Ruairí Quinn
Ceist:1 Mr. Quinn asked the Taoiseach the plans, if any, he has to meet EU Commissioner Wulf-Mathies to discuss the Government's proposals on regionalisation; and if he will make a statement on the matter. [18442/98]
Ceisteanna—Questions. - EU Funding.
Proinsias De Rossa
Ceist:2 Proinsias De Rossa asked the Taoiseach the plans, if any, he has to meet with the EU Commissioner Monika Wulf-Mathies to discuss any proposals the Government may have for regionalisation here; and if he will make a statement on the matter. [19361/98]
I propose to take Questions Nos. 1 and 2 together.
EU Commissioner Monica Wulf-Mathies will be in Cork on Friday, 16 October. I will meet with her during the course of that day to discuss a number of European related issues.
I formally invite the Taoiseach to participate in the European Socialist Party's seminar, which he is to address. If he so wishes, I would be happy to meet him there.
Do I take it from the Taoiseach's brief reply that he has not had any discussions with Commissioner Wulf-Mathies prior to that event on Friday about this matter ?
What matter?
The issue relating to proposals on regionalisation, as I set out in Question No. 1.
I had a lengthy discussion on this matter with Commissioner Wulf-Mathies in the early part of the summer when she visited Ireland. She met both myself and the Minister for Finance at that stage. Our officials have been in touch through numerous meetings. The Department of Finance, which has been dealing with this issue, has been in touch with the Commissioner's office on a regular basis. I have had discussions with her previously on this matter.
My question specifically asked the Taoiseach if he intends to have discussions with the EU Commissioner with regard to regionalisation. Will he outline to the House what he considers to be a coherent argument for abandoning the unemployed in Dublin, Limerick, Cork and Waterford, if he proceeds with the plans — which he has indicated he supports — for dividing this country between the west, the Border and the rest of the country? Is the Taoiseach aware that CSO statistics indicate that of the 110 unemployment blackspots in this State, 85 are in the area south of a line from Dublin to Cork? In other words, only 35 of them are in the area which the Taoiseach proposes to ensure continues to receive Objective One status, while the rest of the country will be abandoned to the sad and uncertain moods of the Minister for Finance.
I will discuss regionalisation, and the other options the Government is considering, with the Commissioner. With my Cabinet colleagues and the Commission generally, I will also talk about the excellent work we have been doing in recent years in urban blackspots with the help of EU funds. This work includes the urban renewal initiative, Youthreach and the social and community employment initiatives. All of these initiatives have helped to target disadvantage and we will continue to deal with them, I hope effectively.
The Taoiseach has rightly pointed out that European social funding has assisted with long-term unemployment, through initiatives such as Youthreach and others. However, these are the very schemes that will be hit and lost as a result of the proposals he is putting forward to divide this country in two.
Is the Taoiseach aware that of the unemployed in this State, 35 per cent live in the Dublin region and more than half of those are long-term unemployed?
The Deputy keeps referring to "proposals that I have put forward", but I have not put forward any proposals.
The Deputy should consult his scriptwriter.
They are all in Ballymun and Finglas.
We actually provided money for them.
Many of these questions would be redundant if the Government was to publish in draft form the set of indicators and various other factors it wishes to take into account to maximise European Union support for this country, with which this House unanimously agrees. Let there be no doubt about that. Will the Government, either on Friday or arising from today's meeting, publish the draft proposals that may be before it, in relation to regionalisation, which among other things will require a devolution of democratic powers to such regions? Will the Government consider publishing those proposals in draft form before they are either formally submitted to the Commission or before a final Cabinet decision is taken?
I will do so when the Government has finalised its deliberations on this matter. Today was the second day we have had discussions on it. I know from my colleagues in Europe that nobody has put forward proposals. To put forward precisely what one will do in advance would, in the present position, be very stupid, to put it mildly. We will not do that. We are working through our proposals and looking at how best to maximise resources for the country, not just for the next period but for the long term. I stated yesterday that whatever way we handle the next round of negotiations, there will be many new initiatives. We saw one such initiative last week in agriculture and there will be many more by those countries which do not want to pay as much as they are paying. They will continue to do this within the 1.27. The President of the European Commission made it clear yesterday that these are the main issues.
We must put our framework of negotiations together. We are prepared to have a debate in the House or in one of the committees once our paper is ready and to listen to views before our negotiations. The Government must make a decision on how best to handle this matter. We are engaged in those discussions, considering the various issues and we will make a decision in time for the start of any negotiations.
I thank the Taoiseach for his reply. Has the Government considered the partnership areas and Leader programmes as a basis for the categorisation of regionalisation? Is it correct to assume the Government's intention is to shop around for the best form of maximising funds and, when that has been agreed, to construct a democratic regional devolved structure to fit into that system? Is that a correct or incorrect inter-pretation of what the Taoiseach is saying?
Deputy Quinn knows it is not open to us to shop around for a system. The criterion is firmly laid down that Objective One regions must be below 75 per cent of GDP for the period for which these figures relate — a few years ago. That is the benchmark laid down by the Commission and it is not open to debate.
As of now.
Yes, but that is unlikely to change. We must consider the programmes, cases and national plans to present and maximise our efforts in this regard.
The other major initiative which I mentioned in the House, but which does not seem to have got through to some people, is that if after 2006 we decide not to have regional structures, we will rule out areas, even those below 75 per cent of GDP which we know will continue to be relatively neglected, poor and disadvantaged, for resources. We must examine areas that might be considered transitional Objective One regions and urban and rural blackspots which are under 75 per cent of GDP to know the best way to deal with them. The Government is addressing these issues as we prepare for negotiations. My Spanish, Portuguese, Greek and other colleagues are also doing this.
Is the Taoiseach aware that a number of areas outside the areas being considered for retention of full Objective One status have been classified under different EU schemes as either severely disadvantaged or disadvantaged and accepted as such by the EU? What special arrangements will be made for those areas which exist in virtually all the 13 counties proposed to be excluded? What are the implications for areas that do not secure Objective One status in terms of the rate of industrial grant they can receive? Is there a risk that IDA Ireland or its successor will not be able to give industrial grants to areas excluded from Objective One status? As regards on-farm investment grants against pollution, for example, will they have to be paid at a lower rate on farms which are on the wrong side of the Border in that they are not in an Objective One region?
A number of these issues, because of the detail they involve, are matters for specific parliamentary questions.
We are offering the Taoiseach an agenda.
These questions go to the heart of the choice which must be made.
It is for that reason the Chair believes they should be the subject of separate parliamentary questions.
The short answer is that these matters are under debate. I am not aware that farm investment will be affected but I will check the position. With regard to the other two points raised by the Deputy, urban or rural blackspots which may be situated in Objective One areas under transition must be given consideration because otherwise the schemes to which I referred earlier will face great difficulty. I am acutely conscious that some of the worst blackspots in local authority areas in our cities — not merely Dublin — are experiencing extreme disadvantage which must be dealt with in whatever overall package is put forward.
State aids is one of the issues I will discuss with the Commissioner. I understand that State aids at the higher rate could not be paid to any area if the entire country was classified as a single region under Objective One status in transition. Areas can only be paid at the higher rate if they have been granted normal Objective One status.
The Taoiseach has returned to the issue of what will happen post-2006. He suggested on numerous occasions, when I raised the proposed 1.27 per cent extension of GDP for European Union countries contained in Agenda 2000 — which will result from the accession of new member states, etc. — that I should forget about what will happen post-2006. The number of countries which will have already entered or will be about to enter the European Union at that stage will have GDPs 33 per cent smaller than Ireland's and this will make it virtually impossible for this State to retain its structural funding status post-2006. It is highly irresponsible for the Government to engage in a smash and grab exercise on behalf of one part of the country when the money on offer could provide for those in need throughout the entire State.
The Deputy is making a statement.
Will the Taoiseach guarantee that the Government will not make this decision in private, on the basis of lobbying from various groups, without having the views of Members expressed through the House and its committees?
Two weeks ago I devoted 50 minutes of Question Time to listening to the views of Members——
That was not a debate.
I stated at that stage that I would welcome it if the House decided to engage in a formal debate on this matter because I would like to see Members being forced to come to some of the difficult conclusions already drawn by the Government.
The Taoiseach should provide time for such a debate.
The Deputy cannot have it both ways. The 1.27 per cent extension will have to occur before there is an enlargement in the Union. On the numerous occasions on which the Deputy raised this issue I informed him that I do not see member states — particularly the net payers — agreeing to an extension of 1.27 per cent in the next round of funding. After that, however, the position will be different and I believe enlargement will occur. We must ensure that we do not close a door in this round of funding which will place us at a disadvantage in the next round.
The Taoiseach is closing the door on two thirds of the people.
We are not closing the door. The impact of Structural and Cohesion Funds must be placed in perspective. This year Ireland's total gross public expenditure will be £16 billion, £1.2 billion — 7.5 per cent — of which will be co-financed out of the Structural and Cohesion Funds. It is not the case that all expenditure in an area will stop because it does not have Objective One, Objective Two or Objective Three status. Is it not a little odd after all the years of Structural Funding that it was not EU funds which changed the most disadvantaged areas, particularly those in the Deputy's constituency, but Exchequer funds? The development to which the Deputy has a great attachment in Ballymun will be funded by the Exchequer. It will not receive funds from the European Union.
Would the Taoiseach agree that, since its membership of the European Union, Ireland has been treated as one region for the purposes of Structural and Social Funds support, that what the Government is engaged upon now is a fundamental change in a position which has existed since Ireland joined the Union in 1973, and that any change in the structures of the country will require a devolution of powers and a new democratic local government structure? Accordingly, is the Taoiseach prepared to publish prior to any Government decision what the Government intends to do in relation to the structures involved, the kind of indices which will be used to delineate those new regions, and whether there will be a set of regions linked by social indicators or a set of regions linked on a purely geographical basis?
That is a point of negotiation between the Government and the Commission. The Deputy is correct in that there must be in place a special regional structure. How major or minor that will be is still an issue of debate. Recently in the UK they have made that change on a minor structural basis for Cornwall and Devon. It would seem that one must have in place a regional structure. We will certainly have to put one in place before we could finalise that.
On the Deputy's other point, the reason breaking up the country is now on the agenda is that it has been made crystal clear by President Santer and several commissioners that if we do not do so this country will not receive any Structural Funds after 2006. Ireland would be in transition as a single region until 2006 and thereafter we would receive no further funds for any region, regardless of whether it was over or under 75 per cent of GDP. They are telling us that now so we can make the decision in the knowledge that we will have areas under 75 per cent and there is an opportunity for us to try to get for those regions funds on the other side of 2006. That is the only reason there is a debate on this issue.
Has the Taoiseach clarified with the Commission whether or not there is a cut-off date for submission of proposals for Objective One status and regionalisation? When does the Government hope to make a decision on Objective One status and regionalisation? Has the Government any plans to develop regional administrative structures? As stated earlier, there is no need for those regarding Objective One status, but has the Government any plans to develop such structures? Can the Taoiseach clarify that there are two funds available for Structural Funds, one to which only Objective One regions will have access and a second to which Objective One regions in transition will have access? Will the Taoiseach agree that the west, the midlands and the Border counties were left on the hind teat as far as Structural Funds were concerned on the last occasion and they now deserve a bite of the cherry?
You see the dilemma, a Cheann Comhairle. Of the issues which the Deputy raises, I have already answered the one on Structural Funds. As far as a date is concerned, there is no date set. The discussions are ongoing. There was to be some discussion at the informal Council on the long weekend.
So we are not too late.
No. No country has put forward its negotiating position. Nobody, neither the net beneficiaries nor those who are paying the costs, has shown their hand. Some believe that this may be dragged out after 31 March. I am totally opposed to that. I would rather see it dealt with while the present Parliament and Commission are around. They have made it clear that they need to do that by 31 March.
The Government will come to its conclusions as soon as possible, after we have looked at all of the information available and taken everything into account, including the areas under 75 per cent, the Objective One regions as they are now, and the urban and rural blackspots. Some people forget that there are also rural blackspots.
The Taoiseach said that a formal proposal has not been made. Will he agree that talk of regionalisation is an admission of failure of policies down the years to devolve power and have decentralised structures? Will he include proposals to redress the demographic imbalance in the proposed plans? There is a continuing trend towards the east, which is creating its own problems as well as depopulating the west. Will he acknowledge that, in the long term, regionalisation will not solve the problems it is proposed to address unless there is a legal provision for local investment requiring financial institutions and banks to re-invest profits where they are made? Otherwise those Structural Funds will simply drift to the east again and out of the country, as has happened in the past.
This country is credited with the best record over the past quarter of a century in the use it has made of Structural Funds. Analysis after analysis has shown that this country has used Structural Funds, in city, country and the regions, more effectively than any other. It is also the case that any region in Ireland which receives Objective One status for the next round will not receive the same per capita Structural Funds as the country as a whole received in the past. This reflects the improved economic position.
We have known for a long time that things have been changing and we must now look at the areas that are below 75 per cent of GDP. While this is not the only factor — other factors have been taken into account in the past two rounds, including population, relative prosperity and unemployment levels — GDP is the main factor that is used as a benchmark.
(Mayo): Will the Taoiseach confirm that two thirds of the funding in the next round will be designated to those areas assigned as Objective One and that one third will be designated to those areas assigned as Objective One in transition? If the entire country is designated as Objective One in transition, the entire country will be fishing out of a smaller pool. This means there will be less money to be distributed with a consequent net loss to the country. However, if we draw down the maximum funds for those areas which now qualify for Objective One status while we designate the other half of the country as Objective One in transition we will have the best of both worlds and those areas with Objective One in transition will be able to target their black spots which hitherto have not received their share of the national cake.
I would like to think that is correct, but I do not believe it is. The matter is still subject to negotiation so I cannot say if the Deputy is wrong. However, we will not get any more money in the next round, regardless of the approach we take. Objective One areas and Objective One areas in transition will feed from the same envelope. The breakdown of the contents of the envelope is not clear at this stage. Given what I have heard from the EU Commission I believe it would make no difference, so this argument is a puff of smoke, although we are at the outset of negotiations.
However, it will make a difference if we have Objective One in transition for some areas and full Objective One status based on the 75 per cent of GDP criteria for others. This will allow those areas to still be at the negotiating table post 2006. Let the House be clear that if the country stays as one region we are saying to those areas under 75 per cent of GDP that they are out of the game. Those areas would fall into the sudden death category. That is the European term used to describe those areas. We must decide if we will put regions of this country into the sudden death category.
(Dublin West): Will the Taoiseach elaborate on what constitutes an area for this purpose, irrespective of whether it meets or is over or under the 75 per cent GDP criterion? To date the debate has concentrated on counties. Does the Taoiseach agree there is an important general principle involved here, that it is dangerous and divisive to proceed on the basis of an arbitrary and artificial division of the country to seek EU funding? Does he agree it would be nonsensical to proceed on the pretence that poverty, marginalisation and social problems have been wiped out in Dublin, Cork or some rural areas and that to proceed on that basis would give rise to divisions, resentment and would further marginalise hard hit areas?
That would be correct if all the money we got from Europe was all the money we put into areas with difficulties. I gave the figure of total expenditure. This year £11 billion of gross expenditure will be spent in the general area of social expenditure. That constitutes a great deal of resources. Of that amount only 2 per cent is co-financed. Therefore, it is not the determining factor in how we use State resources to allocate social expenditure. Two per cent of gross expenditure is £244 million and it is a great deal of money, but it is not the determining factor. Whoever will be in Government, Minister for Finance or dealing with social expenditure will have to take account of black spots in certain parts of the country and will have to put resources into them. I said in reply to Deputy Quinn's question that the regional structure has not been worked out and it is important how the system will work in the regional area.
It will involve its own cost.
It will have its own cost, but that will have to be structured and agreed by the Commission. We cannot arbitrarily decide on that. A Government will not state that one area has Objective One status and it is the only area to which we will allocate social expenditure and the rest of the country will be forgotten about. We do not do that now. A total of 98 per cent of social expenditure is Exchequer funded and only 2 per cent is co-financed. While Structural and Cohesion Funds are very useful, we are not dependent on them to the extent that they dominate every decision. They have not done so in the past and there has been a decline in those funds in the past ten years.
We have spent 30 minutes on these two questions. As there are another 33 questions to the Taoiseach, it is important we make progress.
These questions are very important.
That is why the Chair allowed 30 minutes to deal with them, but we must finalise them. I will the call the Deputies offering and ask the Taoiseach to give a final reply. I call Deputy Enda Kenny.
This is a matter of considerable political importance. Does the Taoiseach accept that the matter will be concluded at the March or the June Summit?
The former Chancellor Kohl presented the case for Agenda 2000 and got total agreement at the European Council that it would be concluded by 31 March. In recent weeks there has been some talk that it may be delayed. I am opposed to it being delayed. It should be finalised. If it is not, it will drift into the year 2000 and then there will be many difficulties in regard to expenditure programmes. It would not merely drift from March to June because the Commission and the various mechanisms of Parliament will move into their electoral processes in the autumn and it would be into the new year before the process would be resumed. That is why it needs to be concluded. Otherwise we will go into 2000 without an agreement and that would create an awful mess.
This highlights the problem in the Taoiseach not allowing a debate on this important matter. Will he instruct the Minister for Finance to respond positively to a request from the Select Committee on Family, Community and Social Affairs for him to attend the committee to explain his position on this issue?
Will he provide the documentation which the Government has as a back-up to its position on this issue——
Perhaps Deputy De Rossa should make a decision too.
——to the Deputies of this House through the various committees dealing with European affairs, finance, social affairs and health? All of these committees have an interest in this area. Does the Taoiseach agree it is not adequate for the Government to make this decision privately without taking into account the views of every Deputy in this House?
Does he agree that in arguing for Objective One status for 13 counties which represent approximately a third of the population of this State he is condemning the other two thirds to sudden death in relation to structural funding post-2006? In view of the Taoiseach's expressed preference for this regionalisation proposal, does he propose to change the County Managers' Act to provide for it on a legal basis?
On at least four or five occasions I addressed the regionalisation issue and answered the original question asked by Deputy Quinn. It has already been agreed that senior officials from the Department of Finance will come before the Social Affairs Council tomorrow. The Government does not decide on the regions. The criteria is set down as 75 per cent of GDP and it is not open to the Government to choose regions.
That is not a correct statement.
That is the way it operates in the EU. It is 75 per cent of GDP, up or down the line. As far as sudden death is concerned——
What does the Taoiseach reckon the GDP is in Ballymun?
One cannot take isolated areas. We have to use the social expenditure of £11 billion in those areas, which is what we do anyway.
That is a separate issue.
Funding for Ballymun is not European.
That is not true — what about URBAN?
The URBAN initiative will not be affected. If it is a community initiative it will still be possible to have it in place.
I call on Deputy Stanton. Deputy De Rossa should resume his seat.
When Deputy De Rossa does not like the answer he asks more questions.
The Taoiseach is misleading the House. Darndale, Ballymun and Finglas will lose £15 million.
The Deputy should not interrupt the Taoiseach when he is still replying.
I hope it will still be a community initiative and they will not lose that. As regards sudden death, the Deputy is incorrect. The areas with single region Objective One status will retain it. All of them will experience sudden death in 2006. Deputy De Rossa appears to be arguing that he wants sudden death for the entire country at the end of 2006. That seems to be his preferred option. He is entitled to his opinion but it is not a good negotiating hand.
One third of this State will experience sudden death.
I call on Deputy Stanton. I have given Deputy De Rossa ample latitude on these questions. We have dealt with them for 35 minutes.
Is the Taoiseach waiting for the result of the by-election in Cork South Central before he tells the voters there that they will be committed to sudden death or will he tell them before that?
The Opposition are like the Flat Earth Society.
Will legislation be introduced to enhance the powers of regional authorities in advance of the March decision on the eligibility of areas for continued Objective One status under a regionalisation solution or will it have to await that decision?
It will not be necessary to amend the legislation.