Vol. 494 No. 2
2 Mr. Quinn asked the Taoiseach if his Department, in the performance of its leadership role and involvement in economic and European policy, has contributed to policy formation on the proposed regionalisation of the State for the purpose of ensuring that disadvantaged counties retain Objective One status for EU funding; and if he will make a statement on the matter. [17485/98]
3 Mr. J. Bruton asked the Taoiseach if, in view of his reply to parliamentary Questions Nos. 16 and 17 of 1 July 1998 and recent remarks by the EU Commissioner for Regional Affairs, he will reconsider his decision not to ask NESC to report on the question of Objective One status in the context of the next round of Structural Funds. [17572/98]
4 Mr. J. Bruton asked the Taoiseach if, in view of his reply to Parliamentary Question No. 1 of 17 December 1997, he will make a statement on the activities of his Department in recent months to make an effective Irish input to the work of the European Council on major issues on the EU agenda including the EMU process and the Agenda 2000 negotiations. [17579/98]
5 Mr. J. Bruton asked the Taoiseach if he will report on the outcome of any discussions on the issue of Objective One status for certain regions of Ireland. [17424/98]
I propose to take Questions Nos. 2 to 5, inclusive, together.
I chair the meetings of the Ministers and Secretaries General group on EU policy, the last meeting of which took place in my Department on Thursday, 24 September. Last week's meeting was the fifth meeting of the group since the beginning of the year. As part of its general supervisory role in relation to EU policy the group is responsible for co-ordinating the Irish approach to the key European issues, including enlargement, institutional reform and the Agenda 2000 negotiations. In this context, last Thursday's meeting concentrated on aspects of each of these topics, including the issue of regionalisation.
While the group, which is co-ordinated by my Department, has a central role in shaping the strategy to be adopted in the Agenda 2000 negotiations and, therefore, has examined the assessment undertaken by the Department of Finance of the implications of a regionalisation approach, a final decision on this issue is a matter for Government. No final decision has been taken.
Given the timescale for negotiations, I do not intend to ask NESC to report on the question of Objective One status. There is sufficient expertise and knowledge of the issues, not least in the light of the plans of the eight regional authorities together with the submissions received from other interested parties, to allow full consideration of the regionalisation issue by Departments and ultimately by Government.
Regarding the constructive leaks to the media about the Government contemplating the division of the country into two separate regions, one with Objective One status and the other without, is it the case that agreement has not been reached either by the committee which the Taoiseach chairs or the Cabinet?
That is correct.
With regard to his experience of the negotiations of the previous round of Structural Funds in his capacity as Minister for Finance, does the Taoiseach believe such a division of the country, which would set urban poor against rural poor, is a desirable objective?
My view on this issue does not matter. The Government ultimately will take a collective view.
Does the Taoiseach have a view?
I have a view but any view will not be the final decision. That will be a collective view of the Government. I speak in the House as Taoiseach and not as an individual.
Does the Taoiseach intend to look into his heart?
Regarding progress, the Government has considered both sides of the issue in recent months in terms of whether to seek Objective One status for the entire country, as was sought during negotiations on the last two rounds of funds in which I was involved, or to argue for sub-regions. It is possible that NUTS II areas could be negotiated with the Commission. Some reports suggest it is only a matter of the Government deciding to divide the country. However, that is not the case. Other member states have divided in a similar manner but it requires Commission approval. We have to look at the statistical data to determine which regions would qualify and consider whether this would be to our benefit in the long term. There are arguments on both sides. An excellent paper has been prepared based, among others, on the report produced last December by the ESRI on rural development in the period 1950-1995. The matter has been referred to Government for decision. The Agenda 2000 negotiations will probably commence after the special summit to be held under the auspices of the Austrian Presidency on 24-25 October.
Since we are talking about regional structures which would affect every citizen and party in this House, will the Taoiseach publish the papers presented to the Government last week?
The memorandum prepared for the Government is based on Department of Finance data.
Can we look at them?
No, that is not the normal practice.
Is the Taoiseach aware of what his party said in its election programme on the matter of Objective One status for the west and rural areas experiencing population decline?
I am.
Is the Taoiseach aware that it was stated categorically that Objective One status would be sought post-1999 for the west, the Border region and rural areas experiencing population decline and that there was no mention of studies, statistics or working groups chaired by the Taoiseach? May I take it that that pre-election commitment no longer holds?
The Deputy is probably aware that Commission agreement is required to divide the country into regions. The Eurostat figures would have to be examined to determine which regions were below the figure of 75 per cent of GDP in the relevant years. We did not make this assessment in Opposition. We are now in a position to consider what Objective One status would mean in financial terms for the country as a whole or if we decide to divide the country into regions. The Government wishes to ensure all aspects are taken into account. What benefits would accrue if the country is granted Objective One status up to 2006? It looks likely that we will have access to Cohesion Funds for a four year period. What would happen after 2006 if subregions are not granted Objective One status? The question of State aids also has to be considered. These are extremely important questions which will have to be addressed before we enter serious negotiations. We now have all the data, we have made presentations and have had discussions. We will make a decision on the issue well in advance of entering negotiations.
These are very interesting questions, but what puzzles me is that while in Opposition the leader of Fianna Fáil did not explain these questions had to be answered before he made a categorical commitment to seek Objective One status for the west, the Border area and all rural areas where the population was in decline. Does what the Taoiseach said before the election hold after the election?
Sometimes.
Without being too smart, I was shocked when I went into office to find that nothing had been done on regionalisation.
It was the Taoiseach, not I, who made this promise before the election. It is he who is obliged to fulfil his promises. I made no such promises because I do not believe in making promises before researching the matter. Clearly the Taoiseach did not do any research before making this promise.
What about the £50 million for school children? How much research was done on that?
Does the Taoiseach accept his current attitude diverges significantly from his attitude to this matter before the election?
That is the case on many issues.
No, it does not.
The Taoiseach has done nothing since.
What are the Government's options in seeking Structural Funds from the European Union? What are its choices? Is the Taoiseach prepared to put those options before the committees of the Houses so they can be debated and an informed decision made? This matter does not affect only the Government and rural areas.
Is the Taoiseach aware of the report entitled "The Regional Problem: Regional Incomes and Urban Deprivation" by P.J. Drudy and Michael Punch of the Department of Economics, Trinity College Dublin, which was published this month? Has the Government taken that report into consideration? It was prepared with a view to examining whether areas such as Dublin should be excluded from Objective One status and shows that there is massive deprivation in urban areas of the State. Dublin has the second highest long-term unemployment rate after the west. It is 52 per cent in Dublin and 53 per cent in the west. Has that report been taken into account? It would have a major bearing on the case the Taoiseach hopes to make to the European Council.
To repeat what I have said, the work of the NESC, the NESF and other bodies regarding rural distribution has been examined in the Department of Finance paper which has been prepared on this issue. The assessment for that paper will also influence the discussions on Agenda 2000, as these matters are affected by the Common Agricultural Policy and other issues.
We have negotiated on the basis of Objective One single region status in the last two rounds. Funds will be reduced in the next round anyway. Many people seem to miss the fact that fewer resources will be available under the rule regarding 1.27 per cent of GNP. We can maintain that single region status, negotiate on that basis, conclude the agreement for 2000 to 2006 and end Structural Funds. That is what will happen at this stage of negotiations and my assessment of what has happened at the European Council and ECOFIN meetings to date suggests that will not change.
The alternative is to explore the possibility of isolating regions with less than 75 per cent of GDP as a means of holding on to Structural Funds for those regions after 2006. There is also the case that grant aid for those areas will be higher for a period into the future. On the basis of Eurostat figures, one would not be able to pinpoint blackspots in certain areas. If an entire region is not under 75 per cent, one cannot isolate blackspots within it. The alternative is to subsidise those areas from Exchequer funds, which will probably happen after 2006. These are the issues which are very important and which must be decided on.
Why did the Taoiseach not find that out from his party's MEPs before he made this categorical promise last June?
Now we are getting at the truth.
The Taoiseach did not indicate whether the Government had taken into account the report to which I referred which is an important contribution to the debate. The other question to which the Taoiseach did not respond was whether he was prepared to place these issues before the Joint Committee on European Affairs and the Joint Committee on Family, Community and Social Affairs, the two committees which would have considerable interest in this area.
Will the Taoiseach indicate whether he accepts that the object of the exercise is not to maximise the global amount of money coming to the State but to maximise the amount of money coming to those people who need it most? Rather than aiming it at specific geographic areas and maximising the total amount, this money needs to be targeted at people living with disadvantage.
I do not set the agenda for committees but the Government has to make decisions for negotiation purposes.
I am asking the Taoiseach if he is prepared to put this information before the committee. I am sure it would be prepared to meet tomorrow to discuss these matters if the Taoiseach were prepared to put the information before it for a rational debate.
This is a political cover-up.
I have no doubt the committees can summon the people who can give them most of the information, which has been in the public domain for a long time anyway. Only the Eurostat figures are not and even they have been correctly reported by European correspondents over the past few months. There is no information which is not in the public domain.
The Government is dealing with an extremely important issue which will affect the future of hundreds of thousands of people in the State. I ask the Taoiseach for a rational, political debate on the matter. Make this Dáil relevant to what is going on regarding these decisions.
Remember the letter to the Minister of State, Deputy Moffatt.
The Government will have to make decisions during the negotiations of Agenda 2000. Any deliberations made by the Oireachtas will also be taken into account but we cannot defer Government decisions pending those deliberations. I would be glad to hear the views of Members on this issue. Negotiations will continue for the next seven months.
The Taoiseach gave a comprehensive reply setting out the alternatives — Objective One status for the whole country in transition or for that portion of the country which falls below the 75 per cent GDP ratio, leading to the prospect of enhanced entitlements beyond 2006. Is the Government contemplating a regional structure of devolution explicitly constructed so as to maximise the attraction of EU Structural Funds for seven years and, perhaps, a maximum of a further seven years? Is that a correct understanding of the two options the Government is considering? To maximise the attraction of funds to be dedicated to a specific region of 13 counties, will the Government construct an entirely new structure of regional devolution for those 13 counties?
If we retain single regional status, as of now we are out after 2006. The transitional period is clear and I do not believe it will change.
That is the current option.
That is the position. If we remain in this position, Structural and Cohesion Funds will end in 2006. There would probably be two divisions of NUTS II, no one would contemplate three regions. At this stage of negotiations the difference in terms of money is very little. That would not influence the decision in terms of money. However, areas such as the Border region and some western counties are well below the 75 per cent GDP ratio. Demographic, national, European and other statistics indicate that these areas will stay below that figure for the long term. In that case, with the Commission's agreement, there could be a possibility of retaining European funds for these areas over the long term.
Will that require new devolution structures?
It would require enhancing the present regional structures through negotiations with the Commission. The Deputy will be familiar with what one country did on this issue last month. I do not think it will result in a grandiose regional structure, but there will be some kind of regional structure.
Will parts of the country have more devolved structures than others to obtain EU funds?
No, that would overstate the position. Parts of the country would have a slightly different structure in terms of giving them an opportunity to equalise their levels of wealth with other parts of the country over a ten year period. That is an accurate assessment of the current position.
With regard to question No. 4, what is the distribution of economic functions and decision making between the ECOFIN Council and the Euro 11 Council which comprises members of the euro? What role does the Taoiseach see for the Euro 11 Council in guiding the exchange rate policy to be pursued by the European Central Bank, given that policy on this issue is shared between the Council of Ministers and the bank? It is not the sole preserve of the bank in accordance with the treaty. Will the possible retention of Objective One status after 2006 be settled in the context of the Agenda 2000 negotiations as a whole, or will it be settled separately in advance or thereafter? What is the Taoiseach's view on the suggestion that Germany is receiving comparatively less from Europe, in proportion to what it is contributing, than any other country and that the Agenda 2000 negotiations will involve cooking the books to give Germany more money?
This issue will be discussed in the overall Agenda 2000 negotiations. At an earlier meeting Chancellor Kohl got agreement that regardless of what happened in the German election this matter would be completed by the end of March. The intention was that it would be wrapped up in the life time of the present European Parliament. A timescale was set out for the preliminary negotiations to start at the end of this month and I have no reason to believe it will be otherwise. It will all be done as part of Agenda 2000.
The handling of the euro and the euro discussions last weekend took place within the ECOFIN Council. These issues are also being considered at separate meetings of the euro countries. I do not know if there was a meeting of the euro group last weekend, but I assume there was.
Does the Taoiseach agree it would be inappropriate for Britain to participate in decisions on the exchange rate policy of the euro if sterling was behaving in a manner that was adverse to the interests of exporters from the euro zone, such as exporters from this jurisdiction? Does he agree it is inappropriate that the exchange rate policy for the euro should be decided in ECOFIN now?
It was agreed many months ago that the euro group would discuss these issues. The appropriate way to proceed is by means of the euro group, not ECOFIN.
Apart from the worrying prospect of setting rural poor against urban poor, would it have been better to approach the Commissioner for Regional Affairs prior to the matter becoming the subject of a public debate, given her comments on the radio that she was astonished the matter had not been brought to her attention before being reported in the media? Does the Taoiseach agree that, in the battle for Objective One status, the real battle has to be fought in the area of decentralisation and regional policy? The strongest argument we could put to the European Commission is that we have forgotten our old policies which were bad and will now embark on a proper decentralisation and regional policy.
In terms of what actually happens, it is a question of where the money comes from. If an area is not earmarked for Objective One status after 2006 it will still have to put forward its plans and proposals — as was the case with the national plan for the past ten years or so — and they will be sorted from the Exchequer. If an area is in transition and out of the funds, that does not mean it will not receive funds; it will seek Exchequer funds or co-financing. I would not like people to believe that because an area is not in a particular category it will not get resources. That is not the case. The purpose of Objective One status is to bring the areas of the Community that are underfunded up to the level of the rest of the Community. I assume the Deputy believes that is acceptable.
That is not answering the question. Why was the Commissioner for Regional Affairs unaware that the Government was thinking about changing its policy in terms of seeking Objective One status? It is embarrassing that she was not aware of it when the media and the public here were speaking openly about it.
The Commissioner has been well aware of the considerations for more than a year.
In reply to previous questions the Taoiseach seemed to indicate the previous Government made no attempt to accumulate information which would be of value in claiming Objective One status in terms of regionalisation. Does the Taoiseach agree that the western commission was established by the previous Government and that it included provision for advisory councils charged with accumulating the necessary data in terms of the 75 per cent income? Does he agree that in Westport he said he would abolish the western commission when he came to power, that this is the reason for the long delay in bringing forward the legislation and that he does not understand the dilemma of people in the west caused by the mistakes he made in the provision of Structural Funds for the region in the intervening period?
I do not intend starting an argument with Deputy Carey. However, it should be noted that the Western Development Commission Bill is item 3 on the Order Paper. We spent the past year working with groups and I have progressed the discussions, but they had no legislative powers——
The work was already done.
They had no structure and no possibility of doing anything——
The Taoiseach said in Westport that he would abolish the western commission.
Given that in the context of Objective One status it is not possible to pick out blackspots, something Members would like to see done as a means of recognising the deprivation and marginalisation throughout the island, I wish to register concern that the focus of the debate is drifting away from the critical needs of the west and the Border counties. Is the Taoiseach advising us that the arguments against the creation of a region composed of the long neglected counties in the west and along the Border to accommodate the continuance of Objective One status are equal to or greater than the arguments for its creation? This is a very important matter and there has been no outline or exposure of the arguments. All we have seen in the exchange which has taken place is an effort on the part of specific interests to wind back the efforts at creating a new region to accommodate Objective One status for the west and the Border counties. Those same influences in the House have been a party to the creation of the imbalance between the west and the Border counties and the rest of the jurisdiction over many years. Will the Taoiseach indicate if the detail of the arguments and discussion to which he and the Cabinet is exposed will be provided to all Members to allow us make an appraisal of the seriousness or otherwise of them?
The decision must be made in the best interests of the entire country, something I am determined to ensure. As Deputy Ó Caoláin said, there are blackspots and areas of social exclusion in all parts of the country. However, each of those areas cannot be sub-regionalised. The discussion, if the Commission agrees, would be on the basis that there are certain areas based on Eurostat figures which are under certain criteria for given years. It would be up to the Exchequer to see what would be done for other areas. I am very conscious that the Border regions, the west and some midland regions are certainly well below the criteria in terms of the Eurostat figures and are likely to remain so. If we can use Objective One status to the best advantage, not in transition but fully, to help those areas, the argument is worth examining in fine detail and this is what the Government has been doing for some months. We have commenced most of our work and studies and will make a decision on the matter in due course, well in time for negotiations in Europe.
Does the Taoiseach agree that the statistics clearly show that the west, the midlands and the Border counties fall well below the 75 per cent average community GDP figure? Does he agree these three regions achieving Objective One status would not lead to a reduction in the entitlement of non-Objective One regions to Objective One transitional funding?
Does the Taoiseach agree that the next round of Structural Funds could help to redress regional disparities in this country? Is he trying to fudge the issue, having given a commitment prior to the general election that he would seek Objective One status for the west and the midland and Border counties?
The commitment is contained in page 22 of the election manifesto.
I am glad the Deputy studied the manifesto.
Deputy Naughten's comments offer a fair analysis of the other side of the equation. Areas in transition would retain Objective One status if the country was sub-regionalised and that would prove beneficial to those areas in increasing their average. A decision will be based on detailed analysis and, as happened in the past two rounds, I hope we will successfully negotiate the best deal for the country.
Those of us who have worked on regional policy in the west and the Border counties for the past 25 years do not represent any sinister influence and are not interested in rolling anything back. However, the current indicators which make the case for being below the 75 per cent level do not mean we are required to ignore that an opportunity might be lost by relying on indicators which might be inadequate for an urban region.
In a recent newspaper article, Dr. P.J. Drudy of Trinity College made a case in regard to the inadequacy of GDP as a measure of urban poverty in which he pointed to the need to consider a series of social indicators such as early school leaving, income levels and long-term unemployment. Those who see the case for the west and the Border region in a straightforward manner under the existing criteria are not required to turn their backs on the people who perhaps have the strongest case for advancing from the poverty in which they live. Is the work carried out by Dr. Drudy and his colleagues being considered in the construction of a set of human-based rather than spatial indicators? Social and spatial indicators could be combined to make the case for a region of localised urban poverty. Will the urban strategy be abandoned altogether and will the strategy change from one based on the entire country to one based on a region as suggested in the leak? Will such a strategy be drawn up using the same indicators as heretofore? We must know whether the previous kind of methodological work on GDP is being supplemented by recently published work which clearly makes a strong case for obdurate urban poverty in Dublin, Cork and other places.
In regard to granting Objective One status, the objective criteria of the existing figures relate to an entire region, not sub-regions or sections within that. However, that does not rule out the criteria to which the Deputy referred being considered in relation to urban and other European initiatives. Such criteria are not applied however in regard to Objective One status for the entire country; GDP is used to determine whether the benchmark for the relevant years is above or below 75 per cent.
Are we choosing not to argue that case?
The European model of GDP does not take that case into account to the extent to which the Deputy said. It would not be accepted.
How do we know?
Because this case has been put many times and it has not been accepted. There is no certainty we can agree or negotiate subregional status for this country and it certainly could not be done on the basis of selecting blackspots. This would not be accepted by the European Commission.
We will now proceed to questions nominated for priority.
On a point of order——
We must move on, we have devoted 40 minutes to these questions.
I am entitled to raise a point of order. I put two specific questions to the Taoiseach to which he did not reply.
The Chair has no control over that. We will now proceed to Priority Questions as the time has elapsed for questions to the Taoiseach.
There was a lot of waffle in the answers to those questions.
It is disgraceful that this issue was not properly debated and discussed.
Before we proceed to Question No. 67 I remind Members that the temporary arrangements for priority questions agreed to by resolution of the Dáil on 28 May were effective only up to the end of the last session and have now elapsed. Accordingly, we will revert to the previous system under Standing Order No. 38, that is Priority Question Time will last for 20 minutes and if the fourth and fifth questions are not reached they can be taken as ordinary questions.
(Dublin West): Will Deputies and the Minister unofficially continue the 20 minute arrangement covering the five questions?
That is a matter for the sub committee on Dáil reform. If the Deputy has any submission to make on that subject, he should make it to that committee.
(Dublin West): For the purposes of today, the Minister and Deputies could do that.
There is no obligation on them to do so.
(Dublin West): Four minutes per question for the five priority questions, for which the rest of us have to sit and look on.
We cannot discuss the matter now. Will the Minister proceed with Question No. 67?
