Dáil Éireann debate -
Wednesday, 14 Nov 1984

Vol. 353 No. 10

European Communities (Supplementary Funding) Bill, 1984: Second Stage.

Minister for Finance (Mr. Dukes)

I move: "That the Bill be now read a Second Time".

The Bill which I am recommending for approval is a short one and it is required for technical reasons to enable payments to be made to the European Communities in order to enable them in turn to fund their programmes, and in particular, agricultural expenditure, this year and possibly next year. The need for the Bill arises from an undertaking made by the Minister for Foreign Affairs, and by Ministers representing all other member states of the Community, on 2 October last to provide additional funds outside of the normal Community funding in the form of reimbursable advances. This extra funding is required because the Community have reached the permitted limit on their normal funding of a proportion of VAT receipts, and of customs duties and agricultural levies. The amount of Ireland's extra payment is £6.2 million.

It is necessary for me to seek specific approval for this extra payment for technical reasons. As the House will be aware, our normal EC contribution is made from the Central Fund under regulations made under the European Communities Act, 1972. That Act provides that the EC Treaties, and all other Communities laws, are directly binding in Ireland. However, the undertaking of 2 October to which I have just referred was specifically designated as a voluntary undertaking and it was not possible therefore to make payments in accordance with that undertaking without this new legislation.

The amounts of the advances in ECUs, rounded to the nearest 100,000 are as follows: Belgium, 34.6 million; Germany, 288.6 million; Denmark, 20 million; Greece, 15.4 million; France, 288.7 million; Ireland, 8.6 million; Italy, 153.8 million. Luxembourg, 2.5 million; Netherlands, 50.1 million and UK, 201.2 million. The additional funding by all member states will enable the Community to meet the supplementary expenditure required in 1984. The total amount of supplementary expenditure is £1,340 million gross, of which £1,320 million is for agriculture. Of the total of £1,340 million, £618 million can be met from normal Community revenue and balances. The remaining £722 million is being met by way of extra payments.

The Bill provides for the possibility of making a further payment in the period up to the end of December 1985. This has been inserted in the Bill because, as yet, there is no agreement on the means of funding the shortfall in Community receipts in 1985 although the Council are committed to providing the necessary funds. It seems as well to provide for a further voluntary undertaking, although the Government hope for, and are pressing very strongly for, early implementation of agreement to raise the limit on the Communities' normal own resources which was made at Fontainebleau last June by the Heads of Government. Under that agreement the VAT limit is due to be raised to 1.4 per cent by 1986 at the very latest, and an increase to 1.6 per cent may be brought into effect in 1988.

Members will be aware of the importance of the continuation of Community expenditure programmes not only in terms of their financial benefits to Ireland, but more generally in terms of maintaining the common policies of the Communities. These programmes are essential and they are the concrete elements of European unity as achieved to date. The Bill is required to allow those programmes to be funded adequately for 1984 and, specifically, to allow us to make our contribution under the arrangements that have been worked out for the Community and to provide for a similar arrangement being made in 1985. I should like to stress again that the provision in the Bill in relation to 1985 is one which is dictated by prudence. I would place great emphasis on the fact that the Government want a different approach to be taken to the funding for 1985 but it is a matter of prudence to provide at least for this mechanism so that we will be enabled to make a contribution were that method to be followed in that year.

I commend the Bill to the House.

Mr. O'Kennedy

In his conclusion the Minister said that these programmes are concrete elements of European unity as achieved to date and referred to the need to continue to promote the common policy. He suggested that the Bill was concrete evidence of the common commitment to fulfilling the aims of the European Community. It is my view that the Bill is concrete evidence of quite the opposite, not that that is the intention of the Minister or the Government. The need for the Bill is concrete evidence of the failure of the European Community to provide adequate resources under the terms of the Treaties which were established at the beginning of the Community and to which we acceded in 1972. It is because of the failure of the European Community to adhere to the principles of those Treaties, including our Treaty of Accession, that we have to introduce this Bill which, if it is concrete evidence of anything, is concrete evidence of that failure.

I should like to give some examples. As the Minister said, the amount of money involved is about £1,340 million and we are expected, something that was not envisaged in the Treaty or in our Treaty of Accession, to make this type of ad hoc arrangement. The Minister has focused on the need as being to fund agricultural expenditure and I am not suggesting that that is not the way it is but the Minister, frankly, might have put a little more before the House. He should have put before the House the budget preoccupation of recent years and the cost of that to the European Community. He should have told us why it is we have not got agreement on the lifting of the 1 per cent own resources. I am speaking here particularly of the British budget issue. We are being asked now in this Parliament to vote an extra sum — in our case of the order of approximately £6.2 million, which represents close enough to approximately an 8 per cent or 9 per cent increase on our normal contribution — to keep the Community going on an ad hoc basis.

What the Minister might have told us — and which I would invite him to do in replying — is how much of the funds of the European communities at present now needing to be replenished are swallowed up in what is euphemistically called the British budget arrangement. One must ask how much are the rest of the members of the European Communities being forced to pay because the British have bullied the Community into changing the rules?

Let me give the House something of the order of what I am speaking about. In 1983 the rebate to the United Kingdom was of the order of £600 million — a repayment over and above what was ever envisaged in their Treaty of Accession or ours. Next year the figure will be closer to £1 billion if current arrangements come to fruition. Bluntly, that is the reason that has forced the Community into its present position, that has even brought about the fact that from "own resources", because of the need to repay the British for what they owe the Community, we now find ourselves in the extraordinary situation that all member states will be asked, as is the Minister asking us this morning — in this instance we are probably the first Parliament to be asked though I may be wrong in this respect — to give what might be described as good example. I do not know whether that is the case; perhaps others have already dealt with this matter. The reason this Bill is before us is that it is outside the remit of the Treaties. It was not envisaged in anything we signed. The reason this Bill is before us is not just, as the Minister said, to fund agricultural expenditure but rather because of the pressure imposed on all of us through British intransigence, by the manner in which they have turned the Community in on itself through their preoccupation with their budget rebate issue.

It is quite significant that the proposals that emanated from the Commission in 1981 — I should know, I was a member of the Commission at the time — pointed out the need, in what was then called the mandate proposals, to increase the Community's "own resources" for the following year, which was 1982, to lift the ceiling above 1 per cent and have been consistently ignored since 1982-83, indeed to date in 1984 by the Council of Ministers. They have been ignored because that Council have capitulated to the British Government. Because they have done so, because the Community's "own resources" cannot now be and have not been lifted above that 1 per cent ceiling, we find ourselves in this position. Had that been done it would not have been necessary to have devised this kind of ad hoc arrangement which we are being asked to sign, we would have been able to have done so in accordance with the Treaties. But, because of the failure to lift “own resources” above the 1 per cent ceiling we must top this up at this point, that is ourselves and other member states. One must ask which nation was the one that blocked any increase in “own resources”? No marks for the answer — the United Kingdom. They blocked the increase. They were consistently determined that they would not have it until such time as what was owed them was repaid as they saw it, casting aside the rest of us in the EC, our principles, aims and commitments.

That is the reason we are here discussing this Bill this morning and, let us not delude ourselves, it is a consequence of that failure that we find ourselves in this position. That is not a view held merely predictably by Irish public representatives, Irish governments or people like myself, who dealt with the British in this connection both as Minister for Foreign Affairs and as a Commissioner. It is the view of all the parliamentarians of Europe, and that of many others as well, that what is now being proposed is not really in line with the aims of the Treaties, particularly the procedural Treaties. For that reason I must say that when the Minister said that this represented concrete evidence of European achievements to date I find it to be quite the opposite. It is evidence of the failure of the European Communities to adhere to their own policy decisions.

We have all become preoccupied with the budget of the EC, have we not? That has been the constant pre-occupation of the EC over the last three or four years thanks to that great European torchbearer, Margaret Thatcher, that person of great European idealism. The constant pre-occupation has been with the British budget issue, everything else taking second place. In turn its consequence has been that the policies necessary to develop the European ideal — as proposed from the beginning, as were outlined in great detail in the mandate proposals, in relation to research and development programmes, to industrial technology, to unemployment — policies that were necessary, which represent the real test of Europe, and its relevance to the problems of Europe today, have not even begun to be launched because of the intransigence of the British and the weak reaction of other member states. They have now reached the conclusion — which is of great significance to Ireland and our economy generally and which forms part of the understanding we are now being asked to endorse — that henceforth they will deal with the budget. They will curtail budget spending. The next question to be posed is what is the relevant agreement presided over by this Government and Minister? The agreement now reached — and it is unthinkable that an Irish Government could find themselves in the position of presiding over such a conclusion — is that from 1985-86 one thing will be clear — it is not as yet law because it cannot be, rather is it a discipline now agreed — that henceforth the rate of growth on agricultural spending will be less than the rate of growth in the budget. That is something that never appeared in any Treaty, nor did it form any part of any arrangement to which we acceded in any Treaty. Certainly it is not something that is part of the spirit of the European Communities, to which I shall advert in a moment.

I am not saying that all of this has been drawn up by the Government opposite who happen to be presiding over the affairs of the European Communities for the current six months. I am not saying that pressures have not been brought to bear on them by member states.

Mr. Dukes

Including by the Commission of which the Deputy was a member.

Mr. O'Kennedy

Not when I was a member. Now that the Minister has seen fit to raise that point let me say that if he reads the proposals from the Commission, those proposals in which I was involved, despite what the heads of Government had insisted that the Commission would do, he will see precisely——

Mr. Dukes

I have read them.

Mr. O'Kennedy

If the Minister has, then he is misrepresenting the position. Perhaps then he would concentrate on the budget issue. That is what we were told to do at the Stuttgart Summit at that time, and we did not do as we were told. We did much more, as the Minister will discover. We did insist that one could not deal with the question — I wish the Minister would read it — purely on a budget issue. As the record will show, we did insist that it was not just a question of rebates to Britain. We insisted particularly that if the European Communities were to have any meaning — and it can be seen right across the whole range of the mandate proposals with which I was very definitely involved — then any Community that preoccupied itself with a budget was doomed immediately to turn in on itself and die.

We presented a whole range of policies which Europe needed to be relevant to the needs of today and tomorrow. The Minister present today who saw fit to make that intervention knows a fair bit about the effects of budget preoccupation on any community. What he is allowing to happen in Europe he has done in this nation. Anyone who concentrates on the budget issues is bound to see the consequences we see in Europe and in Ireland today — a sense of hopelessness and frustration, an all-pervading sense of gloom, which is the consequence of people of little imagination, no confidence and small minds. I might not have said that were it not for the Minister distorting the reality of the mandate——

Mr. Dukes

That is a sham tune on a cracked record.

Mr. O'Kennedy

When the Minister's record of assertions is measured against the reality it will be seen as the poorest record of any Minister for Finance in this House for a considerable time.

An Ceann Comhairle

Now we have that cleared up, perhaps we might get back to the debate.

Mr. O'Kennedy

We do not believe this Bill should be passed in its present form. We seldom have an opportunity to protest at the way the European Communities have been turned away from their fundamental aims and obligations by the intransigence of the Council of Ministers, particularly the British Government and the way they have forced the Communities so far off the correct path.

In this Bill we are making provision for a contingency in 1985 which the Government do not want to see arise. We are told that for 1985 there is agreement at Council level to provide the additional necessary funding and Ireland has been pressing for this to be done by way of raising the 1 per cent VAT limit in that year. However, in case agreement cannot be reached in raising the VAT limit in 1985, the Bill provides for another voluntary agreement for that year. What we are saying is that the Government want to see, even four years too late, the ceiling lifted on VAT own resources for 1985 as has been proposed by the Commission since 1980 and 1981, but in case we do not succeed and in case the British dig in their heels further, we want to get the sanction of this House now to enable us to continue this ad hoc arrangement whereby Ireland will top up payments in an extra treaty while the British Government in particular and others refuse to lift the ceiling of resources. If ever there was a case of conceding before getting to the negotiating table this would be it. If the member states of the Community and their parliaments pass a measure such as this for 1985 and say that ideally they would like to have an increase in the 1 per cent own resources but in case others do not agree they will provide it through this type of topping up exercise, is it not clear that that iron-hearted lady of great European commitment, who has given a new sense of purpose to Europe and all its ideals, will see the mealy-mouthed weak-kneed members of the various Governments already conceding? She will only have to assert, as she has always done, that there will be no increase in the resources in 1985 unless and until she gets back her money, and the rest of us see Europe on her terms. That is the reality. We are not talking about an increase of own resources that would be necessary to fund agriculture, social policies or the new policies of technology. If the Minister ever gets around to reading the mandate he will see that the total amount of money being spent by the individual member states on research and development was far in excess of that spent by Japan in any of the last five or ten years. Nonetheless, the results in terms of technological development are weaker and worse.

When are we going to get a renewal of the commitment to European policies that is so needed while we are tinkering about with measures like this? The only time we have anything to say about European development is when we are reacting against the European development we claim to be promoting. This is an ad hoc arrangement outside the Treaty and we should reflect on it. Why are we being asked to make this unprecedented contribution? I have already given the reasons why I think this is happening. The total shortfall this year is of the order of £722 million. That happens to be a little less than the British rebate for this year. It is time we said that out loud in this House, and not glossed over it by saying we want to keep up spending for agriculture. The reality is that because of these mechanisms for repaying the British what they never paid in the first instance, we find ourselves in this situation.

It is time we faced up to the argument of what are the resources of the Community. If funds collected by way of border levies, border taxes, border tariffs and agricultural taxes belong to the country collecting them, as Britain claim, then the basis of the European Community funding is turned on its head. The Dutch through the free port of Rotterdam would be making a very major contribution if what she collects at the border were claimed to be Dutch contributions to the European Community, which they are not. These are the issues we should constantly bring up at Government and European Parliament level — it must be said that the European Parliament have taken a leading role in these issues — otherwise there will be a further squeeze on agriculture, a reduction in spending generally and we will not have enough resources for enlargement.

Even if we get the increase in own resources to 1.4 per cent in 1986 it will be inadequate even to meet the needs of enlargement, never mind to develop policies of the European Community. It will also be inadequate to protect the interests of the communities which might be affected, such as the Irish fishing community. This measure will just about cover the extra cost of the accession of Spain and Portugal, should that come about, but it will not develop one new idea of policies. Meanwhile, agriculture will continue to be squeezed.

Is it not a scandal that, in a world crying out for food, where we see the effects of starvation, especially in the African subcontinent, Europe should be cutting back on food production instead of promoting at least in the short term a relief measure and not just for the selfish interests of Ireland? It is difficult for anyone to understand why, at a time when millions are starving throughout Africa, we in Europe are deciding to curtail agricultural spending and, consequently curtail agricultural development. I suppose we are to curtail, too, the necessary funds that would come through the Lomé Convention in which Ireland has played a prominent part, both during the Presidency of the Taoiseach and during my time as President of the Council of Ministers. The Lomé Convention is designed to help these African peoples to be as near self-sufficient as possible; yet we curtail the funds and then raise our hands in horror when the inevitable tragedy occurs. I am not saying that all the responsibility lies with the Government, much less the blame, but it is time that all of us who have any belief in Europe and in what it represents in terms of balance and equity both within and in the context of a fair international world order, shouted from the rooftops that we will not be bullied, that we will not see Europe set aside.

I recall the European Council which began in Dublin in 1978 and at which I witnessed the British Prime Minister thumping the table and saying, "I want my money." We have seen the consequences of that attitude for Europe in the meantime. Unfortunately, the other Prime Ministers did not give Mrs. Thatcher the response she deserved but I am glad to say that they did not concede at that Dublin Council. I consider that to have been one of our proudest achievements. However, the British Press were able to get through to our own Press and present that European Council as being almost a disaster, a crisis for Europe. We swallowed that story when we should have been patting ourselves on the back for not having allowed Europe to be focused on a narrow budget issue.

Unfortunately, the subsequent European Council which is presented sometimes as a success and which was held in Luxembourg in 1980, signalled the beginning of the failure of Europe. That was when the compromise was made and terms agreed that were unacceptable on the basis of any of the principles of Europe. The slippery slope taken at that time is the reason for our being here today debating this issue. We should not have given in on the basis of not causing a crisis. We should not have heeded the threats of the British Prime Minister. Perhaps what happened then was a reflection of the strength of that lady and of the weakness of the rest.

Those of us who believe in European principles must not tolerate such developments. I understand that what is being agreed for 1985 is a budget discipline system so as to ensure that agricultural spending will always increase at a rate lower than EC levels. That is no part of the Treaties.

It is interesting to note that five or ten years ago spending on the CAP represented almost 75 per cent of the total EC budget. Is it not farcical that the corresponding figure now is about 65 per cent when increasing numbers of people are leaving agriculture? In the past two decades about 14 million people have got out of agriculture in Europe; yet by this arrangement we are ensuring that agriculture will expand at a rate lower than EC revenues. There is not yet the legal authority for this but a discipline is agreed and that is to be followed up.

By way of this discipline we are eroding the powers of the Commission and of the Parliament, both of which have expressed their views on this. We are witnessing a situation, as envisaged in this Bill, where for 1985 there is a discipline agreed before the Commission make their proposals and before the Parliament go through the conciliation procedure with the Council. Presumably this arrangement is being presided over by our Minister, though perhaps under great pressure by way of response to the other Ministers for Finance. We have agreed something which cuts across and erodes the whole budgetary authority both of the Commission and of the Parliament.

It is not surprising that even the British Commissioner has described the arrangement as self evidently artificial in the sense that it will not provide enough resources to fund the needs of the Community for next year. The Parliament have resisted the move as being contrary to and opposed to their principles but we are prepared to allow it happen during our presidency. We must demand that the position be corrected. The British have expressed their satisfaction with this self discipline for next year. They are the only ones who are happy with it and the reason for that is that they have turned the whole budget argument in the direction they wished. All of next year's envisaged expenditure should be incorporated in the budget for 1985. Yet here we are presenting a kind of nonsense budget for 1985, a budget which by way of the provisions of this Bill, we may top up and are likely to have to top up.

In the normal way this House would be supporting any legislation that would be important from the point of view of discharging our responsibilities and also any funds that would be in line with our national development, particularly agricultural development within the Community. The Minister rather plausibly told us this morning that the only reason for the funds is to meet agricultural expenditure but he has not considered the root cause. He must know that the only reason for using those terms is because of the way agricultural expenditure is being squeezed and will continue to be squeezed unless we shout that we have had enough.

We must not be seen to be the little boys who are happy to wag our tails when someone who has a strange commitment to Europe, perhaps the British Prime Minister, makes demands. From my contacts both in the Commission and in the Parliament I know that the best example for us is to say that we will not accept this kind of ad hoc arrangement, especially in respect of 1985.

Mr. Dukes

They already have.

Mr. O'Kennedy

We are the last in line.

Mr. Dukes

The Deputy should accept that we have an ad hoc arrangement.

Mr. O'Kennedy

I am talking about this Parliament. We are the first national parliament, perhaps the second, to do this. I hope this protest will be seen for what it is, a protest against the manner in which the EC budget has been twisted, squeezed and turned against the very principles of the budget.

Mr. Noonan

(Limerick West): As we know, agriculture is fundamental to our economy and this Bill is further evidence of the attitude now being adopted to agricultural development not alone by the Government here but by Europe generally. The decision by the Council of Finance Ministers that in future they will control agricultural spending and take that away from the Council of Agriculture Ministers is something which this side of the House cannot accept. We will have to try to ensure that changes will be effected as soon as possible, because the Agriculture Ministers are the proper people to decide the agriculture budgets.

I am appalled at the decision which the Irish Minister, who presided at the meeting, allowed to be put through at that meeting and was party to. He should have realised the importance of agriculture to our economy. When we joined the EEC we did so as equal partners and our main interest at the time was the improvement it would bring to our agricultural production and marketing. However, in the past couple of years since the Government began to represent us in Europe we have seen a general downgrading of agriculture and an ignoring of the problems of our small dairy farmers in their efforts to increase production. Many of them have to increase production in order to exist.

Now, with the super-levy and the imposition of reduced production in dairying, the situation has become very serious and will be in the years ahead. As a result of the many decisions that have been allowed to be made in Europe, a climate of economic turbulence has been created with accompanying downgrading of agriculture by Government policies both here and in the EC. The Government allowed the super-levy to be operated, despite major work by Fianna Fáil Ministers when they were negotiating.

This is no longer a farming issue but a national problem because it affects every household in town and city as well as in the country. It bodes disaster for us. The Minister concerned could not even get his sums right and we are now faced with a further reduction in production. The earlier agreement was bad enough but we are to have our production reduced by a further 1 per cent of our 1983 figure.

The reduction in farm incomes has been significant in the past two years and it has caused damage to the whole economy. It will lower the standard of living of everybody and will add to our already massive unemployment figures. The dairying industry has been the bedrock of our national income from the export of dairy produce and three quarters of our calf production as raw material for our beef industry has come from dairying. Therefore, this new crisis in regard to the super-levy is bordering on the criminal.

In the past our dairy farmers responded significantly to requests for increased output. Now they have to face harsh penalites for that response. Ireland's dairying industry is unique in the Community and this should be realised. At the moment it is not. When we begin to pay our penalites later we will be bitten in a serious way. Even at this late stage the Minister should bring home strongly the consequences on us of the super-levy. Our national interests are at stake. We have been told that despite the super-levy our farmers have reached average European standards. This is not the case. The issue is one which affects our national interest. The dairying industry represents something in the region of 33 per cent of our total agricultural output. Its contribution to the cattle and beef industry is immense as it provides 80 per cent of the raw material for that important industry. Beef exports accounts for 70 per cent of total agricultural exports.

Significant changes have taken place in the dairying industry in recent years. Our creameries have been rationalised. There is a growing trend towards specialisation and greater efficiency on dairy farms. This augurs well for the future of this important branch of our economy. However, it is important that pricing conditions remain attractive and that no barriers are placed in the way of progress. For reasons well known to the House our dairying industry, in contrast to that of our continental neighbours, has been denied the opportunity to realise its optimum potential. Other member states have a distinct advantage. They do not deny that. As regards the super-levy, not to allow this country normal growth in milk output is inequitable. In the future it will create a position where we will be permanently disadvantaged vis-à-vis other member states.

The Council of Ministers act on proposals from the European Commission. The Commission have publicly voiced their acceptance of the justification of Ireland's case. They have a responsibility to translate that acceptance into a formal proposal to the Council of Agriculture Ministers. The only form that proposal could take is to grant a total exemption to us until we reach the European average in milk production. What we are asking is that the proposals be reasonable and just and that the Council of Ministers in making a decision should recognise the importance of the dairying industry to the economy. The most appalling feature of the Government's handling of this matter was the acceptance by the Taoiseach of a 5 per cent increase for 1984 with no guarantee beyond that. One would have expected that before he accepted a downright bad deal he would have tested the reaction of his colleagues. He admitted in public that he did not do that.

If we were in Government there would be no question of a super-levy being imposed on farmers. I do not say that lightly. It will be remembered that on two occasions the Minister for Agriculture resisted a proposed super-levy or any restriction on milk production. The reported agreement I have mentioned by the EC Finance Ministers that agricultural spending will rise at a slower rate than Community revenue means a worsening of support for agriculture. Coupled with the restriction on milk production it does not hold out any hope for farming, particularly dairy farmers. If Spain and Portugal joined the Community——

An Ceann Comhairle

I have given the Deputy considerable latitude. This Bill is to provide extra funding for the Community in certain eventualities and the Deputy must relate his remarks to the Bill. He is simply giving a general review of the activities of the EC.

Mr. Noonan

(Limerick West): I will be guided by the Chair. However, recent decisions taken by the Council of Ministers regarding the funding of agriculture is something I should be allowed to comment on.

An Ceann Comhairle

The Chair sees that as being in order but the Deputy is not doing that.

Mr. Noonan

(Limerick West): I will continue and if the Chair considers that I am out of order——

Mr. Dukes

He will be the first to tell the Deputy.

Mr. Noonan

(Limerick West): While the accession of other countries is welcome they will draw heavily on the funds of the EC.

Mr. Dukes

The Deputy welcomes it but he does not welcome it.

An Ceann Comhairle

Deputy Noonan without interruption, please.

Mr. Noonan

(Limerick West): Greater vigilance will be needed in the future to protect the interests of farmers. As has been recently stressed, we must pay the closest attention to the terms of entry of Spain and Portugal. The recent attitude to agriculture must not persist. I am referring to the decision by the Council of Finance Ministers to restrict spending on agriculture within the EC. It highlights the need for Ireland to ensure that the maximum funding from the regional and social fund will accrue to this country. Whether we like it or not, Irish agriculture must increasingly look to itself for improvement of farmers' incomes. A lot can be done within the industry to improve matters.

Our attitude has been outlined fully by our spokesman on Finance. While the Bill allows the Government to increase their contribution to the EC, nevertheless it will have a disastrous effect because of recent decisions taken by the Council of Finance Ministers to restrict agricultural spending in future. I support the views expressed by Deputy O'Kennedy.

Minister for Finance (Mr. Dukes)

I should like to thank the Deputies opposite for their contributions. Listening to Deputy O'Kennedy and Deputy Noonan I have had more than a little difficulty in deciding what was the main drift of their remarks. I suppose it is my Christian Brother training but I like to look for good in everyone. I did that this morning and I found a little good in the Deputies opposite in that they have shown the capacity, which seems to be widespread in the Fianna Fáil Party, of looking in two different directions at the same time, to perform the most amazingly complicated mental gymnastics and to put forward as a result positions which are contorted, to use one of Deputy Noonan's words.

Deputy O'Kennedy and Deputy Noonan expressed worry at the level of funding available now for agriculture in the European Community and the level of funding that will be available in future years. They are right to do that. There is no doubt that the level of available funding for FEOGA activities both on the market support and structural sides is a matter of very high importance to this country. However, I cannot see the logic in the Deputies opposite expressing that worry and then saying that they object to this Bill. As I said when I was introducing the Bill, it is needed in order to make sure that this country can participate in an ad hoc arrangement that will recover the difference between the total amount of funding available under the Community's own resources and the total amount of money required to fund the decisions that have been made about expenditure right across the whole range of Community expenditure this year.

The total amount of supplementary expenditure needed this year is £1,340 million gross, of which £1,320 million is for agriculture. The extra payments are required in order to cover £720 million, the balance being met from Community balances and normal revenue. If we do not operate that ad hoc arrangement, Community funding for agriculture this year will fall £720 million below what is required to give effect to policies as they are at present. If the Opposition are saying that they oppose this Bill, I should like Deputy Noonan to say clearly and unambiguously that he objects to making money available to fund the Community's agricultural expenditure this year. I will even give him a couple of minutes of my time if he is disposed to say that, although it might be disorderly of me to suggest it. Deputy Noonan seems to be in the unhappy position of a man who is following a colleague who is cutting off his nose to spite his face.

Is Deputy Noonan serious about the concern he mentioned in relation to agricultural expenditure? If so, he should reflect again and change his mind about this because he would have the most extraordinary difficulty about going back to his constituents and telling them how he demonstrates his commitment to the funding of agriculture in the European Community by refusing to hand over £6.2 million of our funding which is a part of that required in order to make £1,320 million available to cover the deficit on agricultural spending in the Community this year. If Deputy Noonan embarked on that enterprise I would nearly make time available to follow him because I am sure it would be one of the greatest amusements I would have had for quite a long time. He might last for a while because, with the mental somersaults which he and Deputy O'Kennedy indulged in today, he might get away with that extraordinary two faced approach. I do not use the word "two faced" in any pejorative sense. He is like the Roman God of War——

Mr. Noonan

(Limerick West): The Minister is too kind.

Mr. Dukes

Deputy Noonan has shown his concern regarding agriculture and he should not be led into the same trap that Deputy O'Kennedy appears to have fallen into. Deputy O'Kennedy and Deputy Noonan spent a fair amount of time going over a lot of old battles that have been fought, not only in this House but elsewhere, and I do not intend to follow them very far down that road.

Mr. Noonan

(Limerick West): It would be embarrassing for the Minister to do so.

Mr. Dukes

I would not be embarrassed even if I were to tell the House the amount of time I spent when I was an employee of the EC trying to head off or deal with some of the more mischievous effects of the famous mandate of which Deputy O'Kennedy is so proud. It was not by any means roses all the way. However, it is not relevant to the Bill.

Deputy O'Kennedy went on at some length about how necessary it is to increase the total amount of resources available to the Community. I strongly agree that it is a great pity that it has taken until this year to get agreement on increasing the level of own resources. Deputy O'Kennedy does not seem to be aware of the fact that we now have agreement in the Council that the level of the own resources of the VAT contribution to the Community will be increased to 1.4 per cent from 1986 at the latest. That phrase "at the latest" is very important. That will be debated fairly keenly in the Council over the next few months and during the course of next year. I hope it will not be for too long a part of next year, because I should like to see some positive results out of it during the course of next year. The fact remains — and I do not attach particular significance to the fact that it has come about during the period of office of this Government, although I am sure we had a substantial influence on it — that we now have an agreement which raises the level of own resources available to the Community We also have indications of further progress after that for a further raising of the VAT ceiling to 1.6 per cent. That must be seen in its proper context.

Mr. Noonan

(Limerick West): But at what cost to our agriculture? Would the Minister tell us about that?

Mr. Dukes

Deputy Noonan is now following the ground covered by Deputy O'Kennedy in dribbling a bibful.

Mr. Noonan

(Limerick West): We do not dribble at all.

Mr. Dukes

I was just about to come to the question of the effects on the total availability of funding for agriculture. If we had no increase in the level of own resources, in the percentage of VAT which can enter into Community own resources, we would have a gradual increase in the total availability of funds to the Community over a period arising naturally from the growth in GNP and the affects of that on the things which go to make up own resources. Even on those grounds a rate of expansion in agricultural expenditure less than the expansion in own resources would not necessarily mean an actual restriction in the amounts of money being made available. When you add the fact that we are raising the own resources base from 1 per cent now to 1.4 per cent in 1986 at the latest and a prospect of a further increase after that, we can safely say that there are provisions there which, if we pay due care and attention to what is going on, will cover our agricultural requirements over the years in question.

Deputy O'Kennedy has spoken at some length, making very colourful remarks about the activities of various member states in relation to budgetary limits. The Deputy is more than a little out of date. He seems to believe that there is still an objection to an increase in the VAT limit. There is not. As I said, we have an agreement that it will be raised to 1.4 per cent in 1986 at the latest. The main objections to that did not come from the member state which was the subject of so many of Deputy O'Kennedy's remarks — the United Kingdom. The main objections at the moment come from elsewhere.

Mr. O'Kennedy

Such as where?

Mr. Dukes

I could fairly say that the UK at the moment are rather anxious that the VAT limit be raised, for a whole series of reasons into which I do not wish to go here but which on another occasion I might have the opportunity of debating with the Deputy.

Mr. O'Kennedy

Why not now?

Mr. Dukes

Firstly, because I do not think that it is directly relevant to the provisions of this Bill.

Mr. O'Kennedy

I believe that it is.

Mr. Dukes

Secondly, to do the subject justice and overcome the Deputy's grand misconceptions about the whole matter would take quite a long time. I have spent a lot of time——

Mr. O'Kennedy

The modesty of it. The Minister should put the facts before the House.

Mr. Dukes

I have spent some time in the last four months arriving at the point at which we have arrived now in the Chair in the Council, making sure that the Community budgetary position was properly protected.

Mr. O'Kennedy

The Minister should put the facts before the House.

Mr. Noonan

(Limerick West): It would embarrass the Minister.

An Ceann Comhairle

The Minister, without interruption.

Mr. O'Kennedy

The Minister does not want to tell the House what he is doing. That is all.

Mr. Dukes

I can assure the House that I would not be at all embarrassed in the debate. The embarrassment might come to the two Deputies who would find——

Mr. Noonan

(Limerick West): The Minister should not worry about us.

Mr. Dukes

——the further we went into it, that they could no longer persist in this ostrich-like attitude of ignoring what is going on in the real world and basing all their remarks on what they think happened, in order to make what I would regard as petty points about a matter of some very considerable substance and importance to this country.

Mr. O'Kennedy

On Committee Stage I shall put some facts before the House. The Minister does not want to go into them.

Mr. Dukes

I deal in facts. The Deputy is the one who deals in assertions. As I said on the last occasion in the House on a related issue, most of the Deputy's innuendos result in backasswards statements. That is something which we really should bear in mind in listening to the type of allegations being made this morning by the Deputy. Deputy O'Kennedy referred to the question of budgetary discipline. His allegations about how that process cuts across the budgetary authority of the Commission and of the Parliament are more than a little misplaced. The Commission are not a part of the budgetary authority, in case Deputy O'Kennedy may have forgotten.

Mr. O'Kennedy

I did not say that. I said the budgetary authority of the Commission. They have the role——

Mr. Dukes

The Deputy spoke of budgetary authority. The Commission are not part of the budgetary authority. I can only take the words which Deputy O'Kennedy uses.

Mr. O'Kennedy

The Minister said that the Commission have no role to play.

Mr. Dukes

I said nothing of the kind.

Mr. O'Kennedy

I said that they have a role to play. That is what I said — that and no more. This is typical of the distortion of the Minister.

Mr. Dukes

I am sorry. I seem to have annoyed the Deputy.

Mr. O'Kennedy

Misrepresentation would tend to annoy anybody.'

Mr. Dukes

I like to be able to give the facts. Deputy O'Kennedy does not deal in them all that often. The Commission are not a part of the budgetary authority.

Mr. O'Kennedy

I did not say that they were.

Mr. Dukes

There is, therefore, no question that a code of conduct in the Council can in any way cut across the Commission's authority in whatever area.

Mr. O'Kennedy

The Commission have authority under the Treaty, quite clearly.

Mr. Dukes

The Deputy is seeking an escape route.

An Ceann Comhairle

Deputy O'Kennedy will have to restrain himself.

Mr. Dukes

The Deputy has a habit of dribbling a bit.

Mr. Noonan

(Limerick West): I wonder who is dribbling now.

Dr. Woods

On a point of order——

An Ceann Comhairle

Deputy Woods, on a point of order.

Mr. Dukes

The Deputy is going to have to mop up the spills on this.

Dr. Woods

Is it reasonable to expect the honourable Member in the Opposition to sit there quietly while the Minister makes such ridiculous remarks?

An Ceann Comhairle

That is not a point of order. The Deputy should resume his seat.

Dr. Woods

Could the Minister not confine himself to the subject matter of the debate? It concerns the general order of the House.

Mr. O'Kennedy

On a point of order, I should like the Chair's ruling on this.

An Ceann Comhairle

The Deputy is being disorderly. Deputies cannot bob up and down at will during a debate.

Mr. O'Kennedy

A Cheann Comhairle——

An Ceann Comhairle

Please, Deputy, you are not in order.

Mr. O'Kennedy

I want to ask the Chair if it is in order for the Minister to misrepresent what is said and then repudiate the misrepresentation. That is all. Is that in order?

An Ceann Comhairle

That is a bit difficult to follow.

Mr. Dukes

I agree. It is more than a bit difficult to follow. It seems rather contra-indicated for a Deputy who has not been here during any of the debate now to come in——

An Ceann Comhairle

The Minister should address the Chair.

Dr. Woods

It is only the Minister's facetious remarks. We are not used to them on other debates.

Mr. Dukes

I am quite prepared to come back in here a bit more often and liven up the proceedings a bit.

Dr. Woods

It is the Minister's condescending attitude. We must be free to comment on that. We have more logical debates at other times.

Mr. Dukes

Coming back to the remarks which I was making about budgetary discipline, I spent some time at the Council over the last few months. I have been drawing together the positions of member states which started off from very diverse starting points.

Mr. O'Kennedy

Modesty.

Mr. Dukes

They have been drawn together from all points of the compass, from all kinds of fairly extreme positions to the point we have reached now. I must say, with all due modesty, as Deputy O'Kennedy suggests that I have——

Mr. O'Kennedy

Only for Mr. Dukes, Europe was going to end up in those extreme positions.

Mr. Dukes

——I am quite pleased with the results. Member states have shown again that if you spend long enough time, have enough patience, and do not get too excited or rush around in a mad fury, you can achieve very substantial and useful results from Community discussions. The Deputies appear afraid that this is going to restrict expenditure on agriculture. I explained already to Deputy Noonan the framework of the whole operation. I am just a little worried that Deputy Noonan seems to be repeatedly departing from his own preoccupations in saying that, in addition to increasing agricultural spending, he also wanted, if I understood him correctly, large increases in the amounts available for the Regional and Social Funds.

Mr. Noonan

(Limerick West): The Minister's problem is that he does not understand the situation.

Mr. Dukes

I have quite a deal of sympathy with the Deputy in saying that. That is another reason why I am so pleased that we have finally reached agreement on increasing the ceiling for own resources and that there is a prospect for a further increase after that.

Deputy Noonan made some remarks regarding the super-levy but I think the Deputy is a little behind once again. If he saw the news on television last night or if he had read the newspapers this morning he would have known that there is now quite a disposition in the Agricultural Council to defer the determination and calculation of the super-levy for some months and to defer the collection of the levy for some months after that.

Mr. Noonan

(Limerick West): That does not alter the basic situation. Who is drivelling now?

Mr. Dukes

It could substantially alter the situation——

An Ceann Comhairle

The Chair would like to go on record as saying that "drivel" is not a parliamentary expression and it should not come from either side of the House.

Mr. Dukes

I have not used it.

Dr. Woods

That is not so.

An Ceann Comhairle

I think it has been used on a few occasions.

Mr. Noonan

(Limerick West): The Minister used the word three times.

Mr. Dukes

No. What I said, and I repeat it now, regarding the Opposition is that they have dribbled a bibful. It is a very popular expression in the vernacular.

An Ceann Comhairle

The Chair would prefer not to have it on record.

Mr. O'Kennedy

We hear this kind of thing from the Minister regularly.

Mr. Dukes

There are more trenchant ways of saying that but they would not be proper language for this House. Deputy O'Kennedy objects to having an arrangement in 1985. I have provided for the arrangement so that we would have a backstop but that in no way takes from the strength of the case I will be making for a better arrangement in 1985, which is an earlier implementation of the increase in the own resources ceiling. For the life of me I cannot see how it can in any way be interpreted as a sign of prevarication, weakness or lack of confidence to make sure that we have a backstop. There is no doubt in my mind that the fact that this House will have passed the Bill, as I hope it will, covering the requirement for 1984 and making provision for 1985 on the basis of the existing agreement, but which does not specify the mechanism, will put me in a stronger position in the Council when we discuss what we will do in 1985. In the Council when we are discussing this I will be in a stronger position if I can say to my colleagues that the evidence is before them in the form of a Bill passed by this House, that I want this arrangement to be made in 1985 and then we can discuss the kind of arrangement. That will strengthen my position rather than weaken it and from that point of view I ask the Deputies opposite to reconsider their objection to this part of the Bill.

We are not the first member state to make this provision. The Greeks have already provided for making their payments and provisions to give effect to the arrangement for this year are now being discussed in several other parliaments in the EC. It is time we did it because we are now in the middle of November and the payments have to be made by the end of the year. I was quite concerned to make sure that we had the Bill introduced and debated here at the earliest moment. In this connection I must record my appreciation of the Opposition who agreed to do this even after the Whips had come to an agreement last Thursday regarding the timing of business for this week. It was a proper response on the part of the Opposition.

I do not think that the Opposition are making a good case for objecting to the ad hoc arrangement for 1984. I cannot see the logic in expressing grave concern, as they have, about the level of funding for agriculture not only for this year but also for future years while objecting to the measure that is needed this year to make sure we can cover the level of expenditure required this year. Nor can I see the logic of objecting to making it possible to have a similar arrangement for next year. The fact that we will have provided for a similar arrangement for next year will strengthen my hand and the hands of my other colleagues who will be involved when we come to insist on a satisfactory arrangement for 1985. This will include a very strong line on our part that the 1.4 per cent VAT ceiling should come into operation not just from the beginning of 1986 but at an earlier point. The passage of this Bill will do two things. First, it will cover our contribution in respect of what is required in 1984 and, secondly, it will strengthen our position in arguing for a better system in the course of 1985, a system which is quite consistent with the concerns expressed by the Opposition today.

Question put and agreed to.