Dáil Éireann debate -
Wednesday, 23 Apr 1975

Vol. 280 No. 2

Private Members' Business. - Adjournment Debate: EEC Regional Fund.

Mr. Herbert

In putting down this question I was motivated by a very deep suspicion that the Government would be tempted to use Ireland's allocation from the EEC Regional Fund as a subsidy to the Exchequer by activating the partial repayment clause of article 4 of the Council directive. This clause, coupled with the fact that all Ireland would qualify for regional aid, and that a big percentage of the capital budget, especially that portion dealing with infrastructure, would be deemed to be approved expenditure under the fund criteria, would make it comparatively easy for the Minister for Finance by an administrative sleight of hand to subsume our fund allocation and still remain within the requirements of the directive.

The European Parliament in document PE 40-041, debated in plenary on 13th March, 1973 condemned this Council regulation with special reference to the partial repayment clause. The debate was carried into the national scene by an article in the Irish Independent of 14th of this month, which carried a report on the expression of grave dismay, anxiety and concern on the part of senior officials at the recent Commission in Brussels at the Government's intention to use the partial repayment clause of article 4. The debate has now grown into a national debate and there is universal condemnation of the Government's intention. The debate is joined by students, members of local authorities, industrialists, members of chambers of commerce, regional development organisations, all very responsible bodies. They have all joined in the universal condemnation of the Government's intention vis-à-vis the regional fund. What have we heard from the Government through their financially embarrassed Minister for Finance? Nothing except a long stream of civil service jargon couched in ambiguity and reeking of dishonesty——

Mr. J. Gibbons

Hear, hear.

Mr. Herbert

——punctuated by the Minister's own peculiar brand of venom directed at Members on this side of the House, directed at people like myself, harmless back-benchers who are merely attempting to honour a solemn commitment entered into two years ago to the people in the under-privileged regions, the people of Deputy McDonald's area, the mid-lands, and all the western regions.

The House will recall that during the debate on the EEC three years ago, during the referendum campaign, regional policy played a central role. At that time as the Government, we were committed to the realisation of the evolution of a genuine regional policy, one which would correct not merely national imbalances but also community imbalances. We further promised and pledged the people of the under-privileged regions that when the fund would be established they, and they only, would be the sole beneficiaries. The Fine Gael Party were co-guarantors to the people of the under-privileged regions, but now it appears that they are reneging on this very solemn pledge, promise, commitment, call it what you like.

Last Thursday the Minister lectured us on regional policy. He repeated that line over the weekend. He told various national bodies such as students, chambers of commerce, local authorities, regional development organisations and industrialists that they did not understand the basics of a regional policy, that they did not know exactly what they were talking about. Amongst other things he said, as reported in some of the daily papers last Monday, that our allocation was a flea bite. For that he cannot blame Fianna Fáil. We rejected as unacceptable the size of our allocation and we have rightly indicted the Government for their failure in this regard.

Mr. J. Gibbons

Hear, hear.

Mr. Herbert

Small though the allocation may be, if properly applied it could generate a sizeable investment and positive development across a very broad front. If the supplemental clause of article 4 were activated a percentage of the aid could give a valuable supplemental grant to the £10 million given to the IDA this year to modernise existing Irish industry, thereby ensuring competitiveness and consequent expansion. A percentage of the aid could be used to pay interest rebates on new loans from the EIB by activating clause 2 (d) of article 4 for infrastructural purposes. There will be a £4 million loan this year and £1½ million of this aid, if used for this purpose, would generate an EIB loan of £50 million at 7½ per cent and that, with £75 million from our own resources, would make £125 million available for investment in the infrastructure. We should be able to afford this kind of money. It might seem big money— £125 million, £50 million at 7½ per cent —but this is the type of investment we must have if we are to correct existing imbalances.

This type of finance, if placed at the disposal of local authorities for infrastructure development directly related to industrial activity, will make it possible for local authorities to embark on this type of vital activity which is, at the moment, far beyond our capacity. Repayment of loans to the Local Loans Fund is, as the Minister knows, far beyond our capacity at this stage.

Another percentage of this infrastructural money generated through the EIB loans, supplemented by our own resources, could be used to provide infrastructure for the disadvantaged areas. The provision of roads, electricity, domestic water, plus encouragement of the tourist potential are just a few examples of what could be done if this aid were properly used.

The use of the repayment clause denotes to me a lack of basic philosophy so far as our Community involvement is concerned. It would project us as a nation of mendicants, pocketing the loot, instead of having a dignified and aggressive policy of using Community aid to supplement national aid generated from our own resources. With such an outlook I am convinced that in a few short years we will be co-equals with our Community colleagues in every respect.

I want to hear from the Minister tonight a clear statement, devoid of ambiguity, of the intention of the Government in relation to aid from the regional fund. If he states the aid will be used to stimulate new infrastructural development, I would ask him to indicate the nature of this development and tell us where it will occur.

Finally, I ask once again will there be investment under article 3, paragraph 21 of the Council directive on hill and mountain farming and in certain other less favoured areas?

Mr. J. Gibbons

I support my colleague, Deputy Herbert, in his very careful and reasonable presentation of his case for the application of the regional fund. I would refer the Minister in particular to the undertakings given up and down the length and breadth of the country, not only by the Government at the time, the Fianna Fáil Party, but also by, very notably, the present Minister for Foreign Affairs, Deputy Dr. FitzGerald. I do not think even the Minister for Finance, rash as he may be, would have the temerity to get up here and say there was any ambiguity about the promises made. When we speak of regional development everybody has a pretty good idea of the area about which we are talking. The Government in the recent past—and it was the Government despite what the Minister for Agriculture and Fisheries said here today in answer to questions—presented a map of the disadvantaged areas. Surely the areas represented by the Irish Government to the EEC authorities on that disadvantaged areas map would be very, very similar indeed in both extent and area to the area we wish to have thought of as the area that should benefit, and solely benefit, from the application of the regional fund.

To our horror and dismay, we discover, in spite of the frantic efforts made by the Government to conceal the fact, that the pathetic sum of £4 million for expenditure this year from the regional fund is being snaffled by the Minister for Finance because the Government are in simply hopeless financial trouble. One has only to look at the antics of the Minister for Education when confronted by the managers of the secondary schools all over the country who tell us, public representatives, that they will be unable to continue unless they get more money from the Department of Education. The Minister for Education has no hesitation in telling the House and the country that he realises this is the case but he cannot get the Minister for Finance to cough up the necessary funds.

Turn to the Department of Agriculture and Fisheries and we are told that the drastic cutting down of areas in which the disadvantaged areas scheme will operate is due to the fact that the Minister has £6 million, and only £6 million, to devote as the Irish contribution to that scheme. In the case of the farm modernisation scheme and the implementation of Directive 159, in answer to a question yesterday, the Minister told us that at the end of January last, after Directive 159 had been in operation here for almost 12 months, only 18 farms in the whole State had drawn grants under the directive. The reason again is simply because the Government are so hopelessly financially embarrassed that they are reaching for any source and one of the first and easiest is the regional fund and the Minister for Finance grabs this from those who live in the most deprived part of the country. There is no blinking that fact and there is no use in the Minister for Finance getting up here and saying it will be used in the development of infrastructure in the regions. There has, of course, always been some infrastructure development in these and other regions. Even that is running down because the infallible indicator shows the drop in employment in the building industry, the massive drop in industrial employment and the rapid approach of economic and financial chaos in this country. The Minister can no longer conceal it. He should take his courage in his hands and come clean to the House and to the country. The worst blow of all was to hit the people who are least able to defend themselves, those in the deprived areas of the country.

Minister for Finance (Mr. R. Ryan)

The counties which will mainly benefit from the regional fund are counties Donegal, Sligo, Leitrim, Roscommon, Longford, Cavan, Monaghan, Galway, Mayo, Clare, Kerry, parts of Limerick and parts of Cork. There are a number of misconceptions circulating as to the nature and scope of the regional fund. They would be laughable if they were not so misleading. While certainly some of them arose originally through a misunderstanding we cannot now ignore the damage that is mischievously spread for base, partisan motives at home and also done with the malicious intent of doing harm to Ireland's position in Brussels.

The facts of the situation are that Ireland's share of the regional fund for the three-year period 1975-77 will be only £35 million. That is a greater share of the regional fund than, according to the criteria of the fund, Ireland was entitled to.

Actual receipts in 1975 will be only £4 million which is far less than 10 per cent of what the State will be paying by way of aid for development in those depressed areas to which I have referred but the fund will enable more projects to be tackled than would otherwise be possible.

Although the regional fund is theoretically in existence it is not yet in a position to pay out any money to member States. The reason is that as no money has been paid into the fund no money can be paid out. The Community supplementary budget has yet to be passed. It is at present, as Deputy Herbert acknowledged, the subject of dispute between the Council of Ministers and the European Parliament. The draft supplementary budget would enable the fund to approve this year only the commitment of £8 million Community support to projects sponsored by the Irish Government but actual payments from the fund to Ireland this year will not exceed £4 million.

The implication of this is that in 1975 assistance actually to be received from the regional fund will amount to less than 1 per cent of the 1975 public capital programme of £460 million. That is less than 5 per cent of the regional fund type projects already in hands in the areas to which I have referred. This, I think, puts the regional fund in its proper perspective. The public capital programme is the instrument through which the Government's investment strategy for promoting balanced growth, on a nation-wide basis, in employment and output is implemented.

While we welcome the availability of regional fund assistance it must be appreciated, on the basis of its present financing, that it will make little more than a minimal contribution to economic and regional development in this country. It will contribute far less to national investment this year than, for example, loans which we are obtaining from the European Investment Bank. We all hope that in time the regional fund will develop as the means by which significant capital flows will be channelled to this country in order to affect in a fundamental way the pattern of our development and to bring our living standards up to average European levels at least. The fund, however, as it is at present constituted, falls far short of what is ideal or far short of what is even practical help towards significantly lifting Irish living standards to European standards.

Fund assistance may be given, and may only be given, for investments costing more than £20,833 and which are of the following types:

(1) Industrial, handicraft or service activities which create ten new jobs at least or maintain existing employment.

(2) Expenditure of not less than £20,833 on infrastructure, which is either directly related to these activities or an essential pre-condition for them.

(3) Investment in infrastructure on mountain and hill farming and farming in less favoured regions, for instance, access roads to farms, electricity and drinking water and disposal of sewage.

In reply to Deputy Herbert I want to say most definitely that it is the Government's intention to expend portion of the regional fund on infrastructure and mountain and hill farming.

Mr. Herbert

What portion?

Mr. R. Ryan

You cannot spread £4 million across the country on every particular project and leave anything worthwhile. The money will be spent where it is most needed.

(Interruptions.)

An Ceann Comhairle

Order. The Minister must be allowed to make his case without interruption. I am sure Deputy Herbert will appreciate that a rigid time limit applies. It is unfair and disorderly to interrupt the Minister.

(Interruptions.)

Mr. R. Ryan

It is a pity Deputy Herbert would not read it and convey it to the people instead of carrying on this outrageously, irresponsible pretence of assuming that £4 million equals £460 million in the Government's capital programme. He knows well it cannot be spread across every project in this country. He also knows well it does not even scrape the amount of regional development that is required. It is high time people topped carrying on this campaign which is deliberately intended to damage the Irish image in Brussels. For every £ this country receives from Brussels it will have to prove that it has already spent at least another £ for investment in industry and it will have to show before it gets the money that it has spent at least £2.33 for every £ it gets for infrastructure development. That is the proof that instead of the fund coming to the aid of the Exchequer the Exchequer has to prove that it has spent the money before any assistance whatsoever has come because that is in the small print that Deputy Herbert has tried to conceal.

Mr. Herbert

I have read it.

An Ceann Comhairle

Deputy Herbert should desist from interrupting. No further interruptions, please.

Mr. R. Ryan

I would like now to deal with criticism that the regional fund assistance is somehow or other not being channelled to the west. This criticism is demonstrably false, maliciously mischievous or just plain ignorance. It is not so much that the critics do not understand but that they know so much about so many things that, as the Americans say, "it just ain't so".

Mr. Herbert

Did the Minister not start this scare?

An Ceann Comhairle

Order, please.

Mr. R. Ryan

I did no such thing. I have said most specifically what is in the small print that the Deputies opposite want to conceal. I have asserted and I will continue to assert —we have never said anything else in this House—that the money will be spent where it is most needed and that, of course, is in the less developed areas.

Mr. Herbert

The Minister for Foreign Affairs said differently.

Mr. J. Gibbons

Which £4 million?

An Ceann Comhairle

Order, please. Interruptions must cease.

Mr. R. Ryan

The money will be spent in a manner which will ensure that the resources of this country are supplemented to give the necessary development in the areas of greatest need. The quickest way of providing finance for any project is for it to be financed by the Irish Government. It must be financed by the Irish Government before any money comes from Brussels.

Our percentage share of the fund's resources for the years 1975, 1976 and 1977 is based on the premise that the whole of the State is a less developed region of the Community and that the population and needs of the whole State should be taken into the reckoning in determining our share. While the sum allocated is small in relation to our needs it is relatively high compared with that of other member States but we will have to include projects from all over the country in our request for assistance if we are to maintain our percentage share of the fund when the conditions governing grant of assistance after 1977 are being decided. If we do not do this it means that after 1977 Ireland would get less money and the less developed regions would get no more than the proportion they are getting at present. These are harsh realities and it is time people stopped playing cheap, miserable, parish pump politics on that issue here.

Mr. J. Gibbons

Hear, hear.

(Interruptions.)

Mr. R. Ryan

The amount of fund assistance is small in relation to our total development needs and it would not be possible to use this assistance to top up State aid granted to more than a minority of projects. If the supplement method was adopted, the Government and Brussels would be obliged to select certain projects for assistance while excluding all others, including most of the projects in the less developed regions.

(Interruptions.)

An Ceann Comhairle

Order. There is less than two minutes left.

Mr. R. Ryan

State aid is pitched at a level sufficient to attract and promote the investment in question. It would not make sense to channel additional funds to aids which have already proved to be sufficient. I have no doubt if Fianna Fáil were in power it is a few Tacateers who would get the extra bonus money. It would not be the areas that need it most.

Mr. Wilson

The Minister should be ashamed of himself.

Mr. R. Ryan

The benefits of the regional fund assistance will be spread as equitably and as widely as possible. County Cavan will get its share, notwithstanding Deputy Wilson's efforts to prevent it. The preamble to the fund lays down the obligation that the fund assistance should not lead to member states reducing their own development efforts but should complement them. Under the National Coalition Government we have already given far more development aid than has ever been given in the history of the State. There will be no reduction in the development aid, in the regional development of this country. Rather, will we increase the aid given by the Government. We are glad to have it complemented by the regional fund, small and all as this is.

The receipt of moneys from the fund will help to increase the overall volume of projects so that Ireland will be able to promote more projects with the fund than we could have done if it was not received. That is the truth, the whole truth and nothing but the truth. Anything else to the contrary, it seems to me, is coming only from a strange combination of the extreme right and the extreme left wing of the European Parliament, the mischief-makers of Europe who would like to discredit everything that an Irish Government would do in the name of the Irish people. We will do it notwithstanding their best efforts to discredit us.

The Dáil adjourned at 11 p.m. until 10.30 a.m. on Thursday, 24th April, 1975.