European Parliament (Irish Constituency Members) Bill 2009: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister of State at the Department of Finance (Deputy Martin Mansergh)

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

Given the nature of the legislative proposal being made, I congratulate the 12 Members of the European Parliament elected to represent Ireland at the recent election in this jurisdiction. I compliment from this House former Senator Alan Kelly from County Tipperary, who represents the Labour Party, on his election. Equally, I extend my sympathy to the unsuccessful candidates and compliment all candidates, successful or otherwise, on the extensive campaigns undertaken by them in seeking election to represent Ireland in the European Parliament. I am pleased turnout for and interest in the election were considerable.

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

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

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

In December 2003, the European Parliament voted in favour of a formula establishing, inter alia, the principle of independence of MEPs and parity of treatment between Members. Detailed implementation arrangements were developed by the European Parliament, having regard to the opinion of the Commission and approved by the Council of Ministers in July 2005. Accordingly, the proposals developed have the full agreement of the three major institutions of the European Union.

The agreed implementation arrangements are set out in the Decision of the European Parliament 2005/684/EC adopting the Statute for Members of the European Parliament and will come into effect in July 2009. The legal position in relation to the statute is that its terms, in so far as they are addressed to member states, are binding by virtue of European law. National legislation is required to give effect to certain provisions of the statute.

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

The purpose of the Bill is to change the current statutory provisions providing for the payment of Irish MEPs by the Oireachtas by revoking the European Assembly (Irish Representatives) Act 1979; make statutory provision for current MEPs who are re-elected and wish to continue to be paid by the Oireachtas; confirm that the existing pension scheme, the European Assembly (Irish Representatives) Pension Scheme 1979 — Statutory Instrument No. 387 of 1979 made under the 1979 Act — remains in force to discharge existing and preserved benefits; and provide a statutory basis for certain tax, pension, administrative and conflict of interest issues which I propose to set out in detail.

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

Section 3, which deals with the superannuation of Irish Members, provides powers to the Minister for Finance similar to those contained in the 1979 Act. It empowers the Minister to make, amend, or revoke a contributory pension scheme for Members and former Members of the European Parliament and provides continuity for the existing scheme established under the 1979 Act by confirming it remains in force. Continuation of the existing scheme is required to enable the discharge of existing liabilities due to former MEPs and preserve accrued benefits for current MEPs. Section 4 deals with disqualification of Members for membership of or employment by certain bodies.

Section 5 of the 1979 Act provides for the disqualification of Irish MEPs for membership of, or employment by, certain bodies. The relevant bodies are detailed in the Schedule to the Act, and this section makes similar provision in the new Bill.

The purpose of section 5 in the 1979 Act was to avoid potential conflicts of interest arising for MEPs by having direct involvement in the affairs of State-sponsored bodies. It sought to extend the then existing limitations in the individual statutory provisions for each of the bodies, which generally were designed to ensure that a person should not at the same time be a Member of the Oireachtas and a member of a board or staff of a State-sponsored body. It would not have been practical at the time, in 1979, to seek to amend each of the individual statutory provisions for each of the bodies to deal with the issue of membership of the European Parliament, and the matter was addressed in the 1979 Act by section 5 and the associated Schedule.

The opportunity provided by the new Bill is being taken to update the Schedule. In this context, the individual legislative provisions applying to the bodies in the Schedule have been reviewed with a view to determining the bodies that may now be excluded from the schedule of bodies to which this provision will now apply. The outcome to the review undertaken is that changes in circumstance, legislation and status affecting the bodies require only ten of the 41 bodies listed in the Schedule to the 1979 Act to be included in the Schedule to this Bill.

One additional body has been proposed by the Minister for Communications, Energy and Natural Resources for inclusion in the Schedule to the Bill. The Irish National Petroleum Corporation Limited is a legacy State company, which was established under the Companies Act by the Government for oil trading purposes during the oil crises in the late 1970s. The memorandum and articles of association for the company exclude membership in the Oireachtas for directors, but do not include a similar exclusion from membership of the European Parliament. For consistency purposes, and as the opportunity exists under the Bill to address the issue, it is included now in the Schedule to the Bill.

Article 12 of the Statute makes provision for member states to apply national taxation provisions to the salary paid by the European Parliament to MEPs, subject to the avoidance of double taxation. Section 5 of the Bill inserts a new section 127A in the Taxes Consolidation Act 1997. This section makes provision for the application of national taxation provisions to the salary paid by the European Parliament, subject to avoidance of double taxation of the salary. It provides for the granting of a credit against Irish tax due on a MEP's salary of an amount equal to the tax paid by the MEP for the benefit of the Communities in respect of that salary. The section also clarifies under which income tax schedule a MEP's salary is taxable.

Section 6 is a technical amendment of the Ministerial, Parliamentary and Judicial Offices and Oireachtas Members (Miscellaneous Provisions) Act 2001. For the avoidance of doubt, it confirms that service as an MEP for which the Member obtains preserved or paid pension benefits from the European Parliament cannot be treated as pensionable service that can also be transferred and be reckonable for the purposes of the Oireachtas pensions scheme, or the European Assembly (Irish Representatives) Pension Scheme, 1979.

The purpose of section 7, amendment of the Houses of the Oireachtas Commission Act 2003, is to provide a legislative basis to enable the Houses of the Oireachtas Commission to conclude a service agreement with the European Parliament to act, on a recoupment basis, as a paying agent in respect of certain costs. The European Parliament has sought the agreement of all national parliaments to act as paying agents.

The proposal from the European Parliament relates only to the costs of parliamentary assistants to MEPs, that is, the cost of a contract of employment and the cost of a contract for services provided locally. The proposal requires the national parliaments to facilitate payments directly to local assistants or employees of MEPs, under a contract for services directly to a service provider, and make all necessary statutory and other contributions and deductions which apply in the member state concerned. Payments made will be recouped from the European Parliament and retained by the Oireachtas Commission. Accordingly, the Houses of the Oireachtas Commission will act simply as an agent for making certain payments on behalf of the European Parliament. Funding, rates and liability for costs etc. remain a matter for the European Parliament. The Houses of the Oireachtas Commission is amenable to the request made by the European Parliament, and enabling legislation is required to facilitate the conclusion of a service agreement.

Sections 8 to 10, inclusive, are standard type provisions providing for the repeal of the 1979 Act, in section 8; expenses incurred in the administration of the Act to be paid out of moneys provided by Oireachtas, in section 9; and the Short Title of the Act and designating when the Act comes into force, in section 10.

The current annual cost to the Exchequer for funding salaries for MEPs is €1.2 million. The implementation of the European Parliament decision will involve the Parliament assuming the cost of funding of salaries for MEPs from July 2009. This will potentially provide a maximum €1.2 million per annum reduction in costs to the Exchequer, but this sum may be reduced somewhat depending on the number of MEPs who qualify for and decide to avail of the option to maintain their existing salary provisions from the new parliamentary term beginning in July 2009.

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

I draw Members' attention to the need to give legislative authority to the provisions of this Bill in compliance with our European obligations before the beginning of the 2009 European Parliament term commencing in July next. Accordingly, I commend the Bill to this House.

Senator Ciaran Cannon

I welcome the Minister of State, Deputy Mansergh. I join with him in congratulating all those who have been given the immense honour of representing the nation in the European Parliament and, in particular, our colleague and friend, former Senator Alan Kelly.

Members of the European Parliament are currently paid out of their respective national budgets, and at unequal rates ranging from just €840 per month in Hungary to over €12,000 in Italy. None of us would argue that Senators from Dublin should be paid more than those from Sligo, Cork or Galway, and it is time the inequity to which I refer was brought to an end.

It is important to recognise that every MEP represents an electorate of equal importance and it is only fair and appropriate that this longstanding disparity in pay and entitlements would be rectified. All MEPs should be paid an equal amount, thus giving them parity of treatment. The fact that MEPs will be paid by the EU and are not dependent on their respective national exchequers for remuneration will also offer a greater degree of independence to all of the members of the European Parliament.

New rules governing the remuneration of MEPs were adopted by the EU in September 2005 and this Bill is reasonably straightforward in that it seeks to put in place measures in Irish law to allow us comply with these new rules. MEPs who have been re-elected have the choice of opting for the new EU scheme or to continue to be paid by the Oireachtas, and this Bill makes statutory provision for that arrangement.

In the recent past there have been quite rightly many calls to provide greater transparency in the expenses regime that applies for MEPs and, indeed, for all politicians. In Ireland, there is total transparency of politicians' expenses and, thankfully, the EU seems to be heading in a similar direction.

From July of this year a number of new measures will be implemented that will provide for such transparency. Included in these measures is a proposal that all staff employed by MEPs will now be paid directly by the EU, and this Bill allows for that to occur.

No doubt the new arrangements first proposed by the EU and facilitated by this Bill are to be welcomed. They will provide for equitable treatment for all MEPs and much greater transparency in their expenses regime.

Senator Marc MacSharry

I join Senator Cannon in welcoming the Minister of State, Deputy Mansergh, and I welcome the opportunity to make a few brief points on the legislation. Like other Senators, I congratulate all members of the new European Parliament who were elected on these islands. In particular, I congratulate the esteemed former Senator Alan Kelly who put in a tremendous performance. Indeed, we are all proud not only that he is going straight from this House but that he is also the youngest member of the Irish delegation. We all wish him well, there is no question about that.

Like my colleague, Senator Cannon, I welcome the fact that finally there will be some level of equality in terms of payment scales throughout the European Union. While Hungary is a most extreme and perhaps more recent case, for many years Spain's MEPs were the lower paid ones while the MEPs of Ireland and other countries enjoyed pay scales and expenses that were very generous indeed. It is good that the 2005 recommendations are finally becoming law in this and other countries. I very much hope other countries will be rowing in as we have, and this can be the beginning of many reforms that are required throughout the European establishment.

As we do not get too many opportunities to speak about the European Parliament in the Seanad, I ask the Minister of State, Deputy Mansergh, to indulge me. He might take the message back that in the context of Seanad reform we would like to see all European legislation brought before this House at proposal stage so the Houses could debate the merits and issues that may arise regarding proposed EU legislation, rather than just inheriting EU directives through the committee system into law. The current system means we do not act in as representative a way as we should in the context of interpreting proposed EU directives. I would appreciate it if the Minister of State could take that on board.

As Senator Cannon said, this is a highly technical Bill and concerns a housekeeping matter. However, an issue has emerged which has been brought to my attention. In these days of scarce resources it would seem unusual that, if the European Parliament is prepared to pay the salaries of all of our MEPs, we should have an option for them to opt for a higher pay scale. I understand this provision is contained in section 5. The Minister of State mentioned the overall cost to the Exchequer is some €1.2 million. It may be less than that now because newer MEPs, such as Alan Kelly, will not be able to avail of the old regime. The vast majority of our MEPs will, presumably, avail of it, which will mean they will be on a higher pay scale of some €100,000 and would pay taxes here. We should seek to save money and on that basis we should try to incentivise all MEPs to opt for the new system, which provides for a salary of some €90,000. It would allow them to avail of a system that gives them a very generous free pension contribution of some 3.5% and makes them comply with European taxation, which would apply to the total amount of €90,000 without exemptions. The rate is substantially less and is 15% or 16%, but it would mean the European Parliament would save money.

There may be a loss in direct taxation to Ireland, but the overall saving of almost €1 million which would be paid to those who are eligible for the old scheme adds up to €5 million, €6 million or €7 million over the next five years. It makes sense to try and incentivise the MEPs concerned by asking them to be taxed at the European as opposed to the Irish level. We will then have direct savings on the payment of their salaries. It is something we should look at. If we cannot examine this issue in the House today, perhaps the Minister of State, if it comes before the Dáil, could consider it.

The issue arises over and above European taxation for MEPs who opt for what the Oireachtas is paying directly and are taxed and assessed on the balance, in terms of Irish taxation levels. In this day and age we should try to incentivise MEPs to opt for the cheaper scheme and, effectively, save the Irish Exchequer the money which can currently be saved. I understand, having spoken to a number of MEPs, this may be looked favourably upon and I welcome it.

It is appropriate to welcome Alan Kelly, MEP, to the Gallery. We are all very proud of his achievements. He is a former finance spokesman for the Labour Party and I will miss the banter he and I had throughout various debates.

I welcome the Bill in terms of the streamlining it is trying to do in this area, but I ask that the area I referred to be examined because it is an anomaly. It is something we could proactively do and it would result in direct savings. Some tax would be given away in the context of allowing existing, former or re-elected MEPs to avail exclusively of the European taxation amount in the same way as Commissioners, auditors or other civil servants appointed by Ireland who are based in Brussels can. Theoretically it is a residence issue, but MEPs from all parties or none are based in Brussels or Strasbourg from Monday to Friday. It would be remiss of me as finance spokesman for this side of the House not to highlight a potential saving where one exists and this is certainly one.

Senator Michael McCarthy

I welcome the Minister of State, Deputy Mansergh, and the debate on the Bill. As Senator Cannon quite rightly said, in the spirit of transparency and accountability it is good that the House is putting on the record the very important matter put before us in this legislative proposal giving effect to European decisions made in December 2005.

I did not get a chance on the Order of Business to put on the record my profound, warm and sincere congratulations to my former colleague on this side of the House, Alan Kelly, who is now a Member of the European Parliament. I pay tribute to all Members of this House who contested the European elections. It was rumoured the Leas-Chathaoirleach would run in Munster, such is his standing in the constituency, but perhaps he will run next time. It is an outstanding achievement for the Labour Party, not just in north Tipperary but throughout Munster. I join my colleagues in wishing Alan the very best for his tenure in Brussels and wish his wife, Regina, and his family, who are quite rightly very proud of achievements, the best in the future.

Former Senator Kelly has brought to my attention a matter regarding taxation. I would appreciate if the Minister of State, Deputy Mansergh, could clarify an issue. I understand there is a taxation issues regarding salaries and a likelihood that Members of the European Parliament would be subject to a 15% tax in Brussels on their salaries and would also be subject to the appropriate rates of taxation here. If that is the situation, I would appreciate if the Minister of State could clarify that issue and outline the thinking behind it or the clarification because, all things being fair and equal, it is something that may not be allowed to happen.

Senator Cannon made a very important point. In terms of equality of membership and the Members of the European Parliament, the salary of Hungarian MEPs is quite paltry compared to that of Italians and others. It is right and proper that salaries are being put on a level playing pitch and we are doing our bit to ensure we are moving forward.

I wish to make a number of points. I welcome the discussion on the European Union and hopefully between now and the next European referendum we will get a chance to discuss it at much greater length. The Minister of State was a Member of this House during its last term when there were discussions between the various MEPs, from all hues and none, who came into the House and put forward their points of view. That was a very successful outing and I suggest we do it again because it connects this House with the European Parliament and gives us an insight into the thinking of our MEPs.

In terms of European elections we are all fighting one corner or the other and we put forward the unique policies of our own parties. However, when our MEPs are in Brussels they all don the green jersey, do the best they can for us at that level and sing from the same hymn sheet. I suggest MEPs come back to the House between now and the next European treaty so we can have discussions and debates on the implementation of the next treaty.

The issue of salaries and expenses is important. We have seen from events in the United Kingdom that there is cynicism about politics, which is being fuelled by certain elements of the media. One can understand that, given what has happened in the UK, but it will seep into other parts of the European Union. It is very important we state how we do our business and what is debated in the House, and are quite clear about how we want salaries and expenses put in a public forum and not just debated here. Such information should be available for public consumption so people are aware of what goes on here and the manner in which we have sought to give legislative effect to European directives.

Europe is an very important part of our lives. We are part of Europe as much as Europe is part of us. We are at a critical juncture in this country. We will need the support of the European Union in terms of a course forward given the economic difficulty in which this country finds itself and the challenges that now exist. We need to be part of the European Union to meet those challenges. This is an important step in terms ensuring co-operation between Ireland and Europe.

Whatever side one takes in terms of the Lisbon treaty it is always important to ensure one has accurate and fact-based information. I supported ratification of the Lisbon treaty on the previous occasion. It was quite clear to anyone who had any form of contact with the public at that time that it was not going to succeed and that it was destined to fail. While I do not wish to point fingers, there was a certain amount of taking for granted on the part of a number of political parties on what I would deem to be the right side of the campaign. I wish the Minister for Foreign Affairs, Deputy Martin, well in the negotiations with his European counterparts. We must ensure that if and when we put the same treaty before the people we spell out clearly what the treaty is about and we are clear in terms of the guarantees. Any guarantees the Minister can extract from the current negotiations must be watertight and above board. Media commentary in recent days has suggested there is a question mark over the legality of these guarantees. We must be sure that whatever is agreed in the negotiations this week can be put to the people as being precise without fear of contradiction.

The National Forum on Europe, a Labour Party proposal introduced by the previous Government, was an effective forum in terms of the bringing together of all views. Former Senator Maurice Hayes was an important driver of the forum which I regret is no longer in existence. It was an important forum for us in terms of Europe. That it no longer exists is not good.

I would be grateful if the Minister of State, Deputy Mansergh, could provide Members with clarification in respect of the taxation issues. I look forward to hearing his reply.

Senator John Hanafin

This is essentially a technical Bill. In supporting it we are supporting a welcome change in payment method from the Oireachtas to Europe to allow parliamentarians in Europe to look after their own affairs from a financial perspective, which is only right and proper.

Other changes appear to be warranted, including the single payment for all MEPs. This change is laudable in terms of the differences in pay available to parliamentarians from each member state of the EU. I am conscious that a member from Italy may well benefit from €140,000 while a member from Hungary might benefit from only €14,000. This measure provides certainty and ensures the system is uniform. Provision is also made for changes to superannuation. While the superannuation scheme is a generous one, when all is taken into account, and not everyone likes flying, especially during the winter months, Members deserve it. Even though they are well paid, they work hard and their constituencies are enormous. For example, the Ireland South constituency is the size of many small states, including Israel and Lebanon, and at least five or ten of the US states are smaller. The Ireland North-West constituency is, I imagine, even larger, stretching from the top of Donegal to the Shannon and including parts of Ulster such as Donegal, Cavan and Monaghan, parts of Leinster including Longford and Westmeath and all of Connacht and part of Munster, including Clare.

This is a technical Bill which seeks to ensure our Members are well looked after in Europe, that any anomalies that appear, such as questions that have arisen in respect of the claiming of expenses which are to be vouched in future, are addressed and that Members who turn up to perform their duties will receive a significant payment. The level of commitment, constituency size, input and expertise necessary requires that payment in this area reflects that paid in the private sector. That is the way we have always envisaged the public sector would work.

The measures introduced in this Bill will result in a €1.8 million per annum saving to the Irish Exchequer, which is broadly to be welcomed. Members may choose to become part of the new system or, if existing Members, opt to remain part of the old system. The Bill is technical and is broadly to be welcomed. I am sure it will find support on all sides of the House. It includes amendments of the Taxes Consolidation Act 1997 and amendment of the Houses of the Oireachtas Commission Act 2003 and, in doing so, improves the lot of our Members in Europe. It streamlines how membership operates while ensuring responsibility for Members is retained by the Oireachtas. It ensures Members will be looked after and will have the facilities they need to operate. While the allowances provided may seem generous they are only proportionate to their responsibilities. I believe this technical Bill should be broadly welcomed.

Senator Joe O’Toole

I welcome the Minister of State to the House. I agree with the general thrust of this legislation which I believe is necessary. That said, I have a number of questions for the Minister of State.

Whereas there is broad public acceptability — I have no doubt this issue is again running in front of the media and public opinion — that service in the European Parliament may not be included as service for the superannuation schemes under the Houses of the Oireachtas, I would like to make a few comments on the matter. This goes against the spirit of most pension schemes where like work can be counted as long as contributions are made. I believe this provision is unnecessary. It also goes against the major tenet of the European view on pensions which is that they should be portable from one type of occupation to another, in particular within the European Union, and that they should be designed in that way. This is a much more sensible way of dealing with the question of double pensions or whatever concerns the Taoiseach has at this time.

I cannot understand — I did not hear the Minister of State mention this in his Second Stage speech — the reason for the schedule of exclusions. Why should a Member of the European Parliament not be an employee of Bord na gCon, on the board of An tÚdarás um Ard-Oideachas or on the Law Reform Commission? I am not seeking an explanation for this as I know there is none. I would like to know if any Minister ever asks a draftsperson the reason for inclusion of these exclusions. I would like to know whether the officials — I know they cannot answer me — ever challenge the draftspeople on the inclusion of these exclusions? This is akin to saying that a person, because he or she is a politician, is too corrupt to stand on these other issues. I do not see the point in this measure.

The issue of pay is dealt with well in the legislation. Also covered is the issue of expenses. There has been continuous war about expenses in the European Parliament and in the UK about expenses there. I know exactly how this happened as the same almost happened in this Parliament. There are many people in both Houses of this Parliament who believe that the easy way to reward is through expenses rather than salaries. Thankfully, both Houses of the Oireachtas have rejected that option over the past 20 years and insisted instead on dealing with salary claims in public. People can argue about what politicians are paid but they will not be able to look under the carpet for the sorts of issues that arose in London.

How are expenses calculated in the European Parliament and the Oireachtas? We have nothing to lose in asking outside bodies to develop a formula for Members' expenses. If I live in Schull and represent Cork South-West in the Dáil, I would have to travel to Dublin several days per week while also maintaining an office in my constituency. I would inevitably incur expenses in terms of research and secretarial staff and telephone and Internet communications. In the private sector, it is not difficult to work out the reasonable cost of these outgoings. Politicians' outgoings are high not because they are paid higher expenses than anyone else — they are tied to the rates paid to public and civil servants — but because some Members live on the other side of the country and travel several times per week to Dublin while also looking after large constituencies at weekends. No private sector operation would or could be designed in that manner.

Expenses have to be addressed to sustain our system of democracy. The task is not difficult once one realises that a Member has to be in Dublin a number of days per week and is required to keep an office. Reasonable mileage allowances can be calculated based on constituency size so that representatives can attend meetings and functions over the course of a year. That is 20 times more effective than the current system of vouching expenses which entails large back office operations and considerable paperwork because someone has to decide whether a particular meeting involves representation or simply canvassing. People make mistakes or abuse the system because all systems can be abused.

I discussed this matter previously with the Minister of State when we were wearing different hats. I have consulted several international companies, such as American Express, and found that they take a simple approach to the matter. They work out a figure based on where an employee lives and what they would reasonably require from him or her over the course of a year in terms of travel, accommodation and communications and they only ask for receipts if the annual claim exceeds 80% of the estimate. That system saves the companies money in back office operations and is easier on everybody.

In terms of the European project, it is important that Members of the European Parliament are properly resourced. Equally, however, it is important that the public has confidence in them. Throughout Europe politics is currently at a low ebb. Anti-politics votes are being cast all the time. We must realise, however, that whatever the flaws of democracy, the alternative is unthinkable. We only have to look at the images coming from Tehran over recent days or recall the protests by Solidarnosc in Poland or against the other side of autocracy, the Shah, in Tehran in the 1970s.

It is important that we sell this message as part of our efforts to gain support for the Lisbon treaty. The Minister of State made an elegant comment about Europe being minor in budgetary terms but major in regulatory terms. These are important issues. I commend the IFA on its forward thinking in outlining the impact of Europe on Irish agriculture and the food industry, although I will not comment on its carry-on last year. Over recent weeks the Minister for Foreign Affairs, Deputy Martin, has done a fine job in raising these issues.

I do not want us to spend the next six months sorting out people who are never going to buy into this deal. We have heard how we should proceed and we have done the business in terms of reaching agreement with our European partners. Most reasonable people will accept our explanation if it is made by all groups. I hope all Members of the Government take a strong stand on these issues, and not only the Minister for Foreign Affairs and the Minister of State at the Department of Foreign Affairs. I support this Bill, even though I raised a number of questions which I hope the Minister of State will consider for the future.

Minister of State at the Department of Finance (Deputy Martin Mansergh)

I thank Senators for their contributions and for facilitating the passage of this Bill through the Seanad. Given that today is Bloomsday, I remind them that a notable feature of James Joyce's writing was how steeped it was in Europe and its awareness of how Ireland both enriched and was enriched by being a European country.

As I indicated in my opening comments, this Bill is the culmination of many years of discussions among Members of the European Parliament and the principal institutions of the European Union. It represents the views and considerations of all member states and for the first time establishes a single and appropriate system for remunerating MEPs. In doing so, it fulfils a long-standing ambition of the European Parliament and reflects its growing role in the affairs of the European Union.

The statute on which the legislation is based forms part of European law and is binding on member states. This statute will enter force on the first day of the new parliamentary term, 14 July, and will form a single and transparent set of terms and conditions under which all MEPs will work. While the Bill before us only addresses a small part of these measures in terms of certain transitional provisions for serving MEPs who were re-elected in the recent election, the statute is an extensive document which sets out the rules and general conditions applicable to MEPs in the exercise of their important mandate. It provides, inter alia, for the enshrinement in law of the freedom and independence of Members, the free and non-binding nature of their mandate, the right of initiative within the Parliament, the right to inspect parliamentary files and the preservation of linguistic diversity. These provisions are necessary for enhancing the credibility of a parliament which continues to grow in stature.

The net effect of this Bill is to transfer liability for payment of MEPs' salaries from the Oireachtas to the European Parliament. Ultimately it will transfer the current charge on the Exchequer for salaries and pension costs amounting to €1.8 million in 2009 terms to the Parliament. Given the ongoing restraints on public expenditure in Ireland, this is welcome.

I turn now to some of the points made by Senators during the course of the discussion. Senator MacSharry suggested there should be some incentive for previously elected MEPs to shift to the new system. I wonder whether that should be necessary. When the point is given public spirited MEPs will not lose out by shifting to the new system. On the other hand, the Exchequer gains. All members should be encouraged to shift to the new system and I am sure each party can do that, should it be necessary, with their members.

During my opening contribution I was pleased to see the former Senator Kelly in the Gallery. I congratulated him outside the House earlier. The European Parliament elections were, in some respects, satisfactory for all the main parties. I regret the loss of Eoin Ryan's seat in Dublin but the net effect was to strengthen the country's commitment to Europe. There were eurosceptic candidates and movements challenging which were, I am glad to say, not successful and we are that much further forward as a result.

Obviously, there will be no double taxation. If tax is levied in Europe, credit will be allowed under the national taxation system.

I was present on two occasions in the last Seanad when MEPs addressed this House and it was a very successful exercise. It was organised by this House. It is within the powers of the Leader, the Chair and the Whips and there is nothing I am aware of to prevent that being done again. It provided a useful connection between Members of the European Parliament and this House and it was a very appropriate use of this House in that regard.

I agree that after our experiences last year, and indeed earlier in the decade, there can be no complacency about the second referendum that will take place but the point has been made in this House by Senator O'Toole and, I am sure, others that reassurances have been sought and, subject to the European Council meeting, we can be reasonably sure they have been obtained and that they will deal with the concerns that are genuine and bona fide. Equally, there are many forces outside this House which will not be satisfied, whatever we come back with, and which will be determined to find conspiracies and dangers lurking and will urge people to vote "No".

It is right that there should be argument and debate and that there should be two sides to the argument but the key questions that must be asked are what conceivable benefit or advantage to Ireland would there be from rejecting the Lisbon treaty the second time, and how will it help our economic position. Parties opposite aspire to be in government, and I know they support the ratification of the Lisbon treaty. It would be a nightmare for them as for us if it were not ratified. If any Government, be it the current one or a future one, had to operate in a position where we were out on a limb, where our continuing membership of the European Union would be daily challenged and where we would be acting to create a major breach, following the next British general election, in what has been achieved in Europe in the past 40 years, we would bear a significant part of the blame for that.

I would not be unmindful of the fact that a large percentage of the arguments being used against Lisbon are straight imports from across the water, especially from the media and, to a point, significant parts of the political system where it does not seem to be possible to have any serious, rational and unprejudiced discussion on Europe. I would hate for this country to be dragged along behind that particular chariot.

I entered public service first 35 years ago and I recall one of the first questions I was asked when I was interviewed to go into the Department of Foreign Affairs. It was 1974. Britain had entered the EEC with us in 1973 but a referendum on a possible British exit was being mooted; it was held the following year. I was asked what I thought Ireland should do in those circumstances and my clear answer was that I believed Ireland should stay put in the EEC regardless of what Britain chose to do, and that answer remains valid.

It horrifies me that we would even think of overturning what has been, by and large — I do not want to sound too utopian about it — one of the most successful steps in Irish foreign policy, which was to seek EEC membership in the early 1960s, achieve it and then make the most of it. It is unthinkable to me that we would revert to being some sort of semi-dependency on our next door neighbour because there will probably be few other choices left to us at that time.

We have not heard a Sinn Féin voice in this House today but I find it extraordinary the side of the argument it is on because it appears we have two choices. We are in partnership with the whole of Europe, which includes Britain, or we effectively reject the path we were on and committed membership of Europe. We adopt what an ambassador chided me for calling a eurosceptic — he said it was europhobic — attitude in which case we go back to the type of claustrophobic relationship from which we have successfully escaped. Senator O'Toole, in praising the exercise of democracy, contrasted it with other places in the world, for example, in the context of the turmoil in Iran, and one could also mention Burma, or Myanmar as it is now called, where the opposition leader is outrageously held in detention.

Senator O'Toole and I were members of the Houses of the Oireachtas Commission under the last Seanad. I remember with a shudder that we were urged by many good people that what we needed to do was to adopt the state-of-the-art British vouched expenses system for parliamentary salaries and allowances. We have been able to see in the past month or two exactly what sort of model that is.

The question was raised about the exclusions from membership of certain listed semi-State bodies, which is really a carryover from other legislation. I would have some doubts as to the practicability of this. We have got rid of the dual mandate in regard to the European Parliament and membership of this House. For a long time, it was the case that if one was elected to the European Parliament, one had to decide at the next election which of the two to opt for. Now, the break is instant. I do not believe a person would be satisfactorily able to serve on the board of a semi-State body and be a member of the European Parliament given the amount of travel that is involved.

I will not delay the House any longer. I thank Senators for their co-operation.

Seanad Éireann díospóireacht -
Tuesday, 16 Jun 2009