It is hard to be either supportive or enthusiastic about the actual document which the Government have published. I will not call it a plan because it is not a plan in any real sense of the term. Once we get past the nice colourful and elaborate cover and the usual list of praiseworthy but vague purposes which the document contains we can find little in the way of detailed targets to be achieved or any clear spelling out of how any particular progress is to be made in any field. Instead we are presented with an old fashioned listing of general areas where money is to be spent.
There are statements about millions to be spent on roads, tourism, communications, ports, airports and various items. All of these have no doubt some merit in their own right but what we are not told is how and why these particular projects and the amounts of possible spending mentioned were selected. There are general references to building so many miles of road or carrying out different projects but there is no attempt to relate the proposed spending to any specific targets or expected results.
What has happened to the attempts being made for years to introduce some proper system of assessment for public spending, expecially of a capital spending nature? The ESRI a couple of years ago came to the conclusion in one of their reports that if the capital spending projects of Irish Governments over the previous 25 years had been self-financing, that alone would have put the budget of two years ago into surplus because of the huge amount of money that would have been saved. It is indicative of the inferior nature of capital spending over the past few decades, in particular its unproductive, unremunerative nature and its almost universal inability to remunerate its own capital. Time and again we in common with others have called attention to the need for some form of audit to be carried out on State spending which would do more that simply prove that someone had not run away with the money but rather which would look at the whole question of whether value had been got for particular spending, be it current or capital. This is particularly appropriate and necessary where capital spending is concerned. Unfortunately, this document does not mention that at all. There is an assumption that we are going to have a continuation of a system whereby if one can show that one spent the money on something referred to in a document of this kind then that would be sufficient and the fact that one was pouring money down the drain is immaterial and no one is to be held responsible or blameworthy in any way for that.
We must ask where are the efforts at showing how spending on some project will provide some identifiable contribution, whether by way of financial return, additional output or improved facilities? In other words, where is the planning, whatever about the plan? If we are going to spend money on tourism projects, for example, what are the reasons for the particular projects? Will they meet some already existing gaps or shortages in our present facilities? Will they mean new additional capacity to cater for more tourists and offer attractions previously unavailable? The list could go on and on but the point should be clear by now. This is not a plan because it does not cater for any of those necessities.
A plan should meet a number of requirements. It should first set out a review of the existing situation so as to establish the base or starting point from which we move forward. Secondly, it should outline, as fully as possible, the likely pattern of future development on the basis of existing trends and policies. This would provide some sort of bench-work for the level of progress expected in the absence of the additional action to be proposed in the plan. Thirdly, a plan should then spell out the possible options for further action which are open for decision. Various possible projects should be assembled, the relative merits and demerits of each examined so as to establish an order of priority for undertaking such projects and the overall scale of spending or commitment of resources required to undertake these projects should also be established.
Fourthly, the possible additional projects identifed in step three should be set alongside the overall circumstances of the economy and assessed in terms of their impact on output, employment, balance of payments, Government finances, regional distribution and other aspects. In this way the scale of any feasible plan can be identified and the appropriate number and pattern of projects from those examined in step three can be selected in order to offer the best prospects for an additional development effott.
The plan can then be put forward showing why these number and type of projects were selected, indicating the scale of the additional boost they will give to national development by way of extra employment, improved living standards and many other development objectives. I have taken time to spell out briefly these requirements for a satisfactory plan because I believe it important for the eventual success of the Irish case within the European Community to show why the Government's effort is unsatisfactory and why it is necessary to have in its place a proper planned document. I can understand why the Government might think they should be reluctant to publish any detailed plan along the lines I have suggested. If they do, presumably they feel they are offering hostages to political fortune in the sense that by identifying clearly the scale of the extra results they aim to achieve, they provide future critics with ready-made material if the results for any reason fall short of their planned level. Political prudence can suggest it is preferable to be as vague and general as possible on the grounds that if nothing is clear then nothing can be clearly wrong. Whatever the short term political reasons for that approach, it is not good enough when we are dealing with the future of the nation. When nothing is clear, nothing can be achieved other than a vague sort of muddling through. In the American phrase — if you do not know where you want to go, any road will take you there. But apart from any of the general reasons which would apply at all times there are particular reasons, on this occasion, that there should be a plan worthy of the name put forward to the EC authorities.
While the principle of Community support for the development of the poorer areas has long been accepted — indeed, it was incorporated in the original Rome Treaty — the process of establishing appropriate arrangements and financial support for such development has been slow, complex and controversial. The reasons are not difficult to understand. If some member states are to be given financial support, others must pay for it. Before doing so the paying states need to be satisfied about the need, scale and nature of the support to be given. On the one hand, they want to make sure that financial aid is not used to subsidise industries, for example, which would then compete with their own firms, thereby, perhaps, weakening their own industries. On the other hand they do not wnat to see money spent on irrelevant projects, which may seem prestigious for the country undertaking them, but which are not really going to help the overall development of the Community — the modern equivalent of building the pyramids — or, put more simply, creating white elephants. So there is a difficult but necessary task to be performed in establishing the type of development projects which should have Community support.
Infrastructural projects, such as roads, telecommunications and ports, have been acceptable because they can be seen as helping to overcome some of the initial barriers or cost disadvantages which the weaker regions suffer, without at the same time posing any unfair subsidised threat to established industries elsewhere in the Community.
A second area where Community partners need to be satisfied is that their financial support will indeed be used to aid a greater effort at development, and not simply mean that the national government will cut back their own efforts and substitute Community funds. This issue of "additionality" has surrounded debates on regional policy for the past 20 years, and it is still a valid and legitimate concern. I will return later to this issue in more detail.
Thirdly, if agreement is reached on appropriate projects, and these are additional development efforts, there is a Community need to be able subsequently to verify that the funds were spent on the agreed programme, and also to establish the extent to which the expected results were achieved or, in the usual case where actual performance differs somewhat from initial expectations, to be able to identify and agree on the reasons for these differences. In more recent years, Regional Fund activity has been looked at in terms of asking for overall programmes for development, not just shopping lists of individual projects to be financed, and for presenting information in a form so that what are called "regional impact assessments" could be carried out to review the outcome of any programme. However, if we ask: "Does this represent an additional effort and, if so, how much?" We are faced with some large question marks. What level of development spending do the Government envisage in the absence of the possible additional EC funding?
I emphasise additional, because there would, presumably, be a continuation of the prevailing level of funding in the absence of this new initiative.
To answer these questions there should be a proper plan spelling out the main features as I have outlined them, and that plan should spell out the other need, an indication of the results expected from the plan spending, so that the other requirement — of carrying out some assessment of the impact on regional development — could be made in later years.
On the regional question there is, of course, grave disappointment throughout the country at what the Government have done. They set up, nominally at least, these working groups and advisory groups in each of the seven sub-regions, as they were identified last year. Then they proceeded at Central Government level to draw up a plan with no reference to what had been done by those groups who worked so hard in the regions. I will come back to that, but in regard to regional development, quite apart from the EC or any additional funds or anything else, this Government have it entirely within their power to make a significant difference to the regions in this country if they would proceed with a relatively costless programme of decentralisation.This has been talked about since the late seventies. In a small way it was implemented in two or three places but no substantial work has been done and there has been no substantial transfer of Government Departments from Dublin. Most of it can be funded privately in the sense that the capital can be arranged through those who will develop it, and it is terribly disappointing to find that after many years of waiting we still do not have it except in some very small instances. We are administratively the most centralised Government in Europe as far as I can see. We contrast with France which has Departments of State all over the country and we contrast with Britain which similarly has decentralised huge Departments. It is interesting to note that recently, because of the increases in advances in information technology, the Department of Health and Social Security in Britain have been able to decentralise one of the sections of that Department not just out of London but into Derry. Even though Derry is perhaps the furthest city from London within the UK, there is not the slightest difficulty in operating there. With the kind of technology available today almost anything that relies on information — and much administrative work does — can be carried out anywhere. You do not even have to think in terms of cities any longer except perhaps to make it more attractive for people to move there rather than to a rural area.
I would now like to turn to the question of how the Government have sought to foist the development plan we are discussing today on the Irish public. There are some very damaging features arising from all of the hype attendant on the recent publication of the plan. The danger of this kind of political over-kill is that the public's expectations will be inordinately raised and at the end of the day they will find the promises made are totally unrealisable. This kind of thing only deepens the public cynicism with politics and politicians.
At the launch the Government sought to represent their so-called plan as a £9 billion investment programme of a spectacular nature to generate 35,000 jobs a year. Can you blame the average person, if they take this at face value, for imagining that we would never again see a poor day? But when we look behind this PR hype, what do we find? What we have got from the Government is, to all intents and purposes, the annual capital budget rolled over for a five-year period. When this is taken account of, the net picture is that the increased revenue being sought from Brussels is not £9 billion but rather £1.5 billion pounds, with all that spread over five years, in other words, approximately £300 million extra per year. That, while obviously welcome if we get it, is a very small sum of money in today's terms when one takes into account the level of expenditure incurred by the State.
On the job creation front, as for the 35,000 jobs per year promised, it is important to bear in mind that these are gross job projections. To put them in perspective, let us remember that before this plan was published the gross job projection of the Government was 29,000 per year. But we know full well that the level of redundancies in Irish industry and services is running at over 23,000 per annum. As a result there is very little net jobs growth in the economy. At best we know that the figure is perhaps a few thousand. On top of that looms the tragedy of large-scale emigration.
What the much hyped 35,000 jobs nets out at then is nothing more than a possible increase of 6,000 in the number of gross jobs created annually. But we do not know how many of these jobs will be counter balanced by job losses elsewhere in the Irish economy, e.g. in agriculture. Indeed, we also know that aside from the present unemployment and emigration crises, even the National Development Plan itself projects an annual growth of 25,000 people into the labour market each year between now and the end of the century.
So, even to contain unemployment at its present appalling level of 18.5 per cent of the workforce, and to contain net emigration at the 32,000 plus figure, the Irish economy would need to generate a net 25,000 new jobs to accommodate the increased numbers coming into the workforce each year. That is the real perspective against which to judge the gross increase of 6,000 outlined in this plan.
Some people suggest that the Government are right not to overplay the possible net job creation arising from this plan, but they cannot have it both ways. They cannot on the one hand acknowledge that there is very little job creation in this programme, and, on the other hand, play up this development programme as somehow constituting a spectacular £9 billion investment plan for the country. Job creation is the ultimate criterion by which any economic development plan for this country must be judged at a time of mass unemployment and emigration.
Like everybody else in this House, I am obviously very concerned that in the run up to full free competition and the free movement of goods, people, capital and services throughout the Community by the end of 1992, Ireland should be well placed to compete. There are undoubtedly geographic disadvantages and attendant cost penalties which this country must come to terms with if we are to compete on anything like equitable terms with the member states of mainland Europe.
That is why I certainly do not wish to belittle the amount of money which we are entitled to by way of transfer payments to compensate for these dramatic changes from the richer countries of the Community. But what I am concerned about is that the money is set down in its real value terms, not in all this political hype, and that it is deployed in the best way possible to prepare this economy for fair and free competition within the EC and also to provide a better future for our workforce, particularly for the long term unemployed.
In this context, the net £300 million annual improved availability of EC funding can be put in stark relief. It is the very minimum which this country will have to get in the event of full Community tax harmonisation to compensate this country for necessary tax changes arsing from that process alone. Therefore, the compensatory mechanisms as outlined in this plan are quite paltry.
We only have to look, for instance, at what has happened one of our primary industries, namely the dairy sector. They have been made to pay the price of the necessary retrenchment that has had to be forced on the factory farming techniques of mainland Europe. But that was done at a time when we had not reached optimum output from a grass based dairy sector here in Ireland.
This was one example of successive Irish Governments in the past getting it wrong. This brings me back to my central theme today. A proper economic and social plan for this country has to be carefully worked out; it has to have carefully assessed development programmes prepared and has to have a clear view of the attendant economic developments that can flow from such projects.
In the seventies, in the initial blast of competition that resulted from our entry to the Community, we saw the casualties that resulted in domestic industrial sectors like car assembly, footwear, clothing and textiles. Therefore, we have to be very much alive to the implications for this country of total free movement of goods, people, capital and services which will be at our doorstep in a mere threeand-a-half years time. Will the same thing happen, for example, in services, as happened to many of our domestic protected industries in the immediate aftermath of 1973?
