John Bruton

Opinions & Ideas

Category: Ireland (Page 2 of 5)

TESTIMONY BY JOHN BRUTON,  AT THE SEANAD SPECIAL SELECT COMMITTEE ON THE UK’S WITHDRAWAL FROM THE EUROPEAN UNION

I welcome the opportunity to speak here today and commend the committee for its work.

If I may, I would also like to commend the government on the way they have ensured, through effective diplomacy, that the particular problems of Ireland have been publicly recognized in the negotiating positions of both the EU 27 and the UK.

I will go into some of the difficulties that will arise in the Brexit negotiation.

It is important to say that Brexit is a British initiative, for whose consequences Britain must take primary responsibility. It was not forced upon them. In fact, as I will show, numerous concessions have been made by its EU partners to keep the UK within the EU Treaties, which it freely adhered to in 1973, and which its people overwhelmingly endorsed by referendum in 1975.

The context of the Brexit negotiation is changing all the time. In recent weeks, the EU economy has been improving. Election results in the Netherlands and France are more positive than many feared. Even the Trump Administration is beginning to see value in doing business with the European Union. The EU has remained united in its response to Brexit, a matter for which the Irish government can also take some credit.

WHAT IS THE ALTERNATIVE TO A HARD BREXIT?

While I believe it may seem impossibly optimistic today, I believe conditions can be envisaged  in which, eventually, the UK voters might decide, either not to leave the EU at all, or to decide, after it has left, to rejoin.

Ireland should try to keep that possibility alive.

The terms for Brexit, as set out so far by Mrs May, will do incalculable damage to this island, politically, emotionally and economically.

We cannot simply wait for this to happen. While seeking to mitigate the effects of Mrs May chosen hard Brexit, we must also do everything we can to ensure either that, at the end of the day, there is no Brexit.

Apart from a few open questions, Theresa May has said what she wants. She wants out of the single market, out of the customs union, and “control” over immigration

The open questions she has avoided so far are about the financial terms of the divorce, the status of EU citizens living in the UK and vice versa, and two aspects of a future trade agreement (if there ever is one), namely arbitrating disputes, and  third country imports getting into the EU via the UK.

The Article 50 letter, sent to Donald Tusk, did not tell us much more about the UK negotiating position than the Lancaster House speech did, although it does not repeat the pledge to leave the Customs Union.

 How the EU will respond to Mrs May’s letter?

The European Council is meeting this week to agree the orientation it will give to the EU negotiators for the discussions with the UK, that will start formally in June, and in earnest after a new German government is formed in September.

These orientations will be agreed by consensus, so every EU head of government will have to be satisfied.  

 In working out the orientation to be given to the negotiators, a crucial thing will be  for the European Council  to have in mind  what would be it’s ” best alternative to a negotiated agreement” (BATNA).

It is important to have such an alternative ready, because there is every possibility that no agreement will be reached within the two year time frame for negotiation and ratification of a withdrawal agreement.

Mrs May has said that, for her , no deal at all  preferable  to a bad deal . Her BATNA, so to speak, is no deal at all.

“No deal” would mean the UK simply crashing out of the EU overnight, sometime before the end of March 2019.  This “no deal” scenario could lead to an overnight halt to flights, to trade and to commerce. There would be immediate, massive currency instability.

As pure negotiating tactics, maybe it not surprising that Mrs May would pretend that “no deal” would be better than what she would call a bad deal, but she is hardly serious.  

“No deal” is something the UK cannot really afford. This “no deal” scenario put forward by Mrs May will, I expect, be probed during the UK election campaign to discover what it actually means.

The fact that it was put forward, vindicates Tony Blair’s description of the UK government as, at the time of the Lancaster House speech, “not driving the (Brexit) bus”, but rather “being driven” by partisan and ideological forces it had not tried to control .  

The EU country that would be worst affected by the UK crashing out of the EU, with “no deal”, would, of course, be Ireland.

So Ireland must use all its imagination and ingenuity with its EU partners to ensure that there is a better alternative than “no deal” available, to what Mrs May might consider a “bad deal”..

SHOULD THE EU OFFER UK VOTERS ANOTHER OPTION?

If the UK government is unable or unwilling, because of domestic politics, to work out a responsible “best available alternative to a negotiated agreement”(BATNA), then the EU side should do so for it.  

It should adopt it, alongside its line by line response the UK’s negotiating demands

Having a BATNA would also strengthen the EU’s negotiating position. It would provide something with which an emerging deal could be compared. It would also provide a basis on which the UK electorate could reconsider its decision of 23 June 2016, if it ever wants to do that.

As Tony Blair said, UK voters have a” right to change their minds”. After all politicians are allowed to change their minds, so why not voters?

 If it was the UK voters who, in a referendum, sent their government on a mission towards Brexit, it would be reasonable that the same voters, rather than Parliament, should adjudicate on what will have been achieved (or not) by their delegates.

But if UK voters ever do change their minds about Brexit, it will happen slowly and incrementally.

Parts of the Brexit scenario, obscured during the Referendum, will become clearer during the negotiation. The unavoidable interconnections between EU freedoms, and EU rules, will emerge.  So that this happens, it will be in the EU side’s interest to ensure that there is maximum public understanding of the unfolding negotiation, at every stage.

Transparency will work in the EU’s interest.  A running commentary is exactly what is needed, in the interest of public education!  

When the UK public comes to see that the alternative to a single set of  EU rules, is either

no rules at all, or

multiple sets of contradictory rules for different jurisdictions,

citizens, in both the EU countries and the UK, may come see EU membership in a different and better light.

They may, for the first time in many cases, see the EU as something that actually simplifies their lives, rather than the reverse.

In my view, the “best available alternative to a negotiated agreement”,  the BATNA, that the EU side should adopt,  is an offer of continuing UK membership of the EU  broadly on the basis that the UK  was a member in 2015,  before David Cameron’s ill fated “renegotiation”.  

The terms obtaining then were generous to the UK. They allowed it to opt out of the euro, of Schengen, of Justice and Policing cooperation, of the Stability and Growth Pact, and of the justiciability in the UK of the European Convention.

Furthermore, the UK itself had also decided, without Brexit, that it would have a referendum of any new EU powers anyway.

In that sense, the UK was already having its cake, while eating it, before it ever decided on Brexit. These  pre 2015 terms should be left on the table by the EU side, but without the unjustifiable UK budget rebate.

President Tajani of the European Parliament made such an offer when he met the UK Prime Minister recently. That was a  very important initiative, and underlined how central the European Parliament will be in this whole process.

Of course, at this stage, the UK would reject such an offer out of hand.

 But, as the inevitable consequences of Brexit become clearer, UK public opinion might begin to see merit in it, particularly when it is compared with the costs of simply crashing out of the EU overnight, with no deal at all, which is supposedly  still Mrs May’s fall back  negotiating scenario, or as compared with what she calls a “bad deal”.

The resistance to keeping such an offer on the table is more likely to come from some existing EU member states.

Some members will point to the UK’s insatiable demands, when it was a member , for opt outs, rebates, and exceptions.  Arlene Foster’s analogy about feeding crocodiles may come to their minds. They will recall General de Gaulle’s original veto of UK membership, and his foresight that the UK would never settle in as a member. They might also argue that offering the UK a way back, after it has triggered Article 50, might encourage others to try it on too.  

 But if they sit back and think about it, they will, I believe, conclude that a UK that inside the EU, is better for the EU, than a UK outside it, even with a trade deal.

Keeping the offer of resumed UK membership on the table would be good politics, and good economics, for the EU.

I mention, in passing, that article 6.8 of the Vienna Convention, which sets out the law  on treaties generally, explicitly allows revocation of a notice of intention to withdraw from a treaty.

A political declaration by the EU heads of Government, at some stage in coming months, in favour of facilitating an eventual UK resumption of EU membership, on its  pre 2015 terms minus the budget rebate , would create a realistic yardstick against which the UK citizens could compare the terms of Brexit at the end of the negotiation.

THE EU NEGOTIATING POSITION

I do not propose to go into detail here about how the EU side should conduct the negotiation with the UK.

Obviously it will keep the 27 member states informed at every stage.

Ireland will need to ensure that  any deal guarantees that the UK will not engage in unfair or environmentally harmful trading practices, that there will be no unfair subsidization of UK enterprises competing with Irish enterprises, and to get  assurances that the EU will  take immediate action  if that happens.

We will have a special interest in the post 2020 agricultural policies of the UK, and in ensuring that they do not introduce production subsidies that disadvantage Irish exporters, that the UK adheres to reasonable climate change emission standards, and that it does not permit third country imports that undermine traditional Irish exports.

We will need to protect our electricity and energy supplies, after the UK has left the EU’s common energy policy. Ireland network in entangled with the UK one, and it is through the UK that we can access the rest of the EU network.

The EU has agreements on this with other countries, like Switzerland, which, though not EU members, contribute to the EU budget.

The EU will have difficulty offering the UK a better deal than it is giving to Switzerland on this or any other matter.

THE STATE OF BRITISH KNOWLEDGE OF THE EU, AND ITS IMPACT ON THE NEGOTIATIONS

It is important to remember that Westminster politicians have never taken much interest in how the EU actually works, in its procedures and rules, and in the compromises that underlie its very existence. They have this in common with many politicians in bigger European countries, who treat the EU as a sideshow to national politics.

So, even though the Conservative Party sponsored the idea of holding a Referendum on leaving the EU, it did not give much thought to what leaving the EU might actually mean in practice. In a sense, they are now finding out about how the EU works for the first time, just as they are leaving it!

Mrs May’s first priority, after the Referendum, was party unity.

That may be why she told the Conservative Party Conference last year that she would go beyond the mere terms of the Referendum.

She would not just leave the EU.  She would refuse to join the European Economic Area (unlike, non EU member, Norway).

She would also refuse to join the EU Customs Union (unlike, non EU member, Turkey).

She would reject the jurisdiction of the European Court of Justice.

This kept her party quiet.

But now come the actual negotiations. This is where Mrs May’s rhetoric at the Conservative Party Conference, meets the reality of a rules based international trading system.

A RULE BASED INTERNATIONAL TRADING SYSTEM REQUIRES A COMMON SYSTEM FOR MAKING, AMENDING, INTERPRETING, AND ENFORCING AGREED RULES

In a rules based international trading system, unpleasant compromises are essential if you are to persuade others are to open up their markets to your exporters, to your bankers, to your planes,  and to your people.

In a rules based international trading system, you cannot, unilaterally, make, amend, interpret, and enforce the agreed rules, in a way that suits only you.

There has to be a common system, which involves some concession of sovereignty.

You often also have to accept an external enforcer, like the European Commission or an International Court. This is a concession of sovereignty.

And you often have to accept an external body interpreting the meaning of the rules, someone like the European Court of Justice, or a Disputes Panel of the WTO. Another concession of sovereignty.

But this is unacceptable to those who have made national sovereignty into a religion. It is unacceptable to some of Mrs May’s Euro hostile MPs, and to some of the supporters of Donald Trump.

Some have argued that if Ireland is inside the EU, and the UK is out of it, a special “bespoke deal” for the island of Ireland, or for the UK and Ireland, could be envisaged.

I do not see how this could work as far as trading standards and tariffs are concerned.

The ECJ would be the final arbiter of Irish standards, while the UK Supreme Court would make the  final arbitrations as far as the UK and Northern Ireland standards would be concerned.

Ireland would be obliged to collect EU tariffs, and enforce EU standards, on any goods entering the EU through Ireland, and do so at the Irish border, unless we wanted to exclude ourselves from the EU Single market.

Any precedent established for the UK and Ireland in this matter will be examined by the countries in EFTA and the EEA. They will want to be sure that their existing deal is better than anything offered to the UK, which has refused to join either EFTA or the EEA. This will be especially the case if those countries are contributing to EU funds on an ongoing basis, and the UK is not doing so.

The EU side in the negotiations will also have to respect the long standing “Interlaken principles” of 1987 which say that, in negotiating privileged relations with non EU states, the EU will prioritize integration between its own members over relations with non members, and will safeguard its own decision making autonomy.

I think this reference to decision making autonomy may mean that EU rules and the ECJ must take precedence over the decisions of any joint bodies the EU might agree to set up with the UK.

SOME OF THE PRACTICAL PROBLEMS OF BREXIT

I have been reading publications of Conservative supporting think tanks, like the Bruges Group and “Leave means Leave”, and they are discovering how much extra bureaucracy will be involved in the UK decision to leave the EU Customs Union and the Single Market.

The UK will have to introduce Customs controls on the goods bought and sold between the UK and the EU. This will involve checking where the goods came from, if they are properly labelled, if they are safe, and if the tariffs due have been paid. The delays will be substantial, at the border in Ireland, at ports in the UK, ports in Ireland and ports on the continent.

Customs clearance alone will add 8% to the cost of goods arriving in the UK by sea from Ireland or the rest of the EU.

At the moment 90 million customs declarations have to be checked in the UK for goods arriving from outside the EU. Once the UK itself leaves the EU Customs Union, UK customs officials will have to check 390 million documents!

Some may think the UK could reduce these difficulties by being in the Customs Union for some goods, but not for others.

This is impossible under WTO rules. A Customs Union restricted to some countries is a departure from the WTO norm of non discriminatory trade policy among all WTO members. A Customs Union is allowed by the WTO only if it covers substantially all trade. The UK will be trying to join the WTO on its own account, and starting out attempting to break WTO rules may not be wise.

Even if the UK eventually decides to stay in the Customs Union, but leaves the Single Market, and  tariffs will  then not have to be collected at the border and in ports,  the origin of goods will still have to be checked, as will compliance with EU safety and labelling rules.  This will take a lot of time, whether it is done, at the border or in a depot, electronically or on paper. The cost of doing business will increase, and for no productive or constructive purpose.

By leaving the EU Customs Union,  the UK will not only exclude itself from duty free access to the EU market, which represents over 50% of UK trade, but it will also lose the benefit of Trade agreements the EU has negotiated with 60 other countries, which account for a further  17% of UK exports.

For example, since the EU negotiated a trade deal with Korea ten years ago, UK exports to that country increased by 110%. Leaving the EU means the UK  giving that up, temporarily, and, perhaps, permanently.

There may be opportunities for Ireland to replace some UK trade with Korea.

Japan has more investment in the UK than it has in the rest of the EU combined, but a lot of it is there so as to access the EU single market. Again this is an opportunity for Ireland.

Mrs May is also beginning to discover that her hard line on immigration will have costs. 20% of employees on UK farms, and 29% of employees in UK food processing plants are EU nationals, who will lose their right to live and work in the UK.  

When the UK tries to negotiate trade deals with countries outside the EU, like India, it will find that it will face demands for more Indian migration to the UK, as Commissioner Hogan pointed out earlier this week.

UK Airports will find themselves losing business, when the UK has to leave the EU Open Skies Agreement with the United States. More US transit traffic will be routed through Dublin.

The UK will also have to try to join the European Common Aviation Agreement, as a separate member, if UK owned airlines are to have the right to fly passengers between EU airports. Rival airlines will not make it easy for them to join.

A sudden “no deal” Brexit would leave the UK outside the EU’s Aircraft Safety Agency’s jurisdiction, without a ready replacement.

After Brexit, the UK will have to set up 34 new national regulatory bodies to do work now being done for the UK by the EU Agencies, from which the UK will have excluded itself, because these agencies come under the jurisdiction of the ECJ.

An example of this is Euratom, a body confined to EU members, which regulates nuclear safety.  Amending the Euratom Treaty will not be simple.

UK farmers and food producers will find themselves facing tariffs of 35% on dairy exports, 25% on confectionary, and 15% on cereals. UK lamb production will be hard hit. These tariffs will have to be collected at the border here, and in Irish ports trading with Britain, and this will be the direct result of a sovereign UK decision.

If Mrs May wants to be able to make deals to extricate herself from some of these bad outcomes, she will need much more negotiating flexibility.

A lot will depend on what the Conservative Manifesto says. If it repeats the promise of a low cap on immigration, then Mrs May have less negotiating flexibility at after the Election than before.

HOW TO MINIMISE THE DAMAGE BREXIT WILL DO

As I have said, even if the UK decides to stay the EU Customs Union after all, additional barriers to trade  will go up at the border in Ireland, and between Ireland and Britain.

Ireland must use every legal means available to prevent this damage, including making full use of all the institutions set up in the Good Friday Agreement to persuade the UK to  continue to adhere to EU standards within the UK, even after it has left the EU.

For example, if, after Brexit, the UK decides , as part of its agenda of “taking back control “ to develops new “British standards” for

  • packaging ,
  • plant safety,
  • pharmaceutical safety, or
  • food safety,

the disruption to North / South trade in Ireland, and to trade between Ireland and the UK, will be immense.

Even slight differences in standards can add hugely to costs, and can require expensive duplication of testing and production lines. This will be the case even if there are no tariffs. Similar regulatory barriers could arise for the provision of services sold between Ireland and the UK.

Increasingly, international trade agreements are in fact about standards rather than tariffs.

As the only EU country with a land border with the UK, keeping harmony between EU and UK standards, will be disproportionately important for Ireland.

Since 1973, both parts of the island have been bound by almost identical rules, made under similar European Communities Acts, covering each jurisdiction, under which both of us have implemented EU laws, which have been interpreted in a uniform way, by the European Court of Justice (ECJ).

All that may change on the day the UK leaves to EU.

The UK Prime Minister has announced that she will, later this year, introduce a “Great Repeal Bill”, to repeal the 1972 European Communities Act , under which EU laws automatically apply in the UK , and by which EU law has primacy over UK law.

The “Great Repeal Bill” would then come into full force on the day the UK actually leaves the EU.

This proposed “Repeal” Bill in misnamed because it will not actually repeal the EU laws, but simply declare that these same laws are now sovereign UK laws, independently of the EU, without altering a single comma.

But what happens after that?

DIVERGING STANDARDS COULD CREATE NEW TRADE BARRIERS

The Great Repeal Bill will  go on to  provide a mechanism whereby the UK can then quietly repeal, or amend, these EU laws, one by one, without reference to the EU.

This will be done by Ministerial orders, which cannot be amended, and are rarely even debated.  If these orders unilaterally change the standards to be met on the UK market, this could, overnight,  erect a new barrier to trade with Ireland and across the border here.

The same will happen if a UK Supreme Court decision interprets a rule the UK has inherited from the EU, in a manner that differs from the interpretation of the same rule by the ECJ. Overnight, we have a new trade barrier.

Of course, it will take many years for UK Ministers to go through every inherited EU directive and regulation, every amendment to them, and every court judgement interpreting them, and then to decide on which to keep, which to amend, and which to replace .

But all this will be done behind closed doors, under pressure from special interests.  All this could happen with no discussion with Ireland or with other EU countries. That is the logic of the Brexit rhetoric about “taking back control”

Theresa May has promised that this process will be subject to “full scrutiny and Parliamentary debate”, but this seems impractical because so many EU laws are involved. And the scrutiny and debate, if any, will be confined to Westminster.

She said nothing about scrutiny in the Parliament in Edinburgh, or in the Assemblies in Belfast or Cardiff, let alone any consultation with Dublin!   

This problem will get more and more severe as time goes on, as the UK seeks to justify its decision to leave the EU by introducing new rules and regulations of its own.

The British / Irish Intergovernmental Conference, set up under the Good Friday Agreement, must make this a permanent agenda item. It will have to meet much more often to keep up with the rapidly moving EU and UK regulatory agenda, to spot divergences that might create new trade barriers.  It will need a substantially enhanced secretariat, and as the initiator of Brexit, the UK government should come forward with concrete proposals on this.

Some of the laws being repatriated from the EU by the UK deal with matters that now fall within the competence of the devolved assemblies. These Assemblies will be able to make new rules of their own, which may differ from one another, which raises the theoretical possibility of new barriers to commerce within the UK itself.

The exact same former EU regulation could be interpreted in one way north of the Irish border, and in another south of the border.

AN IRELAND CLAUSE IN THE UK’S “GREAT REPEAL BILL” ?

What we can do to prevent all these disruptive and costly trends?

In my testimony in the House of Lords, I suggested that the proposed “Great Repeal Bill” contain a special “Ireland clause”.

This clause would require any UK Minister, or a devolved UK Assembly, which is contemplating making any unilateral UK amendment to an inherited “EU/UK” law, to give public notice of his intention to do so.

It should then be obliged formally to consult both the Irish Government, and the Northern Ireland Assembly on the matter.

Such an “Ireland clause”, should also provide for the monitoring of any divergences between the interpretations by the ECJ and by the UK courts, of the EU laws inherited by the UK.

In this way one could to identify anything that might cause a problem for any part of Ireland, or for Anglo Irish relations.  It would reinforce the work of the British Irish Intergovernmental Council, to which I referred earlier.

This would not avoid all the problems that will arise from Brexit, but it would should ensure that every step is taken with proper deliberation and foresight , and that further damage is not inflicted by accident .

THE GOOD FRIDAY AGREEMENT

There is another aspect of Brexit to which I must refer. That is its impact on the Good Friday Agreement.

The consent principle in the Good Friday Agreement said that the constitutional status of Northern Ireland, defined as its status as either part of the UK or part of a united Ireland, could not be altered without the consent of the people of Northern Ireland. That is not affected by Brexit.

But it is arguable that Brexit changes the constitutional status of Northern Ireland, in another sense, by taking it out of the EU.

This type of constitutional change was not envisaged at the time the Agreement was being negotiated, but,  if Brexit was on the cards then, I am sure the negotiators would have attempted to deal with matter.

Brexit will impact living standards in Northern Ireland. The CAP provides 60% of the cash income of Northern Ireland farmers. The 57% of all exports from Northern Ireland, which go to the EU, will suffer.

Strand Two of the Good Friday Agreement covers North/ South relations, and a strong North/ South dimension was important in ensuring the overall balance of the Agreement.

One of the key elements in Strand Two is the Special European Programmes Body, which helps spend EU monies on projects that promote closer North/ South relations.

When the UK takes Northern Ireland out of the EU, all that will change, and, in the absence of EU monies, Strand Two will lose an important part of its content.

The UK government, which is the initiator of Brexit, has to take responsibility for all these issues, and propose alternative ways forward, to strengthen both Strand Two and Strand Three of the Agreement.. This will require the continued use of the review procedures in the Good Friday and St Andrews Agreements, in light of Brexit, as it evolves. This is a matter your Committee will probably wish to explore

WHAT IRELAND SHOULD DO NOW

In making its preparations, Ireland should act on the assumption that the UK will leave both the customs union and the single market.  While we should work for the best, we should prepare for the worst.

In our efforts to get the best outcome, and indeed to help the UK, we will only get the support we deserve from the other EU states, if we show we are fully committed to keeping the EU together. We cannot allow a perception to develop that we are half hearted about preserving and strengthening the EU. As a member of the euro, we are necessarily in the EU for the long haul.

Acting on the assumption of a hard Brexit, Ireland should adopt an aggressive strategy to improve its overall competitiveness, in other words, improve its ability to survive the worst outcome.

To deal with a bad Brexit outcome, Ireland must become hyper competitive. The right action agenda is to be found in the “Competitiveness Challenge”, presented to the government by the National Competitiveness Council.

As the Report points out, we start from a good position.

Ireland has the 5th highest productivity in the OECD, after Luxembourg, Norway, the US and Belgium.

In the ease of doing business, Ireland is in 5th place in the EU after Denmark, Finland, Sweden and Germany.

We should now aim now at first, not fifth, place in both of those tables!

The Competitiveness Council shows where there is room for improvement.

Our immediate competitor in many areas will still be the UK .

Comparing Ireland with the UK, using the World Bank Rankings measures of ease of doing business , the Competitiveness Council Report  says that,  for a business wanting to

  • get electricity, Ireland is in 33rd place, while the UK is in 17th place in the world
  • get a Construction permit, Ireland is in 38th place, while the UK is in 17th place
  • enforce a contract, Ireland is in 90th place in the world, while the UK is in 31st place (our case clearance rate in our courts is the worst in the EU)
  • trade across borders, Ireland is in 27th place, while the UK is in 13th place
  • get Credit, Ireland is in 32nd place , while the UK is in 20th place.

The remedy to each of these problems is different. It will usually involve action by several government Departments. So a “whole government” approach will be needed, with a narrow focus on dramatically improving Ireland’s competitiveness position in every area where our costs of doing business are too high.

The Taoiseach, and his office, are in an ideal position to drive this, because he has unique authority to clear away road blocks caused by disputes between Departments.  Making Ireland hyper competitive, and able to withstand the hardest of hard Brexits, would provide a unifying agenda for the New Politics, going beyond the Programme for Partnership government, which after all agreed was when Brexit seemed unlikely.

In fairness, the figures quoted by the Competitiveness Council show that for registering property, Ireland is 41st place while the UK is in 47th place, and for ease of paying taxes, Ireland is in 5th place while the UK is in 10th place. But even there we can do better.

If our aim is to be hyper competitive, that must influence our policy on public sector pay claims. That aim strengthens the case for setting up a “Rainy Day Fund” to meet unexpected fiscal eventualities, and the case for a strong Independent Parliamentary Budget Office.

We should not spend today, what we are unsure we will actually earn tomorrow

As our population ages, and the retired population inevitably increases, we will not be able to afford any work disincentives in our tax and income support systems.

We cannot afford to have so many households where no one is working, an area where Ireland is apparently worse than any other EU country

Nor will we will not be able to afford to narrow our tax base, as some propose. In fact we should be broadening it.

The likelihood of a hard Brexit should be the signal for a comprehensive action plan to make the Irish economy hyper competitive, starting now, even before the UK starts negotiating its withdrawal terms.

 THE EU IS A FRAGILE, VOLUNTARY,  UNION THAT CAN ONLY WORK IF THERE IS GIVE, AS WELL AS TAKE.

Meanwhile Ireland must work to make the EU more effective, and more visibly democratic.

Ireland must help the EU shake off its pessimism. It must defend the EU from unfair criticism. But it must also come forward with ideas for the reform and improvement of the EU.

There is no denying that the Brexit decision was a blow to the EU and created a risk that the 27 EU countries will start pursuing national interests at the expense of the common EU interest. So far there is no sign of this, and Ireland can claim a lot of credit for that.

The 27 EU states need to act resolutely to strengthen EU wide democracy, to ensure respect for EU rules, and to show that the EU can do business efficiently with the rest of the world.

The European Union is not a monolith. It is a voluntary Union of 28 states, with no independent tax raising power.

It operates on the basis of rules, which its 28 members must freely respect. If they fail to do so, the EU ceases to mean anything.

These rules are made under the authority of the EU’s Treaties, which have been ratified by all member states, and the Treaties can only be amended, if all 28 states agree.

If unanimity is the rule, the more members the EU has, the harder it becomes, by a form of geometric progression, for the EU to amend its Treaties.

A CLUB THAT CANNOT AMEND ITS RULES WILL FOSSILIZE

A club that has no power to change it basic rules will eventually fossilize and die.

The EU’s 28 members are, in theory, sovereign equals, regardless of differences in population or wealth.  But voting weights do recognise differences in size, on all issues where unanimity is not required.

The EU makes trade deals on behalf of its members, using the extra bargaining power that its size gives it. But because it negotiates on behalf of 28 states, not just one, it can be harder for the EU to finalise a trade deal that it would be for one state, negotiating alone.

In the case of some Trade deals, it is sufficient for them to be ratified by the European Parliament alone. In others, all national parliaments, and some regional parliaments, must ratify too. In these cases, the EU has much more difficulty being an effective trade negotiator.

COMPROMISES BETWEEN NATIONAL INTERESTS NEEDED IF EU IS TO DO TRADE DEALS

Likewise, if it becomes too difficult for the EU to complete trade agreements, because a few states within the EU hold up the agreement in order to advance a national interest, then the EU’s utility as a trade negotiator will fade away.

This was an argument  advanced by some of  those who favoured Brexit, namely that the UK could negotiate its own deals more easily outside the EU, without having to wait for 27 other countries to agree.

The European Commission conceded, under pressure from national governments facing early elections, that the Trade deal with Canada had to be ratified by the national parliaments of the 28 states, as well as by European Parliament and the  28 governments.

This was a risky decision and may hamper the EU’s ability to do trade deals.

If the EU’s deal with Canada had  failed because the Walloon Parliament in Namur  failed  to ratify it, years of work by Canadian and EU negotiators would have gone down the drain.

Other countries would then begin to doubt if negotiating with the EU is worth their time. The Brexit advocates would have won part of their argument.

A lot more is at stake here than the content of the agreement with Canada.

TREATY CHANGE MUST ALSO BE POSSIBLE

It has become accepted wisdom in every EU capital now that EU Treaty change is off the agenda. This is because of

  • The requirement to have a referendum in Ireland on a Treaty change involving a transfer of sovereignty
  • the voluntary decisions of France and the Netherlands to have referenda on certain EU matters,  and in the Netherlands  even on a minor agreement with Ukraine.
  • the expectation that a Treaty change would be preceded by a cumbersome  Convention.

The net result of all of this is that the EU will not consider Treaty changes, even ones that might make it more democratic.

If that remains the case, the EU will eventually freeze up, because it will not be able to respond to new circumstances, and its member states will have to look to other less democratic or transparent institutions than the EU, to advance their collective interests. One could even see NATO being called into service for more broadly defined “security“ purposes.

I agree there is no need for a comprehensive review of the Treaties, so soon after the Lisbon Treaty came into force. But a Treaty change to respond to concerns that emerged in the UK referendum campaign, for example changes to make the EU more visibly democratic and accountable, should be possible.

For example, Treaty changes could be envisaged to

  1. Have  the President of the European Commission be elected directly, in a two round election, by the entire electorate of the EU.
  2. Have the President of the Euro group be similarly elected by  the Euro zone countries
  3. Give National Parliaments of the EU, if a minimum number agree, a power to require the Commission to put forward, for consideration, a legislative proposal within the EU competence in the Treaties. National Parliaments already can delay EU legislation, so why not allow them make a positive proposal?

 

RESPECT FOR RULES BY MEMBER STATES IS AN EXISTENTIAL NECESSITY

If one or more member states get into a habit of failing to respect EU rules or directives, the EU ceases to be operational, particularly if the states failing to respect the rules are the bigger ones.

Last year, France has threatened to flout an existing EU directive, because efforts to amend it, in a direction France wanted, are being blocked by the national parliaments of 11 EU states under the procedures introduced in the Lisbon Treaty.

In response the then French Prime Minister, Michel Valls,  threatened not to implement the  directive at all,  something which would completely undermine EU rulemaking.

He  said

“If it is not possible to convince ( the 11 states to accept the amendments France wanted) … France will not apply this directive.”

That is a direct threat to the EU from a founding state. It is really dangerous and should not be countenanced.

 

Ireland Has The Most Progressive Income Tax System In The EU

This note examines the latest OECD data (Taxing Wages 2017) on the progressivity1 of the Irish income tax system in comparison with other OECD countries. It finds that according to OECD measures the Irish system is the most progressive and that taxes in Ireland are relatively low on those with average incomes and below.

Income Tax

Ireland has the most progressive income tax system (including employee social insurance contributions) in the EU. The tax paid by a single person on two-thirds average earnings(average earnings are just under €35,600) is the fifth lowest in the OECD (out of 35 countries) after Mexico, Chile, Korea and Israel. If raised to Danish or German levels, a single person in Ireland would pay over €5,000 more in tax on an income of about €24,000.

The tax paid by a single person on average earnings is the 28th highest in the OECD. A single worker on an average income pays about €14,500 in income tax and social insurance contributions in Belgium compared to over €6,830 in Ireland a difference of over €7,650.

The tax paid by a single person on one and two-thirds average earnings (€59,400) pays €18,660 in tax which is slightly above the OECD average. A person at the same income level in Belgium would pay €28,800 in tax- just over €10,000 more.

A major reason for the relatively low direct tax burden in Ireland is that PRSI is lower here. In many higher tax countries PRSI funds pay-related unemployment, pension and health benefits while the Irish system provides flat-rate benefits only. Irish employees (and their employers) have to fund supplementary pensions separately. For example, Irish employees pay about €2 billion (after tax relief) towards their pensions annually. In many higher tax countries, these are funded through the tax system.

If we look at the tax payable (excluding PRSI), the tax paid by a single person on one and two-thirds average earnings is the 10th highest in the OECD .

Marginal Tax Rates

How do marginal tax rates in Ireland compare with other countries ? For a single person on two-thirds average earnings, the marginal rate in Ireland is 29.5 per cent compared with an OECD average of 32.1 per cent. The UK rate is 32 per cent. We are the 20th highest in the OECD at this level of income where rates range up to 54.6 per cent found in Belgium.

At average earnings a single person in Ireland faces a marginal tax rate of 49.5 per cent: the third highest in the OECD (average 36.2 per cent). Again Belgium is the highest at 55.9 per cent while the UK rate is 32 per cent.

At one and two thirds average earnings, the marginal rate of tax in Ireland (49.5 per cent) is the 9th highest in the OECD and above the OECD average of 43.4 per cent. Sweden is highest at just over 60 per cent and the UK is at 42 per cent.

Conclusion

Compared to other OECD countries

  • The level of direct tax paid in Ireland is low particularly for those below average earnings
  • Employee PRSI in Ireland is less than half the OECD average2
  • The Irish system is the most progressive in the EU
  • The top marginal rate is not particularly high but it applies at a relatively low level of income

 

Source: Taxing Wages 2017, OECD 2017

________________________________

Notes:

1 The measure of the progressivity of the tax system is obtained by comparing the tax due by a single person on 67% of average income with that payable on 167% of average income. Tax includes income tax, universal social charge and employee social security contributions.

2 In many higher tax countries PRSI attracts pay-related unemployment, pension and health benefits while the Irish system provides flat-rate benefits only

 

 

 

TEARING UP 40 YEARS OF COMMON RULE MAKING…..THE MEANING OF THERESA MAY’S SPEECH

Once Theresa May said ,at her party Conference in Birmingham in October, that she was insisting on immigration controls, on rejecting the jurisdiction of the ECJ, and on making trade deals with non EU countries, a hard Brexit became inevitable.

MAY SAYS SHE WANTS A STRONG EU

She said in her recent speech that she wants the European Union to be strong and successful, without the UK.

It was important that she say that. It set a good tone and it differentiates her position from that of Donald Trump, who, like Vladimir Putin, wants the EU to break up.

Mrs May says she wants the EU to stay together, but for that to happen, there can be no question of a country, including her own, being offered better terms by the EU, for leaving the EU, than it would obtain if it stayed in the EU.

That is not “punishing” anybody, it is common sense.

Mrs May set out her goals, but not all the pitfalls on the way.

FINAL DEAL WILL HAVE TO BE RATIFIED BY THE PARLIAMENTS OF ALL EU STATES

The eventual Free Trade agreement she wants with EU will not be finalised in Brussels. It will have to be approved by the 27 or more Parliaments within the EU.  The difficulties Ukraine and Canada have had getting their Agreements approved show how unpredictable that may be. Convincing Michel Barnier to agree may be the least of the UK’s negotiating problems!

She said that, on leaving the EU, the UK will retain all the  then existing EU rules for goods and services, but will then change them, as necessary afterwards. This implies a gradual hardening of the border in Ireland, as UK standards begin to diverge from EU standards.

MORE BUREAUCRACY INEVITABLE

To the extent that the UK diverges from EU standards, the UK businesses will have to apply two sets of standards, one for the UK market, and another for the 45% of UK exports that go to the EU. More paperwork, not less!

Once the UK has left the EU, goods coming  into the EU (including into Ireland) from the UK will be subject to checking under “Rules of Origin” requirements, in other words to check that they do not contain an undue amount of content that is not from the UK at all, but from elsewhere.

For example, there will have to be checks that UK beef burgers do not contain Brazilian beef.  These “Rules of Origin” checks will involve a lot of delays, and yet more bureaucracy, which will be especially onerous for small firms.

One study estimated that the need to apply “Rules of Origin” checks could reduce trade volumes by 9%.

PROBLEMS FOR RETAILERS

The UK decision to leave the Customs Union will create big problems for the Irish retail trade. Many retail chains treat Ireland as an extension of the UK retail market and have built their distribution chains, the network of warehouses, and their logistics on that basis.

Now transiting goods destined for Ireland through the UK, or from Ireland via the UK to continental Europe, will become much more complex. Customs inspections, paperwork and even road use costs may arise. These problems could be mitigated by new customs agreements, but this will not be easy. These problems will be particularly acute for food products, which are perishable.

New ways of getting goods in and out of Ireland, avoiding the UK , may have to be devised. Ireland will need to redirect its transport infrastructure towards the continent and away from UK routes which will require investment in new infrastructure at ports like Rosslare and Cork.

HALF IN, AND HALF OUT, OF THE CUSTOMS UNION?

Theresa May was remarkably unclear about the sort of relationship she wants with the EU Customs Union. She wants bits of it, but not all of it.

In attempting this unusual feat, she will run into difficulties with the World Trade Organisation (WTO), a body of which the UK now wants to become a fully independent member.

The WTO works on the basis of non discrimination, or the so called “Most Favoured Nation” principle.

As I understand it, any concessions that the EU Customs Union grants to the UK, as a non EU member, would have to be extended to all the EU Customs Union’s trading partners, unless the concessions cover “substantially all” trade between the UK and the Customs Union.  If this is so, Theresa May’s formula will be unworkable. The UK will have to be either ” substantially in”, or “substantially out”, of the Customs Union.

Any concessions the UK might get to allow it to be partially in, or partially out, of the EU Customs Union for a given product or service, will have to be purchased at a price from the EU and from the other members of the WTO.  The whole process will be dragged out by other countries seeking an advantage in an apparently unrelated field.

It will drag on, and on.

HOW IRELAND SHOULD APPROACH THE BREXIT NEGOTIATIONS, WHEN THEY START

Theresa May’s commitment to the Common Travel Area (CTA) with Ireland is welcome, but the CTA is an understanding rather than an enforceable legal agreement. The extent to which it gives legally enforceable right to work in either jurisdiction will be tested in the negotiations. Spain will seek similar rights for Spanish workers working in Gibraltar.

How should Ireland approach the negotiation of UK exit from the EU?

Obviously, Ireland has more to lose in this than any other EU country.

But Ireland needs to be clear in its own mind that it is in the EU, and intends to stay there.

Ireland has  prospered in the EU, in a way it  did not prosper before it  joined and when it was dependent on the British market. Ireland has prospered thanks to foreign investment, which came to Ireland on the explicit assurance that Ireland would remain in the EU and that firms located in Ireland  would have full access to the EU single market.

Incidentally, the UK also did better economically in the 43 years since it joined the EU, than it did in the period before it did so.

There has been a lot of abstract commentary in the Irish media about the stance Ireland should take in the Brexit negotiations. Some have suggested that Ireland detach itself from the common EU negotiating stance. This would be a big mistake, because in trade negotiations size matters.

While the negotiations will be conducted by the European Commission, they will be intensely scrutinised at every meeting of the European Council, where Ireland will be represented by the Taoiseach. No move will be made without intense Irish involvement on the EU side.

Irish Embassies in every EU capital will be vigilant. Ireland will need to deepen its understanding of the fears and hopes of every one of its 26 EU partners, understand their history, and speak their languages. It is by framing Ireland’s goals in terms that the  other 26 can see is in their interests too, that Ireland will maximise its success in the Brexit negotiations.

As Brexit is a British initiative, it is proper that, as the first step, Britain should accompany its application to leave the EU, with a detailed prospectus setting out how its proposed relationship with the Customs Union might work, specifying how its proposals might be reconciled with WTO rules.

It is better that the UK identify any legal, practical , and logistical  difficulties, for itself and by itself.

In that way, it will own the problem, and own the solution.

It is not for the EU to tell the UK what to do, because that would just allow the UK to blame Brussels for the bad news, and blame others for problems that are INHERENT in what the UK itself is now looking for.

IN ANY NEGOTIATION, SIZE MATTERS

Of course, Ireland can continue to work with the UK on common problems. To the extent that bilateral discussions with the UK can smooth the overall path of the wider negotiations,  that would be welcomed by Ireland’s EU partners.

But Ireland would have to be entirely transparent with its EU partners in regard to any discussions it might have with the UK, on any subject that was part of the overall EU/ UK negotiations. That is vital.

On issues of importance to Ireland, the extra leverage Ireland will have, as a member of the EU team, will help Ireland get a much better deal than it could ever get, as a smaller country negotiating on its own, with a much bigger UK.

In any negotiation, size matters!

IRELAND MUST BECOME HYPER COMPETITIVE

Now that it is clear that we have to prepare for a hard Brexit, Ireland should adopt an aggressive strategy to improve its overall competitiveness.

That is how we will attract new business to Ireland, and withstand the destructive currency gyrations that unfortunately will be part of the Brexit process.

Ireland must become hyper competitive. The right action agenda for the government is to be found in the “Competitiveness Challenge”, presented to the government last month by the National Competitiveness Council.

In his foreword to the Report, the Taoiseach said “We need to continue our effort to control and reduce costs-whether for property, legal services, finance or energy”

As the Report points out, Ireland has the 5th highest productivity in the OECD, after Luxembourg, Norway, the US and Belgium. To overcome Brexit, we should aim now at first, not fifth, place on this table!

When the UK leaves the EU, we will still be competing with them, and they will be freed of the discipline of   EU state aid rules, and thus able, if they wish, to compete unfairly with us. Comparing Ireland with the UK, on the World Bank Rankings, the Competitiveness Council Report  says that,  for a business wanting to

+  get electricity, Ireland is in 33rd place, while the UK is in 17th place in the world

+  get a Construction permit, Ireland is in 38th place, while the UK is in 17th place

+  enforce a contract, Ireland is in 90th place in the world, while the UK is in 31st place (our case clearance rate in our courts is the worst in the EU)

+  trade across borders, Ireland is in 27th place, while the UK is in 13th place

+   get Credit, Ireland is in 32nd place , while the UK is in 20th place.

The remedy to each of these problems is different. It will usually involve action by several government Departments. So a “whole government” approach will be needed, with a narrow focus on dramatically improving Ireland’s competitiveness position in every area where our costs of doing business are too high.

The Taoiseach, and his office, are in an ideal position to drive this because he has unique authority to clear away road blocks caused by disputes between Departments.

PAY AND TAX POLICY MUST TAKE HARD BREXIT INTO ACCOUNT

 Making Ireland hyper competitive, so as to withstand a  hard Brexit, would provide a unifying agenda for the New Politics, going beyond the Programme for Partnership government, which after all agreed when Brexit  seemed unlikely.

If the national aim is to be hyper competitive, that must influence public sector pay claims. It strengthens the case for setting up a “Rainy Day Fund” to meet unexpected fiscal eventualities, and the case for a strong Independent Parliamentary Budget Office. We will not be able to afford to narrow our tax base. We should not spend today, what we are unsure we will actually earn tomorrow!

We will not be able to afford any work disincentives in our tax and income support systems, nor to have so many households where no one is working, an area where Ireland is worse than any other EU country.

The clarity we now have from Theresa May’s speech about the direction Brexit will take, is the signal we needed for a comprehensive plan to make the Irish economy hyper competitive, starting now, even before the UK writes its Article 50 letter.

 

NATIONALISM AND PERIPHERALITY…..TWO PROSPECTIVE LEGACIES OF BREXIT

bonnetThis long article by Andrew Duff, a former MEP, draws on the recent House of Lords reports on the subject, to illustrate how complicated the Brexit negotiations must inevitably become. 

After 40 years of interdependence and common rule making, the UK is now setting out to reconstruct the entire apparatus of a separate nation state, with separate rules, and separate rule making and  adjudication systems. This is how Theresa May has chosen to interpret the referendum result, by ruling out any jurisdiction of the ECJ.

A nation state apparatus, that would have sufficed in the 1960’s, will not suffice for the 2020’s, because the world is much more interdependent, more interconnected, and faster moving, now than it was then.

The exercise the UK is undertaking will involve establishing a new bureaucracy, to deal separately with all the regulatory questions that previously were delegated by it for collective decision within the EU. The EU superstructure will have to be replicated in London, at some cost.

The UK may want to develop separate standards for many goods and services, but, if it does so,  UK firms will have the extra cost of complying, not only with the new UK standards, but with EU standards as well for any goods and services they wish to export to the rest of Europe.

There will thus be duplication at firm level, as well as at government level.

The only way to minimise this would be to go for a “soft Brexit”, whereby the UK would adopt EU rules, but without having a vote on those rules.

Such an option may be sustainable business wise, but it will not be sustainable politically in the medium term.

It would represent a substantial diminution of UK “sovereignty” relative to the “sovereignty” the UK now has as a full EU member. This would soon become politically unacceptable to the British people.

One can easily imagine the anger of the “Daily Mail” about the UK having to enact, and enforce, EU standards, on which the UK had had no vote!  But that is what a soft Brexit would entail.

For these reasons, a “soft Brexit” will only be a temporary arrangement, and one should  not invest all ones hopes in it.

I am coming to the view, reluctantly, that the only viable long term options are either

  • a “hard Brexit” or
  • a decision by the voters of the UK to stay in the EU after all.

The latter seems very unlikely indeed at the moment, because UK voters will not want to admit they made a mistake. They have no sentimental attachment to Europe anyway and sentiment seems to trump economics in voter’s minds nowadays.

But that could change gradually.

British people are, many for the first time, now learning about what the EU really is.

At the best of times, British people were never very curious about the EU or how it worked. Now they are required to find out, as part of the exit negotiation. It will be something of a revelation!

For 40 years, UK voters have been passengers in the EU car. Now, having decided to get out of the car, they are taking a first look under the bonnet.

They will discover how interconnected the different parts of the engine are, and how difficult it would be to link into some, but not into all, parts of the engine.

The UK will have to build its own engine from scratch now, and decide in which direction it wants the new car to travel. There was no consensus at all on the latter point on the “Leave” side in the referendum. Some want a more globalised Britain, the majority wants the exact opposite.

Ireland will be a spectator in this process.

The physical isolation of Ireland from the rest of the EU, in the event of a hard Brexit, is a problem that will need much thought at EU level, in the interests of European solidarity.

Experts in logistics, transport and communications need to be brought together at EU level, to examine how the costs of this physical isolation of Ireland can be minimised.

Commisioner Verstager, who is responsible for EU competition policy, should look at what needs to be done to ensure that states that are physically isolated from the core of the EU, like Greece, Malta, Cyprus and Ireland,  can always participate on an equal basis in the internal market.

CHINA TRANSFORMED …..A NEW BALANCE OF POWER

china-flag-mapThe economic transformation of China is the most important global economic event of the past forty years. It has changed the balance of power on the Eurasian landmass, in ways we are only beginning to comprehend.

The economic transformation of China happened because, since 1979, there has been lively economic competition within China, something that was not allowed in the Soviet model.  China’s economy grew, while the centralised Soviet system stagnated. This explains why Communism survived in China, but collapsed in the Soviet sphere. China also grew thanks to the opening up of global trade, under successive rounds of trade liberalisation, which allowed China to build a powerful export sector.

Now China is having to transform itself again. Its export led model has reached its limits. Labour costs are rising because the big transfer of labour from farming to industry is over, and the Chinese population is beginning to age. The working age population of China peaked in 2015 and will decline from now on. Chinese exporters are being undercut by lower wage economies like Vietnam.

The Chinese economy has also reached environmental limits. The pollution level in some cities is dreadful, and the air is dangerous to breathe, even on an apparently clear day. I  experienced  this for myself when I visited China in the past fortnight on business.  Environmental losses reduce China’s GDP by 10%.

The proportion of its population living in cities will grow from 20% in 1978, to 50% today, and to 75% by 2030. This will lead to even more pollution, unless the cities are built to a different model. China is devoting a lot of research to this and may soon become an exporter of green technology. Necessity is the mother of invention.

Meanwhile China has an increasing number of well off, high spending, consumers. The Boston Consulting Group recently estimated that what it calls the “upper middle class” ( a group that can afford regular foreign holidays) will rise from 53 million today, to 102 million by 2020. Interestingly it estimates that, by 2020, the upper middle class in will reach 73 million in Indonesia, 32 million in India, and 21 million in Thailand.

At the other end of the scale, China has not got a well developed welfare system. The income gap is very wide. Stress is high. Parents are left looking after grandchildren back in rural China while sons and daughters seek work in the cities. There is a two tier labour market, under which long established city residents qualify for social supports, but recent arrivals in cities do not, and can remain in a precarious situation for years.

Nationalism is very strong in China, and one can foresee a clash between the American nationalism of Donald Trump, and the Chinese nationalism of the Communist party.

Both can exploit suspicion of the other, to rally political support internally.

The United States should be cautious. The abandonment of the Trans Pacific Partnership, by both Donald Trump and Hillary Clinton, will leave China in the driving seat, as far as trade policy in East Asia is concerned.  It is ironic that China increasingly sees itself as the defender of an open world trading system, while the United States adopts protectionist rhetoric.  Adding a conflict over the status of Taiwan to this mix could have unpredictable results.

If, under Donald Trump, the US moves closer to Russia, the EU may find its interests aligned more with those of China in some fields, like climate change.  This will be reinforced by the anxiety many of the central European members of the EU feel about Russian intentions, and Russia’s view that some of them should properly belong in a Russian sphere of influence, rather than being so closely aligned with Western Europe through the EU. Russian support for west European politicians like Marine le Pen is part of a strategy to undermine the EU.

Historically, China has been a supporter of EU integration, while Russia has been hostile, because it felt itself excluded from pan European security structures.  Russia feels itself hemmed in. Russia’s seizure of Crimea, and its involvement in the Syrian Civil War, can also be seen as attempts to break out of its strategic isolation and gain access to the Black Sea and the Mediterranean.

It is also to break out of its sense of isolation, that China has promoted its “one Belt, One Road” policy to link itself with Western Europe.

As a continuing member of the European Union, it will be in  Ireland’s economic and political interests  to play its full part in building a  balanced structure of peace on the Eurasian land mass, that protects the rights of small states, but  which also one that ensures that no great power feels itself hemmed in, or isolated. For that is how wars start.

 

FERGUS O’BRIEN RIP

former

I am deeply saddened to learn of the death of my great friend, Fergus O’Brien.

He had a distinguished career in politics, winning friends for his direct approach, in all parts of the political spectrum.  He was never silent when he felt the issues at stake were important. He was someone to whom I turned for advice many times.

His ministerial career was fruitful and contributed to the development of what was to become the IFSC, in Dublin’s , then semi derelict, dockland quarter.

I saw him during his illness and was struck by his positive attitude and his continuing interest in others, in his faith,  and in the country to which he had given such great service.

To Peggy and all his family I extend heartfelt sympathy.

WHO WILL PROTECT IRISH AND OTHER EU FIRMS DOING BUSINESS IN THE UK AGAINST DISCRIMINATION, AFTER BREXIT?

cropped-European-Union-flag-006-1.jpgMany Irish firms, and firms from other EU states, have extensive investments and trading interests in the UK. Indeed this must one of the most intense investment relationships in the world.

For the past 40 years, these investments have been protected by UK membership of the EU, which allowed firms, who might feel they were being discriminated against, in favour of British owned competitors, to appeal not only to the UK Courts, but also to the European Court of Justice(ECJ)

Yesterday the UK Prime Minister announced that , once the UK leaves the EU, the jurisdiction of the ECJ in the UK would be ended. Thus there will no longer be any, non UK controlled, arbiter to protect Irish or other EU investors in the UK against discriminatory laws by a future UK government. The UK has no written constitution.

Therefore it will be important that there be a robust independent investor protection disputes mechanism, capable of overturning discriminatory decisions that might be taken by the UK courts against the interests of EU owned firms.

 This must take immediate effect the day the UK leaves the EU.

It cannot wait for the longer term trade agreement the EU negotiates with the UK, which may take years to finalise. Investor protection clauses can be controversial, as we have seen with the TTIP negotiation, and are a reduction of “sovereignty” in the abstract sense.

But , given three factors

  • the highly nationalistic tenor of UK politics at the moment,
  • the dramatic ideological trends in the Labour  party, and
  • the likelihood of trade tensions between the UK and the EU,

Irish and other EU firms doing, or intending to do, business in the UK will need a very robust independent investor protection regime.  These three phenomena must be confronted realistically. We must not assume that everything will work out in the end. It may not!

Unless Irish and other European firms have concrete assurances that they will not face discrimination of any kind in  their activities in the UK after Brexit, they may have to commence disinvestment to protect their shareholders’ legitimate interests. The proposed “Great Repeal Bill”, reversing EU law in the UK, will need to scrutinised with immense care by  Irish and other European investors in Britain. Political assurances will not be good enough.

In the present atmosphere of UK politics, it is all too easy to envisage calls for discrimination in favour of UK firms in contracts with UK local authorities, in access to certain public services, and in standards for goods and services. All would be done, of course, in the name of “protecting British jobs”, or “defending British standards”.

If the ECJ is no available to protect Irish and EU firms from discriminatory practices on the UK market, alternatives will have to be agreed with the UK. These alternative mechanisms, investor courts in other words, will have to have the power, like the ECJ, of striking down UK decisions, including UK court decisions,  that they deem to be discriminatory against the interests of an EU investor.

These mechanisms are known as  an Investor-state dispute settlement (ISDS) or an  investment court system (ICS). They are an instrument of public international law and  grant an investor the right to use dispute settlement proceedings against a country’s government.

Provisions for ISDS are contained in a number of bilateral investment treaties, in certain international trade treaties, such as the North American Free Trade Agreement (chapter 11), the Trans-Pacific Partnership (chapters 9 and 28) and the Comprehensive Economic and Trade Agreement (sections 3 and 4). ISDS is also found in international investment agreements, such as the Energy Charter Treaty.

If an investor from one country (the “home state”) invests in another country (the “host state”), both of which have agreed to ISDS, and the host state violates the rights granted to the investor under public international law, then that investor may bring the matter before an arbitral tribunal.

The prospect of having to use such cumbersome procedures will undoubtedly be daunting and difficult for small firms.

This will be particularly difficult for Irish firms who have been used to treating the UK as part of their “home market” since 1966 and the Anglo Irish Free Trade Agreement.

In the aftermath of the original referendum decision, soothing statements were made by British Ministers about the position of Ireland, and about there being no “hard border. But Prime Minister May’s speech to her Party Conference yesterday represents a major shift in position. She is going for a “hard Brexit”, which inevitably means a “hard border”. She offered no assurances to Ireland.

Indeed it is hard to see how the UK could offer special protection to Irish firms investing in the UK that it was not also offering to French or Romanian firms.

The Irish food industry is heavily invested in the UK market. Before it joined the EU, the UK discriminated heavily in favour of UK farmers and against Irish exports. The food industry is far more complex now than it was forty years ago, and the opportunities for discrimination more subtle and more numerous.

The European Union will need to adopt a tough line on investor protection in the forthcoming negotiations and make sure these protections apply in full from the moment the UK leaves, and are not left to a wider long term negotiation.

THE APPLE DECISION……….GOOD FOR INVESTMENT IN EUROPE?

apple-euThe EU Commission decision that Ireland must collect 13 billion euros in back taxes from Apple has created quite a sensation. Most people agree that multinational companies can, and should, pay more tax. That general goal of the European Commission is widely supported.

The key question is whether Apple was given selective aid, and , if so, if this breached EU  competition rules.

It is therefore important to say that the Irish government never “selected” Apple for subsidy.

Apple, of its own accord, simply applied for, and was given, an interpretation of Irish tax law as it stood at the time (in 1991 and again in 2007). Any other company, in a comparable legal and factual situation, could have applied for, and got, a similar ruling.

It is important to stress that, in its interpretation of the meaning of Irish tax laws, the Irish Revenue Commissioners act independently of the government. Their relations with individual taxpayers, large and small, are confidential. They hold themselves to a high standard of objectivity and integrity.

The Commission ruling, going back and revising ten years of tax liability on grounds of competition policy, rather than of tax law, creates uncertainty for many other companies about their present liabilities.

At a time when too many companies are failing to invest and are, instead, paying down debt or accumulating piles of cash, this added uncertainty is not good for the revival of the European economy.

It may even encourage some companies to incorporate or invest outside the EU, where the Competition directorate of the European Commission will not have the same power to issue retrospective directives to national tax authorities.

The Commission decision in the Apple case attempts to change the way in which profits can be attributed, for taxation purposes, as between different parts of a multinational company’s structure.

Previously, companies could get authoritative guidance on what was permissible in this respect from the relevant national tax authorities. This was possible because taxation was understood by companies to be primarily a member state, rather than an EU, competence.

Now companies will no longer be able to rely in the same way on these rulings, but will have to seek clarity from the European Commission on whether a ruling could be construed as offering a “selective” advantage to the company. In light of the Irish experience, revenue authorities of member states will be very cautious. All doubtful cases will tend to be referred to Brussels. This will add greatly to the burden of work of the Commission, and will entail an extension of the Commission’s field of activity. Commissioner Verstager herself has said that companies should double check the compatibility with EU Competition and State aid rules of the rulings they have been given by their national tax authorities.  

As the corporate structures of multinationals vary considerably, the national tax ruling on each of them will have to be individually examined and adjudicated upon as to whether “selectivity” of some kind is involved.

The test of whether a ruling is illegal, in the Commission’s eyes, is whether it is “selective”. “Selective” is defined as giving a company an advantage over other companies in “comparable legal and financial situation”. As the factual situation of every company is different, this leaves a lot of room for subjectivity and argument.

The Commission will have hundreds of thousands of tax ruling of the 28 member states to review, and so far it has only looked at a thousand.

The Apple ruling also raises  new questions about which country is responsibility for collecting the taxes on particular profits, depending. Up to now, it was understood that a country was expected to collect taxes on profits on activities within that country. Now, Ireland is being told it must to collect the 13 billion euros from Apple even though, in Commissioner Verstager’s own words, “other countries” may actually be owed the money, not Ireland.

Much of the profit may actually be derived from activity undertaken by Apple in the United States, and any tax to be collected it may belong to the US. But Ireland now is told it must collect the money anyway. This is new form of universal jurisdiction!

This precedent will increase uncertainty, jurisdictional disputes, and compliance costs. Yet the Commission is promoting TTIP, precisely in order to reduce uncertainty and compliance costs. The form of the Apple decision sends a directly contradictory signal.

I believe it would have been wiser for the Commission to concentrate its attention, in a forward looking way, on ensuring the uniform and rigorous implementation of the EU Anti Tax  Avoidance Directive which has already been approved by all member states, including Ireland.

The determination of the amount, and the collection, of back taxes should be left to national tax authorities, who, after all, have plenty of incentive already to go after the money!

PETER BARRY

peter barryThe loss of Peter Barry will be felt deeply throughout Ireland, but particularly in the city of Cork to which he devoted a life of public service.

Peter represented all that is best in Cork, its culture, its pride and its intimacy as a city. He knew, and was loved and respected, by his neighbours in Blackrock.

Just as I never heard Peter Barry say a bad word about another person, I never heard anyone ever say a bad word about him. This was perhaps the key to his success  as international diplomat on behalf of Ireland. He won respect without ever needing to command it. The inherent dignity of his personality sufficed to ensure that he always got a fair hearing for his views.

He was a crucial figure in the history of Fine Gael. At a time when Jack Lynch was dominant in Munster politics, Peter Barry’s election to the Dail in 1969 reminded the people of his province that there was an alternative, ready to govern.

That alternative government came to office in  March 1973, under the leadership of Liam Cosgrave, and Peter Barry was among its senior cabinet members. Serving in the portfolios of Transport and Power and in Education, he held his own in a government of many talents.

Among the practical matters he promoted as Minister for Transport and Power, was the completion of rural electrification. Even then, there were places in Ireland, like the Black Valley in Kerry and Ballycroy in Mayo that, because of their remoteness, did not have a supply. In 1976 put through the legislation to ensure that those remote areas at last got that requisite of a modern life, an electricity supply.

He was briefly Minister for Education, and in that capacity, I was his parliamentary Secretary (Minister of State).

In Education,he continued the implementation of the important reforms of his predecessor Dick Burke, establishing management boards for schools and the Transition Year.

He was deeply committed to the Irish Language and to all aspects of Irish culture.

But he also had an interest in the development of the European Union. He supported the late professor Jim Dooge, who chaired the committee at EU level that lead to Single European Act, which was the reform of the EU treaties that created a genuine single EU market for goods and services.

As has been pointed out by others in the last two days, his central achievement as Foreign Minister was the negotiation of the Anglo Irish agreement.

This agreement ended the international isolation of the nationalist minority in Northern Ireland. It created an institution, the Anglo Irish Conference, that ensured the governments in London and Dublin were required to work on ongoing basis to ensure fair treatment of both communities.

The very existence of the Conference, created by the Agreement, provided a safety valve for the discussion of differences that inevitably arose, from time to time, between the two governments. Rather than these differences becoming the subject of megaphone diplomacy, discussion of them could  be referred to the next meeting of the Conference. This allowed time for things to cool down. In a sense, this typified Peter Barry’s approach to politics. He combined conciliation with firmness and his calm demeanour lowered the temperature and allowed others to take the time to find a more constructive way forward.

Looking back over his early contributions in the Dail debates. I am struck by the number of occasions of which he raised the issue of unemployment, particularly the level of unemployment in Cork.

During our time together in cabinet in the 1980s, there were a number of major setbacks to employment in Cork, notably the closure of Dunlops and Fords. As the Minister responsible for employment at the time, I remember well the persistence of Peter Barry’s representations to preserve employment in Cork. It was partly as a result of his efforts that an Employment Task Force for Cork was set up at that time, and I believe some of the initiatives taken by that Task Force laid the foundation the tremendous industrial renaissance that took place in Cork and around Cork Harbour.

Peter Barry was immensely loyal to his friends. He was loyal, in every possible way, to each of the Fine Gael leaders under whom he served. I have particular reason to remember that deep appreciation.

 I believe that the loss of his wife, Margaret, was felt very deeply by Peter. They were an exemplary couple in every way, and Margaret’s support of Peter in his political life was vital to him. They inculcated in their children a deep sense of public service.

Peter Barry was a credit to Ireland and to Cork.

COMMEMORATIONS REVEAL WHAT WE BELIEVE TODAY

cropped-irish-flag.jpgPresident John Kennedy once said that a “nation reveals itself “ by the events and people it chooses to commemorate.

This state is a rule of law based, parliamentary democracy, which has integrated itself with its European neighbours by peaceful negotiation and compromise, which is militarily neutral, and where its military power is subordinate at all times to the civil power.

If we decide that we were to choose from our history a “foundation event”, and chose as that foundation event the 1916 Rebellion and Proclamation, does that accurately reflect, or reveal, who we really are in 2016?

That is the argument I would like to explore today.

I believe our democratic state of today in fact came into being as the result of a process, not of one event.

A PLATFORM THAT LEFT NO ROOM FOR COMPROMISE AFTERWARDS

The Rebellion of 1916 was launched on a platform that left no room for compromise.

The Proclamation, which our schoolchildren are now being asked to regard as the founding stone of our democracy, left no room at all for democratic negotiation.

Therein lay the seeds of Civil War because, in politics as in life, compromise and negotiation are essential to a civilized life.

Rather than the Republic being proclaimed, on the steps of the GPO, in the name of a living Irish people, whose opinions had been taken into consideration, it was proclaimed in the name of

“God and the dead generations”,

 neither of whom could be consulted about what they meant.

 The rights of the proclaimed Republic were not conditional on consent, but were

 “sovereign and indefeasible”.

By definition, the Irish people would thus have no right to compromise the “sovereign and indefeasible” rights of the Nation, which was treated, in the wording of the Proclamation, as something separate from the people.

IGNORING THE ULSTER PROBLEM

The fact of fierce resistance in North East Ulster, even to Home Rule Administration, let alone to a Republic, governing Ulster from Dublin, was fully known to the signatories of the Proclamation

But in what they wrote in their Proclamation, this political reality was swept aside, as if it did not matter at all. This was politically irresponsible and showed no understanding of Irish history.

The only oblique reference to the Ulster problem in the Proclamation was a promise to cherish all the ”children” of the nation equally, and to be “oblivious of the differences carefully fostered by an alien government”.

It is worth reflecting on the assumptions being made here. Ulster Unionists were “children”, and normally children were in that era expected to be obedient, whatever they might think themselves.

The wish of Ulster Unionists not to be governed from Dublin, was assumed by the Proclamation’s signatories, not to have been a conclusion that they had come to freely themselves, but only the result of “careful fostering” by an alien government”.

At the very least, this did not show very much respect for the seriousness, or the  reasoning powers, of those who had signed the Ulster Covenant, only five years previously.

INCONSISTENT WITH MILITARY NEUTRALITY

The Proclamation acknowledged the support received from “gallant allies” in Europe, namely the German, Austrian and Ottoman Empires. It was not neutral in the war. It took the German side.

The Proclamation sits oddly beside the present Irish policy of inflexible military neutrality, one that requires a UN Security Council resolution, for Ireland even to allow it forces to go overseas defend another EU country that might be attacked.

THE NATURE OF THE SUBSEQENT STRUGGLE PREORDAINED

It is important also to stress that the 1916 Rebellion was not launched just to fight FOR, or to obtain, an Irish Republic.

The Republic was proclaimed already to exist, once declared outside the GPO, and to exist as a “Sovereign Independent State”, of 32 counties.  No room for compromise there.

Such a state does not even now exist. Yet its existence was declared to “indefeasible” in the words of the Proclamation. A recipe for endless conflict.

It is on the strength of, and in pursuit, that unfortunately absolute and unqualified claim, that people continue to be killed, including Adrian Ismay a couple of weeks ago.

Those who declaim the Proclamation, as many have been doing at pageants in recent weeks, should think about what its words mean, and what they led to.

That is aptly described in a 1924 quotation, from a member of the IRB Supreme Council at the time of the Rebellion , about the what  1916 led to, right up to until 1923 in this part of Ireland, but much longer, in the other part.

 PS O Hegarty said

“ We turned the whole thoughts and passions of a generation upon blood and revenge and death; we placed gunmen, mostly half educated and totally inexperienced, as dictators with powers of life and death over large areas. We derided the Moral Law and said there was no law but the law of force….Every devilish thing we did against the British went it’s full circle and then boomeranged and smote us tenfold”[1]

That is what the decision to initiate military action in 1916 led to, in the opinion of one of those who took it. He faced up to the consequences of that decision, while his memory was still fresh.  He knew what he was talking about.

As well as reading the Proclamation, Irish schoolchildren, 100 years later, should be invited to read PS O Hegarty’s words.

 WE SHOULD REMEMBER THE FIRST VICTIMS

And it needs to be said that it was not just “the British” who were killed as a result of the decision to start a Rebellion in a heavily populated, built up, area in 1916.

For every Volunteer killed (including those executed afterwards), three Dublin civilians died as a result of the fighting the Volunteers’ leaders had initiated.

The first casualty to die, on Easter Monday, was James O Brien, an unarmed DMP policeman from Limerick, shot in the face at the gate of Dublin Castle.

Another early unarmed DMP casualty of the Volunteers was Michael Lahiff, a 28 year old Irish speaker, from the West of Ireland, shot in cold blood on St Stephens Green.

Michael Cavanagh, a Dublin carter, who tried to retrieve his cart from a Volunteer barricade, was executed by the Volunteers.

 These were not “Brits”.

 They were Irishmen.

 They were the first to die.

 Their pictures adorn no public building, this Easter in Dublin, but they should.

The prominent display of the pictures of these men, 100 years after they were killed, would have reminded future generations of the real cost of 1916. Unfortunately that opportunity has now been lost. It seems that , even after 100 years, to have done that would have been  too much of a challenge to ancient myths, too much of a challenge to our ability to reimagine things.

O Brien, Lahiff and Cavanagh are still being treated by official Ireland as mere “collateral damage”, as they were treated by the people who killed them.

One must indeed ask the question of whether killing unarmed people is ever justified in war.

JUST WAR PRINCIPLES MUST BE APPLIED, TO THE PAST, AS WELL AS TO THE FUTURE

One must also ask the question whether this particular war was justified.

When it comes to taking life, moral questions always arise. Such questions should be at the centre of any commemoration, especially one we have decided to hold the commemoration on the same day as the great Christian feast of Easter.

Was the decision to take up arms in 1916 in accordance with “the Moral Law” in O Hegarty’s simple and clear words?

It is especially important to ask that question now, because the Irish State has chosen to place such a huge emphasis on enthroning the 1916 Rebellion, as the supposed foundation event of our democracy, in the uncritical minds of today’s schoolchildren.

Given that one of the purposes of education is to pass on a moral sense to the generation, it is vitally important that the morality of the decision, to initiate killing and dying in 1916, be examined by, and for, these schoolchildren.  That is a responsibility of the Irish State, and if it fails to discharge it, it is failing the next generation.

Let me cite an example of the sort of moral blindness that pervades the current commemoration of 1916.

I read a history professor, in a Sunday newspaper recently,[2] say that to have expected those who started the rebellion to  have sat down beforehand and examined

 “whether what they were planning met the criteria for a just war, makes no historical sense”.

Really!  “Makes no historical sense”?

That is like saying that moral considerations ought have no weight,  in the taking other people’s lives.

Of course the leaders who initiated the Rebellion should have examined whether the course they were embarking upon conformed to morality. I am sure some of them actually did so

To say that it “makes no historical sense” (whatever that means!) to use moral considerations, in judging the past, is dangerous nonsense.

We study history is to learn lessons that are valuable to the future…so that, drawing on past experience, we can better weigh up, in the most informed way possible, in light of evidence from the past, what is right and what is wrong.

It is that moral sense, in my view, that makes us human. It is the mark of a civilised man or woman.

The decision of the IRB, Irish Volunteer, and Citizen Army leaders to initiate military action in 1916, was a FREELY TAKEN decision, it was not taken in self defence, so must be examined against  the criteria for a just war

These criteria for a just war include the following.

 WHO IS ENTITLED TO LAUNCH A WAR?

“Only a competent authority or popular representatives has the right to start a war or insurrection”.

Interestingly the IRB’s own constitution of 1873 made exactly this point.

It said

 “The IRB shall await the decision of the Irish Nation as expressed by the majority of the Irish people as the fit hour of inaugurating a war against England.”

 By no stretch of the imagination could that criterion be said to have been met, before the killing was started on Easter Monday.

RESPECT FOR MILITARY DISCIPLINE REQUIRED

Furthermore, as far as the Irish Volunteers were concerned, the rebellion was initiated in direct contravention of the orders of their military commander, Eoin McNeill.

 This is a serious issue for today and for the commemoration of what happened a century ago, given the prominent involvement of the Irish Army in this centenary commemoration .

 An orderly state, and the proper civilian control of the army serving such a state, is vital to civilization.  The maintenance of an orderly state requires scrupulous respect for military discipline, and careful respect for the chain of command, when it comes to the taking of life. Both were seemingly ignored when violence was initiated in Dublin 100 years ago

 The contravention of military orders of Eoin McNeill in 1916 should not be celebrated, without serious and well explained reservations.

A JUST CAUSE?

Another criterion for a just war is

“War requires a just cause: armed aggression or governmental policies (eg genocide) threatening the civilian population”

Ireland was not being attacked in 1916. In fact the Volunteers were allowed by the authorities to drill freely, something that would not be allowed nowadays.

 Governmental policies, in the previous years, had, [i] in many respects, been particularly beneficial to Ireland

 Old Age pensions and social insurance, from which Ireland was a net financial beneficiary, had been introduced.

 The landlord system had been completely overturned.

All that had been achieved by democratic methods.

Furthermore, the principle of legislative independence for Ireland had already won from the Imperial Parliament, in September 1914, by the passage into law, and signature by the King, of the Home Rule Bill.

 All that happened BEFORE any rebellion here, and, as Conservative leader Bonar Law subsequently admitted, there was no going back on Home Rule.

 The point of principle was already won without a shot being fired.

A LAST RESORT?

Another criterion for a just war, is that war should be a last resort, not a first recourse. All other methods of redressing grievances ought to have been first exhausted.

 Given that the principle of Irish legislative independence had already been conceded, in a Bill passed into law only a year and a half previously, it is hard to argue that starting a rebellion in 1916, and the War of Independence of 1919 to 1921, were, either of them,  a “last resort”. In fact much of what was being sought had already been conceded in principle and in law. Home Rule was law and there was no going back on it.

 For example, Home Rule was accepted even by the Conservatives as a “fundamental fact”, the only issue outstanding being that there be no “forcible coercion of Ulster” to go in under it.[3]

 The only open question was whether, or in what conditions, Home Rule might apply to Antrim, Down, Armagh and Derry (and perhaps Fermanagh and Tyrone which had narrow nationalist majorities).

 I believe the Home Rule government would not have got jurisdiction over all those counties. But, after all the killing and dying of the 1916 to 1923 period, and the Treaty of 1921, the Free State did not get jurisdiction over those counties either!

  Nor after the “Armed Struggle” from 1970 to 1998, does this State have such jurisdiction today. Indeed, under the Good Friday Agreement, we no longer claim it, but respect the right of the people of Northern Ireland to decide their own future in that regard.

WOULD 1916 METHODS EVER HAVE ACHIEVED A UNITED IRELAND?

 If we ever do have a United Ireland, it will not be achieved by the methods used in 1916. Our centenary Commemorations should realistically acknowledge that

But, under Home Rule, if the exclusion of some Ulster counties was once accepted, there was no barrier in the way of the rest of Ireland progressively winning ever greater degrees of sovereignty. That could have been achieved by peaceful negotiation, if it was what the voters of the 26, or 28, counties wanted.

Further, the 4 or 6 counties , if excluded from Home Rule, would have been under direct rule from Westminster. There would have been some continuing southern Irish representation in Westminster too. This would have meant much better protection for the northern nationalist minority than there were under the Stormont arrangements,  that were set up in response to the Armed Struggle initiated in 1916.

 Indeed some of the powers withheld from the Home Rule Administration in the first place were only withheld , to reassure Ulster Unionists, because  it was envisaged,   in the original Home Rule Bill, that  that all 32 counties would be fully included from the outset.

 The same principle of legislative independence, conceded to Ireland in September 1914, was conceded b to Canada, Australia and other dominions.  We know now that they all proceeded to full sovereignty, without   the suffering and bitterness of war.

 The path of violence, started upon by Pearse, Clarke and others in 1916,and followed from 1919 to 1923 by their imitators, was traversed at a terrible price .

 Given the value Christians place on each human life, those who take life, have the primary burden of proof to discharge. It was for them to prove that no other way was open.  I believe that burden of proof was not discharged.

TWO WRONGS DO NOT MAKE A RIGHT

Some may seek to justify the 1916 Rebellion on the ground that the UVF had threatened violence in 1911. That is to claim that two wrongs make a right, not a view I accept.

Others may justify it because there was a war on anyway, the Great War. Again this is an argument that two wrongs would or could add up to a right.  The Anglo Irish War, started in 1916, was a separate conflict and, as such, it must be justified or not, on its own merits.

I believe it was not necessary or justified.

WHY HOME RULE COULD HAVE LED PEACEFULLY TO INDEPENDENCE

Home Rule, already law, could, if it had been allowed to do so and had not been derailed by the 1916 Rebellion and the 1918 Election result , have led this part of Ireland peacefully to the same position of Canada enjoys today, if that was the wish of its people.

 I say this for a number of reasons.

 Home Rule Parliaments would have elected under the same wide suffrage that applied in 1918.

 Sinn Fein might have won significant representation in the Home Rule House of Commons, as would the Irish Labour Party and the group led by Tim Healy. All three groups would have pressed for ever greater degrees of independence, going beyond Dominion status.

It is not credible to say that the UK would have denied, to a Home Rule Ireland, the powers it freely granted to dominions like Canada and Australia, under the Statute of Westminster of 1931, if that is what the Irish people really wanted.

The suffering of the War of Independence was not needed to achieve Dominion Status.

 In the 1918 Election, the policy of the Irish Party, led by John Dillon, was Dominion Status for Ireland. So also was the policy of the Asquith Liberals and the Labour Party. The policy of the Coalition Government remained the implementation of Home Rule, on the basis on which it had been passed into law four years earlier.

 The policy of Sinn Fein, led by Eamon de Valera, was complete separation of the 32 counties from the UK on the basis of the 1916 Proclamation.

 Sinn Fein won the election but, after all the killing in the War of Independence, all they ended up with was Dominion status, the very policy of John Dillon, and their other defeated Irish party opponents.

Therein lay the roots of the Civil War from 1922 to 1923.

 After all the deaths of the War of Independence, the separatists had to accept, in the Treaty of 1921, the exact policy of their democratically defeated Irish Party opponents of 1918.

It is said that Home Rule would have left British forces on Irish territory. But so also did the Treaty of 1921. It left the UK military in control of ports on Irish territory.

 But these ports were handed back in 1938, through entirely peaceful negotiation.  The fact that those ports could be won back by purely peaceful negotiation on the eve of World War Two, shows that the limitations on Home Rule could also have been negotiated away, peacefully.

TO LEARN FROM HISTORY WE MUST ASK” WHAT IF?”

If a nation is to learn anything at all from history, it must be willing to examine, using all it knows now, what might have happened, if different historical choices had been made.

 The choice to use force in 1916, and again in 1919, must be subjected severe and honest reappraisal, in light of what we can see now might been achieved, without the loss of life .

 If we fail to do that, we are passing on to the next generation, through  “indoctrination by commemoration” , a  dangerous misunderstanding of history.

 The focus on  the  1916 Rebellion and particularly on its uncompromisingly worded  Proclamation, is a worry at a time when  there is such a level of disdain for” politicians” and for the compromises that are a necessary part of democratic  politics.

WE SHOULD INCULATE RESPECT FOR POLITICAL COMPROMISE…AND AVOID IMPLACABLE PROCLAMATIONS

 Redmond and Dillon, whose achievement of getting Home Rule finally passed on 18 September 1914, a feat that eluded O Connell and Parnell, were “politicians”, who achieved what they did by tough but peaceful parliamentary methods. That centenary, two years ago, of an achievement by these mere “politicians” was almost completely ignored by the Irish State.

 Like WT Cosgrave and Eamon de Valera after them, those “politicians”, Redmond, Dillon and Devlin, LIVED and worked for Ireland .

 But that’s apparently not romantic enough to “re imagined” by our poets and seers.

 But THEY got the job done. They got Home Rule passed into law, they won back the land

 In contrast, the 32 county Republic, proclaimed at the GPO in 1916, never came into existence.

 This was for reasons that were knowable at the time, namely the implacable resistance of Ulster Unionists. These reasons were knowingly ignored because they did not fit into the ideology of the Proclamation, and of those who drafted it.

 That needs to be explained to Ireland’s schoolchildren, too.

[1] PS O Hegarty, The Victory of Sinn Fein (Dublin Talbot Press 1924) page 91

[2] Souvenir Supplement of the “Sunday Times” 13 March 2016, page3

[3] “Irish Times “ , 18 November 1918

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