DUP peer Lord Hay of Ballyore was born in the Republic and is a long-term resident in the North of Ireland.
The former Mayor of Derry city holds an Irish passport, but when he applied for a UK passport he had to apply for British citizenship.
He said he was invited for an interview to prove his nationality, but was not prepared to do so.
The DUP peer claimed the process for citizenship could cost around £1,300 and that would put off many people born in the Republic of Ireland who wanted a UK passport.
Speaking to the Northern Ireland Affairs committee which is investigating citizenship, Lord Hay said he had a “right to a British passport ” and said he was being “discriminated against”.
“I see myself as a British citizen living in Northern Ireland all my life. I have a right to British citizenship and a British passport. I am being discriminated against because I can’t get my British passport,” he said.
“I count myself as British. At this moment in time, I need to hold an Irish passport to get to where I need to get to.”
Lord Hay said the process was driving people towards getting an Irish passport.
He said the situation is “totally crazy and is wrong “.
The DUP politician said the current situation “goes against the Belfast Agreement ” and he said there should be ” parity of esteem for people living in Northern Ireland who were born in the Republic of Ireland”.
The former Stormont speaker claimed there were about 40,000 people living in Northern Ireland who were born in the Republic of Ireland.He said people were much more inclined to apply for Irish passports because they cost €80 as opposed to a cost of £1,300.
He said the fees were “very insensitive “.
Lord Hay also said the Irish passport application service was streamlined and he said it was much more efficient than the UK process.
He said the Irish passport process was simplified some years ago and is straightforward and said it was much simpler to get an Irish passport than a British one.
“There could be modest changes to this to resolve it, but I’m not sure the will is there from the Home Office to resolve it,” Lord Hay said.
“The Home Office should look at how the Irish government simplified things back in 2005, and made it much easier for people who were born and living on the island of Ireland. A very simple process, and a very reasonable proceed process and a process that you can trace.”
He said he declined to go for an interview to prove his UK citizenship and told MPs he had reapplied for a UK passport.
Born in east Donegal close to the border, Lord Hay was giving evidence to a cross party group of MPs on the Northern Ireland Affairs committee which is examining the issue of citizenship and the passport application process.
Before he took his seat in the House of Lords, Lord Hay was a DUP MLA and was Assembly speaker until 2014.
Co Derry woman Emma DeSouza took a legal case in 2015 when an application for a residence card for her US-born husband was rejected.
The Home Office deemed her British even though she has never held a British passport and has always held an Irish passport.
Last year in a change, the Home Office announced family members of British or dual British – Irish citizens from Northern Ireland would be able to apply through a post-Brexit residency process known as the EU settlement scheme.
Mrs DeSouza, who is from Magherafelt, told the committee that she supported what Lord Hay was recommending.She said it was not a “Good Friday Agreement” issue but a “Home Office policy issue”.
Mrs DeSouza said there was no policy to naturalise as an Irish citizen in Northern Ireland simply through residence.
Mrs DeSouza said the process of renouncing UK citizenship needs “to be addressed” and that those who regard themselves as Irish believed they were being discriminated against.
She said she was raised in Ireland and being Irish was a “fundamental part” of who she was. She told MPs that being Irish is “the only identity I have ever had and it is the only passport I have ever had”.
Mrs DeSouza said there could be further legal challenges to the UK rules but she added: “It won’t be me, I have served my time.”
She told MPs that legislative change to make UK citizenship renunciation easier would be “a bonus” to Irish people.
The Westminster committee will take further evidence on citizenship and the passport process in the weeks ahead.
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