I move:
That Seanad Éireann takes note of the National Development Plan, 1989-1993.
National Development Plan, 1989-1993: Motion.
We on the Government side particularly welcome this debate on our National Development Plan which contains the largest budget ever mobilised to modernise our economy, accelerate economic growth, provide increased job opportunities and contribute to narrowing the gap between our living standards and those in the more prosperous regions of the European Community. As such, this plan is of fundamental importance and its success will have a critical bearing on all our people in their everyday lives in enabling us to prepare for the single market in 1992 and to reap our fair share of the significant economic benefit which will accrue from this at Community level.
The plan has its origins in the decision of the European Council held in Brussels on 12-13 February 1988 when it was decided that as part of the Delors plan for the relaunch of the Community and the completion of the single European market the amount of the Structural Funds for the less-developed regions should be doubled and a special effort made for the least prosperous, including Ireland.
This plan should be seen as an extension of our Programme for National Recovery, is consistent with its objectives and takes us further along the road of economic and social development. The Programme for National Recovery has already laid the foundations of a sounder and more prosperous economy by bringing about marked improvements in key areas such as the public finances, interest rates and inflation, the balance of trade payments and competitiveness. The plan which we are now debating proposes to build on this progress with the support of the Structural Funds of the European Community, which represent one element, a major element, in the Community's follow-up on the incorporation of economic and social cohesion into the Treaty of Rome as a major objective of the Community as a whole. This was, of course, one of the most significant aspects of the Single European Act.
The availability of the increased resources resulting from the doubling of the EC Structural Funds represents a unique opportunity for Ireland to raise the whole country as a region of the Community on to a new plane of development and to overcome the structural deficiencies that are holding up back and without putting at risk either budgetary stability or our balance of payments. The under-utilisation of our resources, including the talents and abilities of our people, is the biggest challenge we face today. It is imperative that we tackle this challenge successfully. In facing it, we can be armed with the confidence which should inspire us from our proven capacity to master modern industrial and service technologies and to sell our products and services in the markets of the world, as evidenced by the fact that we now have a trade surplus with all our Community's partners. Nevertheless in order to improve our performance as a modern economy and reach the standards we desire, it is urgently necessary to bring our economic infrastructure up to the highest possible standard of provision and efficiency and also to expand and strengthen the productive capacity of our economy. The plan is concerned with both of these.
I would like to deal briefly with the situation in the Community to which our national plan will relate. This Government have been very active and effective in ensuring for this country the full benefits of our membership and in protecting our national interests in the Community. The outcome of the negotiations on the reform of the Community's Structural Funds, which were of vital importance and significance for this country and other less-developed regions of the Community in the context of the completion of the internal market, represents a major achievement by the Government in ensuring a meaningful follow-up on the cohesion provisions of the Single European Act and provide us with major opportunities resulting from the doubling in the level of the Structural Funds resources for the less-developed regions, the commitment to a special effort for the least prosperous of these regions which, at our insistence, will also include this country and the provision that for these regions the rate of assistance from the funds can be up to 75 per cent.
In addition, we were also successful in obtaining agreement that certain infrastructural projects with private sector funding will be eligible for assistance — a provision which will be particularly helpful to us, given our budgetary constraints, in ensuring that we will be in a position to maximise our take-up from the funds and, through partnership arrangements with the private sector, ensure that certain projects can proceed much more rapidly than would otherwise be the case.
In this context, Senators will note that a special feature of the plan is provision for funding from the private sector where such private funding can be regarded as similar to public expenditure and thus, under the regulations qualify for Structural Funds' assistance. This is particularly so in the case of roads where we have already identified a number of projects such as the Dublin Ring Road, the Newbridge-Kilcullen by-passes, the Lucan-Kilcock Road and the downstream crossing of the River Lee as suitable for such private sector input.
Another area is that of tourism facilities and amenities where substantial investment by the private sector, with assistance from the European Regional Development Fund, is envisaged in the plan in line with the high priority we have given to tourism development since our assuming office.
Because of the still precarious state of our public finances and the massive overhang of Exchequer indebtedness, I need hardly emphasise the constraints which we face in regard to expenditure by the Government here. Against this background and the need for a continuing reduction in the Exchequer borrowing requirement, which was again underlined in the recent Community's Annual Report on the Economic Situation, the increases in the Structural Funds and their deployment in enhancing our economy's potential output assume critical importance in providing a firmer basis for our economy to continue on a higher but sustainable growth path.
Deeply conscious of the crucial importance of this plan, the Government made careful and effective arrangements in its preparation. First, we acknowledged the vital role to be played by the Commission both in approving the plan to be submitted and in its subsequent implementation. It was clear to us that full and close co-operation with the Commission was essential in order to make a success of our preparation for the completion of the Single Market and in particular to ensure that the plan meets all the necessary requirements. We arranged, therefore, at an early stage to establish the closest possible degree of co-operation and co-ordination between the Government and the Commission and the Administration here and the services of the Commission.
For this purpose, on the Commission side a task force of relevant Commissioners and Directors General was established, headed by President Delors. On our side this was paralleled by a Committee of Ministers and Secretaries over which the Taoiseach presides. The objective is to ensure that the Government's policies and Community policies are fully co-ordinated on an ongoing basis and that as the plan took shape it would be with the full knowledge and understanding of the Commission at every stage. We developed what was, in fact, a novel partnership between us and this co-ordination and co-operation will continue in order to ensure the successful implementation of our plan.
The plan covers the State as a whole and this is in accordance with the Community's regulations under which Ireland is one region for the purposes of the Structural Funds.
In preparing the plan, the Government carried out an unprecedented level of consultation at both national and local regional level. At national level the Central Review Committee under the Programme for National Recovery was consulted: this is, of course, representative of the major national economic organisation, including farmers, industry, employers, trade unions and cooperatives.
This was complemented by an important regional input from the working and advisory groups in the seven sub-national areas designated by the Government. The working groups represented the relevant Government Departments, State bodies and local authority management. the advisory groups included elected representatives of the local authorities such as the chairpersons of each county council and corporation within the area and of the larger urban district councils as well as representatives of a wide range of vocational groups with an interest and involvement in local development such as the CII, CIF, chambers of commerce, FUE, ICTU, ICMSA, ICOS and Macra na Feirme. Criticisms that the views of local elected representatives were ignored are, therefore, totally without foundation. Indeed, specific arrangements were made to ensure that the views and suggestions of the advisory groups were taken into account by the working groups.
The Government adopted these arrangements against the background of their strong commitment to regional development and their desire to have a regional contribution in planning the best use of the increased resources from the Structural Funds. We believe that these arrangements struck an appropriate balance between, on the one hand, representation of central Government which will have to provide the great bulk of the matching national finance and which has to assess the expenditures involved in the total national budgetary context and, on the other hand, representatives from the areas themselves who brought to the task their knowledge of the needs, assets, weaknesses and resources of their areas together with a spirit of local enthusiasm and enterprise.
This is the first time that regional participation of this kind has been instituted in this country. We did this on our own initiative, because we firmly believe in the strength and vigour of our regions and local communities and their indispensable role and contribution to our overall development efforts at national level.
Criticisms of our arrangements in this regard are, therefore, devoid of any substantive content and are a bit hard to take, especially from those who participated in the previous Government which consistently refused to introduce any regional or sub-national dimension into the operation of the Structural Funds in this country. Under the new regulation, given that Ireland remains a single region for structural fund purposes, we could have adhered to the position established up to now that the national Government was the single regional authority to be involved in the process. Instead, and in line with the stance on consultation and involvement which we have adopted at national level on domestic economic and social matters, we introduced these new arrangements to ensure that regional and local knowledge and experience were drawn on and utilised to the full.
It has been suggested that the Government introduced the regional dimension as an afterthought and only under pressure from the Commission. This is nonsense. Let me remind Senators that I announced the Government's intention to introduce this regional dimension as early as October 1987 when the negotiations on the Commission's proposals were only in their early stages. There was no pressure from the Commission and could not have been since we had already spontaneously announced our intentions to proceed according to the spirit of the approach we had advocated in successive elections.
Those Senators who think there would have been a basis for pressure from the Commission are also misinformed. I refer them to the new regulations on the funds adopted in June and December 1988. They will search these in vain for any provision that would provide the Commission with a legal basis for pressing us to adopt a regional dimension within Ireland. Instead, it was left to each member state concerned to designate the competent authorities and it was completely optional whether these included regional or local bodies.
Moreover, in Irish terms, since we are one region for community purposes, the reference to a regional authority refers to the national Government. The language of the regulations has to cover varying situations in all the member states concerned and the reference to regional authorities is primarily relevant to countries like France or Spain, which are divided into regions, most of which have large populations than that of the entire State here. For example, in France, the average population of the 22 regions is 2.4 million and the most populous has 10.2 million people. In Italy, the populations of regions are also, in general, quite large by reference to the population of Ireland, ranging, in fact, up to 8.9 million.
It has been claimed on the one hand, that the programme documents drawn up by the working parties were subject to a rigid pattern imposed from Dublin: on the other hand, there were complaints that, as summarised in the national plan, they varied and showed differences in approach and style. Our detractors cannot have it both ways. Of course, while there were general guidelines from the centre, no rigid pattern was imposed and the approaches and priorities of the different working and advisory groups did show differences, as is only to be expected, in view of the varying natures and needs of the sub-regions.
It has also been suggested that the sub-regional breakdowns in the plan had, as their point of departure, figures that were predetermined at national level, without reference to the inputs from the regions. This is also wide of the mark. Precisely because we had the central Government Departments, as well as the local authorities represented on the working groups, we had a constant feedback from these groups in the process of preparing the national plan. Due to the time constraints, the two exercises had to proceed in parallel but they did not proceed in sealed compartments. As a result of a process of interaction, the sub-regional breakdown set out in the national plan matches quite well with the results emerging from the working and advisory groups, all of which have, incidentally, essentially completed their reports.
I should like to avail of this opportunity publicly to thank all the representatives on both the working and advisory groups for their commendable efforts which facilitated the significant regional input to and dimension of the national plan and the operational programmes. The results of their work were taken into account and incorporated, as appropriate, by the Government in the national development plan which, for the first time ever, contains planned total expenditure, including the amounts which we are putting forward for EC support from the structural funds in each of the seven sub-regions in response to the assessments of needs and objectives made by the groups.
As Senators will have noted, Chapter 6 of the National Development Plan contains a summary of the objectives and strategies which were identified for each region together with financial tables outlining a detailed sectoral and functional breakdown of the planned expenditure over the period 1989-1993 in each region. It is clear from these tables that each region will benefit substantially in the developments planned. Given the substantial role of the Exchequer in funding the expenditures involved, the decisions on the allocation of resources as between the different regions had to be taken by the Government, but let me emphasise that these decisions took fully into account the needs and priorities as identified by the groups. It also needs to be clearly understood that within the constraint of the limit on the resources available, increases in the share of any region could only be at the expense of other regions.
Apart from their input into the preparation of the National Development Plan, the work undertaken by the groups has also provided a valuable input into the formulation of the operational programmes which will set out in greater detail the development measures which are set out in outline form in the national plan. Most of these programmes, the coverage of which is set out in Chapter 5 of the national plan, have already been submitted to the Commission and the remaining ones will be forwarded very soon.
These programmes will be examined by the Commission in parallel with its examination of the national plan and we expect that they will be approved at the same time, or, possibly, in some cases in advance of the six month maximum period set in the regulations. Indeed, by acting quickly in this area we are ahead of nearly all our Community partners and are, therefore, well positioned to ensure that projects can go ahead and that the assistance from the structural funds can flow as quickly as possible.
For the information of Senators, I should mention that a provision in the co-ordinating regulation, dealing with the transition from the old to the new regime for the structural funds, permits approval of programmes once the plan has been submitted, but before the Community support framework for the five-year period is agreed with the Commission — a provision which we wish to see availed of to the fullest extent possible to ensure that there is no interruption or undue delay in our take-up of assistance from the funds this year.
Responding to recent criticisms on the future role envisaged for the consultation structures, I should mention that the coordinating regulation provides that, within the framework of the new partnership, the member states and the Commission are to ensure effective monitoring in the implementation of programmes which are assisted from the funds. Such monitoring is to be carried out by way of jointly agreed reporting procedures, sample checks and the establishment of monitoring committees set up in agreement between the member states and the Commission.
The manner in which these provisions will be applied in our case has yet to be discussed in any substance with the Commission and it is, therefore, too early at this stage to comment on this particular aspect. However, as we pointed out in the national plan, our present system of ongoing co-ordination and integration between the various State agencies and local authorities is efficient, cost-effective and practical and this will continue to ensure that particular developments planned for each area are implemented in an integrated way which will ensure coherence and complementarily between the individual measures and programmes. An additional consideration to bear in mind also is that the work of the groups at sub-national level will be important, and to a large extent, the guiding factor which will influence and will be taken into account in the detailed implementation at regional and local levels of our operating programmes.
We do, of course, welcome any constructive comments and suggestions for improvement to the plan. While there is no real scope for significant changes in the fundamental provisions, the Government will be flexible as regards the more detailed aspects of the particular sectors and in the timing and implementation of particular projects. Thus, the procedures which we are following are as open as possible in the circumstances to receiving submissions and proposals from any quarter or particular interest groups.
A vitally important aspect of this National Development Plan is the manner in which the expenditures envisaged in the plan are fitted into and made compatible with the strict budgetary discipline being pursued under the Programme for National Recovery.
The economic recovery policies that we have implemented since March 1987 have the approval of the European Commission. Indeed, the recent annual report of the EC stresses the continuing importance of the process of budgetary adjustment, stabilisation of the debt-GDB ratio, a continuing reduction in the Exchequer borrowing requirement through cuts in public expenditure, with a greater emphasis on current than capital. The degree of improvement in the public finances achieved to date has been remarkable. The debt-GNP ratio has been stabilised ahead of schedule as a result of renewed economic growth and associated revenue buoyancy and the reduction of Government expenditure by 9 per cent of GNP since 1986 but further adjustment will be necessary, even after this year's targets have been achieved. The reduction in the level of borrowing achieved in recent years, the improvement in the rate of growth in the economy, have done no more than ease the problems of budget management to a limited degree. The recognition in the programme that "a fiscal policy which faces the financial realities is the key to putting the economy back on the path to long-term sustained growth" must still remain a major guiding principle for policy over the next five years.
The size of the Exchequer deficit is the primary determinant within our control of the environment for investment and sustained economic growth — through its impact on financial markets and interest rates, and on stability and confidence generally. For this reason, and in view of the scale of outstanding debt and the large amount of resources this pre-empts, it is necessary to proceed beyond stabilisation over the medium-term. At the same time, there is good reason to believe that, with a positive response to the development programmes set out in this plan, the economy can move reasonably quickly on to a higher growth path.
Growth in the Irish economy over the period to the mid-1990s could exceed the average of the EC, given continuing implementation of a responsible domestic policy strategy. Key elements in this will be the maintenance of a good management-labour relations climate, low inflation and interest rates, a stable rate of exchange and a constant emphasis on competitiveness. Given a consistent adherence to the right policies and attitudes, we could prudently anticipate real economic growth of the order of 3.5 per cent annually over the medium-term which, on current forecasts, would be better than the EC average. Such growth should lead to a modest reduction in the burden of debt over the coming few years. However, to fully re-establish sustainable growth in output and employment a more substantial reduction in the real level of debt is clearly necessary.
The progress made under the Programme for National Recovery and the prospects of further major progress under this plan, however, could be endangered if we allow inflation to rise significantly again in relation to our trading partners. Thus, to keep prices and the rate of inflation down is one of the most important tasks we face in maintaining economic progress and in ensuring the success of this national plan.
The plan we have adopted is, despite the demands for additional capital expenditure, consistent with the financial policy goals we have been adhering to and, in fact, improves on them. The plan envisages a reduction in the Exchequer Borrowing Requirement to 3 per cent of GNP in 1993, and in the debt-GNP ratio from its current level of 133 per cent to 120 per cent by that date. It is possible, if the experience of the last two years were to be repeated, that financial progress could be faster than that. The Exchequer returns for the first quarter of 1989, in so far as they give any valid signal for the year as a whole, are encouraging. It is not possible accurately to predict the course of events for many years ahead but our responsibility is to set realistic, achievable targets and implement consistently and courageously the policies necessary to achieve them. If conditions warrant, we will raise our sights higher as the implementation of this plan brings the desired results.
The targeted reduction in indebtedness should, in turn, lessen by about one-tenth the annual burden of debt-service, thereby releasing resources for other desirable purposes, including a reduction in taxation.
One of the purposes of the plan is to secure a substantial increase in private investment. We do not propose to make economic growth and employment dependent on increased domestic Government expenditure. There has been substantial progress recently in streamlining the economy, and we have the capacity to absorb the additional funds now available and to use them for productive purposes without difficulty. It is not legitimate to criticise this plan for what it does not contain. Neither taxation policy nor social welfare policy, which are in the Programme for National Recovery, feature as such in The National Development Plan, because they are not directly relevant to the increased Structural Funds. The title of the plan is National Development Plan, and it is essentially an expansion in depth and an elaboration of some key development aspects of the Programme for National Recovery.
The plan envisages total expenditure of £9.1 billion over the five year period 1989-1993. This includes £3.6 billion of public and similar expenditure, £2.1 billion of private sector expenditure and £3.4 billion from the EC Structural Funds. Full details of these expenditures are set out in the plan. For 1989, the plan provides for expenditure of £1.5 billion, including £0.4 billion from the Structural Funds. The 1989 budget has already taken this expenditure into account so that the development measures could go ahead as rapidly as possible.
The plan is geared to maximise the amount of Structural Fund aid which will be made available to Ireland and to use it to best advantage in developing the economy. The amount being sought from the Structural Funds goes beyond a strict doubling for Ireland over the period and represents what the Government here would regard as a fair allocation of the available funds in the light of our development needs.
The public finance position limits the Government's room for manoeuvre in providing domestic resources to develop the economy. What the plan sets out to do is to maintain domestic public and similar expenditure on structural development somewhat above its 1988 level and on top of that to invest the additional Structural Fund resources in additional development.
This is in line with the "additionality" provision in the Community regulations. This provision requires — and I suggest Opposition Senators take careful note of this — that the increased appropriations from the funds should result in at least an equivalent increase in the total volume of official or similar structural expenditure, including the Community assistance, in the member state concerned, taking into account the macro-economic circumstances in which the funding takes place.
In our circumstances, given the level of the national debt and the continuing need to reduce the level of Exchequer borrowing, the scope for increasing the level of Government investment in the economic infrastructure is of necessity limited, but the higher intervention rates now available from the Structural Funds are very great value in this regard as they will mean that the increased Community assistance will greatly increase the return that can be procured in improved infrastructure from domestic expenditure, public and private.
As I have indicated, the Government intend to pursue a further reduction in Exchequer borrowing over the medium term. This reduction must be sought primarily on the current side, that is by reducing the budget deficit. This will require continuing strict financial discipline. In fact, since 1986 the greater burden of adjustment has been on the current side, which has been reduced by 4.3 per cent of GNP, compared with a reduction of 3.3 per cent in Exchequer capital borrowing. For the first time since 1982 the Public Capital Programme in 1989 showed an increase of £80 million over the outturn for 1988, an increase that was, however, achieved without resort to additional Exchequer borrowing.
The reformed EC Structural Funds provide for an increased maximum rate of Community contribution of 75 per cent of eligible expenditure involved. The precise contribution rate which will apply to particular operations will be a matter for negotiation with the EC Commission. Factors which are to be taken into account include the seriousness of the specific problems to be tackled and the financial capacity of the member state involved. Other factors, such as the extent to which an investment will generate revenue, will also have a bearing.
Since Ireland has been classified as one of the least prosperous regions, it would be appropriate that the highest contribution rate should apply in Ireland as far as possible under the regulations and this is reflected in the plan.
In determining the development priorities, the Government looked first at the main features of the economy which needed most attention, and where there are serious structural deficiencies which need to be remedied. We have to overcome low income and output levels, where quite insufficient progress has been made since we joined the EC. We have problems arising from our population structure, which has meant we have had to face both a rapid growth in labour supply and a high dependency ratio. This has also undoubtedly exacerbated our financial problems. The persistently weak demand for labour has led to high unemployment and emigration.
We face difficulties in finding necessary development funds, because of continuing budgetary imbalances and high indebtedness. Access costs and serious gaps in our infrastructure hinder investment and development. We are still relatively heavily reliant on agriculture. There are weaknesses in our industrial structure and investment levels have been low in recent years. Many of these problems arise in part from our position on the periphery of Europe. The completion of the single market and the parallel cohesion measures must aim to reduce the scale of these difficulties and begin to close the gap between Ireland and the central regions of the Community.
It was clear that two types of action were needed: action to improve the competitiveness and efficiency of the Irish economy, taking account of our geographic position as an island on the periphery of Europe, inadequate infrastructure and low population density and action to strengthen the productive capacity of the economy.
Improving the competitiveness and efficiency of the economy requires investment in transport facilities such as roads, rail and bus, seaports and airports. It also requires investment in telecommunications, postal services, the energy network, sanitary services and waste disposal facilities. All of these were identified as sectors where steps need to be taken to improve our position.
As regards strengthening the productive capacity, the areas identified for development are industry, services, tourism, agriculture, fishing, forestry and rural development generally. Action on these sectoral areas must be complemented by the development of human skills through improved educational and training resources and particular measures to facilitate the occupational integration of young people and to combat long-term unemployment.
Now that the development plan has been submitted, the Commission will assess it and proceed to draw up what is called the Community Support Framework. This Community Support Framework will be prepared in consultation with the Government here. In effect, it will set out the development measures which the structural funds will assist over the period and the level of assistance which will be provided. This will be a crucial document since it will establish the overall financing position for the five-year period. The process of consultation and dialogue with the Commission, which has worked so well in expediting the preparation of the plan, will continue to operate during the examination of the national plan, the operational programmes and the support framework.
The regulations require the Commission to take a decision approving the Community Support Framework not later than six months after receiving the plan. However, I am confident that the process can be completed earlier than that. In discussions which we have had with President Delors and the Commissioners involved, we have stressed the need for early decisions so that all the development operations can get under way as early as possible. They have assured us that the Commission will complete its work as quickly as possible.
The plan sets out the overall strategy which will be followed in each of the relevant sectors. The operational programmes will spell out in more detail the precise measures to be undertaken. These will be chosen in a way which will maximise the development effect and deal with the main deficiencies in each sector. These programmes will show the specific developments and projects in each sector. They will have to be agreed with the Commission and, in fact, will form the legal basis for the commitment of funds by the Community. The programmes involved are set out in the plan and are as follows: industrial development; tourism; roads; transport, including air and sea freight, sea ports, airports, rail and bus; energy; sanitary and other local services; telecommunications and postal services; human resources, education, training and employment; agriculture and rural development.
As we have highlighted in Chapter 2 of the national plan, the role of the Community in terms of the pursuit of a common macro-economic strategy at Community level designed to ensure that the Community economy expands at a rate in line with its potential and that the potential benefits of the internal market are fully realised, and the implementation of the internal market programme and the development of Community policies in accordance with the spirit of the cohesion provisions of the Single European Act is of crucial importance in ensuring that the objectives which we have set in the plan are realised.
The co-ordination of economic policies within the Community has now been given added significance and impetus with the requirement in the Single European Act that member states shall conduct their economic policies and shall co-ordinate them in such a way as, in addition, to attain the cohesion objectives of the Single Act. By way of followup on this, the new co-ordinating regulation and related entries in the minutes of the Council provide that the assessment of programmes assisted by the funds shall take account, inter alia, of macro-economic effects and performance and the extent to which programmes complement national policies.
This provides a strengthened basis for the pursuit of the Community's cooperative growth strategy whose importance was again underlined in the research results described in last year's Cecchini Report on the internal market. Its effective implementation would provide major benefits in tackling more effectively the still unacceptably high level of unemployment in the Community and in maximising the gains from the internal market. Senators will recall from the debate which we had here at the time of its publication that the Cecchini Report identified that, coupled with an appropriately growth-oriented economic policy, the benefits at Community level of the internal market could be as high as an increase in GNP of up to 7 per cent — additional to the economic growth which would otherwise occur — while the increase in net new jobs would be five million.
In short, given the limited size of our domestic market and with the Community market accounting for three-quarters of our exports, the realisation of our economic potential is critically dependent on growth conditions in the markets of our Community partners. In this context and viewed in historical perspective, it is notable and striking that between 1960 and the first oil crisis in 1973 when the Community economy was at its most dynamic, economic convergence improved fairly steadily with cross-country deviations of GNP per capita narrowing substantially.
Indeed, during that period the four poorest countries now in the Community — Ireland, Greece, Portugal and Spain — managed on average to reduce the gap separating them from the four richest member states by about one-third. However, since 1973 the convergence process has not only halted but has even gone into reverse and the gap between the four poorest and the four richest member states has widened by 5.5 percentage points.
It is difficult to quantify fully the overall employment impact of the plan, embracing both the direct job content of the measures themselves and the wider implications for economic performance of strengthening the economic base and the development strategies. The Government are, nevertheless, satisfied that the rate of job-creation will be stepped up progressively as these measures take effect. It is considered that the pace of new job creation, estimated at 29,000 last year, can be accelerated to at least 35,000 annually by 1993. This would represent the creation of more than 150,000 jobs over the five years. It would accommodate the natural growth of the work-force, and, if job losses can be contained, it would enable a continuing significant reduction in unemployment.
In assessing this plan, it is important to bear in mind that it concentrates principally on the essential development priorities over the next few years. The increase in the funds, while substantial, does not represent any kind of abundant largesse, nor is it a chance to indulge in unrealistic attitudes and pursue projects not relevant to the funds or their purposes.
Achievement of the targets in the plan will be of particular significance, therefore, in narrowing the gap between living standards here and those in the more prosperous areas of the Community. To the extent that the Community succeeds in fully exploiting all the opportunities which the internal market will create, our prospects and opportunities would, of course, be all the greater.
The plan and supporting programmes which we have formulated provide this country with an unprecedented opportunity, in partnership with the European Commission, to consolidate the solid progress which the Government have already achieved under the Programme for National Recovery and thereby opens up a new horizon of higher growth, increased employment and higher living standards for all our people.
In the process, the Community will have demonstrated in a very practical way its commitment to the achievement of the cohesion objectives in the Single European Act of greater convergence in living standards and, in turn, this country will be better positioned to contribute to and participate more fully and effectively in the prospects which are opening up towards further steps in the Community's development.
The Government are determined to ensure that the benefits of the National Development Plan and complementary operational programmes will be distributed equitable and on a balanced basis throughout the country which will set our economy and society on a course of increased prosperity and justice for all. I commend it to the House.
Debate adjourned.