Statement by the Taoiseach on UK/EU Affairs

I am delighted to have the opportunity to speak to the House today on this topic which is of major strategic importance to us in the context of our national, bilateral and international interests.

We are now approaching a critical juncture. In just nine weeks, on 23 June, the UK electorate will answer the question that is being put to them in their referendum – a straight choice between whether the UK should remain as a member of the European Union, or if it should leave.

This referendum result is, of course, solely a matter for the UK electorate to decide. But it has to be recognised that the answer they give is of enormous interest and importance not just to us, their closest neighbour, but also to the wider EU and international community.

At the outset I want to set out the essential elements of the Government’s approach:
· As the UK’s closest neighbour, Ireland has a unique perspective and interest in the outcome of the referendum.
· We will remain an EU member irrespective of the referendum result.
· We want the UK to remain part of the EU and work with us to make it better.
· We will continue to build on the strength of the British Irish relationship that has benefited from our common membership of the EU, especially in the Northern Ireland context, and as co-guarantors of the Good Friday Agreement.
· We will continue to articulate our position and promote engagement and understanding on the issues.
· We will deepen our analysis and understanding of the risks associated with a Brexit and ensure that any necessary contingencies are in place.

At home, in London and in Brussels, we will continue to engage with our partners and work to ensure that we meet all of our objectives.

From the Government’s perspective, there are three distinct phases to this:

Phase One was the period from the UK Election Result to the conclusion of the EU New Settlement Deal and the setting of a date for the UK referendum.

Phase Two, the current phase, is the lead up to the date of the UK Referendum.

Phase Three will commence once the referendum result is decided.

Phase One
The discussion of the UK’s position within the EU has gained in intensity since David Cameron’s Bloomberg speech on the issue in January, 2013. In 2014 our National Risk Assessment named Brexit as a strategic risk for the first time. This helped to stimulate public debate on the issue, while also informing the Government’s need to intensify preparations.

In May, 2015 the Conservative Party formed a new UK Government and Prime Minister Cameron set about delivering on his commitment to negotiate more favourable arrangements for continuing British membership of the EU and to hold a referendum on the issue.

During this time, the Irish Government has been very active in our engagement with the UK Government, and with our EU partners, in outlining our concerns and our interests in this matter, in working for an acceptable deal at EU level and on assessing the implications in the event of a UK vote to leave the EU.

In early 2015 I re-organised my Department specifically to prepare for this issue and established a new Division in my Department to focus specifically on relations between Ireland and Britain including bilateral issues that arise in the context of the EU-UK debate. During this phase, work has been ongoing across Government Departments to identify the key strategic and sectoral issues that could arise for us if the UK were to vote to leave the EU. My Department’s EU Division has also been centrally involved in these discussions and was responsible for preparations and input to the EU negotiations that resulted in the agreement in February.

Both I and my Government colleagues have emphasised at every opportunity that Ireland has a unique relationship with the UK, which is recognised widely, including within the UK itself.

We have made it clear that Ireland’s best interests are served by the UK remaining within the EU.

It is a position that I have emphasised on numerous occasions – when I spoke at the CBI Annual Conference in Belfast in March last year; at the British Irish Association in Cambridge last October; at the CBI Annual Conference in London last November and more recently at an Irish event in London this January.

I have met with Prime Minister Cameron six times on a bilateral basis since 2013 and have ensured that our discussions cover our position and our concerns. Those conversations have also been continued in the context of our frequent meetings at European Councils. The Minister for Foreign Affairs and Trade and our other colleagues in Government have had extensive engagements on the issue with their UK counterparts.

I have also discussed Ireland’s concerns with Northern Ireland’s First and deputy First Ministers, the Scottish First Minister and EU/UK issues have been discussed by the North South Ministerial Council.

The position of the Irish Government, and our strong preference for the UK to remain as a member of the EU, remains unchanged. And it is a view widely shared across the Irish political spectrum and by the great majority of business, NGO and academic or media commentators here.

Essentially, we have set out four main reasons why we wish the UK to remain a member of the EU. These relate to:

• The Economy;
• Northern Ireland;
• The common travel area and
• The effectiveness and credibility of the EU itself.

The Economy
The importance of the Irish UK economic relationship is apparent in the 1.2 billion euro in goods and services that we trade every week. Last year 41% of our total agri-food and drink exports went to the UK. They export more to Ireland than they do to China, India and Brazil combined making us the UK’s 5th largest market. This trade sustains approximately 200,000 jobs each side of the Irish Sea.

The UK is the 3rd largest investor in Ireland, after the US and Germany. In 2012/13 investment by Irish businesses in projects in Britain helped to create and sustain almost 2,800 jobs.

Overall, studies show there would be an adverse impact on both the British economy and in turn on the Irish economy if the UK leaves the EU. The ESRI report on the potential risks associated with a Brexit noted that a 1% decrease in UK GDP leads to a 0.3% decline in Irish medium term GDP/GNP.

Clearly, the beneficial economic relationship enjoyed by our two countries would be at risk in the event of a UK vote to leave the EU. Research has shown that Irish owned-enterprises and SMEs in sectors such as agri-food could, in particular, face significant challenges. In addition to trade, issues could arise for the energy sector in areas such as security of supply and the Single Electricity Market.

There has been some suggestion that a UK exit could give Ireland a marketing advantage in FDI terms. But we must be realistic, we would also face intense competition from other EU Member States and the ESRI research suggests that we would not necessarily see major gains. It has also been suggested that opportunities might arise for us in the Financial services sector, but it is important to note that capacity issues may arise here.

In considering negative impacts, research also suggests that Northern Ireland would be the most adversely affected region of the UK.

Northern Ireland
The EU has made an important contribution to sustaining peace and prosperity in Northern Ireland and has provided a broader context for relations on these islands.

Much-needed funding, including through programmes like PEACE and INTERREG, will provide almost €3 billion in the six years to 2020.

It is also the case that North-South cooperation is simply much easier when both jurisdictions are members of the same Union.

Our Governments are co-guarantors of the Good Friday Agreement and our officials and agencies work together every day in very many small and big ways to support the social, economic and political transition of Northern Ireland. The trust that enables that kind of close cooperation was forged at least in part through years of working side by side in Brussels since 1973.

Common Travel Area
The fact that we and Northern Ireland make up the island of Ireland is also a key consideration for us in the context of the EU/UK debate.

The Common Travel Area which has been in existence since Irish Independence is an important feature of the close relationship between our two countries. It allows free movement between Ireland and the UK and ensures that Irish citizens and British citizens are treated on a par with access to social welfare.

It is an arrangement that is valued on both islands and I believe that both Governments would work hard to preserve its benefits in event of a UK vote to leave the EU. It is particularly important as regards the border between North and South which has in practical terms been effectively eliminated.

But this cannot be guaranteed. We should be aware that the CTA has only ever operated where both Ireland and the UK were either outside of the EU, or within it. Any uncertainty that is created around the seamless flows of goods, services, capital and people between our two countries would not be welcome.

These would be key issues for Ireland both bilaterally with the UK and also in the context of new terms and conditions for the EU’s relationship with the UK, but the precise outcome would by no means be clear.

EU
Ireland’s close relationship with the UK is also an important feature of our engagement on EU issues. The UK is an important voice at the table in Brussels and we want that voice to continue to be heard. We are allies on many of the key issues facing the EU – above all on economic issues and we share a broadly similar vision for Europe.

We want to see a Union that is globally competitive, with a fully functioning single market – including in the digital area -internally efficient and outwardly coherent on trade, innovation and world affairs, including migration.

We also want a Europe that respects and draws strength from the differences between Member States.

The withdrawal of the UK would change the balance of opinion within the Union on these and other issues in a way which could damage Irish interests. . More broadly, it would weaken the Union internationally and at home, in terms both of substance and reputation, at a time of serious challenges.

But I must emphasise that whatever the outcome of the referendum, Ireland will continue to be a committed member of the EU and of the Eurozone. That is what our people have said on many occasions, and is repeatedly borne out by repeated opinion polls. We value our access to a single market of over 500 million people and the benefits our exporters derive from EU trade agreements with other countries.
EU membership is a key asset for Irish business – as IBEC underscored last week in a valuable report – and in attracting inward investment. Irish agriculture continues to benefit greatly from the CAP. And more broadly, we are conscious of the significance of being part of a Union with other like-minded democracies which share our values and interests. But there is no doubt that the Union we most want to see is one with the UK within it.

EU New Settlement Deal
On 18 February, the EU Heads of State and Government paved the way for the UK referendum date to be set following their agreement of a ‘New Settlement for the UK in the EU.’ In this, we successfully addressed many of the issues of concern to the UK, and reached an agreement which was acceptable to all EU partners, and which allowed Prime Minister Cameron to launch his campaign for the UK to remain in the Union.

Given the huge importance for us of keeping the UK in the EU, I was active in the negotiations, I sought to be constructive and supportive, and Ireland’s role in securing a positive outcome at the European Council has been widely recognised. As I reported to the House last month, agreement was reached across four principal areas: Economic Governance; Competitiveness; Sovereignty; and Social Benefits.

Phase Two
Having participated fully in the agreement, we have now entered the critical pre-Referendum phase of this debate. The UK Electoral Commission has formally designated the Remain and Leave Campaigns and the Referendum Campaign has, as of Friday last, formally begun.

In the run-up to the referendum, we will continue to articulate our views on these truly significant issues as an interested friend and as a neighbour.

Irish citizens living in the UK will have a vote. Voters in Northern Ireland are estimated to be c. 1.2 million. Around 120,000 UK citizens living here are also enfranchised. The British Embassy in Ireland is targeting them with a view to ensuring that they are registered to vote.

While fully recognising that the outcome of the referendum is entirely a matter for the UK electorate, we will continue to ensure that the Irish perspective is presented to all interested parties. We support calls encouraging those eligible to register to vote and inform themselves on this crucial issue.

I urge all other Members of the House to use their connections and influence to reinforce the case. This is a matter on which we should be united. I also hope that people in Ireland will also reach out to family, friends and business colleagues in Britain.

I hope that voters in the referendum – including the Irish in Britain and the people of Northern Ireland – will be aware of our very close economic ties, of the importance of the EU to the development of Northern Ireland, and of the importance of the EU partnership between Ireland and Britain.

This is also a critical time in deepening our understanding of the many implications for Ireland if the UK were to vote to leave the EU and the uncertainties that could arise for key areas of our relationship.

In this pre-referendum phase, the work already carried out by Departments is being further developed to deepen our understanding and analysis of the potential impacts in the key areas of concern that I have outlined above. Through my own Department, I am ensuring that a whole of government approach is taken to this vital work.

Phase Three
The next phase will commence once the result of the referendum is concluded. The direction that this takes will depend on the result, but let me first consider what will happen in the event of a vote to leave.

Implications of a Vote to Leave
David Cameron has made it clear that this is a once only deal for the UK. If the vote is to leave the EU, a period of two years is provided for under Article 50 of the EU treaties, during which the exit terms of a Member State would be negotiated. Although negotiations could well take significantly longer, any extension would need to be agreed unanimously by the remaining 27 EU Member States.

If the UK were to vote to leave the EU, a number of very different scenarios could be envisaged. The Irish Government will continue to plan for any contingencies so that we are prepared to deal with the potential consequences in the event of a UK vote to Leave. But we need to be realistic about how far we would be able to pursue bilateral negotiations with the UK. A future EU-UK agreement would set the overall framework and determine future arrangements in very many sectors. We would have to deploy all our political, official and diplomatic resources in a negotiation which in many ways could be as important as our EEC accession negotiations.

However, it is worth noting that there is already a clear framework in place for bilateral co-operation between the Irish and UK Governments under the Joint Statement which I signed with the UK Prime Minister in 2012. We review progress at our regular Summit meetings.

This provides a framework for co-operation on a Joint Ireland/UK Work Programme covering issues such as the Common Travel Area; Energy & Climate Change; Economic & Financial Issues and Trade & Investment.

As part of this, Government Departments meet regularly with their UK counterparts and annual plenary meetings take place between Secretaries General of Irish Government Departments and UK Permanent Secretaries to progress key areas of co-operation. Such bilateral engagement will continue, whatever the outcome of the UK referendum, but will take on added importance in the event of a Leave vote.

Implications of A Remain Vote
In the event of a vote for the UK to remain in the EU, then the agreement reached in February would take effect.

This means that the agreed measures in relation to economic governance, competitiveness, sovereignty, and freedom of movement would be effective immediately. Those Measures on social benefits and addressing the abuse of free movement would be implemented by amending or complementing existing EU Regulations, while they would be taken forward quickly, would therefore not take effect immediately after the referendum.

Two social welfare changes could be implemented as part of the EU agreement. First, child benefit for the children of EU nationals working in the UK could, after a period of four years, be index linked to reflect conditions in the country where the child lives. Second, access to “in-work” benefits could be limited, for four years for people newly entering the UK labour market. This would not apply to any EU citizen already residing in the UK.

The Government have raised with our UK counterparts, at both political and official level, the possible implications of these measures for Irish people in the UK. I personally have spoken to David Cameron on a number of occasions. The British Government are therefore fully aware of our concerns and of the unique status of the Irish community in Britain over very many years.

As necessary, we will continue these discussions, where we will continue to actively pursue the best interests of Irish people living in or moving to the UK. I recall that , during post-European Council statements on 22 March, Deputy Martin raised the potential implications of the proposed social welfare changes for Irish citizens in the UK. I would propose to circulate a paper early next week addressing this issue. This would also respond to other specific points raised by Deputies in the House today which are not fully dealt with in this speech.

Over the course of the next nine weeks we will see an intensification of the EU/UK debate as the Remain and Leave campaigns in the UK battle for the hearts and minds of their electorate.

We cannot, and will not, tell the people of the UK how to vote. But it is vitally important that we continue to clearly articulate our views on this issue – to set out what is at stake for Ireland and to clearly state our support for the UK remaining in the EU.

Of course, it is our sincere hope that on 24 June, we will be welcoming a Remain vote.

If that is not what the people of the UK decide, then we will be as prepared as it is possible to be – to manage the consequences and deal with the uncertainties that arise.

But of one thing I have no doubt – that we will work unstintingly to maintain a strong, positive and productive relationship with the UK in whatever future course is determined by its people on 23 June.