I should explain I am not concluding or answering. I am intervening in the debate. A Leas-Cheann Comhairle, this debate was opened by the Parliamentary Secretary who had the advantage of being here for the opening speeches. I think it preferable that he should reply, having heard the opening speeches. I should simply like to intervene in the debate, of course, to reply to some of the points made, in passing, and to make my own contribution to the debate and continue thereafter.
Deputy O'Kennedy, in speaking, expressed some concern that I was not present at that stage and did not open the debate. The position is that, at this time—when Ireland has the Presidency of the Community—the burden of work involved is very considerable. During the weeks since the year began I have been out of the country literally more than half the time. During the working week, and on the days on which the Dáil meets, those are precisely the days on which meetings occur which I have to attend. But the portion of my time absent is much greater than that. It did not prove possible to arrange this debate to start on a day when I would be present in the House. While Deputy O'Kennedy suggested there was no urgency about the debate, I must say I have not got the feeling that that was the Opposition's view because, in fact, we are debating the third and fourth reports, one of which is very overdue for debate. The fact that we have to combine them shows the problem we have had in finding time to have a debate of this kind. I was reluctant to seek to have the debate postponed until it could be taken on a day on which I could be sure of being present. In fact, even today it is a matter of pure chance I am here because there was to be a council meeting of Development Ministers in Brussels today, cancelled only a few days ago, and I was not aware that I could be here today until a couple of days ago.
Therefore, I apologise for the fact that I was not here for the opening of the debate. But this is in the nature of a situation when a country, especially a small one which does not have a number of Ministers, holds the Presidency of the Council of Ministers. However, I am glad it has been possible for me to intervene in the debate, to deal with some of the points that have been raised and speak more generally about some aspects of development of the Community.
Taking a few points that have come up in discussion, Deputy Gallagher, speaking earlier on regional policy, said he was disappointed that the whole country was treated as a region. He seemed to feel that, because of that, in some way the west of Ireland would get less. Of course, the contrary is true. The method by which, very arbitrarily and, as we thought, not very rationally, the amount of the regional fund allocated to different countries was determined was fundamentally based on the population of the regions which were thought to justify assistance. This was adjusted in our case, not once but twice, as a result of the efforts we made to get it increased to a higher proportion. But the basis of the calculation on which the whole thing started was population. If, in fact, we had not insisted that the whole country be treated as a region, we would have lost out doubly. First of all, the population base would have been very much smaller and the basic share from which we started would have been smaller. Secondly, the argument we were able to use, and use with effect, in getting our original allocation topped up twice— that is, the argument that there was no part of this country well enough off to be able adequately to subsidise development in the less well-off areas —could not have been used but for the fact that, uniquely amongst Community countries, the whole of this country was correctly designated as a region for those purposes. I think it fair to say that the amount we would have got from the fund would have been, probably, no more than about a third of what we have now got had we not successfully pressed the case that the whole country be treated as a region. When one takes into account both the effect on the population basis and the fact that our argument for topping that up was so heavily based, necessarily, on the fact that there was no part of the country that could afford adequately to subsidise other parts of the country, taking the two together, we probably got about three times as much by adopting that approach than had we adopted the narrower one.
Of course, that having been done, the question of where this money is allocated is one for the Government and for the Dáil. Of course, given the nature of the development problems within this country, there will be inevitably, and properly, a bias in the allocations in favour of the west, just as there is in our existing development policy, regional policy and our system of industrial grants and in any aspect of policy which involves transfer of resources within the country at present. The way in which that would be done and the extent to which it would be done are a matter for the Government to determine and for the Dáil to debate in due course. The inclusion of Dublin for the purpose of the regional policy is a means of getting a larger allocation but does not permit the Government to use it in the Dublin region. Just as the proportion of other funds which comes to Dublin for development purposes, our domestic funds, is low in relation to the population and income of the region, so, in the case of the regional fund, the distribution will, of course, be biased in favour of the parts of the country that most need assistance.
I hope I have explained that adequately because it is important that there be no misunderstanding about the distinction between the whole country being a region for the purpose of getting the money and what we do with the money when we get it, or to be more precise, the selection of schemes which we submit for assistance from the fund which will necessarily, naturally and properly be biased in favour of less developed regions and particularly, of course, of the west of Ireland.
Deputy O'Kennedy, in speaking, alleged that from time to time—in the previous debate last December in particular or at other times—I had given the impression that everything was going swimmingly, that the Community is an enormous success and that there are no problems. I hope I have given that impression. One has to make a clear distinction here between the fact that the Community from our point of view is enormously beneficial and is making a great difference to the development of our country, that our participation in it has changed the whole nature, character and value of our involvement in affairs outside this country and the fact that the Community itself is a very imperfect entity in this stage of its development. There are many features of it we wish to see improved and shall work to improve. There are other aspects of it which, of course, are disappointing from time to time by comparison with our expectations from it. One always has the problem in commenting on anything in life, in drawing distinctions between the comment one makes by reference to absolute standards and relative standards. I can remember when I was a member of the staff of a State enterprise for many years by absolute standards of efficiency all of us in it were conscious of the fact that we fell short of those standards and were seriously self-critical of the way the concern was run. But when it came to an objective evaluation of how that particular concern stood in efficiency, in comparison with similar organisations in other countries, we were not at all surprised to find that the Irish firm was, in fact, the most efficient by objective standards of comparison. Relatively speaking we were the most efficient. But, in absolute standards, everything falls short of expectations. The same is true of the Community. It has many defects, some of which will persist for a long time to come, some of which may be difficult ever completely to overcome. At the same time, it represents an enormous step forward politically and economically, and one which from our point of view is enormously beneficial.
Depending upon the particular occasion on which one speaks and in the particular context one may tend to emphasise either the defects which are so glaringly evident or the advantages which should also be evident. It is always possible to take a phrase out of context and to suggest that on one particular occasion a comment one makes is unduly pessimistic or optimistic in its orientation. This is inevitable when one is dealing with something which, while being greatly to our advantage has, of course, serious defects.
Deputy O'Kennedy was also critical of what he alleged to be a tendency on my part to relate our position to that of France, Germany or Britain and apparently attempting to ape those countries, or to match them. I did not, he said, sufficiently relate our position to that taken up on certain problems by, say, the Benelux countries. I am not conscious of this and Deputy O'Kennedy was not specific in his criticism. But there may be a point here that on many issues the Benelux countries adopt a progressive and forward-looking attitude, do not create difficulties, do not put obstacles in the way of developments beneficial from our point of view or that of the Community, whereas the larger countries —who have, of course, more vested interests to protect and which, on the whole, have been somewhat less enthusiastic about the development of the Community into a supernational organism—are inclined on particular issues to create problems. Therefore, when one is reporting on progress, one tends to have to report not that at last one has persuaded the Benelux countries to agree that there should be a regional fund, which they always supported—in fact they were always willing to support any form of regional fund that would secure agreement— but that the obstacles or difficulties raised by, Britain, France or Germany, from their different viewpoints were or were not being maintained or were or were not being removed. Therefore, from time to time in reporting progress on particular issues one must, perhaps, realistically pay more attention to the attitude of the larger countries because they are the ones that hold up developments.
In regard to the regional fund— and it may well be to that that Deputy O'Kennedy was referring—there were no difficulties with the Benelux countries, as I have said, but France, Germany and Britain, each from their different viewpoints, were pressing particular interests which, taken together, formed a triangle of conflicting interests which had proved extremely difficult to resolve into a more forward-looking geometrical shape.
We, of course, are conscious of the fact that there is no way in which we can be compared in the importance of our role to these larger countries. We are the second smallest country after Luxembourg and our interests in the Community must always be in that sense relatively small. However, because of the way the Community is structured, because each country can press its own interests when they are of importance, and because no country is ever forced to adopt a course of action which it perceives to be against its vital interests, our role from our point of view is important and is sufficiently important and powerful to enable us to protect our interests. Of course, it does not stand comparison with the scale of the influence that can be exercised by one of the larger countries, and I hope nothing I said has ever suggested the contrary.
It is fair to comment, in the context of the presidency, that because smaller countries do not have so many vital interests to protect in so many different areas and, perhaps, also because their Ministers are less distracted by post-imperial involvements in various parts of the world, it is possible for a smaller country to play a relatively more active and more useful role in the presidency than for larger countries. This is not inevitably true, but it is well-established as the norm in the Community that a small country's presidency tends to be more productive and more harmonious than those of larger countries. This applies to us as to others, because like the other smaller countries we have not got a large number of vital interests to protect. We have some that are of crucial importance, especially those relating to agriculture and to questions of regional policy, but when these and a small number of other matters are not at stake we can take a more detached view. When it comes to the negotiation, for example, that between the Community and the African, Caribbean, Indian Ocean and Pacific States, to which Deputy McDonald made reference, there were very few significant Irish interests involved, whereas each of the larger countries felt they had major interests to protect.
As a result, the fact that this negotiation came up for conclusion during the Irish presidency proved, I think, speaking quite objectively, to be fruitful and beneficial, because, first of all, the Irish President, myself in this instance, did not have to be looking over his shoulder all the time on each issue to consider whether there was some vital national interest to protect. On most aspects of it I was able to look at the matter objectively. The other countries were conscious of the fact that we were not seeking to protect some vital national interest and were, therefore, more relaxed and more willing to allow the presidency to play its role of conciliation and give a lead in seeking solutions to problems. The role of a small country can be, in matters of that kind, I will not say more important but more useful and more valid than that of a larger country.
As I am on that subject, perhaps it is worth continuing with some remarks on the question of the presidency in a more general vein. We inherited the presidency of the Community at a time when there had been two years in which progress had been relatively slow for a variety of reasons, partly, but only to a small degree, because of the British so-called renegotiation but also because of other internal difficulties in the economic community and the economic crisis, and certain political tensions between Member countries.
These difficulties were greatly alleviated, although not completely resolved, by the time of the Paris Summit meeting in December of last year. Consequently, we had the good fortune to inherit the presidency at a moment when some of the road blocks in the way of progress had been, a few weeks before, swept aside. Therefore, the clearance of these road blocks occurring just before we took over the presidency and our own position, as I have outlined it, as a country which has not too many vital interests to protect, combined to enable us in the first 11 weeks or so to make quite unusual progress on a number of different policy issues where progress had hitherto been slow.
Naturally, we have tried to make the fullest use of these opportunities and to give the Community a new impetus by putting our backs into the job and tackling the work resolutely, thoroughly and with energy. It is only fair to say that we might have done all that and more besides and in less favourable circumstances and very little might have come out at the other end. There are other countries that did their best in the presidency at different periods and ended up with very little to show for it because they were unlucky in the time they inherited this office.
In the ten or 11 weeks of our presidency we have managed to get off the ground a number of important matters. We have mentioned the negotiation between the Community and the African, Caribbean, Indian Ocean and Pacific countries, which is of enormous importance to Europe because it gives a new type of link, of a very satisfactory kind from the point of view of both sides, between the Community and the 46 countries in these parts of the world. It links together something like 40 per cent of the member countries of the United Nations although in population the two sides represent 500,000,000 or 600,000,000, a rather smaller proportion of the world population.
The linkage will be of great importance to both sides, from the point of view of the developing countries with whom this link has now been established, a much wider group than those previously associated, because they include a number of countries that have been independent for many years past as well as a number of former members of the British Commonwealth or former British colonies. This much wider group has the advantage now of this involvement in a stabilisation fund for certain primary materials, which will be directly beneficial to them, which will provide a very interesting and, I hope, valuable model of the kind of stabilisation fund that could be established on a more global basis and for a wider range of commodities. The group might help to provide a solution to the dangers of instability in commodity prices which has so often threatened the welfare and even the ability to survive of some of these developing countries, and which has also, in recent years particularly, threatened the economic stability of the industrialised countries which have found great difficulty in facing up to the problems posed by enormous price fluctuation of primary materials.
This negotiation was also productive in creating new industrial co-operation arrangements between the Nine and the 46. It also involves a very substantial fund running to 3,390 million units of account which is about £1,700 million over a five-year period and it involves trade arrangements beneficial to both sides. The fact that it has been possible to negotiate in the first month of our presidency this difficult agreement is certainly beneficial to us because our ability to make a contribution to this Community must obviously be of this kind rather than in the form of a financial contribution where we are net beneficiaries.
In addition to concluding these negotiations we also succeeded in getting the mandate for the Community for the GATT negotiations, the next round of worldwide tariff reductions. We had to get that agreed in time for the discussion in the GATT in mid-February. We succeeded in getting regional policy regulations agreed much more rapidly than anybody foresaw. Early on, I was told there was a chance that the obstacles might be cleared at the March meeting but in fact we cleared all but one of them at the February meeting. The doubts then expressed as to whether it would be possible even by March to have these regulations cleared proved quite unfounded.
There is at present in progress a process of conciliation between Parliament and the Council of Ministers which holds up the formal implementation of the regulations. It is part of the process by which Parliament asserts its growing authority in matters of this kind although because of the way in which heads of Governments determine the size of the fund, Parliament is not in practice in a position to make any variation in it. When this process has concluded the regulations can immediately be brought formally into effect but the problem of reconciling divergent national interests in this matter was settled under our presidency much more rapidly than had been foreseen.
We are also making good progress in the negotiations with certain Mediterranean countries and hope to be in a position, certainly within two months, to sign agreements with the MAGDA countries and with Israel. This is an aspect of the Community's activities which for a long time past has been dragging its feet. Also, at a meeting of the Council of Ministers attended by the Tánaiste we succeeded in making the breakthrough of getting adopted the regulation of the free movement of doctors and of pharmaceutical products, which had been awaiting decision and action for years past. Since the mid-1960s I have been following the work of the Community in seeking to achieve free movement of the professions and on each occasion when I visited Brussels over the years 1964 and 1965 onwards, I always made contact with the relevant director general to discuss progress— or lack of it—in these areas. Now, ten years afterwards we have the first regulation for a liberal profession adopted and hopefully, that fact will not be only important in itself but will provide a lead for other liberal professions where perhaps the backlog of activity over the past ten years will begin to show results.
In our case the regulation for doctors is of great importance because we export doctors. The number of medical graduates here has always far exceeded our needs and our capacity to absorb them and availability of access to the profession in other countries is immensely important to our graduates. Hitherto, so far as European countries are concerned, this availability depended on ad hoc arrangements with these countries, most notably the United Kingdom. In effect, the decision as to our qualifications was in the hands of the United Kingdom body and not solely under our own control. To have this matter resolved by the Community in a way that relieves us of this excessively direct relationship with the United Kingdom in this matter is very satisfactory from our point of view. It means that our doctors now have the right to free movement as of right, without being dependent on the regulations of the United Kingdom body. Getting this through, contrary to many gloomy prognostications, is another important development in the first few weeks of our presidency.
All the work in this area involved considerable strain on all the staff concerned. In a sense it may be easier for a small country at ministerial level to undertake the presidency because the Foreign Minister of a small country may have less post-imperial preoccupations elsewhere in the world. On the other hand, the staff are much less numerous in a small country and the strain of undertaking the presidency is enormously greater. It is already evident that the country, less than half-way through our period of presidency, owes an enormous debt of gratitude to the public servants in so many Departments, my own in particular, but in many others also who have been willing to work so extraordinarily hard and with such dedication in this period to make a success of the Irish presidency.
That is true in particular of the arrangements made for the meetings held in Dublin recently at Foreign Ministers level and at heads of Government level. These arrangements proved notably successful and received great praise from all concerned. Privately and publicly the comments by other Ministers and by the President of the European Commission on our work in making these arrangements have been extraordinarily laudatory and obviously were genuinely felt. Objectively speaking, our arrangements did enable the heads of Governments meeting to run more smoothly than has been the case at some other heads of Government meetings in the past. People have certainly shown their gratitude for the work we did and this redounds to the credit of the country. It is not merely a question of arranging rather spectacular meetings successfully; the work of presidency involves much more humdrum work at official level which has to be carried out with very few people under very considerable pressure. At this near half-way point I can report that all concerned stood up to the strain remarkably well and that there has been nothing but praise for the work achieved so far. We have not faced any problem where anything has broken down or where there has been any failure on our part that would be a source of complaint to any of our partners. I hope that will remain true during the remainder of the period.
Before discussing somewhat further the heads of Governments meeting, the summit in Paris and the results flowing from them, I should like to deal with some points raised by Deputy O'Kennedy in his opening statement, points which affected me particularly or in which I have a particular interest. He referred to Press reports that there had been disagreement between ourselves and France about the arrangements for the heads of Government meeting and suggested that I had in some way dismissed this and said it had not happened. I did not say that. When the question was raised as a result of Press reports which were not accurate and were pretty wide of the mark in some respects I said that there had been a problem which had been resolved in the course or a meeting of less than two hours in the Council of Ministers several weeks earlier. This is the case.
Most of the arrangements we pro posed for this meeting arising from the directives and headlines and indications given at the Paris summit were accepted by our partners without difficulty but one point did arise where there was a sort of philosophical— one might almost say theological—difference of view. It had been our impression that the approach that other countries would wish and the one that would seem to be the simplest to the arrangements for the heads of Government meeting was that matters coming within the framework of the Community and which are matters for the Council of Ministers and for the heads of Government meeting as a Council of Ministers should be treated separately and consecutively with political co-operation matters which are not under Community auspices.
The French had a divergent view and felt the meeting of heads of Governments should submit to being constituted physically in both these forms simultaneously throughout its entire length rather than be divided into consecutive segments. There is a consecutive segment, I think, and the net difference is nearer at the end because, in fact, the decisions taken have to be classified and dealt with according to whether they are, in fact, decisions of the heads of Governments meeting as the Council of Communities or heads of Government meeting to discuss particular population matters. The point was, therefore, a metaphysical one which was resolved in discussion at this meeting and the Press publicity attaching to it was certainly disproportionate to the divergences on this metaphysical point, which was resolved very rapidly without difficulty. As Deputy O'Kennedy raised the point, I merely wanted to clarify what the issue was.
On development aid, Deputy O'Kennedy asked were we the ninth State who, at a meeting of the Development Council last year, had been unable to commit itself to work towards the target of 7 per cent. My recollection of that is that we were not the ninth State but, of course, we indicated that our position, which we had inherited, was one where the share of GNP devoted to development aid was only a tiny fraction, one-twentieth, indeed, of the target and it would take as quite a while to catch up from the position where we started from two years ago, which resulted from the fact that the importance attached to development aid in Ireland was not very great and did not have a very high priority. We made it clear at this meeting that we would not be able from the position where two years ago, the share of GNP devoted to development aid was .035 per cent to one where it would be .7 per cent, or twenty times as much, within four or five years at that rate but that we would aim towards the .7 per cent and we would set ourselves the target of each year, taking one year with another, increasing the share of GNP devoted to this purpose.
We would increase it each year, taking one year with another, to an amount equivalent to .05 per cent of GNP per annum which would bring us over a measurable period of time up to the target and would involve very substantial increases in development aid over the period. This commitment on our part to the target set was taken as quite adequate. It was not Ireland which was the country that had difficulties with that commitment at that time because our Government was willing to commit itself in this way.
Deputy O'Kennedy also suggested at columns 1971 and 1972 of the Official Report that we cut back in the current year—that is, 1975—the percentage of GNP for this purpose. That is not the case. We calculated most carefully and to the best of our ability what, in fact, based on the projections of GNP in 1975 was, the sum of money necessary in order to maintain the percentage of GNP that had been allocated for this purpose in 1974 and, having arrived at that figure, by admittedly in this very difficult year a small amount, so that far from any question of a percentage cutback in development aid the planned amount for the current year is fractionally higher as a percentage of this year's GNP than last year's development aid provision was of last year's GNP. If, in fact, the money is spent—because of difficulties with international commitments which sometimes do not materialise it is sometimes difficult—it will, in fact, be a significantly higher proportion than that actually spent last year. In each of the two years we have been in Government we have found that some of the international arrangements through which we contribute to development aid falls through the course of the year or do not materialise and we are then left in the position that we have provided money for purposes and the money is not called up and on several occasions we have had to look around for other things to do with the money, which is a curious position to be in but, seeking to maintain our commitment, we have done this. It has not always been possible at the last moment so the actual amount spent sometimes turns out to be less than the amount originally committed. The amount committed for this year is, as I say, a higher percentage of the estimated 1975 GNP than the amount committed for last year was of the 1974 GNP. It is likely to turn out in practice a significantly higher share than the amount spent in 1974 was, in fact, of the 1974 GNP.
Deputy O'Kennedy's assumption here was quite incorrect. In fairness, it should be said the figures are complex and the form in which they are published does not lend itself to easy analysis. This is a matter I am looking at. Deputy O'Kennedy is not to be blamed for being uncertain as to what the position was though he should not, perhaps, have made such a definite assertion about something he had not checked more carefully. I know it is not easy for the Opposition to get the exact facts except by submitting a certain amount of questions and I am not happy about this.
I should like the presentation of the figures to be clearer but one of the difficulties is that development aid is channelled through a number of Departments, principally Foreign Affairs, Finance, Agriculture and Fisheries and certain others. There is a tidying up operation to be undertaken here before we get a clear and simple pattern. We are engaged on this and I would hope the Parliamentary Secretary would have special responsibility for this side of the work of the Department and that he will be able to produce a clear picture as part of his general work on the expansion of development aid and of the arrangements that exist for the organisation of development aid.
Those are, I think, the main points raised by Deputy O'Kennedy with which I wish to deal. I should like now to turn to certain more general matters. First of all, I should like to tell the House that the reports they have before them and which they are considering in this debate are, in my view, whatever criticisms there may be of them, and nothing is perfect, very valuable documents and are regarded as such internationally. Our system of having a twice yearly report on the EEC is an unusual one and, although there is certainly something similar in Britain, the scale of the report is so minimal compared with ours as to be of relatively small value. As a result our reports are looked on as extremely useful reference documents. They are in demand by other Administrations as check lists on the actual work of the Community. The fact that Parliament here sought reports of this kind and has been exigent in its requirements as to what the reports should contain and how they should be presented has helped to keep us up to the mark and has helped us to produce reports which have certainly proved useful not only at home but also abroad. I thought it worthwhile mentioning that at this point.
On the question generally of Community membership and its benefits to Ireland, this is something about which there is some confusion and about which I ought to say something briefly. We had a referendum here and out of that referendum came a very clear-cut decision. That decision was clear cut for several reasons. I would hazard a guess that there were two very strong reasons. The first was a clear perception by the voters that membership would be beneficial to our agricultural sector, which is very important because the increased income derived from agriculture percolating through the Community helps to generate employment and incomes. That argument was a strong one and one which was understood by our people.
It was notable that in the urban areas where there was, of course, the certainty that there would be some increase in prices brought about by membership, and the fact had to be faced in the referendum, these urban areas voted in favour of membership. The fact that our people grasped very readily the concept of the multiplier effect of farm spending and the fact that a more prosperous agriculture would benefit the whole community was clearly understood. They were not taken in by the attractive idea, a natural way of thinking, that what is good for the farmer is bad for the townsman. This is a very natural mode of thought because until recently there was not much economic growth anywhere and out of a static cake, such as existed in the past, if one got more someone else got less. But the people in the urban areas grasped the particular point and I think that the benefits to come to and through agriculture were perceived as being important and that played an important part in the decision of our people. The other thing which was important was probably the recognition, perhaps subconsciously, that membership would, in fact, change our relationship with the United Kingdom which has always been such an unduly close and polarised one and place us in a broader and more satisfactory context. This, too, has, at an almost subconscious level, affected people's attitude to membership.
Let me come back to the agricultural policy because here we face the fact, in the second year of membership, that Irish farmers suffered very severely in relation to the question of beef and cattle. One should try to disentangle the role of the Community and its policies in this matter. Generally speaking, the background to this problem was a shift in the supply demand relationship for beef and for meat generally an a worldwide basis. This is not something for which the Community was responsible. The fact that the expansion of beef production was faster than expected and the demand did not develop as rapidly and also the high prices over the period when we joined the Community put people off eating beef and reduced consumption. This is not particularly a matter involving the Community because it is a world-wide problem.
One has to say about the Community that the policy it had for beef, which was never tested in a situation of surplus, proved inadequate to meet the strains placed on it. The beef policy of the Community and the intervention mechanism which it devised was parallel and similar to the mechanism employed for other products. It was not sufficiently appreciated that, first of all, there could be a surplus of beef. There was a very deep-rooted belief that beef would be in deficit almost indefinitely. Secondly, if there was a surplus of beef it is not a product which can be easily stored, like grain. It requires special arrangements for storage and refrigeration. Therefore, even a small surplus of beef could over-strain the whole intervention mechanism.
The Community can be faulted for having too simply and easily accepted that the arrangements which worked to cope with surpluses of other products, including butter, would work for beef. They worked imperfectly but well in the case of butter and worked perfectly in the case of grain. It did not work satisfactorily in the case of beef. Secondly, I think it is fair to say that the Community institutions and the Commission were insufficiently perceptive about the way in which the market was going and were inclined to encourage farmers to hold on to stocks at a time when it was much better for them to sell them. The attempts which this Government made here to counteract that by trying to persuade our farmers to sell when prices were high did not prove effective because farmers tended to believe, I am afraid—in this case they turned out to be wrong—that the European Commission was a better guide than the Irish Government in relation to their policy in this respect. As the problem was a world problem I can understand people thinking that the Community Commission, with all its expertise, was better equipped than the national Government to advise in this matter. They were wrong and it was unfortunate that the advice the Government gave at that critical period, contrary to the advice given by the European Commission, was not taken more widely.
These are the two criticisms we can make. The beef policy of the Community was inadequate to stand the strains placed on it. It was not envisaged with sufficient imagination when it was constructed. Secondly, the actual forecasting mechanism of the Commission proved inadequate when it was put to the test. However, the fact remains that were we not in the Community our position would have been utterly disastrous. What the Community did, partly because of our pressure in the matter, although it would have happened in any event, was impose a ban on imports from outside the Community. If Britain had joined and we had not joined our position would, of course, have been absolutely impossible at that time.
One has to distinguish between the defects of the policy and the administration of it on the one hand and the fact that with all its defects nonetheless inside the Community, although our farmers had a very tough time last year, their position was many times better than it would have been if we were outside at that time. If you take agriculture as a whole over those two years, and leave aside the special problem of beef, the benefits to the country from membership have been very great. They have been evident in the way it has been possible to increase the price of milk over this period at a rate that has rendered it very remunerative for farmers. The rate at which it has been possible to do this in this period, without undue strain to the Irish Exchequer, because of the extent to which the Community takes up the burden, is very important to realise.
This brings me to the question of the financial effects of membership. When we joined the general expectation was that we would in our first year of membership secure something like £30 million of benefits from membership. This figure was mentioned in relation to the question of our ability to improve social welfare benefits in the discussion on that subject and, indeed, in the election campaign at the beginning of 1973. The actual figures in this connection are of interest. In 1973 we received not £30 million but £44.1 million in grants in outright payments from the Community, plus £11.3 million in loans, that is £55.4 million altogether. Our payment to the Community in that year was £6.1 million so the net benefit was £49.3 million in sums approved for payment to us in that year.
In 1974 the figures rose very sharply. Grants received rose to £72.8 million, loans to £24.8 million, increasing by 65 per cent and 120 per cent respectively. When you deduct the £7.5 million for the contribution we paid for membership the net benefit in 1974 in sums allocated to us in that year was £90.1 million. That is incomplete because there are still £70.4 million of claims outstanding in the guidance section of FEOGA, quite a large proportion of which we will get in due course. The actual gross amount we will eventually receive in 1974 will exceed £100 million. The net amount will approach that figure.
The actual payments lag a little. Instead of receiving £49.3 million in 1973 we received £39 million but that lag of £10 million was made up in 1974 when of the £90.1 million so far approved we received £99.5 million, in other words, almost £10 million extra postponed from the previous year. The approved figures are a more accurate measurement of the trend and volume of aid than the actual cash payments which fluctuate a bit because of a lag in payment. The fact is that in 1974 the net receipts from the Community will have lain between £90 million and £100 million. I think the House will readily realise how difficult our position would have been last year if this money was not available, how many of the services we have been able to provide would have been cut or what enormous further increase in taxation would have been necessary to see us through. From the purely financial point of view Community membership has been of very great value.
It is also highly significant that the ratio between what we contribute and what we get is great. Paying £7.5 million last year we will have received the best part of £100 million, probably a little more when the accounts are finally closed. This disproportion between what we pay and what we receive is of very clear benefit to us. We have to recognise the fact that all this has to come from the Exchequers of other people. We are, from the point of view of other members, an expensive member to have. The fact that our partners are having to pay out about £100 million of their taxpayers money to our benefit, which they would not have to pay if we were not a member, is something we should not forget. We can take too easily for granted the fact that these benefits flow to our Exchequer and that the consumers of food, in Britain for example, have to pay much more for their food, because we are in the Community, than would otherwise be the case.
