I am very pleased to be here this morning to talk to you about the National Development Plan 2007-2013. It is indeed appropriate that we should be focussing in this setting on the new NDP. The Plan provides a strong framework backed up by specific commitments to give major impetus to North/South economic co-operation and complements the SDLP North/South Makes Sense campaign.

The North West region of Ireland of which the city of Derry is the major urban centre stands to benefit greatly from the new opportunities now arising.

Political Situation

The next few weeks will be of crucial importance in bringing about the restoration of the devolved political institutions in Northern Ireland. The Assembly election on 7^th March next is an integral part of the process and timetable under the St. Andrews Agreement. The purpose of the election is to endorse the St. Andrews Agreement and to elect an Assembly that will form a power-sharing Executive on 26 March in accordance with that Agreement and timeframe. The Irish Government looks forward to working together with the new Executive to tackle common challenges and take advantage of common strengths and opportunities for the mutual benefit of all parts of this island including advancing the framework and proposals under the new NDP.

I want to first of all acknowledge the SDLP’s long-time commitment to promoting the logic of an All-Island economy as a means of promoting peace and reconciliation in a practical way. You have always regarded economic progress as being an integral part of resolving the conflict enabling both communities here to find common ground for mutual benefit. Under Mark Durkan’s leadership I believe that the SDLP’s North South Makes Sense campaign has been central to reviving the North South agenda. As its name suggests, North South does make sense. It is in the interests of everybody, nationalist and unionist, North and South, to have a strong North South agenda.

It has also been our shared view that continued suspension will hold back our economic prospects. Rather than an economic gap growing between us we need to see synergies established and co-ordination of economic policies proactively pursued so that all parts of the island can benefit from the window of opportunity that now exists. I firmly believe that the people need to bear these economic realities in mind.

We need to make sure that politics in the North can work on a power-sharing basis. But we also need to keep it working on a sustainable and consistent basis with practical co-operation North and South on the economy, social policy and on the environment. This makes the best sense for both sets of taxpayers from a value-for-money point of view.

The real substance of the Good Friday Agreement is not alone that the institutional framework is operational, but the recognition that if we work together on behalf of the people then we will shape a better Ireland for the good of everybody on the Island. Against a settled constitutional background which is now in place, as set out in the Good Friday Agreement, the time has really come to leave the past behind and take up the cudgels to work for a better future for all. The SDLP have consistently articulated that vision of practical co-operation and mutual respect while promoting sensible economic policies and complementing caring social policies.

Your parties endorsement of an All-Island 12½ per cent Corporation Tax rate and your calls for a strong economic package for the North in the context of an impending settlement of all remaining issues has helped to bring centre-stage the need to focus strategically on what structural and strategic economic reforms are necessary in a post-conflict situation that will revive the role of a dynamic private sector contributing increased revenues and publicly funded service priorities you have identified. As a member of the Irish Government I can say that we stand ready to work with you and all parties of goodwill to ensure that the objective benefits of the all-island economy are pursued and implemented on their merit and in the interests of all.

As I stated recently in my recent address to the All-Island Conference on Infrastructure in Newcastle, Co Down, the economic benefits of peace to the island, and particularly to Northern Ireland, do not receive as much attention as they should. Peace makes an immediate and direct contribution by releasing resources formerly devoted to security for spending on health, on education and on transport. These direct political and economic effects are very welcome but they pale when consideration is given to the indirect benefits of peace. By providing a stable political environment, peace opens the way to new international investment, promotes local business activity and gives people the confidence to put their resources and efforts to work in Northern Ireland. It has also an important and supportive impact on economic activity south of the border. It has long been my opinion that the Celtic Tiger phenomenon would not have been as powerful or as long lasting without the achievement of peace on our island.

National Development Plan 2007-2013

It is just five weeks since the launch of the Irish Government’s National Development Plan for the years 2007-2013. I will talk about the All Island dimension of the Plan shortly but I would firstly like to provide you with a brief overview of the Plan. It provides for some €184bn of investment over the seven years. Some €100 billion of capital investment is provided for under the Plan. The bulk (€63.7 billion) of this will be funded by the Exchequer with significant contributions from PPPs (€13.4 billion), the Commercial State Bodies Sector (€15.7 billion) and Local Authorities and other sources (€7.2 billion).

I recall that when I spoke in Derry almost 2 years ago, when supporting the candidacy of Mark Durkan prior to the general election here, I referred to a possible spend on infrastructure on the island as a whole of €90-100 billion over the following decade. There were sceptics then as well who questioned the veracity of that statement and motivation for my saying it. They were proved wrong and are now going to be proved wrong again. It is now clear having published the National Development Plan (NDP) that this figure will be significantly surpassed.

What we are now presented with is a huge challenge and opportunity at the same time. The challenge is to harness this investment to give the maximum economic and social return, North and South. The opportunity is to create an All-Island world-class infrastructure whilst providing major business and job opportunities for the private sector in delivering the programmes and projects.

The NDP provides for a major increase in the level of capital investment especially by the Central Government sector. We estimate that over the period of the Plan, Central Government investment in the Republic will average 5.4% of GNP over the period with peaks of 5.9% in 2009 and 2012. By comparison, the 2006 level was around 4.7% of GNP. These levels of capital investment are over twice the EU average. They reflect the fact that, notwithstanding excellent progress under the previous NDP (2000 – 2006), we still have major deficits in key areas such as Roads, Public Transport and Environmental Services. Good quality infrastructure in these and other areas are essential to our competitiveness. The reality is that the competition in the global marketplace is fierce and we must ensure that all those elements of competitive advantage over which we have control ourselves are decisively tackled. The new Plan will do this not only in the areas of Infrastructure but also in other vital areas such as Education and Training.

In the South we have a window of opportunity to fund this level of investment over the next 7 years. After that pressures on other resource intensive areas such as pensions will begin to appear on the horizon. In this context there are two fundamentals as far as I am concerned. Firstly, delivery of the NDP will take place within a stable economic and budgetary situation which we have so carefully nurtured over the past decade. Secondly, funding of the NDP investment programme will be a priority draw on resources over the Plan period. This is because it represents optimal use of resources through underpinning the long term sustainability of economic growth whilst addressing key horizontal issues such as regional development, environmental sustainability and all Ireland cooperation.

As Minister for Finance, my first responsibility is to maintain that economic strength. We can’t rest on our laurels. We must continue to move forward by implementing the right policies, policies which promote investment and reward work, if we are to consolidate the gains already made. I see that as my first responsibility and the continuation of prudent management of our economic affairs is the best way of meeting it.

Our current prosperity is the foundation on which we will build a better Ireland and the National Development Plan provides the blueprint for the future. However, nothing will be built unless we have a strong economy to provide the resources both in terms of labour and investment resources. Our Government believes in the incentivising power of low taxation and has the record to prove it. The tax reforms which we have introduced have rewarded work, encouraged investment and promoted enterprise. If, having made provision for the full and timely implementation of the National Development Plan and if having committed 1% of GNP to investment in the National Pension Reserve Fund, I have additional resources at my disposal, I will use them to continue along the tax policy path which this Government has followed since 1997. I will not introduce changes which either threaten our current prosperity or impair our ability to realise the vision set out in the NDP. Any further tax reforms which we propose will be affordable, sustainable and will underpin and advance our economic prosperity. Our economic success has been too hard won to be sacrificed on the altar of short-term political opportunism.

All Island Cooperation

North/South co-operation is clearly in the best interests of both parts of the island. Both communities in Northern Ireland acknowledge this, as does the Business sector. Ensuring that we are globally competitive requires us to exploit the opportunities of economic collaboration. Although there are significant differences in the relative positions of North and South, we face many similar economic challenges. These include greater competition from low cost locations, the need to promote investment in R&D, the need to deliver quality health and educational services to our citizens and the need to build world-class infrastructure. Through joint planning, the pooling of our resources and taking co-ordinated action, both North and South can better meet these challenges.

Common Agenda

The British and Irish Governments have already agreed an ambitious agenda for strengthening North/South economic co-operation. Last October, the two Governments launched a groundbreaking Comprehensive Study on the All-Island Economy and agreed a range of important initiatives. These include further collaboration in research and development and a new targeted approach to enterprise training and to identifying labour market needs on an all-island basis. We agreed to pool our resources in trade promotion. This includes the opening up of trade missions to businesses North and South and the placing of the overseas offices of Enterprise Ireland and Invest NI at the disposal of companies across the island. The Taoiseach’s recent successful trade mission to the Gulf included over 20 Northern Ireland businesses.

Even prior to the recent NDP the Irish Government was already committed to investing heavily in projects that directly benefit Northern Ireland. We are investing in the development of integrated all-island infrastructure, for example, roads infrastructure with the completion of the Dublin to Belfast road corridor and the upgrade of other major roads in the South to the Border.

The energy sector is also a key priority. Our State companies intend to build on the progress made under the last NDP by investing in the region of €7 billion over the period 2007 – 2013. During that period the focus of investment by EirGrid (the independent electricity transmission system operator) will include the support of greater interconnection with Northern Ireland and Great Britain. The new North-South gas pipeline, completed in 2006, significantly enhances security of energy supply within Northern Ireland. In addition, we are working towards completion of the second North-South electricity interconnector by 2012. This will greatly improve the physical infrastructure on the island, enhancing security of supply and underpinning the development of the Single Electricity Market, which we are launching later this year. This single electricity market will facilitate cross-border trading in electricity, encouraging greater efficiencies in electricity supply, benefiting consumers throughout the island.

The two Governments are also working towards a common approach in the development of renewable energy sources. In this context, the All-Island Grid Study, to be completed by mid-2007, will inform the long term development of grid systems to enhance support for renewable electricity generation. Development of the renewable sector will benefit us all by reducing dependence on hydrocarbons where we have only small island reserves.

The two Governments’ partnership approach to funding the development of City of Derry Airport, which also preceded the NDP, is an example of how we can jointly deliver better quality infrastructure to our citizens, North and South. The City of Derry Airport serves the entire North West region. Recognising its strategic importance, the Irish Government has recently decided to increase its funding to allow the completion of development works at the Airport. We will now contribute a total of almost €11 million to works at the Airport. The Government’s contribution is matched by the British Government.

NDP 2007-2013 and All Island Cooperation

Building on work already done the Irish Government has set out a detailed, specific agenda for progressing All-Island co-operation in the new National Development Plan. We are prepared to back this up with significant investment North of the Border. Our current hope and strong objective is to deliver these commitments in partnership with a new Northern Ireland Executive.

North-West Gateway

The proposal for development of the North-West Gateway as set out in the NDP will, I know, be of particular interest to all of you. Because of its peripheral position the NorthWest Gateway, incorporating in particular Derry and Letterkenny, faces a number of distinctive challenges. These challenges include finalising and implementing an agreed strategic development framework, enhancing accessibility in an integrated manner through investment on both sides of the border, development of public services on either side of the border in a complementary manner and of a shared strategy for enhancing research and development capacity in the NorthWest, building on the capabilities of the existing third level institutes in both jurisdictions. Arising from this the NDP has set out a more specific agenda for the Gateway area, including;

Ø      Investment on the N2 road route, in cooperation with the Northern Ireland Authorities, to greatly improve the road link between Letterkenny/Derry to Dublin over the period of the Plan;

Ø      Improvements in other Road routes connecting to key Gateways North and South;

Ø      Further investment at Derry Airport and continued support for Donegal Regional Airport;

Ø      Enhancement of the capacity and resilience of energy supply networks;

Ø      Strengthening the innovation capacity at Letterkenny Institute of Technology and building on complementary strengths at Magee College in Derry. I will be visiting Magee College during my visit here to discuss the potential for further collaboration between the colleges.

Ø      Initiatives to deepen the skills base of the labour force in order to facilitate the creation and attraction of higher value-added enterprise functions; and

Ø      Improvements to the stock of healthcare and social infrastructure such as regional hospital and specialist care services on a shared basis between Donegal and facilities in Northern Ireland.

More generally, the proposed all-island package set out in the NDP includes:

·      Joint investment in new strategic projects to benefit North and South; and

·      The opening up of access to existing development funding on an all-island basis, and/or the introduction of new, agreed joint funding measures.

This is an area which was consistently advocated by various SDLP deputations who have discussed the all-island dimension of the NDP with me over the past year when I was preparing the Plan. I recall detailed discussions with Mark Durkan and Sean Farren on the possibility of us being open to joint funding arrangements including preparedness on our side to invest in strategic projects, on a joint-Government basis, within Northern Ireland which are strategically important for the Republic as well, including for example the Dublin-Derry road-route.

New Strategic Projects

In the area of strategic projects, Dermot Ahern and I have discussed possible investment with Chancellor Gordon Brown. There are ongoing detailed follow-up discussions between official from my Department and the Treasury. The Government’s priorities for agreement on joint projects with Northern Ireland include:

- as already referred to and crucially for this region, the completion by 2013 of a high quality road network on the inter-urban routes linking the major population centres of Dublin, Belfast and the North West (especially the Letterkenny-Derry Gateway)

- the future development of the Dublin-Belfast rail line as part of an integrated rail network serving other major population centres, North and South

- improved access for tourism and other opportunities along the Eastern corridor, including better links between Co Louth and Co Down in Northern Ireland

- a significant upgrading of higher education capacity in the North West and the border region through strategic alliances between the educational institutions, North and South

- new schemes to promote graduate mobility, graduate retention and access for people from disadvantaged areas to higher education

- a comprehensive study on education co-operation to be overseen by the responsible Departments, North and South

- a comprehensive study on health co-operation to be overseen by the responsible Departments and agencies, North and South

- maximising the potential for cross-border cancer services, building on the project to provide services for Co Donegal

-                     The Ulster Canal project.

Development Funding

With regard to the concept of all-island funding, the Irish Government proposes to develop all-island funding in the following areas:

- education, skills, science and innovation;

- energy research, including renewable and sustainable energy;

- regional development;

- tourism development; and

- poverty, social inclusion and community infrastructure.

In some cases, these NDP proposals involve more effective use of existing funding on an all-island basis. Other projects will involve a significant investment in Northern Ireland by the Irish Government. Necessary provision will be ring-fenced and is provided for in the unallocated reserve in the Plan. The details will be finalised in discussion with the British Government and the Northern Ireland Executive on restoration.

We have had some opportunity to discuss our ideas with the parties in the Assembly. We have listened carefully and have tried to reflect the parties’ ideas and concerns in our proposals. I would hope that all the parties can recognise these proposals as substantial extra investment in the island economy and in Northern Ireland.

We are very clear that we wish to agree these proposals with the British Government and a new Northern Ireland Executive. We are facing into decisive weeks in working towards restoration of the Executive by 26 March. That is our focus. I look forward to developing these proposals with the British Government and, very shortly, with a newly restored Executive.

Conclusion

We are currently at an exciting juncture in our island’s economic, political and social development. The right policies, the right investment and hard work will maximise the potential of Ireland.

These Assembly elections provide the opportunity for the electorate of Northern Ireland to put the right people in place to deliver on these opportunities.

By co-operating, we will strengthen the entire island of Ireland to the benefit of all its citizens, North and South and its constituent regions. The North-West in particular stands to gain from the agenda we have set. If we work cooperatively and make wise use of available resources we will see those gains.

I wish you all well in your efforts to make sure that the contribution of your elected members can realise the economic and political vision for which we have stood through thick and thin down the years.

Thank you

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