It is appropriate that I should make my first contribution in this Dáil on the motion to establish the Joint Committee on the Secondary Legislation of the European Communities. Some of the fundamental purposes of this committee will be to ensure that whatever is done at European level is made as relevant as possible at national level, and to ensure that the House, and through the House the members of the public, will be well informed of developments in Europe and, in our capacity as public representatives, to maximise the benefits accruing to Ireland as a member of the European Community.
When dealing with secondary legislation one can get the impression that one is dealing with a whole range of bureaucratic instruments which, for some reason or other, are engineered by bureaucrats for their own satisfaction. But it is much more vital than that. The evidence would suggest that to effectively implement the benefits of membership one has to arrange one's own affairs to maximise those benefits. I would like to give some examples which might be overlooked. The areas we look to for major developments in the European Community would have been initially argicultural transfers under FEOGA; a second area of great expectation not quite realised would have been the regional fund; and the third area would have been the social fund.
I will deal with the social fund first because it is very important at this stage. In line with the policies proposed by the Commission over the last 12 months in particular, the social fund has increased very considerably. I do not think it is generally realised that in this year alone the transfers to Ireland from the social fund will be not less than £80 million and last year it was more than £70 million owing to a very major increase in the funds being allocated to Ireland under that instrument.
It is important that the committee, this House and all responsible at this level ensure that the money is being used effectively and specifically for the purposes for which it was basically intended. Frankly, there is a risk that much of the money could be taken up in administration and that it may to a considerable extent be taken up through public service expenditure. That is not, of course, the original intention of the fund. That said, one must acknowledge the role played in this area by the agencies such as AnCO. If we recognise the fundamental need of self-reliance, we must ensure that we do not look at any European funds as being a channel through which we can spend public money rather more easily than would be otherwise possible, having regard to the responsibilities in raising funds at home for public expenditure purposes.
There is great scope for this committee, under recently proposed policies, to bring a whole new direction to the application of social fund moneys in particular. It is appropriate at this stage that I give only one example of many. That is in the area of small and medium sized industries. Hitherto, the social fund has been applied in Ireland in terms of training at what one might call the basic operative level, whether skilled, semi-skilled or non-skilled. AnCO programmes are being used for employment, re-employment, training and retraining. However, a gap has appeared, here as elsewhere, in the management area in small and medium-sized industries. Given the nature of the economy at the moment, it is quite clear that there is a visible, real limit to what we can expect to achieve from external investment in this country. This derives from two reasons. Firstly, in the present international economic climate the capacity to invest in other countries is being diminished and, secondly, our capacity to attract external industry is also limited by the budget situation elsewhere—in other words, the capacity to be as attractive by way of tax incentives as we have been over the period of growth will not necessarily exist.
The native small and medium-sized industries are, and must be, a crucial element in our continuing growth and particularly in employment. Management of these small and medium-sized industries — which may start with a brilliant idea and a commitment, which is in itself a very worthy and commendable thing — may falter, as it has from time to time, in the complex areas of marketing, cost accountancy and general administration. There is a new area to which the social fund has not been directed under the Commission's recent proposal. For that reason, this committee, this House and those in charge of these responsibilities at home, either in Government or in the public service, should look immediately to the preparation of programmes for management in small and medium-sized industries. Incidentally, almost every Irish industry — over 90 per cent by definition — will qualify under the terms of small and medium-sized industries as determined by the European Community's criteria. Particularly in the west, but in many parts of Ireland, weaknesses in management areas have occurred — for instance in Gaeltarra Éireann, of which we have been conscious and which have concerned the Government for some time. There is now more scope for redirecting these funds into those areas, in addition to the traditional areas of the shop floor operatives, whether skilled, semi-skilled or non-skilled. That is one of our great hopes in this new era which will require self-reliance more than anything else. Coincidentally, while we may continue to look to Europe for support in what we ourselves are promoting, we should by definition insist that self-reliance at home be the kernel of our development policies, Europe cannot rescue us, or any other country for that matter, from problems unless we can ensure that we apply self-reliance directly to the purposes and aims of the fund.
This committee should as a priority try to ensure that most of the funds coming through social, regional or other funds will where possible go directly to the private sector. There is a risk that in being administered, which it must be, much of the money might be somehow dissipated by administrative costs. I have given the example of the social fund. The huge transfer to FEOGA of almost £½ million this year is less than previously, for one reason only, the productive capacity of Irish agriculture. FEOGA guarantees are not, any more than the social fund, determined by national quota. The regional fund is. The only limit on what one will get under the terms of the FEOGA guarantee is our own productive capacity. It is fairly evident that the productive capacity in agriculture has not been fully realised.
It is of vital importance that in the areas of training and education, in agriculture as in other employment areas, we have a base of training for the farming community which will indicate that it is not just a matter of inheritance from father to son but of skill, awareness and training in regard to marketing to ensure that those with a role to play in this vital element of our economy, agriculture in particular, will be able to draw more from the guarantee side of FEOGA which is the main and basic element of our benefits from the European Community.
This matter of very considerable importance I will not dwell on any longer at this point. However, I could not leave this point on education without mentioning that it is of vital importance that we train and educate people in each area to play an effective role in this new international dimension which we have been given since we joined the European Community. It is overlooking reality to think that people without the experience of the culture or language of another country in which they wish to sell are not at a disadvantage. They are. If they do not know the habits and styles of their intending customers, they will not produce goods acceptable to those people. In every level of education, but particularly in the universities, people must be made aware that they are not autonomous within their own regime, fulfilling their own purposes, but that their work must be relevant to the needs and the potential of this country in the era of European and international involvement. I hope that training will figure greatly in the discussions on education in the committee.
I would like to touch now on something, which arises from a comment by Deputy Molony—that is the budget question as such. It is an element to which we do not tend to pay much attention at home and, in view of the nature of the motion, I will deliberately curtail my contribution, hoping to have a better opportunity on the motion on the developments in the European Community.
That said, I think we should not leave any European development without pointing to this element particularly. There is unemployment all over Europe. When we look at problems at home we should not imply that the only country in Europe suffering these problems is Ireland because self-evidently that is not the case. When we see budget deficits growing we should not imply that Ireland is the only country in Europe that has a growing budget deficit. That is not the case but that is not to excuse the fact that we have a responsibility to ensure that in public expenditure the taxpayer will not be called upon to pay one penny more than he is required to pay in the interests of supplying necessary services.
Because of the budgetary pre-occupation in Europe during my own period on the Commission we achieved a most important breakthrough. History will demonstrate this very clearly. Having got a mandate from the heads of Government in May 1980 asking us to concentrate exclusively almost on the British budget question what they had in mind when they asked the Commission at that time was: solve the British budget question on whatever terms you can dream up. We in the Commission, and particularly myself because I had special responsibility in that area, did not accept that narrow interpretation of the heads of Government. As a consequence we said that the problems of Europe can only be solved on the basis of the introduction of new policies relevant to Europe in a whole range of areas. I can only mention examples without details. I have mentioned some ways in which we are reprogramming the social fund: there is also the industrial innovation programme where Europe had been very much lagging behind Japan and America, our main competitors; energy—new energy policies for conservation and for renewable sources of energy which can be of great benefit to Ireland as regards peat development. I can only touch on these things now.
There is also the role of small and medium sized industries and export contracts for agriculture which have never before been considered in Europe. In a world that is starving and short of food it is a scandal to think that the only preoccupation hitherto of heads of Government particularly has been how they can control the level of agricultural expenditure in the Community. Ironically, the fact is that this year that represents about 60 per cent of the total budget of the EEC where two years ago it represented over 70 per cent. There is a certain contradiction in the fact that heads of Government are still insisting on concentrating on agriculture as the bad boy of Europe wiping up all the funds when in fact its proportion of the total fund is now considerably less even within two years. During that same period in Europe we have seen unemployment grow from approximately 5 million in May 1980 to over 11 million. While the level of agricultural expenditure was dropping unemployment was growing considerably so that the facts speak for themselves in this case and they give the lie to those who say that the problems of unemployment and of urban areas in Europe derive from the vast amount of money spent on agriculture.
Belatedly Governments are now becoming aware of this. The one element that needs to be considered—and I hope this committee will give it considerable attention and thought—is that the problems of Europe self-evidently do not derive from the share-out of the budget as it is now. In the Commission we suggested that the problem is that the budget is too small, representing only about three-quarter per cent of the GNP of the member states. Yet heads of Governments spend meeting after meeting in crisis after crisis—generally at the behest, it must be said, of the one Government — concentrating on what is not the issue. The issue is our relations with other countries, notably with the US, where the fiscal policies being pursued reach out to every farm in Europe, every worker's home there and every industrialist in Europe. Does not every Deputy know that one of the great problems we face is the high cost of money which causes lack of investment and that this derives to a considerable extent from the fiscal policies of the US?
I hope that in the committee in this House we can bring about an awareness of this at home and perhaps abroad through meetings that hopefully we will have with other equivalent committees. As Minister for Finance I was the first Minister at an informal meeting to bring the question of high interest rates before the Ministers of Finance. I was a lone voice on that first day but I am glad that now there are at least ten voices in Europe speaking together on the need to do something. What is not being done is to get at the root cause where it really lies in the fiscal policies of the US. They must be made very much aware that these policies, good and right as they may seem for the great economy of America which is dependent only as to 14 per cent on external environment and is 86 per cent self-sufficent, are detrimental elsewhere. What they are doing and what may seem to be right for them is having a very damaging effect on the economic climate of the rest of the world.
These are the matters I see the committee as most successfully promoting. There will be regulations and directives that the committee must deal with to ensure that Europe will not be producing regulations that are not appropriate to each member state, for the broader issues are very considerably more important. I welcome the re-establishment of the committee. Finally, I hope we can continue the practice that I introduced as Minister for Foreign Affairs and which was very much overdue at the time, that the reports on the developments in Europe get a public hearing. Up to then I recall that under the previous Government we had at least two years when the report was not debated. No occasion was provided in this House in two years to actually analyse and recommend on the basis of the report that was before us. I trust that from now on the Government — I am sure they will — will ensure that these reports and debates on them will be used as a basis for testing ourselves as to how we are applying the benefits that are there for better informing ourselves so as to ensure that we can apply the benefits even better in the future.
