asked the Minister for Finance the modifications which will be required to the National Development Plan, 1994-1999 in view of the fact that it appears that EU funding will be £800 million less than the Government projected; and the reductions the Government will have to make over that period in capital projects which do not qualify for EU funding to minimise cutbacks in programmes contained in the plan.
Private Notice Questions. - National Development Plan 1994-1999.
asked the Minister for Finance in the context of the £800 million shortfall in structural funds which was a key element in the underpinning of the National Development Plan, 1994-1999, now under consideration in Brussels, the infrastructural projects which will now have to be deleted from the plan; the consequences of such a shortfall for the development of the western region; and if he will make a statement on the matter.
asked the Minister for Finance the proposed revisions to the National Development Plan, 1994-1999, to allow for the shortfall of £800 million; and if the Government has made a decision on the individual projects to be shelved.
asked the Minister for Finance in regard to reported statements that the National Development Plan, 1994-1999 will have to be scaled down, the areas it is intended to scale down the plan; the latest figure for the expected EU funding; if it is intended to substitute national resources for the shortfall in EU funds; and if he will make a statement on the matter.
asked the Minister for Finance in regard to indications that the National Development Plan, 1994-1999, will have to be scaled down, in what respect it is intended to scale down the plan; if it is intended to publish a revised National Development Plan; and if he will make a statement on the matter.
asked the Minister for Finance in view of the reports that at least £800 million will be cut from the European Unions funding of the National Development Plan, 1994-1999, and the criticisms raised by the European Commission of a number of key elements in the plan, if he intends to publish a revised plan; and if he will make a statement on the matter.
I propose to take these questions together.
Discussions are underway currently with the European Commission on the National Development Plan 1994-1999 with a view to agreeing the Community Support Framework, which will set out the broad national and sectoral strategies for the use of EU Structural Funds.
It is important to understand how the process works — perhaps I will outline it.
The Minister is learning.
Please allow the Minister to respond.
A Leas-Cheann Comhairle, they could learn.
The national authorities decide their development strategy and on the basis of this put forward their proposals for expenditure in the structural area, including the use of the Structural Funds and domestic resources, in the development plan. The plan is then discussed with the European Commission and on foot of those discussions the Community Support Framework is agreed. The Community Support Framework will set out, inter alia, the development objectives, the priorities adopted for Community assistance and the indicative financing plan. Following adoption of the Community Support Framework, the operational programmes are approved. These set out in more detail the objectives and measures for each of the main sectors. The programmes are the legal basis for the commitment of EC aid.
In addition to expenditure proposals which will be aided under the Community Support Framework, Ireland's plan includes investments to be aided by the Cohesion Fund, to be aided under Structural Funds Community initiative programmes and to be aided under the EFTA Cohesion Fund in the 1994-99 period. These are governed by different administrative procedures from the Community Support Framework and are not part of the current negotiations. The plan also includes eligible national structural expenditure not proposed for EU aid and 1993 expenditure, including 1993 EU aid.
As Deputies are aware, the allocation of resources to Ireland agreed by the Commission in July 1993 falls within the range 8.1 to 9.3 billion ECU in 1992 prices. Converting to Irish pounds and to 1994 prices, this is equivalent to a range of £6.9 billion to £8 billion.
In October 1993, the Commission decided the amounts on which it would negotiate Community Support Frameworks (CSFs) for the disbursement of the Structural Funds in the period 1994-99. These amounts do not cover all the resources in the range because 1993 Structural Fund resources were already allocated and Community initiatives and Cohesion Fund resources are dealt with separately.
Community Support Frameworks are broad statements of priorities and commitments and the indicative amounts of Community assistance contained in them may be subject to adjustment during the implementation period. For Ireland, the CSF amount expressed in 1994 prices is 5.62 billion ECU or IR£4.54 billion. As regards Community initiatives no allocations to member states have yet been made. The Government considers that Ireland will receive at least IR£400 million in aid under the initiatives in the period 1994 to 1999. Cohesion Fund resources over the period 1994-99 are expected to be in line with the figure included in the National Development Plan. The Government is confident that it will prove possible to draw down the full £7.84 billion EC aid on which the National Development Plan was based in the period up to 1999.
Since the plan was submitted in October there have been extensive discussions between the various Government Departments involved and the Commission services. These have been on an informal basis until recently as the Commission services were still engaged in internal consultations before arriving at an overall Commission approach to the Community Support Framework. The discussions have now moved into a more formal phase with the first formal meeting in Dublin on 18 February 1994. Exactly the same process is being gone through in the other member states. There is nothing unique to Ireland about all this.
Naturally, there are issues on which the Commission require clarification and there are areas where they have suggestions for adjustments to improve the overall effectiveness of the measures proposed in the plan. This is not an adversarial process; we view it rather as a constructive one.
Tell that to Mr. Landaburu.
The Minister to continue without interruption.
To the extent that the discussions between the Government Departments and the Commission services can refine and improve the measures in the plan it is all to the good.
Thus there may be adjustments to be made to the plan but we would expect these to be largely at the margins or within particular expenditure areas, with the Community Support Framework reflecting the overall strategies and priorities identified in the plan.
The Commission services are of course concerned to ensure that the best return is obtained from the Community funding. This view is shared fully by the Government.
A large number of evaluations have been carried out on behalf of Departments in relation to previous Community Support Framework and operational programmes. It should be noted that the results of these evaluations have been generally positive. A high priority will continue to be given on an ongoing basis to evaluation and streamlining the operation of the funds.
The discussions with the Commission are being conducted at official level. To a large extent they are of a technical nature. They are being overseen by the Ministers and the Commissioners responsible for Structural Funds. Ministers and Commissioners will keep in touch with each other as necessary.
In the light of the discussions with the Commission, the Government will be considering the investment to be included in the Community Support Framework consistent with the Commission decision on the EU aid currently available for Ireland's Community Support Framework. The Government is confident that, over the full period of the plan up to 1999, it will prove possible to undertake all the investment in the plan and to draw down the full £7.84 billion EC aid on which the plan was based, taking account of the mid-term review which will take place in 1996.
I do not intend to get involved in commenting on any of the details of the discussions as they progress. This would be neither helpful nor appropriate. It could indeed give rise to distortions with relatively minor issues being blown out of proportion. The Community Support Framework when agreed will be published.
There is no delay in the discussions on the Community Support Framework. At this stage only one Community Support Framework, that for Portugal, has been approved. In that case the development plan was submitted in July 1993. The discussions on the Irish Community Support Framework are well advanced by reference to progress on the Community Support Frameworks generally, and I expect them to be concluded over the next month or so. Discussions on the operational programmes are proceeding in parallel with those on the Community Support Framework with a view to having the programmes approved at the same time as or shortly after adoption of the Community Support Framework.
The Minister's answer is in the same order of deception as the original plan. We have 1992 money and 1993 and 1994 prices but the important thing is that for the first time the Minister has admitted that policy has to be decided first and the money is decided afterwards. He is now telling us, in as near to plain language as he ever gets, that the Taoiseach and the Tánaiste have been deceiving the Irish public and this House since November 1992.
Deputy Dukes, it is not in order to accuse any Member of this House of deceiving the House.
A Deputy
It is true.
A collective accusation against the Government has been deemed to be in order as a political accusation, but an accusation against a Member of the House is not in order and I ask Deputy Dukes to modify his language.
They are all in it, but they are not here today.
I accuse the Government, Fianna Fáil and Labour, jointly and severally, of trying to deceive this House. The Minister has made it quite clear again that the figure of £5.355 billion in the National Plan for the Community Support Framework was wrong. He has told us that the figure is now £4.5 billion, £800 million less than the figure in this rag of a document that was produced. Is the Minister aware that the Tánaiste last night grudgingly admitted that the Government will have to look to its own resources to make up this plan? Is the Minister aware that the only resource the Government has is what it extracts from taxpayers and what it can borrow? Is he not now facing the reality that programmes that do not qualify for European Union funding, for example health, apart from Tallaght hospital, local authority housing, education security and emergency services will have to be cut if this bunch of Ministers are to have any hope of covering their backsides against the retribution they deserve for what they have been involved in up to now?
The figures I am using now are the figures from the financial prospectus of last October and Deputy Dukes knows that.
The Community Support Framework is £800 million less than the Minister projected.
Corporation or local authority housing, security services or payment for army duty was never covered by EU aid. Regarding what the Tánaiste said last night, the aid available in the earlier years will be less than projected in the plan and we will have to make some adjustments for that. That position has been recognised since last autumn.
What about Deputy Fitzgerald saying that there is no truth in the rumours?
The aid figure in the plan is not the figure that was approved in October. The shortfall as far as the Government is concerned will have to be made up, the majority of it I hope in the mid-term review in 1996. Already this year we took up some of the shortfall in 1994 by the addition of Exchequer aid. Deputy Dukes is right in that that is an option for the Government and the decision will be made in the light of annual estimates as usual.
More tax and spend.
We have managed over the last ten years or so to secure extra Structural Funding by maximising our various programmes, particularly our community initiative programmes. We can do that successfully again. A large part of the National Plan relates to the private sector and it would be prudent of the Government to maximise the elements of the National Plan that will benefit both the State and the private sector. We will negotiate on the basis that we will achieve as much as possible of the overall figure and we hope to get fairly near the total.
Is it not the caes that this episode is a bungled hamfisted fiasco, a national humiliation which has made us the laughing stock of Europe? Is it not a fact that the Minister insulted the intelligence of the Irish people time and time again by telling them that the figure was £8 billion and that the Taoiseach said the figure was as near to £8 billion as made no difference, when the real figure was £7.2 billion? Did not the Minister again insult this House right up to last week by stonewalling and saying that there is no problem about that £8 billion? Did the Minister not insult two of Ireland's best friends in Europe, Commissioner Millan and President Delors, and literally bite the hand that feeds us? When we are talking about £800 million, we are not talking about trimmings or money on the margins but about the deletion of substantial projects. What are those projects?
Deputy Higgins will recall the last negotiations on the Community Support Framework. At that stage the plan we put forward would cost £3.7 billion, the Community Support Framework was £2.86 billion and at the end of the day, including the Community initiatives and cost increases, the sum reached £3.4 billion.
What is that in 1989 prices?
It would be foolish of us to delete projects from the National Plan before negotiations on the Community Support Framework, when we can take account of the priorities and the aspirations of the Commission. We have our objectives and the Commission has its. In the normal course of the cut and thrust of negotiations, we have to reach an understanding on that. We have to align ourselves for a mid-term review in less than two years' time and we have to take into account the best way of spending Exchequer money if we have any. It would be ludicrous to start eliminating projects which last autumn we felt were worth putting into the plan five years before the end of the plan. The Government has no intention of doing this.
So the Government is going to stick to it?
I know the Minister is confused, but perhaps I could help him in his confusion. When this plan was published on 10 October 1993 the presumption was that we would get £8 billion, ten days later the Minister was told of a decision by the European Union 17 member Commission that we would only get £7.2 billion. In the simplest arithmetic that is £800 million less. Why has the Minister for Finance and his Government colleagues continued, with bluff and bluster, in their attempt to mislead the Irish people into thinking we will get more than that? Will he tell the Irish public that in subsequent years Spain, Portugal or Greece will not again be in the position where they are unable to draw down their full share and that we will not benefit from such a bonus again? Will he confirm that his officials will present revised proposals for the plan to the European Commission on this Thursday? Will he give a commitment that the taxpayer will not be asked to pick up the tab for £800 million, the shortfall resulting from the Minister's bungling and ineptitude?
Sack cloth and ashes.
The Government has an overall plan for £20 billion, comprising European Union and Exchequer aid and private sector involvement and we will continue to negotiate the Community Support Framework on that basis. On several occasions recently, and in my reply, I stated that the figure involved is in excess of £7 billion, but that is not the total picture——
Unfortunately, it is.
On the same day the European Commission ratified the Irish financial prospectus for 1994-99, it stated categorically that there will be a mid-term review. President Delors and Commissioner Millan have stated on several occasions that they would expect, and even hope, that Ireland would achieve a substantial increase in the mid-term review. I cannot tell the House what the result of this mid-term review in two years time will be.
On a wing and a prayer.
If we had followed that advice on a previous occasion, this country would have been at a loss of £300 million to £400 million.
If Fianna Fáil had followed that advice, the Labour Party would still be over here.
For the third time let me repeat, the aid available in the earlier years will be less than projected in the plan so some adjustments will have to be made in the timing of elements of the plan. My officials in negotiations over the next few weeks will, of course, make those adjustments.
On 20 October 1993 I was expelled from this House for describing the Government as gullible, inept and dishonest. The Taoiseach stood up and named me and had me expelled from the Chamber for telling the truth. Last night the Tánaiste in Brussels and the Minister for Finance today had to admit that I was right. At the very least I should get an apology. The Government knows it was wrong and the Minister should apologise not only to me but to the public for misleading them.
I will in 1999 if I am wrong.
The Taoiseach knows he is wrong and he knows his Government has deceived the people. This is too serious a matter for the Taoiseach to be smiling, pretending there is no problem.
I know I am right.
Jobs and peoples' homes are riding on this money.
Let us not personalise matters. The Deputy should ask relevant questions.
I will ask the Chair some relevant questions on ruling the Taoiseach's motion in order when I was expelled from this Chamber. I told the truth then and I am telling the truth now: the Government misled the House and the people of this country when it claimed it had £8 billion in the bag.
A deception.
Obviously the Government does not have the good grace to offer an apology.
There is a hole in the bag.
It is of the utmost importance that the Minister identifies the projects that will be cut as a result of this loss of funds. It is not good enough that tens of thousands outside this House have to wait in expectation until 1996 to see whether they will get training, employment or community development funds. Will he come up trumps and tell us the precise amount we will lose and the cuts that will be made? Will the Government publish a revised national development plan?
The Government will not publish a revised national development plan now or in the future.
If the Minister told us otherwise we probably would not believe him.
There is no point in Deputies asking questions if they do not wish to listen to the answers.
Is the Minister getting vexed?
No. We will work our way throughout the years taking into account that at this stage we will receive £7.2 billion. The review is in less than two years time and the Exchequer, EFTA and Cohesion aid——
That is called a general election.
At the end of the day I hope we will implement the vast majority of what is in the national plan.
Say a few prayers.
It is not necessary at this or any stage to say whether a project is out——
It will not be in the CSF.
We will start a process on Thursday to work our way through each programme, defining our objectives and priorities. If we were to make cuts in an area it would be very bad in terms of negotiations to say so now.
The Minister will cut the less visual projects.
The ones with red roses on the lapels.
The fancy footwork in the Minister's reply put the Nancy and Tonya show in the Olympics into the halfpenny place. On one page we have ECUs and on the next billion of pounds and so on in order to confuse the issue. This morning the Tánaiste and Minister for Foreign Affairs indicated that we might have to look to our own resources, but in his reply the Minister says he is banking on a mid-term review. Is the Government banking on a mid-term review or on our own resources to draw down the money? What effect will this have on the budget the Minister introduced a few week ago?
Deputy Dukes has praised me for having given a comprehensive reply and for the first time outlining all the details.
If that is what the Minister understood by that remark, it is no wonder——
Is the Minister listening?
It is hard to satisfy Deputy Dukes.
The Government's position is that we now have in excess of £7 billion and the EFTA, Cohesion and Structural Funds contributions——
The Minister has gone down £200 million.
The Deputy will be up to £7.84 billion——
The Minister should not make that promise.
There is only one group in this House that is determined to ensure we do not get £7.84 billion and that is the Opposition.
(Interruptions.)
We have the Robert Maxwell of Irish politics.
We have secured £7.2 billion——
Lira?
——and we might secure even more during the next few weeks. Following the mid-term review we will definitely receive additional funds. At this stage we do not know the amount.
The Minister said earlier that he did not know.
I do not know how much but we will receive additional funds.
The Minister must know some of the figures.
If the Deputy had read the document she would know that we have received a commitment.
There is no point in reading it; it is useless.
We have already spent this year a substantial amount in increased Exchequer aid. What we will spend in the remaining years will be determined by the resources allocated in each budget.
Tax and spend.
In addition we will have to maximise the funding available under the Community Initiatives. We did very well under this heading in the 1989 programme. We will have to wait and see how we do during the next few years. There may also be increased private sector funding.
I am extremely confused at this stage. Is it not the case that the figure of £7.2 billion no longer exists, that the figure now stands at approximately £6.93 billion?
Wrong.
(Interruptions.)
Let us proceed by way of question and answer.
With all due respect, that is the question.
Is the Deputy wrong?
If somebody would give the Minister of State, Deputy Treacy the county enterprise board in Galway to play with he might let me ask another question without interruption.
The Deputy withdrew his allegations very quickly.
The Minister of State was giving out lollipops at the cross roads in Galway until the Labour Party took back that jar of sweets from him.
Let us have an orderly question time on the subject matter before us. Relevant questions, please.
Will the Minister tell the House the reason he proceeded to construct a National Development Plan on the basis of figures that he knew were false? The President of the Commission and several officials had advised him in advance of the publication of the plan, yet he proceeded to build a castle on shifting sands. What is the reason he is refusing to give any details? Regardless of whether the figure is £7.2 billion or £6.9 billion, is it not the case that it is at least £800 million short? How does the Minister propose to make this up and what does he think the Tánaiste meant when he said that he would make it up from own resources?
The private sector.
Where exactly will it be found?
Let us come to finality, Deputy.
Is it not the case that one cannot devise a National Development Plan on the basis of lopping 15 per cent off specific projects, constructing buildings without a roof——
Or windows.
——or roads without an end?
That was true of the Deputy's friends in Eastern Europe.
Bart Simpson is off again.
The Minister for graciousness is speaking again.
The Minister for self-righteousness is appearing again.
It is time I called the Minister to reply.
Is it not the case that the Minister will have to name specific projects? Is he prepared to tell the House what these projects are likely to be?
That should be adequate, Deputy. Let us hear the Minister's reply.
I agree with the Deputy that there is a shortfall but we have received a commitment that there will be a mid-term review. It would be unwise to show that we do not care about certain projects or programmes. In the negotiations we will outline the course the plan will take during the next few years. During the mid-term review we will try to secure an increase in funding. That is the way the Commission expects us to negotiate. That is what we did on the last occasion.
More tax.
On the question of Exchequer aid, despite the fact that the public capital programme was substantially increased we were able to cut taxes by £200 million.
The Minister should tell the Tánaiste about the mid-term review as he was talking about own resources.
Whatever about Mr. Landaburu, the Government has some neck to insist on telling us that it has a plan. Does the Minister accept that the plan is based on false figures and that the figure of £8 billion — the fourchette— has fallen to £6.9 billion? Does he agree that the remarks made by the Minister for Enterprise and Employment about Mr. Landaburu were most unhelpful and have done nothing to help Ireland's cause and will he dissociate himself from those remarks this afternoon?
I advise Members that we cannot debate this matter now. I want to bring these questions to finality. We have dwelt on them for some considerable time.
The sum is being converted to Irish pounds at 1994 prices and it falls into the range of £6.9 billion to £8 billion.
(Interruptions.)
The Government will choose the figure of £7.84 billion. I remind Deputy Harney that on the last occasion the Government, of which she and her colleagues formed part, successfully managed——
We did not tell lies.
(Interruptions.)
It is extraordinary that the parties opposite want us to conclude the negotiations four weeks ahead of schedule. That is the worst thing we could do. The Portuguese, the Greeks and the Spanish are doing the same as us.
The Portuguese plan has been approved.
(Interruptions.)
Unfortunately, on a previous occasion Members did exactly the same; they expressed criticism and threw in the towel.
The Opposition will always be blamed.
The Government will secure the maximum amount of funding. We will not be that far off the figure of £7.84 billion.
(Interruptions.)
I am bringing these questions to finality now and I am proceeding to information appertaining to the Adjournment Debate.
(Interruptions.)
That disposes of questions for today.