I apologise for my voice——
Supplementary Estimates, 1998. - EU Structural Funds: Statements.
That is what the Minister gets for speaking to the farmers when he should have kept his mouth shut.
I must have got what is known as farmer's lung as a result of my comments.
The Minister should not let them frighten him.
I welcome this opportunity to make a statement to the House about the issue of regionalisation. Regionalisation for Structural Funds purposes has already been subject to discussion in this House through parliamentary questions to the Taoiseach and myself and through Adjournment debates in both this House and the Seanad. Officials of my Department have also appeared on this issue before the Joint Committee on Family, Community and Social Affairs. It is nonetheless most appropriate that the House should consider an issue of central concern to all Deputies, urban and rural.
However, before dealing with the issue of regionalisation for Structural Funds purposes, I wish first to set out the background at European level for the House. Last March the European Commission unveiled its Agenda 2000 proposals. These proposals basically had a twin focus: first, to set out the Commission's proposals as to the income and expenditure of the Union for the period 2000 to 2006; second, to put forward proposals for the Union's common policies over that period consistent with the 2000-2006 budget proposals and against the background of prospective enlargement to the east.
Agenda 2000 is based on a number of key principles which are important to recite. First, a tight fiscal regime is to operate at European level over the period to 2006. Reflecting this, the ceiling on member state contributions is proposed to remain at 1.27 per cent of the Community's GNP. All costs, including these arising from enlargement, are to be met from within this parameter. Whilst Ireland has accepted retention of the 1.27 per cent ceiling as a working hypothesis for the negotiations, we have queried if it will be sufficient to meet expenditure demands, especially after enlargement. Realistically, however, it is most unlikely that further spending will be facilitated by a relaxation on the receipts side. Apart from the concerns of net contributors — which I will address presently — it would be inconsistent for the European Union which, in the context of economic and employment policy, is urging fiscal restraint on member states, to embark on a course at European level contrary to this prescription without clear cause.
A second key principle of Agenda 2000 is to concentrate Structural Funds assistance, especially at Objective One level, on the poorest regions of the Community. This concentration principle means for example that the Commission is resolutely determined to rigidly enforce the 75 per cent of GDP criterion for Objective One eligibility. Concentration is a principle that the member states support and, indeed, it is one from which we have benefited in the past. This principle does, however, have implications for Ireland's negotiating position in that it highlights the central and key truth of this issue.
Irrespective of whether we regionalise, Ireland, because of its own exceptional economic performance, faces a serious drop in overall Structural Funds receipts over the next round.
In 1997 Ireland received about £2,500 million of EU receipts broken down as £1,520 million under the CAP and £980 million of Structural and Cohesion Funds. Our EU budget contribution was £514 million leaving Ireland as an EU net beneficiary to the extent of 4.1 per cent of GDP. Ireland's net beneficiary position has fallen from a level of 6.6 per cent of GDP in 1991 to an estimated 3.3 per cent of GDP this year. Whilst Ireland will continue to be a net beneficiary under Agenda 2000, by 2006 the combination of drastically reduced Structural Funds transfers and increased Exchequer contributions will mean the gap between our receipts and contributions will have sharply narrowed. With present indications and trends, and assuming enlargement goes ahead as planned, Ireland is likely to become a net contributor during the financial perspective beginning in 2007. Before that, the Union will have to deal with what could be the most intractable issue of the current negotiations — the so-called net imbalances of some member states. Germany, Austria, the Netherlands and Sweden claim they are saddled with excessive net contributions to the EU budget and want remedial action to be taken in the context of the overall Agenda 2000 negotiations. The UK already has a rebate system which effectively means it pays only one-third of its share of the cost of additional EU expenditure.
The European Commission recently produced a report on the issue of net imbalances which put forward some options for dealing with the situation if there was a political consensus that action was necessary. From an Irish viewpoint, the most unfavourable of these options was one which would provide for 25 per cent national co-financing of part of CAP expenditure. This could cost Ireland some 200 mecu by 2006 and both I and the Minister for Agriculture and Food have voiced strong opposition in principle to the idea. The Government will be extremely vigilant to protect Ireland's interests on this issue. As a major net beneficiary, albeit declining in terms of receipts, proposals which target the expenditure side of the budget would hit Ireland disproportionately and compound the difficulties we already face in regard to the Agenda 2000 proposals on CAP and Structural Funds.
The Government is prepared to listen to the case made by the net contributors and to explore the options put forward, especially in regard to the basis for calculating contributions. The final deal we agree in regard to Structural Funds and CAP will be influenced by what, if anything, transpires in relation to the issue of alleged excessive net imbalances. The House should note the linkage between all these issues.
Before turning to the considerations arising in relation to regionalisation, I firmly reject the notion that, if the Government decides to apply for regionalisation, it would somehow reflect an unrealistic approach by Ireland in the negotiations at EU level. Apart from the strong justification on its own merits for regionalisation, the reality is that Ireland's stance to date in the Structural Fund negotiations has been grounded in realism. We have accepted the inevitability of a reduction in Structural and Cohesion Fund receipts and have not advanced unreasonable proposals to mitigate this such as relaxation of the 75 per cent of GDP threshold rule or increases in the proposed Structural Funds envelope. We are, however, fully justified, if we so decide, in putting forward proposals that will facilitate more balanced regional economic growth and assist those regions of Ireland which are lagging behind.
The issue of regionalisation for Structural Funds purposes is before Government on foot of a memorandum for Government and an accompanying paper prepared by my Department. The paper has also been the subject of consideration by the Ministers and Secretaries General Group on EU policy.
The House will understand I cannot anticipate the outcome of the Government's decision on the issue. However, this opportunity allows me to comprehensively brief the House on the facts in regard to this issue.
Ireland, as a whole, is currently treated for Structural Fund purposes as one single NUTS II region under Objective One. NUTS II regions, which are established by Eurostat, the Commission's statistics agency, for various statistical purposes, are also used for the purpose of determining eligibility for Objective One assistance. Objective One assistance channels Community support to the most disadvantaged regions of the Union which are lagging behind economically. The criterion for Objective One eligibility is for a region to have a per capita income in GDP terms below 75 per cent of the Community average. Ireland's GDP per capita now well exceeds this figure. Accordingly, Ireland as a whole no longer qualifies for Objective One status.
Ireland has long pointed out in Brussels that GDP indicators tend to exaggerate our economic progress and that GNP would be a far more reliable guide to our relative wealth. The divergence between GDP and GNP indicators, relatively marginal in other member states, is substantial in Ireland's case. This approach has, however, won no support from other member states or from the Commission. In any event, Ireland's per capita GNP, expressed as a percentage of the EU average, has been over 75 per cent for several years.
There has been some recent comment to the effect that GDP per capita is not a good indicator of regional disparities and comparative levels of poverty. No doubt, there may be some validity in these comments but they are not relevant in this context. The fact is that the indicator chosen for Objective One status must be one which commands support and acceptance across the European Union. GDP per capita meets this requirement and in the negotiations to date there has been no pressure by any member state to open up this issue.
If the eligibility requirements for Objective One assistance were strictly applied, Ireland as a single region would simply not qualify for Objective One status under the next round. However, the European Commission in its Agenda 2000 proposals recognised it would be undesirable for a region to be suddenly cut off from Objective One assistance. The Commission, therefore, proposed that regions like Ireland should be given transition status, whereby Objective One assistance, albeit at a gradually diminishing level, would still be available. In practical terms, this would mean that a region in transition would experience a progressive reduction in EU funding over the period of the next Financial Perspective, that is the years 2000 to 2006. Initially, a region in transition from Objective One would enjoy full Objective One benefits. From then on, a gradual reduction in support levels would occur until, by the year 2006, lower levels of Objective Two-type funding are reached.
The Government is conscious that certain sub-regions of the country at the NUTS III regional level, the next level of statistical mapping below the NUTS II configuration, have not performed as well as the rest of the country in terms of GDP growth. In particular, the sub-regions of the Border, the west and the midlands currently have a per capita GDP of less than 75 per cent of the EU average and are likely to be below 75 per cent for the reference period to be used for the next round of Structural Funds. It is estimated that GDP for Ireland as a whole increased by 21 per cent in the period 1991-1995, as compared with increases in the regional authority areas of the west, Border and the midlands over the same period of only 13 per cent to 15 per cent.
These divergences in economic growth are reflected in the significant regional changes in population distribution that has occurred over the past 30 years or so. For example, the combined regional authority areas of Dublin and the mid-east have seen their proportion of the national population rise from 34 per cent to 39 per cent. For the same period, the combined population of the regional authority areas of the west, Border and midlands has fallen as a proportion of the overall population from 30 per cent to 27 per cent. A similar pattern of lagging-behind is illustrated by the regional breakdown of grant-aided job-creation over the years 1995-1997. When we look at the figures, we find that just over 77 per cent of the grant-aided jobs created were in that part of the country which would constitute the region in transition, while less than 23 per cent of grant-aided jobs created went to the west, Border and midlands regional authority areas.
The imbalance in economic growth, population distribution and job-creation, combined with the fact that the west, Border and midlands have a per capita GDP below 75 per cent of the EU average, gives rise to the possibility of seeking to adopt a regionalisation approach to the next round of Structural Funding. In the context of the Commission's proposals and the position that parts of the country were lagging behind, it was incumbent on me to consider the possibility of seeking to adopt a regionalisation approach to the next round of Structural Funding.
Under the most straightforward regionalisation approach, the existing single region of Ireland would be reconstituted as two new regions, of which one could consist of those regional authority areas whose per capita GDP is below 75 per cent of the EU average. If such an approach were put in place, the region with a per capita income below 75 per cent of the EU average would qualify for full Objective One status, while the rest of the country would still be a region in transition for Objective One funding.
This proposition, if decided upon by the Government and accepted by EUROSTAT, would mean that a region comprising the west, Border and midlands regional authority areas would qualify for full Objective One status and thereby obtain a higher level of Structural Funds than if it were part of a single region in transition. Such a region would also potentially qualify for Structural Funds transition arrangements after the year 2006. It should also qualify for a better State aids regime for attracting new industry for the years 2000-6 than it would if it were in transition.
This last point is a very significant one. Under the State aid rules, an Objective One region should also qualify for a higher level of assistance by way of industrial grants from national agencies e.g. IDA industrial promotion grants. This is in line with the Government's commitment in An Action Programme for the Millennium to bring about the targeting of those sub-regions of the country which, despite Ireland's recent economic progress, are lagging behind. The development of an economic base for the future in these areas would, therefore, be facilitated.
I must stress that the scope for geographical reclassification is limited. The regional classification operates on an EU basis. The NUTS classification system entails the combining of successively larger units to form regions at various levels. Any new regions at NUTS II level — the reference regime for Objective One status — must be generally in line, as regards population and size, with the norm across the EU. Its components must also be geographically contiguous. This means that the option of designating micro-regions, such as poverty blackspots within regions and cities, to avail of Objective One funding for those particular areas is not available. In any case, if it were possible to direct Objective One assistance to relatively poor urban micro-regions, very wealthy areas of the Community, such as the cities of London, Paris or Hamburg, would be able to seek Objective One status for their urban blackspots. This would dissipate the overall allocations for Objective One assistance, and would reduce the amount available for Ireland, whether under transition arrangements or for a region enjoying full Objective One status.
Consideration could be given to including some adjoining counties in the new NUTS II region with Objective One status. This would, however, involve consequential changes at the next level, NUTS III, which might not be acceptable to EUROSTAT and might also endanger qualification for Objective One status by breaching the 75 per cent GDP threshold.
I would stress that if a part of the country were to qualify for Objective One as a result of the proposed reclassification, this would not mean that the rest of the country would be treated any less favourably than it would have been anyway under the transition regime currently proposed for Ireland as a single region. The Government will insist that the non-Objective One part of the country would qualify fully for the transition regime, and we have no reason to believe differently. Consequently, if one region in Ireland qualifies for full Objective One assistance, the other region will qualify for the transition regime currently on offer for the country as a whole.
Overall, there will be a substantially lower per capita transfer of Structural Funds in the next round to Ireland as compared with the current round. In addition, any region in Ireland which receives Objective One status will not achieve the same per capita transfer of Structural Funds as Ireland as a whole received in the current round. This reflects the improved economic performance of the country at national and regional level as compared with the European average in recent years. More specifically, being below 75 per cent of GDP for a region is not the sole factor as regards shareout. Other criteria are equally important. In the final analysis, the levels of assistance going to a region are determined by reference to its population, relative prosperity and unemployment levels. In regard to the latter, for instance, Ireland's unemployment rate and the unemployment rate of any prospective Objective One region in Ireland are significantly below the levels of unemployment in some of the more populous Objective One regions elsewhere in Europe.
In summary, the arguments for regionalisation are compelling. The new Objective One region would continue to receive full Objective One assistance over the period and, therefore, more Structural Funds. It would also have access to a better State aids regime and potential access to transition after 2006. The other region would enjoy transition status as it would if the country were treated as one region. There is, in my view, no downside to the proposal.
In the event of a regionalisation approach being adopted, the regional administrative framework may require adjustment. Such adjustment as is necessary will be the subject of discussion with the Commission and will take account of the views of the regional interests. A major consideration in this general regard is that the efficient and effective administration and management of Structural Funds spending, for which Ireland enjoys a just reputation, must not be jeopardised, particularly in the coming period of declining overall assistance from Europe. Notwithstanding this, the Government would, I believe, be prepared to give any new regional structures a real role in the preparation, management and monitoring of the regional components of the National Development Plan.
I now wish to turn to the linkage between regionalisation and the efforts being made to tackle the problems of social exclusion, particularly as they affect disadvantaged urban areas, the so-called urban blackspots. In this context, it is important to place the role of Structural and Cohesion Funds in perspective. In 1998 total gross public expenditure will be £16 billion, of which £.2 billion or 7.5 per cent is expenditure co-financed by the Structural and Cohesion Funds. Of this £16 billion, £11 billion will be spent in the general area of social expenditure. Of this amount, approximately £244 million, or 2 per cent, is cofinanced by the Structural Funds. Regionalisation will have absolutely no implications for the vast bulk of this expenditure, including the major areas of social expenditure such as social welfare payments, £4.9 billion in 1998; public health expenditure, £2.9 billion in 1998; and local authority housing, £244 million in 1998.
Urban disadvantage and poverty are closely linked in three ways: first, there is a higher risk of poverty in disadvantaged urban areas; second, residents of disadvantaged urban areas experience cumulative disadvantage in terms of long-term unemployment, educational disadvantage and social isolation; third, the quality of life in disadvantaged urban areas is significantly inferior to that in more affluent areas in terms of crime levels, drugs, environmental conditions and socio-economic features such as access to banks, shops, local business activity and recreational amenities.
Under the current round, the specific EU-assisted programmes and initiatives which relate directly to tackling the problems of poverty and social exclusion are the human resources operational programme, the local urban and rural development programme and the urban initiative. These programmes fund a number of very important schemes in the area of social exclusion, including training for early school leavers and the long-term unemployed, local enterprise development through the county enterprise boards, integrated development of disadvantaged areas through the partnerships and community groups and urban regeneration in particularly poor parts of Dublin and Cork through the URBAN initiative.
With regard to the URBAN initiative, I should mention that the Commission does not propose the retention of this initiative in the next round. Ireland has expressed concern in the negotiations that the type of schemes and projects assisted by URBAN in this round should not be neglected and we are calling for the retention of the URBAN initiative after 1999.
While it is true that the bulk of the expenditure under these programmes in the current round occurs in what would be the region in transition next time round, I would stress that this region will have access to the same transition regime currently on offer for the whole country.
Regionalisation of itself will not have a significant impact on the priority to be attached in the next National Development Plan to these programmes. Human resource development and social inclusion — particularly in urban blackspots — will remain priorities, along with improvements in infrastructure and general economic development in both regions. However, the balance between these priorities will necessarily reflect the particular profiles of the regions e.g. measures to tackle disadvantaged urban areas would receive a greater emphasis in the region in transition.
More generally, in the formulation of the National Development Plan for the post-1999 period, I would stress that measures with an objective of tackling social exclusion will continue to receive special consideration. Proposals will be considered with particular reference to reducing long-term unemployment by securing increased job placement; discouraging early school leaving, the primary cause of long-term unemployment; addressing adult illiteracy; and tackling the problems of drug abuse.
I wish to refer briefly to the general preparations for the National Development Plan 2000-2006 in the context of regionalisation. The National Development Plan will seek to consolidate and build on our progress in economic and social cohesion through programmes which will aim to enhance our economic potential; contribute to continuing growth in sustainable employment and to the reintegration of the long-term unemployed and those at risk of becoming so into the economic mainstream; and contribute to a balanced geographic distribution of economic activity which is consistent with maximising national economic growth.
As part of the plan preparations, the ESRI has been engaged to carry out an ex ante evaluation of investment priorities for the next round, including a separate assessment of the submissions from the various interests and Departments. The ESRI has been asked as part of its evaluation to review international and other developments which might be critical for Ireland's economic growth in the 2000-6 period and to quantify the levels of investment required to close the gap in key areas of infrastructure relative to move developed regions of the Community. In keeping with the Government's commitment to meet the needs of less developed areas in Ireland, the ESRI evaluators have also been asked to provide an assessment of the strategies which are likely to be successful in achieving a more balanced spatial distribution of economic activity in Ireland consistent with maximising national economic growth.
The plan is being developed in partnership with regional authorities and social partners. To date submissions for the plan have been received from all regional authorities, relevant Departments and most of the social partners. These submissions are currently under consideration in my Department, which will be engaging in due course in further consultations on these submissions with the regional authorities, the main social partners and Departments.
In the event of a regionalisation approach being adopted, the new regional structures for any new regions in Ireland will be involved in the overall process of formulating the next national plan. They will also have a crucial role in monitoring and managing the regional components of the CSF subsequently agreed with the Commission. This will provide for regional interests to have a more strategic input into the delivery of Structural Funds assisted investment. These new structures would also enhance co-ordination across the current regional authority boundaries, thereby helping to maximise the value of Structural Funding.
Discussions will also be held with the appropriate Northern Ireland authorities to explore and develop the potential for cross-Border co-operation. The nature and extent of these consultations will be influenced by broader developments in relation to the peace process. The proposals of the Border Regional Authority and the submissions from other interested parties in relation to the potential for North-South co-operation will be taken into consideration in any consultation which will take place in this regard.
The final shape of the National Development Plan will be governed by Ireland's shareout of Structural and Cohesion Funds and the decision on regionalisation. In the event of regionalisation, each region will have its Structural Funds allocation ringfenced. The plan will have to take full account of national priorities and expenditure in the regions will have to support this. The Government will also have to consider the appropriate level of plan investment and the funding of this investment against a background of declining EU Structural Funds. Our budgetary position means that Ireland is now strongly placed to meet this situation. As long as we continue with the prudent policies which have played a major part in securing the economic growth of recent years, we should have the resources to make good the reduction in EU aid for the country as a whole. In any event, the declining importance of Structural Funds in co-financing public expenditure in the next round will mean that allocation of assistance from the funds should not distort overall public expenditure priorities.
I wish to nail a number of erroneous contentions regarding regionalisation. Regionalisation would not adversely affect the region in transition by comparison with the single region in transition option. It would not adversely affect the Government's discretion to deal with the problem of urban blackspots. The Government cannot unilaterally define regional boundaries, nor incorporate elements as regards eligibility for Objective One status. On the positive side, regionalisation would guarantee full Objective One status and more funding, as opposed to transitional arrangements, for the region that qualifies; regionalisation should enable that region to enjoy a more favourable State aids regime than if it were part of a region in transition; and regionalisation will leave open the potential for the region to qualify for transition under Objective One in the years after 2006.
The negotiations ahead at European level will be tough and complex and are likely to continue for at least several more months. The European Council in Cardiff last June did not involve substantive conclusions on Structural Funds. While the European Council in Vienna next December can be expected to advance the negotiations, it is unlikely that any final agreement will be reached before the target date of next March.
We did not learn a great deal from that.
There was no information in it.
It is there but the Deputy does not understand it.
When the Government agreed to this series of statements in the House, Members were universally pleased. This House is one of the most pro-European Parliaments in Europe and Members fully appreciate the dramatic economic improvements that have occurred since we joined the European Union. Members particularly appreciate the improvements which have taken place in our infrastructure as a result of the major transfers of funds from the European Union to Ireland, particularly in the form of Cohesion and Structural Funds.
No matter how buoyant our economy is all Members would be worried at the prospect that the flow of Structural Funds would slow down and eventually stop. Members would accept any coherent Government strategy which would protect the flow of Structural Funds during a transitional period to the year 2006, which would guarantee some modest flow of funds to the country after that date.
It is a great pity that such an important debate is taking place under a cloud of indecision and misinformation. It is the Government's job to govern. In matters such as negotiating future tranches of Structural Funds, the responsibility is entirely that of the Government, not that of this House. Yet as we participate in this debate, the Government has not put its cards on the table. We do not know what strategy it intends to follow and all members of Government from the Taoiseach down have deliberately sought to disguise their intentions on this matter. This debate would be far more fruitful if the Government put its cards on the table and informed the House of the present position and what decision it has taken, if it has taken one. It is holding back information and this debate is diminished as a result.
In a lengthy reply to parliamentary questions on Wednesday, 14 October 1998, the Minister for Finance, Deputy McCreevy, informed the House that the Government is currently considering the option of an approach to Eurostat, the Commissioners' statistical office, with a view to having Ireland reclassified from its present single region status. That is a fairly circuitous statement. That paragraph was taken from the document on the word processor and included as a key element in the Minister's speech today, one month later. The Minister further informed the House in that reply that he had a memorandum and an accompanying paper prepared by the Department of Finance before the Government and that he could not anticipate what decision the Government might take. He repeated that today in exactly the same terms. The Minister's attitude, as distinct from that of the Government, is clear from that reply. He favours dividing the country into two regions, one consisting of the regional development areas of the west, the midlands and the Border counties and the second consisting of the remainder of the country. The Minister for Finance envisages that Objective One status would apply to the first region, that additional Structural Funds would accrue to that region between now and 2006, particularly between 2002 and 2006, and that reduced Structural Funds would be available to that region after 2006. The Minister also envisages a gradual reduction in Structural Funds for the remainder of the country, whose status would be that of a region in transition.
Reading between the lines of the Minister's reply it is clear he envisages significant additional Structural Funds would be available to the country as a whole by following that particular negotiating strategy. That reply was given on 14 October and one month later, as far as we can confirm — it was confirmed in the Minister's speech — the Government has not moved forward one inch and continues to disguise its intentions.
I wish to share my time with Deputies Ring, Timmins, Creed and Crawford.
Is that agreed? Agreed.
A month later the Minister repeated in the same terms what he said on 14 October. We can take it that his memorandum and accompanying paper is still before Government and that the Government has not made a decision.
Deputies will be aware of a report in The Irish Times today of a meeting in Cork on 16 October between the Taoiseach and EU Commissioner Wulf-Mathies. Despite the fact that the Commissioner could not confirm to him that additional Structural Funds would be available, even if the Government followed the regionalisation policy implied in the statement by the Minister, the Taoiseach chose not to reveal this information to the House when answering questions on 20 October. Not only did he not inform the House of the Commissioner's view but he proceeded to imply that extra Structural Funds would automatically be available if the regional strategy were followed.
The Government continues to close down the shutters on this issue. Despite the fact that the Department of Finance listed ten documents or papers which have been produced, requests to disclose them under the Freedom of Information Act have been refused.
The Government is responsible for negotiating the next package of Structural Funds. We would have a far more fruitful debate if it had already made a decision and the House knew where it stood. It is a normal procedure for other Governments to take the views of their parliaments before making a decision, However, in this House it is a procedure more honoured in the breach than in the observance. Nevertheless, the House cannot be used as a sounding board if the Government does not lay before it the information it has to enable Members form a view and if the Taoiseach misleads the House when he is asked for information in the form of parliamentary questions.
What is happening today is an exercise in political cuteness, which is becoming the hallmark of the Government. Members of the House, and the Opposition parties, are being asked to take a position in advance of a Government decision while it holds back documents on which it will be made. The Government must think we on this side of the House are dim-witted if it believes we are going to fall into that trap while it holds back and uses the agencies of the State to refuse to give information which should be put before the House.
Everybody knows that the amount of Structural and Cohesion Funds to be paid to Ireland will be reduced over the next eight years. While these funds have been a significant factor in the recent social and economic advances made by the country, their impact should not be exaggerated, although if they were suddenly cut off from the Exchequer the impact of a hard landing would be significant. Nevertheless, the country can now cope with reduced funds from 2002 and can, I hope, eventually cope with their phasing out. However, we have received a great deal of money and we would like to maintain as much of the flow as we can.
I understand we receive approximately £1 billion per year in Structural Funds at present. Members of the Rainbow Government, in which I had the honour to participate, believed this would be reduced to approximately £700 million per year in the period 2002-6 and if this amount was to be enhanced or if significant funds were to be attracted after 2006 a change on the basis of the allocation would have to be negotiated.
In his statement to the House today, and in his reply to which I referred, the Minister indicated he saw no hope of renegotiating the basis on which Structural Funds will be drawn down. He explained that in the first instance, the basis of Objective One status was purely statistical. A country or a region was eligible if Eurostat stated that the per capita income of the region in GDP terms was below 75 per cent of the Community average. Since the Republic of Ireland, which has always been treated as a single region in terms of Objective One status, has now an average per capita income which far exceeds this the country as a whole is no longer eligible for Objective One status and if any part of the country were to continue to maintain Objective One status a regionalisation policy would have to be followed.
The Government appears to be resigned to making no attempt to renegotiate the basis on which Structural Funds and Objective Status is decided. Yet, on Friday, 15 November 1996, the then Minister for Finance, Deputy Quinn, speaking at a two day seminar on Structural Funds at Ballyconnell, County Cavan stated:
The focus of Structural Funds will be shifted from infrastructure and road building from which Ireland has benefited significantly, to unemployment, which has been identified as one of the most pressing concerns for the Irish Presidency. The new focuses will be job creation as the paramount objective; competitiveness and development of small and medium enterprises; research and development and a labour force qualified in future technology; environment and sustainable development; and equal opportunities.
He remarked that one of the areas of major focus would be territorial pacts and that Ireland was one of the first countries to introduce such pacts. He also pointed to a pilot project amalgamating 11 Dublin partnerships from Tallaght to Blanchardstown. The groups would work more closely together as well as liaise with other groups across the EU.
EU Commissioner Wulf-Mathies also spoke at the seminar. She did not demur from the views expressed by Deputy Quinn and confirmed that there would be no immediate fall-off in funding when the next series of Structural Funds was negotiated post 1999. I can find no reference by anybody in the Government to a renegotiation of the basis on which Structural Funds are allocated along the lines suggested by the then Minister for Finance.
It is clear the Minister believes that the criteria for Objective One status are narrow and non-negotiable. Only regions approximating to the size of regional development authorities may be considered. Regions would have to be contiguous and individual poverty black spots, of which there are approximately 170 in the country, could not be included if they fell outside areas to which the total criteria applied.
The Minister informed us of all this on 14 October. The only significant movement he made today is his definition of "contiguous", which would now, with a nod in the direction of south County Kerry and County Wicklow, include adding counties on an individual basis. I presume the Minister drafted this part of his script himself. It did not emanate from Brussels if measured against the criteria which he outlined on the last occasion he addressed the issue in the House.
It is difficult to understand why an approach advocated by the previous Minister for Finance on behalf of the then Government has been abandoned by the Government without any explanation being offered. If, of course, the ten documents in the Department of Finance in which this issue is discussed were put before the House we might discover the answer to this question.
Fine Gael believes that national policy must be framed so that all areas of the country and persons who live in them may prosper equally. At present, despite the boom conditions in the economy, there are great disparities of wealth, income and living standards in the country. There are also huge disparities in the opportunities available to citizens for reasons almost always beyond the control of individual citizens.
The Government must deal with the issue of Structural Funds in the best interests of the country as a whole and of all its citizens. If, as media reports of the last 24 hours suggest, no additional advantage or no additional money will be gained whether the country is regionalised or not then this debate is much ado about nothing. In addition, if, as Commissioner Wulf-Mathies has stated, there is no possibility of Northern Ireland retaining Objective One status post 1999, then those negotiating the North-South bodies arising from the British-Irish agreement will shortly find themselves facing in two directions.
If, however, the Commissioner is wrong in her estimation of the outcome of the negotiations and if regionalisation delivers significant additional funds, as the Minister seems to claim, without adversely affecting either the rest of the country or cross-Border relationships that is the way to go. It is, however, very difficult to make a judgment on this matter when the Government is not stating its position clearly, when it is refusing to make a decision and when it is deliberately withholding relevant information from the House.
I am bitterly disappointed that the Government had not the courage to make a political decision. For the past number of weeks we have been told that the decision would be made on the following Tuesday. The Tuesdays are running out, and we are near the end of the year. I am sorry the Minister for Finance has left the House, but I am glad his officials remain. The Government gave a commitment in its programme for Government that the west, the midlands and the Border regions would have Objective One status. Objective One status can only be got for the Border, the midlands and the west because of our GNP, and the rest of the country got Objective One status in the last round because of the west. What have the begrudgers against the west? The west is entitled to Objective One status.
I hope the Government will have the courage to make the right decision next Tuesday or the Tuesday after, or whenever it makes the decision. The case has been made and the figures proven. We are entitled to Objective One status, but the officials in the Department do not want regionalisation. Who is running the country, the officials or the Minister? Members of the Dáil are elected. The Government was elected and it gave a commitment to the people of the west that the west would get Objective One status. The Government should honour that commitment. Forty thousand farmers marched in Dublin last week and there will be 120,000 people from the west outside the gates of Leinster House if we do not get Objective One status and nothing in this city will move for the next six months. We will camp outside this House until we get our rights.
It will be no thanks to Fine Gael.
The Deputy should keep her mouth shut. She will have her chance to speak later. The only time the Deputy acknowledged the west was when she came down to collect. She should not annoy me this evening. Her father, who is in Brussels, was against Objective One status when the Government was against it. When the Government came on side, he came on side. I have always been supportive of Objective One status. I am for the people of the west. The Government gave a commitment and we want that commitment honoured. We do not want shilly-shallying with one message one day and another the next.
Yesterday the Minister sent out a message, and I never saw rabbits running to their burrows as fast as members of this party did yesterday when that Minister insulted the farmers of the west. Deputy Cooper-Flynn got the message because she was quick enough to say one thing on the radio in Mayo and another in the Dáil. When I joined Fine Gael I said what I thought about the people of the west. I tell the truth. Some people in Fine Gael do not like that, but I tell them what I think because I represent the people of the west and nobody else.
The Minister of State, Deputy O'Dea, should bring that message to the Minister for Finance, Deputy McCreevy. The Minister has a cold, but he will have a worse cold if he does not grant Objective One status to the west. The Minister should keep his word. He went into Government under the programme for Government.
To Deputy Proinsias De Rossa I say that we in the west have suffered for enough years. Why does he not leave us alone on this occasion. If there are a few pounds to be got, let us get it and leave us alone. We are only asking for fair play. This is our last chance. Dublin received two rounds of Structural Funds. This is our chance. It is now or never for the survival of the west. I hope that if we have to march through the lobbies against the Government in protest at not having received Objective One status, Deputy Beverley Cooper-Flynn will join us.
The issue of regionalisation of the country for the next round of EU funding has received much coverage in recent weeks. However, it has all been very vague, and this uncertainty is now epitomised by the most recent reports, the claim that regionalisation will not bring in one extra penny.
In reply to a Dáil question on 14 October the Minister for Finance stated that if, based on the qualification criteria for Objective One status, Ireland was reclassified and if this was accepted by Eurostat, a region comprising the west, Border and midlands would qualify.
He also stated that these areas would qualify for a better State aid regime for attracting new industry for the years 2000 to 2006 than they would if they were in transition. Other than this, we do not have much more information, and, almost one month later, the Government is less forthcoming than before as it seeks to let others make the decision for it. Most people here are in favour of maximising the grant aid we can get from Europe. However, this is a simplistic approach, and until such time as all the pay-offs and balances are known, it is not possible to make an informed judgment.
What might those pay-offs be? We have benefited greatly from our membership of the EU and yet we will not make the most minuscule contribution to its security. To date our European neighbours have looked upon us in a favourable light. Now that we have made progress, will this perception change if we are seen to "play around" with regions just to maximise funding. More important, having spent three generations trying to neutralise a man-made boundary between North and South, are we now going to create one between east and west to add half-pence to the pence.
Every Member can make a good case for the region he or she represents. Statistics tell us what we want them to. I represent the mid-east, and the perception is that it is well off. Parts of it are well-off, but it has areas that are as poor as other regions. The mid-east has received the lowest share of Cohesion/Structural Funding in the current round. The mid-east region has both the highest rate of net inward population migration and natural increase. There is a clear divide between its eastern parts linked to the Dublin metropolitan areas and the outer periphery which is more typical of the midlands and other regions. In addition the high rate of urbanisation is not without its growing pains and its infrastructural and human resource needs. While the proposal to regionalise the country for the next round of funds looks right in theory, it fails to take into account that there are areas of deprivation and marginalisation in other regions. Until such time as this Government puts all the proposals and measures on the table it is not possible to make an informed judgment.
It is unfortunate that we are having this debate in a vacuum. Most of us expected that we would have a Government decision and would be able to react accordingly.
There is widespread familiarity throughout the country with the consequences of Objective One status, regionalisation or Objective One in transition. All Members can make a good case for the inclusion of their own region, but the bottom line is that, in terms of potential economic development, we cannot accept a two-tier system. I attended a public meeting in north-west Duhallow in my constituency which is one of the most depressed regions in the country. Some of my colleagues claim to represent prosperous regions, regions with black spots, and regions that are entirely in depression. I would invite any of them to look at what is happening in the Duhallow region where people are leaving the land at an alarming rate and where it has not been possible to attract alternative industry to drive the local economy.
One of the major consequences of regionalisation is being overlooked. That is not so much that there will be a two-tier system of grants for agriculture, because the Department would not get away with that. There is a very serious downside in respect of areas outside Objective One status, those that may be categorised as Objective One in transition, and that is their capacity to attract alternative industry. A document from the Irish Business Bureau in Brussels states:
The Commission has set down a formula whereby the amount of grant-aid permissible will be modulated into the two categories of regions within Ireland. Objective One will be able to have a grant aid maximum of 40 per cent for new industry, and Objective One in transition will have a maximum of 20 per cent, and this limit may be as low as 10 per cent.
That has very serious consequences for areas that will not make Objective One status, and there is no capacity for national Government to make up the shortfall in that area. I am extremely disappointed that we are accepting the criteria the Commission is quoting for determining what is in or what is out, because GDP is an unfair mechanism.
I live in the south-west region of Cork and Kerry where there is an excessive concentration of multinationals in the Cork Harbour area who repatriate much of their profits. If that aspect was taken out of the equation, we would be among the lowest. However, if one takes average weekly household disposable income, the regions it is proposed to include under the current criteria, such as the midlands and the west, would be excluded because they are in the top three. It should have been possible to construct some matrix of economic criteria that would genuinely reflect regions in need. However, it appears we have thrown in the towel in terms of the criteria which will be used to determine whether we will qualify for Objective One status. This is most disappointing.
There is a danger that the Department of Agriculture and Food is sleep-walking through this entire debate. The Minister for Finance appears to be well briefed. He was hoarse during his contribution but many of the people in Duhallow with whom I attended a meeting last night would have preferred him to be more hoarse or practically voiceless a few days earlier. There is great outrage at the slur he cast on the farming community and the attempt he made to fan the urban rural divide which is the most divisive debate in the country. There are even elements of it during the discussion on Objective One status.
Due to Objective One status, Ireland receives a total of £184 million annually between the REP, early retirement and forestry schemes. However, there is not a giggle from the Department of Agriculture and Food during this entire debate. There is a real danger that these schemes will be undermined. To safeguard the interests of those who may fall outside Objective One status, there is an obligation on the Government to publish simultaneously when it submits a national development plan for the region which may qualify for Objective One status a transparent document that will be a blueprint for the development of the regions which will have Objective One in transition status and take account of their inability to attract industry.
I support the regionalisation of the country with regard to Objective One status. The issue is extremely serious. The Border, west and midlands regions have propped up the rest of the country over recent years. It got Objective One status at our expense. A map, issued as part of the document on the railways today shows a white area covering Cavan, Monaghan and Donegal. That is so because the region does not have a railway or proper roads. Not one penny from the last round of Objective One status money has been spent on by-passing any of the towns in the region. The Border, midlands and west regions should have Objective One status, but it should be stipulated that this money from Brussels is additional and not a replacement for other funds as was the case under INTERREG and other programmes.
I am most disappointed that the Minister did not state that the Government has made a decision. For months the Government has repeatedly stated that it will make a decision shortly. I accept the Minister for Finance's commitment to this issue. He, and many of his officials, have made it clear that there would be a direct benefit from the regionalisation of the country. However, the Taoiseach said this would mean that no extra funds would be made available to Ireland. One must react with disbelief at this statement.
Is the Taoiseach involved in this debate in Europe on our behalf? Is he stating in discussions that if Ireland had Objective One status, it would draw money from a larger pool not only for the next seven years, but beyond? Is the Taoiseach trying to court votes in Dublin? Deputy De Rossa is doing something similar but the Taoiseach should see the bigger picture and ensure that the areas which are entitled to Objective One status receive it so they will have a chance of survival in the future.
The Government has failed to secure approval for the rural renewal plans for the Shannon basin and the urban renewal plans which were promised months ago. One must be extremely anxious about the efforts it is making to secure the best results in Brussels. The Taoiseach rushed home to attend a football match against my county in Dublin recently. Is he trying to build relationships in Europe? Former Taoisigh from all sides had good relationships and secured the best possible results in Europe.
Approximately 40,000 farmers marched in Dublin recently seeking their rights. Many of them were from the areas I mentioned. Time is not on our side and if Objective One status is not secured quickly, there will be a revolt in those areas which have been left out. According to the last census, my county is one of the few where there was no increase in population. People did not stay because funds, which we helped the country to secure, were not spent in the regions which were entitled to them.
I am not prepared to stand back and allow that to happen in future. We beg the Taoiseach to make a decision quickly and ensure that as much aid as possible is secured on an ongoing basis for the areas which needs it most. This does not mean that urban renewal blackspots cannot get funding from other sources. The Minister for Finance stated that this is possible. However, we should not allow ourselves to be sailed down the Swanee for political opportunism.
This is an important debate because it offers us a snapshot of our political culture. It offers us an opportunity to take stock of where we stand as a country and an economy. It is particularly important because it gives us an opportunity to redefine ourselves in relation to the rest of the European Union and other member states.
The debate is not exclusive to the House. It has been ongoing for some weeks at different meetings throughout the country. However, much of the debate has been disappointing, not least because of the ham-fisted and secretive way in which the Government in general and the Minister for Finance in particular have behaved. This is a matter of national interest, which affects the national interest.
If we were to adopt a genuinely regional approach to a development strategy, it would involve fundamental and radical structural reform which deserves wide public debate before the issue is even mentioned in Brussels. Instead, the Government is attempting to insinuate that any debate is in itself contrary to the national interest because it might affect the Government's negotiating stance. This attitude tells us much about what we need to know. The proposal is not the imaginative commitment to regional development which is needed. It is no more than an inept ploy to extract a few extra euros from the German taxpayer.
As I said in the House recently, there is a need to redefine our attitude to the European Union. It is time to put away the begging bowl before it is thrown back in our collective faces. We are no longer the poor relations of Europe and we must take some responsibility for our future. One should consider the figures. The Government is due to run a current budget deficit of almost £2.5 billion this year, with an overall Government balance of close to £1 billion. The £2.5 billion figure is equivalent to the entire expected take from Structural and Cohesion Funds over the next seven years.
It is argued that regionalisation would allow us to increase our share by perhaps £120 million or approximately £20 million a year over the next financial perspective. This is one fiftieth or 2 per cent of the general Government surplus for this year alone. The Minister for Finance and the Department underestimated the tax take this year by close to £1 billion or £20 million a week. A total of £20 million a week more has been taken in than the Government predicted in the financial statement at the end of last year. Yet, the Minister has developed an apparently elaborate plan which will do no more than realise the same amount over the course of an entire year. It is time to ask if the game is really worth the candle.
Ireland has serious infrastructural needs and these are explicitly recognised in Agenda 2000. The Commission appears to have gone seriously out of its way to accommodate Ireland and its needs. The notion of areas in transition appears to have been developed, at least in part, with Ireland in mind. This reflects the fact that the Commission accepts that we have spent the funds well and to good effect. It also reflects the goodwill and influence Ireland has built up in the 25 years since we joined the European Economic Community in 1973 but that goodwill and influence are not without limit and there have been clear signs that we are pushing close to that limit. It is no secret that the agreement with Commissioner Monti in relation to corporation tax has upset many of our partners. It has become difficult to get agreement from the Commission on the use of State aids of any kind. Deputy Crawford mentioned several. The point has hit home to our partners that we are no longer as poor as we once were. All this means that we are under far greater pressure than heretofore to justify special pleading. Our partners expect us to take a far greater level of responsibility for our future and who could blame them?
Last week the Minister said that he intended to bank £1 billion of taxpayer's money to reduce the national debt. It is staggering that this decision, this political choice has hardly aroused a ripple of criticism. Government Deputies have been falling over themselves with enthusiasm to extract a few million pounds from the German taxpayer while the Minister is refusing to spend £1 billion of taxpayer's money on anything. How can we ask others to invest in our future if we refuse to do so ourselves?
When the Minister attends an ECOFIN meeting between now and next March and puts his case to our partners, not least the Germans, the Swedes and the Austrians who have invested heavily in us, he will produce his elaborate maps and tell Mr. Lafontaine and his colleagues that we are entitled as of right to direct transfers from the German taxpayer. The German Government has a borrowing requirement pushing the Maastricht Treaty limits and an unemployment rate of almost 25 per cent in the eastern Lander. Is Mr. Lafontaine not entitled to ask why we want to spend German taxpayers' money on development in Ireland and to put our taxpayers' money in the bank for a rainy day?
There has been a great deal of special pleading. Deputy after Deputy will look to make the case for a particular programme, project or region but the object of the exercise is deeply mistaken. Europe holds some of the purse strings but the far greater purse is in the Minister's back pocket. It is no longer possible or desirable to blame others for our deficiencies. If the roads in Cavan are full of potholes, the blame lies with the Minister, not with Mr. Santer or Mr. Schroder. If our public transport system is inadequate and our sanitation system underfunded, the blame lies in Dublin, not in Brussels.
The Minister banked £1 billion last week, £1 billion of opportunities lost, of development foregone. The Minister is uniquely fortunate. He has real choices. He can choose to invest in our development or he can bank the money. He can choose to help create a developed civilised society or he can give tax breaks to the rich. He can choose to bring our public services up to European standards or he can ask our German friends to do it for us. So far he has chosen to ignore the advice given by Dr. Michael Somers of the NTMA that money is better spent not in reducing the national debt but in investing in our future and public services on which so many depend.
How can the Minister make a case in Brussels when he fails to practice what he preaches? How can we look to spend German, Swedish or Austrian money on our development if we refuse to spend our own? Most of Europe is now social democratic which should work to our benefit. We have a decent case to make for the continuation of regional aid which our colleagues are willing to accept but that case will be damaged if we fail to meet our responsibilities. We cannot ask others to do what we are not willing to do ourselves. If we do, we will be laughed out of court.
This is not an each way bet. If we are seen to chance our arm for a few pounds more and to engage in a mapping exercise which is seen by others as a ready-up, we risk losing much of the influence which has sustained us well. We have often relied on the help and friendship of our partners to get us a good deal and we should think long and hard before jettisoning that goodwill. The cost in terms of money and influence may outweigh any short-term gain.
The next few years will be challenging for Ireland and the European Union. We face EMU at a time when the economy is out of sync with the rest of the European Union. We are looking at enlargement in four or five years' time which will demand serious renegotiation of the common agricultural policy. Does anybody seriously believe that Hungary and Poland can be accommodated within the common agricultural policy as constituted? Our friends have supported us through challenges of this kind. It is important that they do so again. If we put that friendship in jeopardy for the sake of a few pounds more, we are at risk of making a mistake of historical importance.
For many years we have behaved as supplicants in our approach to the European Union. We have sought and received the support of voters for referenda on European issues largely, although not exclusively, on the basis that it was financially good for us. It is time to broaden the debate and there is an urgent need for Government to show leadership. The raison d'etre of the European Union is and always has been political as well as economic. We have chosen to emphasise the financial benefits. The time has come to address the broader picture. When next we face a European referendum we will be in a different relationship than we have been on previous occasions. It is up to us to ensure we do not come in for a rude awakening.
It is impossible and undesirable to deal with the issue of regionalisation without placing it firmly in the context of the big picture. If regionalisation is merely a ruse to dupe the Commission into giving us a few pounds more, we should abort that ruse immediately but that does not mean that there is nothing to be said for a regional approach to development. I was struck by the contribution of Mr. Liam Scollan, chief executive of the Western Development Commission, at a conference in Galway a few days ago. He set out a cogent case for an integrated approach to development in the west. He said, "mere designation of Objective One will be of little use unless it is accompanied by a clear commitment to a timescale of significantly increased investment in the physical and social infrastructure of the regions". He referred to "the utter fallacy of regarding EU money as the solution". The thrust of his contribution — I hope I do not do him an injustice — was to play down the importance of the European dimension while emphasising the importance of the regions as a focus for planning, investment and development.
There is a great deal of merit in the argument made by Mr. Scollan and there is no reason similar thinking could not be applied to other regions. Real planning and development at regional level could play an important part in addressing regional inequality and the social inequality that comes with it. The Labour Party is much in favour of tackling inequality wherever it arises and giving power to local people to make decisions which affect their lives. We will support any genuine move to address inequality and devolve power. Does the Government's proposal represent a genuine effort to do either of these things? All the evidence suggests the Government has no genuine interest in devolution or tackling inequality at regional level.
The regional authorities are incapable of doing a serious job of work. They have no decision-making powers and their structure would make it almost impossible to give them powers of this kind. Fitzpatricks and Associates, economic consultants, carried out an assessment of the regional effects of the CSF two years ago. On the regional authorities, the report was unambiguous. The consultants found that the review process carried out by the authorities was generally unsatisfactory. They made a list of stinging criticisms and a further list of recommendations, none of which has been implemented.
In the circumstances, the authorities would have to be dramatically restructured to allow for any genuine decision making at regional level, yet the Taoiseach has made it crystal clear that he envisages only small changes by Government order. We must wonder at the seriousness of the Government's intent if its reforms are of a nature that do not even require legislation. Perhaps a further hint can be gleaned from the comments of Mr. Noel O'Gorman, a Department of Finance official, when he appeared before the Joint Committee on Family, Community and Social Affairs recently. He emphasised that "the efficient and effective administration and control of Structural Funds spending,.must not be jeopardised". Strangely, the Minister used the same phrase earlier. This message is transparent coming from the Minister and a senior official in his Department, even one as progressive as Mr. O'Gorman. The central control by Merrion Street has served us well and must not be interfered with.
Another indicator of the Government's intent is its treatment of the national plan. A number of months ago the Government commissioned consultants to draw up a national plan to form the basis for the next CSF. The terms of reference envisaged one national plan, not two or more regional plans. However, the notion of regionalisation had not taken off at the time. When Mr. O'Gorman appeared before the Joint Committee on Finance and the Public Service two weeks ago I asked if the terms of reference had been changed to incorporate the regional strategy. He appeared to be genuinely bemused at the suggestion and his response suggested that regionalisation was little more than a lever to extract more money rather than a serious commitment to regional development.
If Ireland is to adopt a genuine regional strategy it will require a complete reorientation of the entire strategy, which is a great deal more than a change in the structure of regional authorities. Fitzpatricks point out that "the CSF does not contain regional objectives, either overall or by region: it contains no quantified regional targets and no projected expenditure by region. .There are, therefore, no integrated regional strategies, plans or programmes. Instead, the CSF is designed, structured and implemented on a national basis through national programmes". That is the status quo as evaluated by the consultants only a year or two ago. Does the Minister agree with that conclusion and does he intend to do anything about it? I suspect the answer to the second question is "no" whether he is prepared to acknowledge this.
The Minister referred to the possibility of retaining in transition status for the areas that might be granted Objective One status beyond 2006. This must be seriously questioned and I do not wish to make any plans on the basis of that assumption. The Commission that will come into power next year will already have sought control by the time the next Financial Perspective from 2007 onwards is negotiated. Most of the current political leaders in Europe will most likely have moved on. Perhaps more important, we are talking about a Union which is likely to include six additional countries or more, many of which have a GDP/per capita ratio lower than Ireland's or the European average. To assume we have any chance of retaining in transition status for any part of the country beyond 2006 is extremely speculative. We could not justify a division of the kind the Minister seems to advocate, based on a faint hope of a carrot in the distant future.
The Minister made a more cogent and interesting argument regarding regional aid. There has been a dearth of information on this issue over the last while. Under the agreement already negotiated with the Commission, the entire country has lost A status for regional aid grant purposes and currently has C status. It is possible under the terms of reference published by the Commission that if part of the country were to retain Objective One status it could be regraded to A status but this is not certain and again this involves serious speculation. Even if we accept that the lower levels of grant-aid will apply, how often is that exceeded? Is it normal practice to give grant-aid in excess of 20 per cent plus ten? On many occasions grant-aid in excess of 25 to 30 per cent has been declined even when it might have been possible to attract even significantly large industry. There is merit in this argument and I am interested to know what the instance of it coming into effect would be.
I agree with the Minister that the 1.27 per cent limit on funding is no longer sustainable. It is difficult to see it sustaining the existing Union over the duration of the Financial Perspective while it is impossible to see it sustaining a Union which might include several other poorer countries over that period. Notwithstanding Ireland's interest in the future as a net contributor, it has an interest in increasing the level of own resources, as the Minister rightly pointed out. That should be clearly articulated and those looking for an increase in own resources should be supported.
It is important that the Union continues based on solidarity, accepts international competences and is willing to support, for example, through the regional and agricultural funds, areas that are less well off. The effect of Government policy to date, and some would say the intention behind it, has been to divide the nation between those who believe they will benefit and those who believe they will lose. I, and the Labour Party, do not intend to go along with this policy of division. There is something particularly squalid in a policy which encourages the disadvantaged in one part of the country to believe that they can only get on at the expense of the disadvantaged in another part.
We must not allow ourselves to be drawn into false choices. We have a moral and political obligation to tackle poverty and disadvantage wherever it arises, be it in the centre of Dublin or Cork or rural Achill or Cavan. Is anybody seriously suggesting that we should invest in the roads infrastructure in Mayo but not in South Kerry? Does anyone seriously believe that a specified course in Letterkenny IT should receive ESF funding while the same course in Carlow IT should not?
We should refuse to get drawn into the politics of division. The people in the west made their case well, as Deputy Ring did earlier, and I have sympathy for it. Much underdevelopment and disadvantage in the west must be addressed as a matter of priority. However, the facts do not lend themselves to the easy, map drawing exercise in which the Government seems to be engaged. The Fitzpatricks report points out that European funding has had different effects in different parts of the country. For example, the Border region has received the greatest input per capita but has responded least well and it also suggests that different types of spending produce different results and different regions may well require different mixes of spending.
This is the last time Ireland can expect to receive significant Structural Funds. It is important that they are spent fairly and well and the money is used to tackle poverty, disadvantage and exclusion wherever it exists and support the needs of the economy and the people. There may be an argument for more regional decision making and control. If so, we have yet to hear it from the Government.
I wish to share my time with Deputy Pat Carey.
Is that agreed? Agreed.
I am glad to have the opportunity to contribute on this important topic. I welcome the Minister's comment that the arguments for regionalisation are compelling and there is no downside to the proposal. With you, a Leas-Cheann Comhairle, and our colleagues in the Border region, I look forward to a decision by the Government to put forward proposals that will facilitate more balanced regional economic growth and assist those regions which have lagged behind.
It is obvious from the statistics quoted by the Minister and from previous replies in the House to parliamentary questions and Adjournment debates that the Border region, the west and the midlands are lagging behind the rest of the country and require special development. I have had the opportunity, through parliamentary questions and Adjournment debates, to highlight the developmental needs of the Border region and I wish to put on record some of the valid and cogent arguments in that regard.
The retention of Objective One status for the period 2000-2006 for the Border region is essential if regional imbalance and disparities in economic performance are to be eliminated. The case for Objective One status is economically and politically justifiable. The infrastructural deficit suffered by the Border region must be addressed and this can only be achieved by drawing down the maximum level of Structural Funds.
Structural Funds after 1999 have exercised the minds of public representatives in the midlands, west and Border regions for some time. That is also true of our colleagues north of the Border. They are particularly concerned about the existing economic divide and the lack of development west of the Bann. Last June the Minister for Tourism, Sport and Recreation, Deputy McDaid, launched the Border Regional Authority report: "The Border Region after 1999: the case for special status". That report outlined in a comprehensive manner the arguments for the retention of Objective One status and it obviously has been the subject of consideration by the Department of Finance. The report outlines the poor performance of the region in socio-economic terms and articulates clearly the region's unique status in the Irish and European Union context.
It must be accepted that the prolonged Northern troubles had a devastating effect on the economy of the Border counties. The seemingly intractable situation inhibited the normal pace of economic growth and development in the region. The Border created an economic divide with towns being cut off from their natural hinterland and rural areas being cut off from their natural town centres. The area suffered from security problems and from a general lack of development in social and economic terms.
In 1997, 14.7 per cent of the labour force in the Border region was unemployed. This was the highest unemployment rate recorded in any region and was well above the national average of 11.8 per cent. Fortunately, employment increased in the area in the period 1993-7 and unemployment fell. However, its performance lagged behind that of the other regions which meant that fewer jobs were created and the reduction in unemployment was lower than elsewhere.
The Border region experiences the highest rate of long-term unemployment. In 1997, 58.7 per cent of unemployed people were classified as long-term unemployed. The underdeveloped nature of the region is clear from the poor levels of economic growth and poor performance in attracting inward investment. The statistics quoted by the Minister for the areas which attracted inward investment were extremely interesting. If one were to take it that the Border region, the midlands and the west were to retain Objective One status, the regions in transition attracted 77 per cent of all inward investment during the period 1995-7. It is clear that the three regions mentioned must catch up on inward investment and job creation.
The Minister said the level of assistance that would be available by way of industrial grants will be greater for a region that retains Objective One status. The Border, midlands and west regions need the maximum level of grant assistance to create employment and attract inward investment.
Urbanisation is a feature of economic growth and the Border region is hindered in its potential development due to its largely rural nature. As a region it was not able to achieve the full benefit of the Objective One status the country has enjoyed to date because of the political difficulties on its doorstep. The region looks forward to the implementation of the British-Irish Agreement. The ongoing peace process must be under-pinned by large scale investment in infrastructure, inward investment and the creation of employment.
Now is the time to address the economic difficulties the region suffered over the past 30 years. It also faces new opportunities for the future arising from the peace process. However, it also faces a new challenge in being on the exchange rate frontline when Ireland enters EMU without Britain.
The region has benefited from Structural Funds expenditure, funds which were successfully negotiated in 1989 and in 1992 by Fianna Fáil Governments. However, the Border region and its neighbours did not achieve the success rate of the rest of the country. The report of the Border Regional Authority, to which I referred earlier, clearly outlines why the region should retain Objective One status. This region, in addition to the midlands and the west, is below the 75 per cent of GDP threshold which determines eligibility for Objective One status. It continues to be remote and peripheral in EU terms and it has special status regarding the historic, political and economic opportunities arising from the peace process.
The region meets the key principle of Agenda 2000 which is to concentrate Structural Funds assistance on the poorest regions. The implementation of the British-Irish Agreement should add considerably to economic convergence on the island. The retention of Objective One status for the southern Border region, the west, the midlands and, indeed, north of the Border and west of the Bann is needed so that necessary economic development can take place to underpin the peace process. Investment on a large scale is needed and this is an opportune time to show that the Government and the European Commission are committed to the necessary economic and social progress that is required.
I welcome the opportunity to contribute to this debate and I compliment the Minister on a comprehensive statement. The objectives of the EU Structural Funds, as determined by the European Union, are to put in place economic and social infrastructures to reduce inequalities between regions and within regions.
In recent years the regional funds, coupled with sound management of the economy, have served to increase equality between Ireland and other European states. It is also apparent that the national development plans submitted to the Commission during earlier rounds of funding have been the key mechanisms for prioritising how moneys are spent. The national development plan for the 2000-2006 round of Structural Funds is now at an advanced stage. It is my aim to ensure that problems specific to the Dublin region are addressed no matter what regional lines of delineation are put in place.
I do not challenge the claim that moneys should be invested in the poorer regions of Ireland. However, I am concerned that the over-simplified statistical analysis places the average income in Dublin at 121.5 per cent of the EU average. Not only does this figure include the incomes of many civil and public servants who reside or work outside Dublin, it takes little account of real household and personal incomes and higher transport, housing and other costs in the region, a fact borne out in a Dublin regional authority survey carried out by Dr. P. Drudy of Trinity College, Dublin.
The figures also sweep over the fact that the economic growth experienced in the last five years has failed to trickle down to many of the urban blackspots that persist in our capital city. The national development plan must address urban problems too. The success of the economy, combined with targeted use of EU funds, will provide many of the resources necessary to eliminate long-term unemployment and social disadvantage.
I accept that these problems permeate throughout the country but they are concentrated in the cities and particularly in Dublin. An analysis of the August live register reveals, for example, that there are 68,000 people registered as unemployed in Dublin city and county. Almost all of these people are concentrated in specific blackspots. The Government, in formulating the national development plan, cannot ignore this statistic.
I was glad to hear the Minister's statement that proposals for the national development plan post-1999 will place particular reference on reducing long-term unemployment by securing increased job placement, discouraging early-school leaving — the primary cause of long-term unemployment — addressing adult illiteracy and tackling the problem of drug abuse. Strategies to deal with these problems are already being put in place, including measures to tackle ten to 15 year old early school leavers and the allocation of moneys, £30 million, to the provision of youth services and facilities.
Everyone accepts that low educational achievement and early school leaving lead to fundamental long-term problems such as unemployment, poverty and disadvantage. Two of the most deprived communities, Ballymun and Finglas, are situated in my constituency. Ballymun is a case study of an urban blackspot, performing poorly across the main socio-economic indicators. The area has the highest unemployment rate in the country and the highest proportion of lone parent families. Opportunities for lone parents to enter the labour force are generally limited due to con-strained employment mobility. I pay tribute to the Ballymun Women's Resource Centre for its promotion of the NOW project and the innovative programmes in architecture, town planning, etc. , it is running in co-operation with Ballymun Regeneration Ltd. Such initiatives will help people to break out of the cycle of long-term endemic unemployment.
The level of educational disadvantage in Ballymun is also striking, with over 50 per cent of the population having completed their full-time education at 15 years of age. The combination of social problems experienced in Ballymun are characteristic of those in other blackspots in that they demonstrate that piecemeal approaches to their solution will fail. An all-embracing approach is necessary if we are to alleviate the cycle of deprivation in these communities.
I am concerned by the Minister's comments regarding the URBAN initiative, which the EU Commission does not propose to retain in the next round. I am glad the Government is taking steps to try to ensure that the URBAN initiative will be retained after 1999. It is imperative that the House, on an all-party basis, should urge the Commission to expand and develop the initiative further. I accept it has been slow to get off the ground but it is an important initiative and it should be continued.
I endorse the measures advocated by the Dublin Regional Authority, which are: raising awareness of the value of education; the provision of additional resources for special needs education; targeted interventions to reduce early school leaving; increased resources for remedial teaching at post primary level; increased staffing resources to reduce pupil-teacher ratios; the extension and targeting of programmes such as the early school leavers programme and Youthstart; consultation in the setting and development of curricula; the provision of additional resources for career and guidance counselling; and increased teacher resources.
Training programmes must continue to be put in place and be made more innovative in order to give the unemployed the necessary skills to enter the labour market. The European Social Fund must be spent in a manner which discriminates in favour of assisting poor and disadvantaged areas in urban parts of Ireland. It must also be used to retrain people with updated skills in addition to taking advantage of new schemes to promote changing information technology systems.
Promoting social inclusion and combating poverty should be key objectives in the use of the next round of Structural Funds. My views on the issue of allocation of Regional Funds are heavily influenced by the need to make a massive effort to tackle poverty in Ireland. There is fresh evidence that poverty now exists at regional and local level. The National Anti-Poverty Strategy identified that 9 per cent to 15 per cent of the Irish population is affected by persistent long-term poverty, with up to 34 per cent of the population at risk from poverty. Specifically, these categories include: the unemployed and the long-term unemployed; children in large families; lone parents; people with disabilities; and travellers. The Combat Poverty Agency report "Where are the poor households — the spatial distribution of poverty and deprivation in Ireland" also shows two pertinent conclusions, namely, that poverty is pervasive and that large concentrations of poverty and disadvantage can be identified in urban and rural areas.
Funds must be directed at creating more effective models of regeneration at local level that are linked to effective national policies. Measures to be prioritised could include: improving the housing and physical environment — maintenance, energy efficiency and estate management; developing local infrastructure — credit unions and small businesses; increasing social provision — community health services, recreational and educational opportunities for youth; and enhancing local enterprise.
When the last national development plan was put in place in 1993, traffic congestion and related transport problems in Dublin city were not nearly as acute as they are at present. For the economy in Dublin to work effectively, a user-friendly transport system is imperative. It is essential that the EU co-finance measures to alleviate traffic congestion in Dublin city and county in the next round of Structural Funds. Statistics in this regard provide compelling evidence regarding why EU Regional Funds should be made available to combat traffic congestion in the Dublin region. For example, it is estimated that car ownership will increase by 35 per cent in the next ten years. The statistics also show that, between 1991 and 1996, passenger and freight traffic using Dublin airport and Dublin port doubled while the figure for rush hour car journey jumped from 174,000 to 227,000 in the same period.
Controlling and defeating the traffic congestion problem in Dublin city is one of the greatest challenges facing representatives from the Dublin region. The European Commission must be made aware of the transport problems faced by people who live and work in Dublin. Co-ordinated proposals must be included in the national development plan if the effort to combat traffic congestion is to be supported by the Commission. The concept promoted by the DTI strategy must be preceded with as a priority. This includes: public transport in the form of light rail transit; quality bus corridors and the extension of the DART. Submissions supporting a rail link to the airport, which I fully endorse, have also been made. Dublin must be one of the few European cities which does not have direct rail link between its airport and city centre.
Other projects which have been identified as important are the completion of the C ring, which includes port access, completion of phase two of the northern motorway from the airport to Balbriggan, the construction of a new bridge over the Liffey, completion of the Church Road phase three connector from Dún Laoghaire to the motorway, completion of the outer ring and the development of a regional strategic cycle network.
We cannot ignore the fact that local authorities in Dublin face problems in disposing of the 3.5 million tonnes of waste which accumulates in the city and its environs each year. There is growing public concern about the long-term environmental impact of landfill sites. The future of waste disposal must not lie in the continued search for landfill sites nationwide. The Government must include innovative waste management proposals in the forthcoming national development plan. Ireland is currently experiencing strong economic growth and part of our resources must be invested in alternative waste management schemes. Investment in a clean environment will, in the medium to long-term, justify any additional expenditure incurred.
I welcome the initiative taken by the Minister for the Environment and Local Government, Deputy Dempsey, to commission a study into the possible use of new and alternative forms of waste generation and disposal. We must secure EU funding to invest in the cleaner and newer technologies coming on stream in order to deal with the problem of waste management in Ireland.
With regard to the issue of new waste facilities, a waste management study was carried out on behalf of the four local authorities in the Dublin region by MCCK Consultants. It indicated that the total cost of new waste facilities up to the year 2011 would be £253 million. In addition, the report made a number of recommendations which are worthy of consideration, including: the construction of a facility to manage biological waste and the provision of integrated waste management centres in each of the four local authority areas.
The Minister referred to future consultative mechanisms and I am pleased that, regardless of the strategy the Government adopts, the role of regional bodies and their subsidiary bodies will be enhanced and that they will be given a more strategic input in the delivery of Structural Funds and Structural Funds assisted development. That is an important step. The new national development plan which will be prepared by the Government in the coming months ought to be cognisant of the need to encourage people to be aware of proposals that will have a serious impact on their lives. I thank the Chair for the opportunity to contribute to this debate.
I regret I only have one third of the time I would need to address this issue. Deputy Pat Carey said he welcomed the Minister's commitment to give regional authorities more power. However, the Minister did not say that. He stated:
In the event of a regionalisation approach being adopted, the regional administrative framework may require adjustment. Such adjustment as is necessary will be the subject of discussion with the Commission and will take account of the views of the regional interests.
That is not a commitment to give more powers to the regions.
I was disappointed with Deputy Pat Carey's speech. As a colleague of his in Dublin North West, I expected he would represent more clearly the strong concerns in that constituency about the Government's proposal to split the country into two economic regions. He opened his speech by dismissing that issue as unimportant and then spent the rest of his time speaking well meaning waffle about what he would like to see. What he would like to see will not happen if the Government adopts the two region strategy.
Let us wait and see.
Before this debate is over, not today or tomorrow, he will have to match his words with his commitment. Well meaning waffle is not good enough on this issue.
This is not a real debate because the Minister made a statement to which we must respond without having seen it in advance. In his speech he said we already had a debate in this House. However, we did not. We were permitted to ask questions within the rules of the House and the Taoiseach gave inadequate replies. I will deal at a later stage with the fact that the Taoiseach misled this House by omission about what Commissioner Wulf-Mathies told him when she met him in Cork.
I welcome the fact we have finally forced a debate in this House. It is being held at the eleventh hour when the Government already appears to have committed itself to a specific course of action. It has taken several weeks to force the Government into conceding this debate, which is symptomatic of the totally unacceptable way the Government has tried to suppress real debate, discussion or analysis on this issue. The reports which have emerged within the past 24 hours of the meeting in Cork between the Taoiseach and the EU Commissioner for Regional Affairs provide further compelling evidence that the Government has been less than forthcoming with the people and the Dáil on this issue.
The transfer of resources through EU Structural Funds has had a huge impact on economic development. However, while the amount we receive in the next round is important, what is even more important is the manner in which we will be enabled to apply these funds. We must seek to ensure that not only can we sustain economic growth and provide physical infrastructure, but that the benefits of growth are spread more evenly throughout every community in the country.
The original objective of the Government was to make a Cabinet decision with the minimum of discussion or debate. The matter was originally brought to Cabinet in September and a decision would have been made at that stage only that Democratic Left, organisations such as the Combat Poverty Agency, community development groups and individual economists began to question the wisdom of dividing the country into two separate economic regions for the purposes of the next round of funds. This was not a strategic approach to planning, development and eliminating poverty, but to extract the last penny from Europe. This alerted many Government backbenchers to the consequences of this strategy and forced a delay in making the decision which allowed a debate to begin.
At this stage we are still operating in the dark as to the basis on which the Government has apparently made a decision in principle to draw an artificial economic border through the heart of the country. Despite the vital importance of getting this decision right in the interests of all citizens, no discussion paper or economic data was published by the Government. If any independent assessment of the social, economic and industrial consequences of this strategy was commissioned by the Government, it has not been published.
At the eleventh hour the Minister for Finance announced that he had asked the ESRI to do a study on what should be in the national plan. However, he has not told us the terms of reference of that report, when it was given to it and when it is expected to reply. Will the ESRI address the issue of a single or two region strategy? I doubt it, given the wording of the Minister's speech.
The limited information available to the public has emerged through the work of parties such as Democratic Left, journalists and economists. It allows us to draw a number of conclusions with reasonable certainty, including the fact that the measure used to determine qualification for Objective One status, gross value added, is a totally unreliable measure of regional income in the Irish context and significantly distorts the real picture of disadvantage in urban and rural areas, not just in the Dublin area; that splitting the country into two regions will have at best a token impact on the global figure the country is likely to receive in Structural Funds and is likely to make no difference at all, and that splitting the country into two regions will severely restrict the tactical options open to the Government in targeting resources towards those areas of disadvantage outside the 13 counties proposed to make up the Objective One region, especially in terms of industrial development and job creation measures.
This debate has been depicted as a case of the west versus Dublin or, more misleadingly, the west versus the rest. However, it is not. I regret that Deputy Crawford and Deputy Ring chose to present it in that way by identifying me as some type of ogre on this issue. This debate is about recognising that poverty and disadvantage is a country wide problem and that it is just as severe in Ballymun as in Belmullet. I have always believed that economic help to improve living standards and enhance employability must be aimed at clusters of people, rather than areas of land or parts of maps.
I emphasise that I recognise the particular disadvantage suffered by some in the west, the midlands and the Border counties and I do not object to them getting a fair share of European and Exchequer support. However, I object to some of the poorest and most disadvantaged areas being put at a disadvantage vis-à-vis these regions by allowing the Government to avoid the tough option of targeting support only at those people who really need it.
Report after report by the Combat Poverty Agency has identified low income urban neighbourhoods as key sources of disadvantage. If the Government persists with a two region strategy, areas in Dublin, Limerick, Cork and Waterford will be at a considerable disadvantage in their efforts to tackle poverty and deprivation.
Unemployment remains probably our biggest social and economic problem. According to the live register area analysis for September, 65,000 of the total of 219,174 on the live register were in the proposed Objective One area, which means that 70 per cent are outside it. More significantly, using data obtained from the 1996 census, the CSO identified 110 unemployment blackspots with average unemployment rates of 37.6 per cent. Some 75 of these blackspots are in the main urban areas with 47 in Dublin, 12 in Cork city, 11 in Limerick city and five in Waterford city. Most of the rest are in the proposed Objective One area with 17 in Donegal, nine in Galway and seven in Mayo. What social or economic sense does it make to cut these areas off from the maximum possible level of support, especially in terms of job creation?
The debate has tended to focus on two options only. The first, which is the one the Government wants, is to seek to have the country sub-divided so that some areas will continue to qualify for full Objective One status. The second is that the entire country should be reclassified as Objective One in transition. This would mean that EU funding would be gradually reduced over the seven year period of the next round.
However, a third option, which does not seem to have been given any serious consideration — the Minister seemed to imply it was unrealistic — is to change the criteria used in determining eligibility for the maximum level of aid. Why does the Minister now say it is unrealistic? Over recent years the European Union defined the objectives it proposes to achieve. It has reduced the number of objectives from seven to three. Why did the Government not make the case for new criteria when the three new objectives were being defined? This is the approach which should have been adopted because Ireland has a strong case for a new system of assessing variations in wealth between it and the rest of the EU and within different parts of the country. Studies and papers produced by a number of highly qualified experts, including Professor Jim Walsh of the geography department of NUI Maynooth, Jim O'Leary, chief economist with Davy Stockbrokers, and P. Drudy and Michael Punch of the department of economics in Trinity College, have all argued that a per capita income in GDP terms is an inadequate measurement. What I have to say on this subject has been drawn from these sources. GNP per capita would be a more accurate measurement. Unlike other EU countries where the difference between GNP and GDP is much less, GNP in Ireland in the current year is likely to be around 85 per cent of GDP because of the high level of income outflows, such as profit repatriation by the many multinationals based here.
The method used to measure GDP per capita is gross value added, or GVA, per person. It is important to remember that this is not a measure of household income. GVA includes the profits of companies based in the region concerned. Thus a region like Dublin, which has a large number of foreign companies and is the headquarters of many Irish ones, might have a significant GVA, but it does not add to the income of local residents. In addition, a significant proportion of the workforce of Dublin commutes on a daily or weekly basis to other areas, so a large portion of their income will be spent elsewhere. For example, the earnings of the 166 TDs and 60 Senators in the Oireachtas is regarded as part of the GVA for Dublin, but a great deal of it is spent elsewhere. The income of Deputies Crawford and Ring is included in the GVA for Dublin but is spent in Monaghan and the west, not in Dublin. Items such as social welfare payments and education grants, which can form an important part of household income, are not included in GVA. In addition, what are called ‘overhead subsidies’ may be a significant factor in distorting the real figure. Into this category fall most farm income supports, including headage payments, and these are not included in GVA.
Many economists believe the household budget survey carried out by the Central Statistics Office is a more accurate measure. If GVA is used as a measure, Dublin fares well on 121 per cent of the national average with the Border, midlands and west at the bottom of the table with 72.2 per cent, 71.8 per cent and 70 per cent respectively. However, if direct household income as measured by the household budget survey is used, a different picture emerges. For a start, the gap between the regions ranked first and last is much narrower and their ranking is different. Using GVA, the midlands and west are the two regions which rank lowest, but on the basis of household income, they rank second and third. The south east, which ranks around middle on the basis of GVA, is last in terms of household income. When allowance is made for State transfers, such as social welfare payments, child benefit, etc. , and direct taxation, such as income tax and PRSI, the gap is closer again, with Dublin on 113 per cent of the national average and the lowest ranking region, the Border, on 90 per cent. This is a more accurate reflection of the real picture and effectively demolishes the argument that income levels between the top ranking and the lowest ranking regions are so great that splitting the country into two regions for the next round of EU funding is justified and is in the national interest.
Another key issue is whether dividing the country into two regions is likely to add significantly to the global sum received. The only document on this matter is the Department of Finance memorandum published in Business and Finance which showed that splitting the country into two regions for the next round of EU Structural Funds would result in a negligible financial advantage. The memorandum was leaked; the Government did not offer the information to the House. We now also know from the account of the meeting between the Taoiseach and Commissioner Wulf-Mathies in Cork last month that she told him there was no guarantee that dividing the country in two would result in additional funding. More significantly, the leaked Department of Finance paper suggested that, if the two regions strategy was pursued, long-term unemployment blackspots in areas outside the west, midland and Border regions would be at a significant disadvantage regarding aids for job creation, with grants for start-up industries falling from a high of 75 per cent to as little as 20 per cent. The paper also suggested that dividing the country into two regions would deliver about an additional £100 million. Spread over the seven years of the next round of funding, this would be under £15 million per year to be spread over 13 counties. This is small beer in budgetary terms. It is the revenue equivalent of about a 2p increase in the price of the pint.
The overall global funding is only part of the picture. Equally important is the consequence of excluding the largest part of the country, which includes the vast majority of unemployment blackspots, from a range of schemes and programmes which could be available under an alternative strategy. Such a strategy could encompass transitional arrangements, Cohesion and social policy funds and rural development programmes as part of CAP reform. The Minister for Finance today dismissed CAP reform out of hand because he said it would require us to pay a little more to support the farming population and the price of produce. That is a totally inadequate response to a fundamental aspect of European Union policy which will impact not only on Ireland but also on the world at large, especially the Third World. It is important to note that, under the proposals for CAP reform, there are guarantees for the inclusion of rural development, regardless of what happens to the Structural Funds regions of Objectives One, Two or Three. A serious debate is needed on that issue. What study, if any, has been made of these options, and if a study has been carried out, why has the House not been briefed on it before now? Whatever combination is achieved, the best approach for the country would be to retain a single economic region structure. This will make little difference to the overall amount we receive, but will allow greater flexibility in targeting resources towards those people who need them most regardless of where they live, east, west, north or south.
The argument that we would receive more funding was one pillar of the Government's case for splitting the country in two. The other pillar was that, if we could retain Objective One status for the 13 counties, these areas would then be automatically eligible for ‘Objective One in transition' status after the next round was completed in 2006. I always thought this was a wildly optimistic view and the account of the meeting between the Taoiseach and the Commissioner confirms this. According to the account, the Commissioner said it was not possible to say at this stage and it was not necessarily the case that transition status would exist for any or all Objective One regions after 2006, with the potential consequences of the expansion of the EU to include a number of relatively poor applicant states. Despite the fact that the Commissioner has gone on record about the argument that, if Objective One status were retained for the 13 counties proposed, it would mean the ‘Objective One in transition' category being secured for those areas after the end of the next round, the Minister for Finance spoke today of the potential for transitional funds for Objective One regions after 2006.
I share the Commissioner's view. With ten prospective members knocking on the EU door and other countries expressing interest in joining, including some of the poorest and least developed countries in eastern Europe, it is likely the EU of 2006 will be very different from that of today. There will be greater demands on the Community's resources and more competition for what is available. We have no idea what Structural Funding will be in place at that stage, and cannot predict that areas will qualify for ‘Objective One in transition' status. It makes more sense to plan effectively for what is available now and seek the maximum degree of flexibility in how we spend it, thus preparing the country for the time in the future when we are likely to be a net contributor to EU funds rather than a significant beneficiary. I look forward to that day.
The publication of the account of the meeting in Cork has effectively undermined the case put forward by the Government for dividing the country into two regions. A further serious question arises: why did the Taoiseach fail to convey this vital information to the House? I also sought information from the Department of Finance under the Freedom of Information Act. I was refused that documentation on the basis that it would be contrary to the national interest for it to be revealed. The Department said that about ten documents had been prepared. What damage could be done to the national interest by an open debate based on information available to the Government on the pros and cons of how we apply for regional funds? Such a debate would enhance democracy and the role of this Parliament as to how we do business with the EU.