Colm’s columns

Colm Rapple
Irish Mail on Sunday, 1st June 2008

EU Commissioner Charlie McCreevy this week highlighted the most cogent reason yet for voting “No” to the Lisbon Treaty. It wasn’t his intention, of course, but that’s what he did.

As an accountant Charlie McCreevy knows better that most, that you should never sign anything that you haven’t read, or don’t fully understand. Yet he has been urging us to approve a treaty that “no sane person would want to read”.

This week he took the argument a bit further by likening the treaty to the annual Finance Bill, another unwieldy tome that’s incomprehensible to most people. Few people ever read it, he pointed out, suggesting that this never did us any harm.

If only that was the case. The truth is that there has been many an unforeseen tax change hidden in the fine print of a Finance Act. Some have emerged to subsequently bite us, others have opened lucrative loopholes for the wealthy and informed.

Some of those changes were undoubtedly put there intentionally, and kept from the glare of public scrutiny by a coating of gobbledegook. Some have been included by mistake emerging only after the ambiguities of the fine print had been fully parsed by the accountants, the lawyers and, sometimes, even the Courts.

The new Revenue powers to access details of deposit accounts is a current example of an intentional change slipped into a Finance Act a couple of years ago. It got little notice at the time but is currently causing so much concern that our new Finance Minister, Brian Lenihan, had to issue a statement on Wednesday trying to dampen down the worries that have been surfacing at TD’s clinics throughout the country.

Charlie McCreevy oversaw a number of mistakes during his tenure in the Department of Finance. Many changes created unexpected loopholes including one allowing the wealthy to invest their tax sheltered pension contributions in private yachts and holiday homes.

In some cases it took years to close the loopholes again but at least the provision of a Finance Act can always be reversed by a subsequent Act. That can’t be said of the Lisbon Treaty and there is plenty of scope in its convoluted wording for both hidden provisions and mistakes that could come back to haunt us.

The Treaty contains a wide range of provisions on which there is no disagreement such as the fact that we won’t have an Irish commissioner for five out of every fifteen years, the reduction in Ireland’s voting rights and the extension of qualified majority voting to a wider range of issues in the Council of Ministers.

Facts are facts but many of the Treaty’s provisions seem open to widely different interpretations.  No agreement is possible it seems between the “yes” and “no” protagonists, so the electorate is left wondering who to trust. The following is a random selection of some of the issues in contention. They are by no means minor.

Five days after the Treaty was signed, the European Court of Justice ruled that a Latvian company building a school in Sweden was entitled to ignore locally negotiated wage norms and pay its non-Swedish workers no more than the minimum wage. The result is that an Irish union can not now legally take action against a company undercutting agreed wage rates by employing foreign workers.

This judgement has caused widespread concern across the EU and the obvious answer would be to add a protocol to the Lisbon Treaty that would cause the Court to reverse its decision. The Court in its judgements applies the treaties.

A “no” vote would enable such a protocol to be negotiated.

Then there is the little matter of our Corporation Tax rate. Some say we can veto any attempt to impose an EU wide tax policy on us. Others are less confident. EU regulations already limit our options with regard to VAT and excise duties. The French who take over the presidency in July have already outlined plans for closer harmonisation of EU corporate taxes.

Danish MEP Jens-Peter Bonde has put it like this:

“If I was Irish and interested in a low corporate tax – which I am not – I would propose a strong protocol to protect the low rate. It is not difficult to foresee an attack from another country, or company.”

Then there is the new Charter of Fundamental Rights. There are those who say that this alone is sufficient reason to support the Treaty.  It certainly looks impressive listing the civil, political, social and economic rights recognised by the EU. But are they really new and could they possibly be enforced to our detriment?

The booklet prepared by the Referendum Commission explains as follows:

“The rights set out in the Charter are not absolute. Some are already provided for in the Constitution of Ireland, and/or in EU law and/or in the European Convention on Human Rights. Some are statements of principle rather than specific rights. Some are stated to be subject to, regulated by, or in accordance with national laws.

“The precise effect of the Charter is dependent on the right involved, the limitations on it, the manner in which it is protected by the Charter and the competence of the EU in the area in question.”

There’s clarity for you.

Then there’s the doubt over our ability to veto any proposed world trade deal. Even if we have the right of veto, is it something that we could use? We are supposed to have a veto on the Lisbon Treaty. It’s worth testing.