course of the European project but it contains important new elements in terms of employment and social rights. These will be important in bringing Europe closer to the citizen provided they are activated and worked on in a way which will bring about meaningful development in employment and social rights.
I join in welcoming Mr. Cassells and Ms O'Donovan to the meeting. I note the point made by the Irish Congress of Trades Unions about proper balance being achieved by entering EMU at an entry rate which protects jobs and living standards. Dr. Dónal de Buitléir, when recently giving evidence to the committee, said that the decision to go into EMU at an early entry date is irrevocable. He went on to say that his judgment was that one is better to enter at a lower rather than a higher rate because the costs of being low are somewhat less that the costs of being high. He went on to say that, in his opinion, the rate of 2.41 is quite low. I think you mentioned 2.5. Would the ICTU agree that is would be in our interest to enter at a lower rate?
In the beginning there was resistance from the governments of member states to including employment provisions in the treaty. The Amsterdam Treaty is somewhat limited in its ambitions, probably because it is running in tandem with EMU. Chancellor Kohl, for example, did not feel that he could get the support of the Lander for more ambitious projects and for EMU at the same time. What has emerged in terms of employment is more ambitious than was envisaged before the Amsterdam Treaty negotiations began. Much of this is due to the position taken by Ireland. Our position was taken partly at the behest of bodies such as the ICTU. This has been acknowledged at this committee. Other member states, such as Sweden, took a similar approach. In the beginning we were in a minority, yet we made ambitious proposals on employment. There may be room for improvement but ICTU would probably agree that the treaty and non-treaty arrangements, including, for example, the shame list, are major steps forward.
What is ICTU's view of the ESRI report on EMU? Does it agree, as the report states, that on balance Ireland should enter EMU from the beginning?
I thank Mr. Cassells and Ms O'Donovan for their positive paper. It will be of great help to the committee in its deliberations. Undoubtedly, the image of the EU initially was that it was for big business and farmers. Thankfully, we have moved on from that and developed the concept of Europe as inclusive. This is why ICTU has such an important role to play in highlighting employment and social rights, as it has done in this paper and previously. It is difficult for us when canvassing in various European referenda to get people interested in the issues involved, particularly in working class areas. People do not view Europe as having anything to do with them. This is demonstrated in the level of turnout in areas which suffer social exclusion. The committee's deliberations on the contents of the ICTU paper will be extremely important in terms of the need to highlight employment and social rights.
To what extent does ICTU think the European Union is responsible for developing labour law generally and employee rights? ICTU has pressed for changes for many years, but does it think Ireland's membership of the EU has helped its endeavours and dragged Ireland kicking and screaming into the 21st century in the context of labour law, parental leave, maternity benefit and other areas? Will the delegation outline how important they think Europe has been in that regard?
I am grateful to Mr. Cassells and Ms Donovan for their presentation. My first point is not Euro sceptic, but it is related to scepticism about economic figures. How much weight does ICTU attach to the ESRI report which attempts to forecast variations in GNP in the next five years? One example is a margin of 0.14 per cent in five years but, in terms of historical data, the figure for growth in GNP last year is not yet agreed. I am more interested in the delegation's "seat of the pants" view of what will happen in the event of Britain staying outside EMU and their view, through their contacts with the British trade union movement, about the likely developments in terms of Britain's attitude to joining the single currency.
It is undoubtedly the case that, following economic and monetary union, many of the instruments of public policy which would have been used to adjust to an economic downturn will no longer be available, for example, interest rate variations, devaluation in extreme circumstances or perhaps revaluation in rare circumstances. Most commentators outside the political process see the need for what they term greater flexibility in the labour market as one of the major conditions. This was stated in the presentation the committee received last week. This ties in with the third issue I wish to mention, the Amsterdam Treaty and its provisions relating to employment, which are welcome.
Objectives have been set but the policy framework for them are not clear. What will be done in Europe to deal with unemployment? This relates to EMU because a huge amount of pressure is being brought to bear on policy making in Europe to introduce what is called a greater level of flexibility in the labour market. I am happy that the word used in the Treaty of Amsterdam is "adaptability". Everybody is in favour of an adaptable labour force. However, a flexible labour force is a code for vulnerable workers without rights who can be employed and disemployed with little entitlement to security or compensation. I am concerned about this matter.
Is the European trade union movement building a position to ensure that whatever happens in terms of labour market flexibility, we do not move in the US direction or in the British direction where spurious claims are made about the benefits of its flexible labour market? I am worried about the concept of a flexible labour market and I am interested in the delegation's views on it.
Mr. Cassells
Regarding Deputy Mitchell's questions, I will ask Ms O'Donovan to deal with the point about the exchange rate on entry to economic and monetary union. We set up a Euro Group to consider this matter in detail and in common with the committee, we invited Dr. Dónal de Buitléir and other economists and the ESRI to make submissions. We have come to a firm conclusion regarding what the rate should be in order to strike a balance between employment and living standards. I will ask Ms O'Donovan to deal with that matter shortly.
Regarding the ESRI report, Senator Brendan Ryan asked what weight ICTU gives to it and the position if Britain stays outside EMU. Deputy Mitchell asked if we agreed with the ESRI's position that on balance Ireland should enter EMU. Our position from the beginning, before the ESRI report, has been that Ireland should enter EMU and if possible enter on the first round if we qualified. All the negotiations on national programmes, going back to the second agreement, the Programme for Economic and Social Progress, were geared towards trying to achieve the various criteria. As part of the National Economic and Social Council, of which the same participants in the negotiations on national programmes were members, we agreed in detail the measures which would be used to try to achieve the criteria.
We have always argued that Ireland should join EMU and subsequently manage the difficulties that emerge for vulnerable sectors and the economy. This is why we took a strong stand against the devaluation that emerged on the basis that it would drive us off course in terms of the plans we had already agreed with employers and others. We are still in favour of Ireland's entry into EMU regardless of whether or not Britain stays outside.
Regarding the ESRI report and others, I am not sure how much weight should be attached to them. One gets different advice from economists. My view, which is probably shared by the members of this Committee, as politicians, is that economists advise, but we as politicians or trade union leaders must make the call ourselves. I would never allow them determine our final position.
In the context of Britain staying out, the Trade Union Congress in Britain probably feels stronger than the Government and the Confederation of British Industry, that is the employers, about wanting Britain to join EMU. The TUC has been urging the British Government to join from day one. I know from our discussions with the TUC that it was very upset that the British Government did not bite the bullet and, given the size of its majority, take the political decision to join now rather than deal with it as a political decision vis-a-vis the next elections and where the parties would be placed.
There is no doubt that in joining without Britain, Ireland will experience difficulties. That is why, as Ms O'Donovan will explain, we sought to strike the entry rate, if one takes the Deutschmark as the proxy for the Euro, at a medium rate rather than at a rate which was too high or too low.
We agreed as part of the current national programme that in the event of difficulties emerging there would be detailed discussions between ourselves, the employers and the Government on how to deal with them. That is the only responsible way to deal with it.
Deputy Seán Haughey asked about labour law and people's rights. There is still a large distance between the unemployed and people in many marginalised communities, and what goes on at European level. It is still difficult to make the connection, which makes it all the more important that, rather than concentrating on agriculture prices and other issues, Europe should be seen to play a concrete role in tackling long-term unemployment and social exclusion. There is a need to work with the various community groups, as we have begun to do at national level. The ICTU level of involvement in Ireland with the various community groups is still not mirrored in other member states or, indeed, at European level. We have argued strongly with other European trade union centres that they should open up and allow the various community groups to get more involved in decision making on these issues.
Much of Ireland's labour law — employment equality, equal pay, maternity leave and part-time workers legislation — was influenced strongly by Europe or came about as a result of European Directives. Therefore, I would agree with the Deputy that membership of the EU has modernised employee rights.
As Ms O'Donovan will explain, one of the significant social rights which has emerged is that we now have the right to negotiate with employers at European level in particular areas. For example, the Parental Leave Directive was negotiated between the trade unions and employers at European level and Ms O'Donovan and Ms Joan Carmichael took part in those negotiations week in and week out at European level with the employers on the contents of that Directive. Then it was transposed by the Council of Ministers and the Commission. That is a significant breakthrough because it means that there is balance in the rights which are agreed and our input has been agreed. When workers see those negotiations take place as opposed to something which comes through the Council of Ministers' process, it makes Europe much more relevant to them.
On the question of labour market flexibility and the instruments which would be available to us, I will first comment on interest rates and devaluation. Given the modern world and the way financial markets have become a global market, these instruments are not even available to us at present. We did not voluntarily devalue the last time; we were forced to devalue. All the relevant elements of the Irish economy, that is inflation, national debt or rate of growth, indicated that the last thing Ireland should do was devalue, but we were forced to devalue by international financial markets. Therefore, I do not believe any more that these instruments are available to us. We might think they are, but they are not. I am much more interested in the EU getting control of financial developments and imposing EU control on international markets than in Ireland trying to argue that we should hold on to those instruments. The crucial thing is that if we do not do that at European level, then for a long time to come we will be governed by people who have no interest in employment, people's living standards and individual nation states. That is the type of European development we seek.
I agree with the Deputy about labour market flexibility. We have argued strongly for the use of the words he used — adaptation to change and adaptability. Indeed, the EU Commission has published a green paper on adaptation to change, which was launched in Dublin by the EU Commission with our agreement. I agree totally that we do not want to end up with the Anglo-American model of labour market flexibility because it not only leads to poverty overall but to a working poor as well in terms of both wages and living standards.
On employment and objectives, there is a very interesting policy framework emerging at European level and it is this: Ireland, Holland, Denmark, Finland, Portugal and Italy are in processes of negotiated tripartite programmes and social pacts. Many other European countries are looking at this as a way forward whereas in countries like Germany and France, Government, employers and trade unions cancel each other in attempts to find a way to modernise the economy and the social model.
We would argue strongly that the policy framework should incorporate the lessons from what we have done in Ireland and what the Dutch, the Finns and the Portugese have done. Therein lies a model for European development and a European social market.
I will ask Ms O'Donovan to comment on Deputy Mitchell's EMU question. It was a major question and we have some important things to say about it.
This is an important issue. The Irish economy is very strong at present and all of the macroeconomic indicators are very good. Ireland's competitiveness is strong — in a survey published last week Ireland was placed second in terms of European competitiveness. All those indications are present. Given that environment we are saying that any decision which the Government makes on the exchange rate and the entry rate for the Irish pound does not need to be at the lowest possible rate because the competitiveness in the economy does not require that.
We also need to be very conscious that incomes and wages could be greatly affected by going in at the central rate of 2.41 DM. Effectively, the value of the pound in the pocket would be seriously devalued.
From a trade union point of view, we have a responsibility to ensure that Government, in making this decision, tries to balance the interests. There are some groups like the farmers who would say they want it all their way. Some of the exporters are arguing for the lowest possible entry rate also because the advantages are clear for them.
However, this is not a one-sided game. This is something which must be done in a way which ensures that there is something in this for everybody. The consequent risk of inflation and the erosion of living standards from the short-term competitive advantage which may be gained at the lowest possible rate would, in turn, create difficulties for the trade unions where there is in place a very tight pay agreement governing wage increases over the next two years. If inflation was fuelled in such an environment, workers would inevitably tell us they could not live with a pay increase of 2.25 per cent while inflation could potentially rise to 4 per cent or 5 per cent. Congress has looked at this from a range of angles and has spoken to the relevant experts. Our position is that the rate of £1 to 2.50 DM strikes the right balance in that it does not go too low, while a higher rate like 2.60 DM is not desirable either because it would put us at risk if there was a significant drop in sterling.
We are concerned that single issue lobby groups, pursuing their own narrow interests, could move this debate away from the broader interests of the Irish economy. The economy is strong and the pound could enter at 2.50 DM without putting employment and jobs at risk, while giving some protection to people on fixed incomes or, as with our members, receiving moderate wage increases.
Could Mr. Cassells state whether the trade union attitude towards support mechanisms for agriculture has changed or is likely to change? Over the years unions have responded negatively to these mechanisms, although they were necessary for the livelihoods of many farmers in the past. He may not have been vociferous on this matter but other trade union leaders were extremely negative and labelled the efforts of farming organisations and the farming community in general to improve living standards as part of a "begging bowl" mentality. I hope that will cease, because the farming community will become more dependent on support mechanisms in the future due to the quota restrictions on production. As leader of Congress and because of his involvement in social partnership measures, I ask Mr. Cassells to state clearly that trade unions support Irish agriculture in its endeavours to improve the living standards of those involved in the sector who contribute so much to job creation in food processing.
How does our employment creation policy align itself or integrate with European policy? Is it likely that agencies such as the IDA will be able to continue positively to promote Ireland and to give incentives, with the support of Government, to attract industry to our more peripheral areas. If we are not allowed to give greater incentives to the more disadvantaged areas, how will we be able to compete with better off areas?
The concept of social exclusion is mentioned in the Amsterdam Treaty — not in a strong way but at least it is a start. The larger member states were concerned that elaborate provisions on social exclusion meant they would pick up the bill for whatever action would follow. In the national partnerships from PESP onwards the concept of local development has grown and been targeted at disadvantaged communities, urban and rural, around the country. There is much misunderstanding about this concept and communities and public representatives have much to learn about it. Sometimes one must lay the foundations before ensuring everyone is included and has space. Whatever way this develops we must ensure public representatives are brought with us, because we must marry participative and representative democracy.
The idea has been a good one and has grown from the national partnership, in which an area was designated as disadvantaged based on criteria such as certain types of social welfare recipients, numbers of unemployed, medical card holders, single parents, educational opportunity, etc. In those areas partnership companies have been set up, which include social partners, State agencies and the local community. If we could enhance the type of local development vehicle we have used in Ireland, and remove the shortcomings which we identify as we go along, it could well become a prototype for use in other countries throughout Europe.
It seeks to provide for environmental improvements because the place where people live can affect their circumstances. Estate management training is necessary particularly in inner city flat complexes, because the living environment is important. Access to education and retraining and matters of that kind are also provided.
In building on the social exclusion provisions of the treaty, does ICTU, along with its fellow organisations in other member states, see an opportunity to keep local development projects on the agenda after 1999 for the most needy areas of Ireland and the EU? It could also apply in the applicant states, because it is a vehicle which seeks, in an inclusive way, to tackle the causes of long-term unemployment and disadvantage. It is not a panacea but the concept is good. I fear that at the end of 1999 someone will ask how the schemes will be funded from then on and hive them off to local authorities, after which they would be killed off. Does Congress see an opportunity to build on and continue this scheme throughout the EU?
Mr. Cassells
In response to Deputy Burke's question about agricultural support mechanisms, what has annoyed most people in agriculture about my comments on this area is that I am from an agricultural background — that is, the approach farming organisations have taken to these issues is being criticised by one of their own. I tried to tell the truth as I saw it, which may hurt more than if an outsider did it.
I still have a number of difficulties in this area. We represent people in the food industry and I believe the approach taken to the development of agriculture, particularly in the 1980s, inevitably led to the quotas and restrictions which have emerged in the past ten years. That is a price we will have to pay, whereas I believe that if the strong criticisms of support mechanisms which we voiced in the 1970s and early 1980s had been heeded, then what is a crucial advantage we have in relation to the food industry would have taken this country way beyond where it is at the moment in terms of development. As an alternative to developing what were our natural advantages, we have had to, understandably, look outside the country and use incentives to attract other industries to provide employment.
Our criticism was not related so much to farm families' incomes other than the arguments we made about the need for them to pay adequate taxation on those incomes. It was more related to the fact that the road we were going down would not leave us with the possibility of developing what, I agree, is one of the primary industries that needs to be developed. We will continue to approach the need for those mechanisms and the need to develop the food industry and jobs with that balanced view.
We have been looking at the area of employment creation and the policy of the IDA. I am a member of the board of Forfás, which has been advising the Government on this matter. I am not here in that capacity so I will not comment on its advice. The three issues we have been examining are first, the incentives we can give companies coming to Ireland; second, the rate of corporation tax; and, third, trying to ensure balance in the level of skills, education and training we have, which is the other dimension companies say is important.
As regards the rate of corporation tax, we support what the Government has done, as a result of advice, which is to go for a single lower rate. We have indicated, though, that it gives windfall gains to the banks and retail outlets. The advice to Government is that it needs to tackle that as well. Otherwise, as an unintended by-product of trying to protect foreign investment, others will gain quite significantly.
It may not be appreciated that other countries — in particular, Germany — have incentives and State aids that are, in part, much higher than ours. Part of the argument the Government has been making for a number of years to the European Commission concerning restricting State aids that better off countries can offer to attract foreign investment. They are forcing us to outbid them and, thus, spend much more money on incentives than we need to. It is required, however, because others — who are not playing by the rules — are giving much higher incentives.
The debate between urban and rural areas is often conducted in terms of ensuring that people locate in the latter areas. However, I am also concerned that people should locate in West Tallaght, North Clondalkin, North Cork and Southill in Limerick. One of the difficulties is that we define regional policy as being cities and towns versus the rest, while parts of Dublin, Cork and Limerick have incredible levels of long-term unemployment. We need to look at that in the context of incentives.
I will ask Patricia O'Donovan to deal with social exclusion and local development. Congress has a working group on local development which has been asked to produce a report, by mid-1998, on how we should deal with that area. The working group was asked to examine precisely how local development can be part of our sustainable development beyond 1999, which was the question you asked earlier.
I agree with Deputy Mitchell that the reference to social exclusion in the Amsterdam Treaty is not as strong as we would have liked it to be. The Amsterdam Treaty provides for co-operation between member states on social exclusion projects, but it remains to be seen how flesh is put on the bones of that. The European trade union movement will certainly be anxious to ensure that this part of the Treaty is activated in a significant way. There is not much to hang on that specific commitment but we will all try to ensure it is fleshed out.
The question relates much more to what will happen to the Structural Funds post-1999. Most of the local development initiatives here have been funded through the EU Structural Funds and they are dependent on that money at the moment. There is a real issue for the Government of the day and for all of us who have played a part in developing these local responses to ensure the local development initiative programme continues to be adequately funded as a priority under any review of the Structural Funds. As has been pointed out, the programme has been one of the most positive aspects of public policy development in this country. It has given the community — generally people who are outside the system and who would never have the opportunity to influence decisions in relation to their own local development — access to State agencies and the resources of employers and trade unions. Congress sees that as a key priority.
We are pleased that the issue was taken up in the Amsterdam Treaty. It is something we will be highlighting in our discussions with the Government on the review of the Structural Funds.
Has Congress carried out any study on the effects of not having a proper European social charter for fair competition? Now that we have this ongoing free movement of people and goods, along with the right to trade in any member state and, soon, a single currency, I fail to see how we can have fair competition if we have different standards in member states which make one country more competitive than another. Has any study been done in that area to show the effects of the lack of a common approach to workers' rights and social standards that should apply if we are to have this fair competition and the authority to trade wherever we like?
Mr. Cassells
Social dumping is a new phrase which has come into the European vocabulary relating to the question the Deputy raised. If we are to have economic and monetary union, a Single Market and free movement of citizens, there is a grave danger that certain countries will be undermined if we do not have common rules and regulations. I am not aware of any detailed study on what the effects of not having common fundamental rights would be. President Santer of the European Commission set up a small group, of which I was privileged to be a member, to examine European competitiveness. The group comprised a small number of business people, trade Unionists and other experts. It came to the firm conclusion that while the European social model needed to be modernised, it was one of the approaches to life that gave Europe a competitive advantage compared to other countries. The fact that you could and did move to common rules on workers' rights would assist. That has been translated as seeing how you can set down a minimum level of labour standards or human rights in terms of competition with developing countries.
We agree with Deputy Barrett that the sooner we move — as is provided for within the framework of the Amsterdam Treaty — towards incorporating fundamental social rights widely in Europe and ensuring that standards are improved, the better.
I often think there is a total misunderstanding because when people talk of the need for social rights they think it involves more and more expense for industry. They should recognise it is an advantage instead and that the same standards should apply to our partners. That message needs to be got across continually. It is not simply a question of seeking more rights for individuals; it is a reality that there cannot be fair competition if different rules are applied.
With regard to the common travel area and the immigration issue, given that the Schengen Agreement and its flanking measures have been incorporated into a treaty, this is the way the Union will have to proceed. I do not have a copy of the treaty here but I understand applicant states will be required to take on Schengen responsibilities from the day they become members. This will mean freedom of travel will be allowed throughout the EU except in the case of Ireland and the UK. Ireland has negotiated opt-ins. There are complicated side problems, but they can be dealt with. What is the current thinking on this in the TUC? Are there any moves in the UK to persuade the British Government that movement on this issue would be an act of solidarity and would be a good development for all Europeans in that we are all living within secure external boundaries but with a right to move freely within them without a passport?
Mr. Cassells
The Trade Union Congress in Britain is now, and probably has been for the past five or six years, strongly supportive of moving as fast as possible towards European integration and opening up on Schengen and all of the other issues. The TUC has done this because it recognises the importance of Europe and the European area for development. It has moved well beyond where the British Government has been prepared to go.
We have two meetings a year with the British TUC — they come here and we go to Britain once a year — to discuss common issues, including Northern Ireland and Europe. They have indicated they wish to move very quickly on all of these issues and they could play an important role in educating public opinion to that effect.
Thank you both for attending the committee and for presenting your paper to us. We regard you as a very important element in the run up to both the current and pending elements of European integration. We value your views and you are part and parcel of the evaluation we must undertake to fulfil the job we have been given. I especially thank you for the succinct way in which you presented your views. These will become part of our report.