Speech by Brian Hayes MEP to the MacGill Summer School – Friday 21st July, Glenties
“Enda Kenny once remarked that Ireland could become the best small country in the world to do business in. My vision for my country is that Ireland could become the best small country in the world in which to live in. A country that could change ahead of time. A country that was genuinely a meritocratic society. A country that prepared for hard times. A country that valued every person and was a beacon internationally for the decent society. A bridge between old and new Europe. And the essence of the plan – a five point plan if you like.
So my five point plan consists of the following,
1. The need for centre ground politics.
2. Why Ireland needs a new relationship with the EU.
3. Ireland a core country of the Eurozone.
4. The relentless need to benchmark ourselves.
1. The Need for Centre Ground Politics
“I don’t believe we can move forward as a country, even with the wind in our sail, unless we have a government that enjoys majority support in the Dáil. For whatever reason, it’s not in our political DNA to reach out and compromise – yet we need it now more than ever.
“After the next election, what is really needed is a majority in the Dáil over a five year period. The only logical centre ground government has to be FG/FF in a grand coalition for a 5-year term. I believe such a government could make the right choices for the next generation sure in the knowledge that they would have a working majority in the Dail. It works in other countries it can work here. In the meantime it’s in the interest of centre ground politics that the current government lasts as long as it can and, Fine Gael’s perspective it’s crucial that it does not take FF for granted.
2. A new relationship with the EU
“Brexit, a more optimistic view of the Eurozone and defeat for now of the hard right in some countries – provides a good back drop for Europe right now. Suddenly the EU is not looking as sick as it did. As Europe comes back from the financial crisis – just like Ireland – I believe we need to pivot to Europe. That our attitude needs to change. That our politics needs to take the EU politics much more seriously. We are one of the oldest EU member states. We need to build new partnerships from the Baltics to the Benelux countries. We need to review our contribution to EU security while having a mature debate about our traditional policy on neutrality.
Our own difficulties around the collapse of the country in 2010/2011 have conveniently allowed many people to believe that it was all the EU’s fault. That the debt was imposed upon us to save German banks or that in some way we could have dodged the bailout had the EU intervened. All of that is economic and political fairytale. The reason Ireland entered a financial assistance programme was because our tax base collapsed, based on a big fat property bubble. Europe didn’t guarantee the banks; we did.
3. Making Ireland a core Eurozone country
“Being part of the Eurozone core is something we should strive for. That means getting our debt down well below 60% of GDP – I think we should aim for 40% within the next 10 years. Yes our debt levels are very high. But a decade of sustained growth – averaging out at 3% – would make a great difference in reducing the actual debt and the cost of servicing debt.
“The key priority right now – must be about getting to a balanced budget next year – what a remarkable achievement that would be. What many commentators do not fully appreciate is that under the Fiscal rules, we will have reached our Medium Term Objective if we achieve this next year and then all the talk about the restrictiveness on fiscal space will fade away. By getting to a balanced budget you then have the flexibility under the existing rules. Until we reach a balanced budget, the expenditure benchmark rule limits our spending levels.
4. The need for benchmarking.
“In the future what’s needed for Ireland is a relentless benchmarking exercise – comparing ourselves against what other similar sized EU countries are doing. They can also learn from us.
“We also must ensure that real growth in current expenditure should never exceed where we see real GDP growth in the economy. We should also make sure, in so far as possible, that increases in expenditure are not of the permanent variety. We should put aside as much as possible for the rainy day, preparing for the worst. And finally we need to respect the advice of the Fiscal Advisory Council.
5. Going global is good for Ireland.
“The one country in the EU that has gained most from globalisation is Ireland. Yes you can become fragile as the world economy dips, but the upside brings real prosperity. We have no fear in embracing globalisation. We are better educated and have an enormous FDI footprint which helps our trade and our connection to the rest of world.
“In the 8 years since 2008, world trade has only increased by half the rate in comparison with the 8 years before. 90% of growth this year is not in the EU. Europe needs trade deals like TTIP and CETA – freeing up markets and opening up trade – as part of its comeback since the financial crisis. And Ireland is perfectly located as an English speaking bridge to the US to help Europe deliver on trade.
Irish living in UK should have a right to vote in the
next European Elections – Hayes
Majority of EU Member States allow their citizens living outside the EU the right to vote
50,000 UK citizens living in Ireland should continue to be able to vote in EU elections
Speaking in London at a public meeting organised by Votes for Irish Citizens Abroad (VICA), Fine Gael Dublin MEP, Brian Hayes said that a way should be found to accommodate Irish citizens living in the UK to vote in the next European Parliament Elections in 2019.
“Over 331,000 Irish citizens live in Britain. Not only are they Irish citizens, they are also EU citizens. Currently they can vote in European Parliament elections while living in Britain. That is going to change because of Brexit and I believe their right to vote should be upheld.”
The Dublin MEP said that the majority of EU Member States do not deprive their citizens of the right to vote when living in another country.
“Ireland, Czech Republic, Malta and Slovakia are the only EU Member States who do not allow their nationals living outside of the country the right to vote in their home EU elections. All other Member States have systems in place to facilitate some form of non-resident voting in EU elections.”
“Austria, Finland, France, Netherlands, Spain and Sweden grant their nationals the right to vote irrespective of their country of residence. Other Member States such as Belgium, Denmark, Greece, Italy and Portugal gives a choice of voting to their non-resident nationals – either voting in their home country or country of residence, provided that they are living in an EU Member State.”
“Ireland is firmly in the minority when it comes to granting voting rights to non-resident citizens and is set to be marginalised further as Malta intends to offer its citizens in Belgium, UK and Italy the right to vote in the next European Elections in 2019 as part of a trial process.
“Under EU rules any EU citizen can vote in EU elections in any of the 28 Member States. This means that Irish citizens in the UK can register to vote in the European Elections in the UK.”
“However, when the UK leaves the EU, Irish citizens will automatically lose their right to vote in EU elections. In contrast; French, Dutch, Spanish and other nationalities residing in the UK will be eligible to vote in their home country.”
“I want the Government to look at this issue to see if a solution can be found. A simple change to the Electoral Act would suffice in extending voting rights to Irish citizens in the UK. The following steps might provide a way forward in advance of 2019.
- Allow Irish citizens, living in any part of the UK the right to vote in European elections in Ireland, provided that they were “ordinarily resident” in the Republic of Ireland within the last 10 years. (i.e) that at some point in the past 10 years a person was on the Irish electoral register before moving to the UK.
- You continue to vote where you were registered before as EU Elections in Ireland are determined by where people live in one of three constituencies – Dublin, Ireland North West and Ireland South.
- In advance of Election Day, registered voters living in the UK would vote via postal ballot as is the case currently for members of the Defence Forces or alternatively a number of polling stations across the UK could be established for the purposes of allowing people vote or for the purposes of voter identification.
“Conditions for the eligibility to vote in European elections are governed by national law. Ireland is therefore able to extend voting rights to Irish citizens in the UK. No referendum is required. Similarly, Ireland could extend the right to vote in European Parliament elections to the 50,000 UK citizens registered to vote in Ireland. I have previously called on the Government to examine this so as to uphold the rights of UK citizens living in Ireland, effectively recognising UK citizens living in the European Union.
“Given the unique relationship between Ireland and the UK and the fact that other EU nationals living in the UK will continue to vote in European Parliament elections post Brexit – why should Irish citizens be disadvantaged? The European Parliament derives its authority from a directly elected mandate. It has grown since the Lisbon Treaty into a genuinely important voice for EU citizens. Brexit should not diminish the rights and democratic expression of those who want the EU to succeed and prosper.”
Auto-enrolment pension system should be in place by 2020 – Hayes
Brian Hayes MEP today called on Minister for Social Protection Regina Doherty to start work for the introduction of an auto-enrolment pension system where all Irish private sector employees would be automatically enrolled in a pension scheme.
“A roadmap needs to be put in place for the introduction of an auto-enrolment system for all Irish businesses. The new Cabinet needs to make it a priority to ensure that an auto-enrolment system is put into Irish law by 2020. This is something that can be done through cross-party agreement.
“There is a pension time bomb coming down the tracks, there is no doubt about that. Our pension system is going to become more and more squeezed as our population inevitably gets older. It is a very good thing that people are now living longer and that we have a healthier society. But we need to address the funding of our pension system if we want our pensioners to be well-protected into the future.
“The Citizen’s Assembly recently voted for a mandatory pension scheme to be introduced to supplement the state pension. There is consensus around this issue and now that the economy is improving we should take the opportunity to encourage people to save for the future.
“I believe that to begin with we should have a system whereby every employee is automatically enrolled in a pension scheme to which they should contribute at least 1% of their monthly salary which is matched by their employer. This should be done with a view to increasing overall monthly pension contributions to 8% of monthly salary. Of course, employees should be given a short period of time in which they can choose to opt-out of a mandatory pension scheme.
“While there needs to be sufficient lead in time to such a policy, we have to recognise that Ireland’s pension system is still behind the curve. In 2012, the UK introduced an auto-enrolment system which is at early stages but is working well and providing long-term sustainability. Auto-enrolment systems have been introduced in Australia, New Zealand and similar systems exist in the Netherlands, Sweden and Denmark. These countries are recognised as world leaders in pensions.
“In Ireland we are far too dependent on our state pension system. We have a very low take up of workplace pension schemes. Less than 40% of Irish workers are covered by a workplace pension scheme. The best way to deal with both of these problems is through an auto-enrolment system which reduces dependency on the state system and ensures people have supplementary pension pots built up.
“A recent global study of pensions called the ‘Melbourne Mercer Global Pension Index’ stated that Ireland’s pension system is good but has serious sustainability problems into the future. It is time that we had a real open debate about pensions in Ireland. Politicians cannot kick the can down the road as this will inevitably come back to haunt us.”
Stakeholder consultation addresses how fintech should be regulated in Ireland- Hayes
Brian Hayes MEP today (Friday) held a stakeholder conference in Dublin, with industry experts involved in the Fintech sector, to discuss how new Fintech services and products should be regulated into the future. The event was held in the European Parliament information office in Dublin from 09.00-11.00 and included industry representatives from banking, insurance, start-ups, asset management and accountancy.
Mr. Hayes said: “We are all well aware of the major impact that Fintech is having on the financial sector and the way that we deal with money. In May the European Parliament was the first EU institution to set out a clear position on how Fintech should be regulated into the future in the EU. The European Commission is currently conducting a public consultation on Fintech with a view to defining an EU strategy on Fintech.
“Today’s stakeholder consultation was a discussion forum for how Ireland should develop a fintech ecosystem which both allows for innovation in financial services as well as maintaining the high level of financial stability that has been put in place since the crisis.
“We are living in the midst of the disruption age. Technology today makes such a difference in winning new markets and growing your business. It is the defining mark of business success or failure in today’s globalised world. This trend will multiply over the next decade, as it has in the last.
“In Ireland, we need to embrace Fintech. We’ve done reasonably well so far but we’re still very far off reaching the full potential that this new digital finance world can offer. Look at the UK, look at Netherlands – they’ve created an innovative space where new financial technology solutions can flourish. The main reason for this is through the creation of ‘regulatory sandboxes’. A regulatory sandbox is a controlled environment set up by a regulator or central bank that allows businesses to test innovative products, services or business models in a live setting.
“It is time that the Central Bank, in collaboration with the Department of Finance, developed a regulatory sandbox for Irish financial firms to test new and innovative products before they go to market. The great thing about a sandbox is that small businesses who are unauthorised can test their ideas before they go through the long authorisation process. The creation of a sandbox in Ireland would give us the confidence to take a giant leap into the FinTech world. We have a fantastic start-up culture, particularly in Dublin, that would welcome this with open arms.
“But in all of this it is important that people are not left behind. Assumptions about the level of personal tech competence or knowledge, cannot be taken for granted. And of course assumptions about the level of national or regional connectivity, also need to be understood. Pretending that people should use online services without proper broadband is another dangerous assumption.
“Equally the financial sector cannot underestimate the degree of trust that was sundered as a consequence of the financial crisis in Europe and especially in Ireland. Europe has helped Ireland in restoring financial stability both in our public finances and in our banks. That stability cannot be put at risk. As financial services move at warp speed into the digital age, with new technology and an enhanced product and service offering, underlying all of this must be financial stability. Trust in banking and trust in financial services must be earned.
“The EU is in the midst of its most radical plans for completing a Digital Single Market. Being part of this single market is so crucial for small fintech firms and we need to harness the benefits that this offers. A lot of work still needs to be done at EU level to catch up to the global fintech revolution. However, the Central Bank and Department of Finance should not wait for the EU to set the agenda, we have to be proactive if we want to make Ireland a real hub for EU fintech firms.”
Postponement of FTT proof that large-scale EU tax harmonisation is not working – Hayes
Brian Hayes MEP today (Wednesday) said that this week’s decision to further postpone negotiations on the Financial Transactions Tax (FTT) under enhanced cooperation shows the deficiencies of the EU tax harmonisation agenda.
“This week the 10 countries who have signed up to an FTT under enhanced cooperation postponed their negotiations once again. This is the third time that negotiations have been cancelled in three months.
“It just shows that Ireland was absolutely correct not to sign up to the FTT plan. The hesitation from the 10 Member States shows that large scale tax harmonisation in the EU is not working and not particularly wanted.
“The debate on the Common Consolidate Corporate Tax Base (CCCTB) may face similar problems if it goes down the route of large-scale harmonisation. The majority of Member States do not want this one-size-fits-all approach to tax in the EU.
“Regardless of the delays, there are many concerns about the enhanced cooperation arrangement from an Irish perspective. There could be an impact on the Irish sovereign debt market and an impact on the liquidity of the financial sector as a whole.
“It is crucially important that the EU should let the negotiations on Brexit proceed and take stock of the consequences of the UK’s exit before going full steam ahead with any grand tax plans.
“If Ireland were to participate in an FTT, we would have to abolish our stamp duty on shares in Irish incorporated companies, which is 1%. This yields almost half a billion euro every year. The Commission’s FTT plan imposes just a 0.1% tax on shares so we could potentially face a loss to the Irish exchequer if we signed up to the plan.”
Hayes welcomes Donohoe’s comments on offshore tax clampdown
Brian Hayes MEP today (Tuesday) welcomed remarks made by Finance Minister Paschal Donohoe in the European Parliament’s Panama Papers (PANA) Committee about Ireland’s efforts to clampdown on tax avoidance schemes following the Panama papers leaks.
“As we all know, offshore tax schemes, designed by tax advisors, is something that leads to losses for all Member States’ tax revenues. This was so clearly brought to light by the Panama papers with the shocking revelations of tax avoidance.
“Minister Donohoe came before the European Parliament’s temporary committee investigating the Panama Papers leaks, to set out Ireland’s position on this issue. He said that following the revelations, taxpayers in Ireland were given until 4 May 2017 to make voluntary disclosures about offshore tax arrangements they have used. Minister Donohoe confirmed that number of disclosures made before 4 May exceed 2,500 and constitute a value of over €70 million.
“Those that failed to come forward face penalties, publication of their names and possible prosecution. This no-nonsense approach to tax avoidance is exactly what is needed and Ireland is clearly demonstrating that it is playing its part to clampdown on large-scale global tax avoidance.
“It is also welcome that Minister Donohoe confirmed that the OECD BEPS guidelines were have an important impact on our tax take. Irish Corporation tax revenue has doubled between 2011 and 2016 and much of this is because we are closing down tax loopholes by way of our implementation of the OECD tax agenda.
“The PANA Committee was set up in the wake of the Panama papers scandal revealed information about the secret offshore companies used to hide wealth and evade taxes. The revelations demonstrated an organised web of financial secrecy which should not be tolerated.”
Published in the Sunday Business Post on 9th July 2017