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The second item is to hear evidence in relation to our on-going work on the European Union budget and Europe 2020 and cohesion policy. I am pleased to welcome from the Scottish Government John Swinney, the Cabinet Secretary for Finance and Sustainable Growth; Ian Campbell, the deputy head of the Brussels office; and John Rigg, the head of the European structural funds division. I am not sure whether Mr Swinney intends to make an opening statement.
I will make an opening statement.
Thank you very much, cabinet secretary. You mentioned the actual size of the EU budget. Obviously, a deal has been struck over what the European Parliament wanted, which I believe was around a 5.9 per cent increase, and what the UK Government wanted, which was a stand-still budget. Did the Scottish Government have a view on that or offer any input to the final overall figure?
We did not offer a view in that debate, but as I said in my opening remarks, it would be hard to argue that the EU budget cannot face some of the challenges that, in the current economic and financial climate, we are all having to face, at whatever level of governance we are operating. We must now be very careful that the implications of the approach that is taken to the EU budget do not damage in any way some of Scotland’s vital interests and various areas of activity involving structural funds, cohesion and, indeed, the research and innovation work that is particularly significant, given our leading-edge position in that regard.
Are you broadly content with the 2.9 per cent increase that has been agreed?
Yes. I would say that that is fair.
You say, rightly, that Scotland is facing considerable challenges and that we might well not qualify for as much money as we have in the past. Has there been any analysis of new ideas that we could bring to the debate to ensure that Scotland gets the best out of the situation?
The key is the approach to achieving Europe 2020. If, as it is fair to assume, Europe 2020 is going to dominate the thinking and choices of the Commission and other bodies—and if, as I think, the EU is very serious about this—we must align ourselves with efforts to contribute to achieving that aim, and do so with the aspiration of ensuring that any funding vehicles that emerge play to our strengths and attributes.
I agree that the synergy between Europe 2020, cohesion policy and structural funds is important. I will throw into the pot an idea that I have raised in the UK delegation to the Committee of the Regions, because it would be useful for us in Scotland to consider it. The 2020 strategy talks about challenges and priorities on several indicators, such as an ageing society and care-dependency ratios. However, in the allocation of structural funds and in cohesion policy, we tend to stick to economic indicators. We in Scotland could widen that beyond gross domestic product to include other indicators—a vehicle is available to do that, because the 2020 strategy considers wider indicators. Has the impact on Scotland of taking that wider approach been analysed?
You make a fair point that resonates with the Government’s approach to constructing the national performance framework. The Government’s purpose focuses on delivering increased sustainable economic growth, but that is underpinned by the achievement of a range of indicators that concern not just GDP but inclusion, tackling geographical differences in economic performance and tackling long-term inequalities in our society. If the debate is exclusively about GDP, we will miss an opportunity to address other challenges in improving our society’s general wellbeing. I understand that the danger might be that Europe 2020 ends up in a GDP assessment, if I can characterise it in that way, but it is clear that we have the opportunity to construct a much more broad-based approach. I am sure that such an argument would resonate with other players in the EU.
I will make a final point before bringing in my colleagues, who are all anxious to speak. Does the Scottish Government have a view on the Commission’s proposal of an intermediate status—rather than transitional status—under cohesion policy? That could have merit for Scotland. We do not qualify for cohesion funding, because of the criterion that GDP must be less than 75 per cent of the EU average. If an area does not qualify under that regulation, it does not qualify at all. The Commission’s new thinking is that an intermediate status could be introduced, which would create flexibility. To be honest, I do not see how we could not argue for that. Have you considered that proposal?
The key is whether the achievement of Europe 2020 will dominate the decision-making process on such vital matters. If Europe 2020 drives many such decisions, that will mean a different way of thinking about resource allocation. The danger that you described is that the 75 per cent rule excludes us from cohesion funding. If we argued that Europe 2020 should be at the centre of all thinking and decision making about such questions, that could open up a different approach to how funds are distributed for a key matter such as cohesion. That might affect structural funding questions, too. If some of that investment were made in Scotland rather than elsewhere, that might contribute more to achievement of Europe 2020 objectives.
I guess that we do not have much time, as the consultation ends on 31 January.
Knowing European decision making, I cannot imagine that 31 January will be the end of the story. I am sure that there will be a few iterations beyond that. These are the points that we have been advancing in those discussions and with the United Kingdom Government. We must remain attentive to how the issue takes its course.
Good morning, cabinet secretary. There is absolutely no doubt that it is an important time for Europe, particularly regarding the budget and cohesion and structural policy. In your introductory remarks, you outlined the Government’s position on the common agricultural policy. You said that it is important but that it should be more focused. Perhaps you can go into more detail on that, or perhaps one of your colleagues will.
On your first point, about the work to focus more effectively the common agricultural policy regime, we are in the fortunate position that much of that thinking or aspiration is consistent with the outcome of the inquiry that Brian Pack undertook on behalf of the Scottish Government. That independent inquiry looked at the shape of farm support and reported early last November. Our position has been that the single farm payment system cannot be sustained and that we must reform the system of farm support to improve the link between payments and land management activity to ensure that we have a much more effective way of distributing those resources. We are all concerned about the fact that, under the single farm payment regime, it is possible for people to be paid for doing nothing. At the very root, that is an impossible position to sustain. The CAP reform agenda strikes me as being something to which we have a lot to contribute, especially because we have been the beneficiaries of such a clear and full report from Brian Pack following the inquiry that he undertook.
Regarding the position on cohesion strategy and structural funding, is there a great deal of difference between the way that the UK Government wants money to go to poorer regions of poorer member states and our position, which is that we would prefer the money to go to poorer regions? Does the UK Government have a difficulty with the Scottish Government’s approach?
To be fair to the UK Government, I am pretty sure that its position is that it wants to get as much out of Europe as it possibly can. I do not think that it goes into such discussions with any other objective.
The Local Government Association has made it very clear that, as far as cohesion policy is concerned, it would like a place-based strategy that is flexible enough to accommodate local differences. There seems to be some synergy with that as well.
Obviously, in the EU, sub-national legislatures such as the Scottish Parliament, the Basque Parliament and the German Länder have to operate within larger national units. Has Scotland considered ways of co-operating at its own parliamentary level within Europe to achieve a greater benefit for each of the countries operating in synergy with one another?
With a range of other communities that operate on the same basis as devolved institutions within a unitary state, we have been keeping open a dialogue, seeking common ground in a host of different areas and taking any opportunity to influence agendas. I mentioned the First Minister’s visit to the Basque Country, which was very much about seeking common ground on certain aspects of the energy debate. We would seek to pursue within the UK any arguments or points that might arise from such discussions—with regard to, for example, the fossil fuel levy—and we would then have an opportunity to argue for and promote some of those agendas at Europe level in concert with partners in other countries. Attempts will be made to create common cause; we have good relationships in that respect with a number of different organisations that operate at our level.
Are co-operative agreements between Scotland and the Länder or the Basque Country encouraged?
I am not sure that they are formally encouraged, but I think that any analysis of EU processes would throw up the need for common ground to be found on all questions. As far as I can see, not much can be achieved in the EU on your own; you have to find common ground and secure agreement with other players, so that is very much the spirit in which we enter the process. On some occasions, we ensure that we are comfortable with the UK position in order to find common ground with other member states; on other occasions—and in the circumstances that Mr Kidd has highlighted—we work with other institutions that operate within a unitary state.
I want to follow through on that point. As Bill Kidd was raising that matter, it occurred to me that Scotland is obviously slightly disadvantaged in relation to transnational co-operation programmes because it is a peripheral region and it suffers from maritime peripherality. I suppose that our nearest partners, with which we have done work on the Interreg programmes, are Northern Ireland and Ireland, but has the cabinet secretary considered, or does he wish to reflect on, the idea that is floating around of having a single European Union-wide transnational co-operation programme that would allow regions to do what Bill Kidd has suggested at a practical level with funding, and co-operate across the EU without their necessarily needing to have a border?
I think that that characteristic is percolating its way through EU thinking. There are various programmes that encourage communities such as Scotland to work with others. It does not strike me that the question whether a territorial border is shared with somewhere to enable that to happen is a particular impediment to gaining access to some of those EU programmes. We have to find areas in which we can pursue joint working to tackle common problems or to address common opportunities. In that respect, there will be plenty of cases in which we can take forward such an agenda.
I think that the idea is to get the Commission to move from allocating funding strictly on the basis that a border is needed.
I return to a point that has been made. It may be difficult to achieve the objective that you have just mentioned if future EU budget decisions are driven by the spatial consideration. However, if we can succeed with the argument in which we say, “Well, actually, if you’re interested in achieving Europe 2020, there are great sectoral opportunities for achieving it, and those opportunities will not just exist between country A and country B, which happen to be located side by side in other geographical locations; there will be common strengths in sectors,” there will be a pretty compelling case to the EU that decision making should be done more on a sectoral basis than on the basis of geographical distribution.
You mentioned working with the Basque region and so on, which is all very good. However, on its visit to Brussels, the Local Government and Communities Committee was made aware that the Welsh Government and the Welsh Assembly had made joint representations on structural funds, which are, as you said, under threat. We are all aware of that. It also criticised
At the beginning of my remarks, I said that an interesting thing that has come out of the dialogue that we have had is that the committee has done some excellent work in all those areas, which the Government welcomes. I think that the Government’s thinking and the Parliament’s thinking are largely the same, so the issue of parliamentary and governmental representation would present the Government with no difficulties whatsoever. It would be helpful to work jointly in that respect.
You obviously disagree with the Commission’s view that there was
I am not sure where that quotation comes from.
It comes from the Local Government and Communities Committee’s report on its visit to Brussels.
I would be very surprised if that was a European Commission statement criticising the Scottish Government. It might have been an observation by the Local Government and Communities Committee—it could explain the detail of the surrounding circumstances. What I can say to Mr Hume and the committee is that the Government is actively involved in the discussion on such matters.
Just for clarification, I think that the statement was made by a witness; it was not made on behalf of the European Commission.
Patricia Ferguson is on that committee, so she can clarify the situation.
I am, and I was on the delegation. The statement was made by an official of the employment directorate-general to the committee. It was recorded by the clerks who accompanied us and formed part of the committee’s report, which has been published and put into the Scottish Parliament information centre.
As ever, Patricia Ferguson puts the case on the European Commission’s perspective extremely diplomatically. As I said to Mr Hume, I would be delighted to engage with the committee on aspects of such representations. As I said, our officials will attend a cohesion policy forum in the EU towards the end of the month, and we will certainly put forward the committee’s perspective.
The Europe 2020 targets were also raised during the Local Government and Communities Committee visit, which, as you will have gathered, was a very productive visit from that committee’s point of view. It had been indicated at that point that the UK Government was not minded to set targets. Obviously we hope that the UK Government will reconsider that position, but has the Scottish Government considered setting its own targets and submitting them to the EU?
As I said to the convener a moment ago, when we constructed the national performance framework in 2007, we built into it a number of targets to judge Scotland’s performance in relation to the achievement of our purpose as a Government. Those are a broad range of indicators that cover economic growth, inclusion, regional equity and sustainability. They represent the core of the Government’s view of how we should be measured and assessed on our performance. I would be very satisfied if those targets were the core of any assessment that we submitted to the Commission.
A joined-up approach is important and has a great deal of merit. I think that we could probably all do better on that. I am trying to be constructive, because later today we will look at a legacy paper and at what thoughts we might pass on to a future committee. It seems to me that there is merit in doing more on this. I am aware of other regions where there is a more joined-up parliamentary and governmental approach. For example, I take your point that officials are attending the cohesion forum at the end of the month, but for some areas both parliamentarians and Government ministers will be attending.
We have certainly had discussions with COSLA and I am sure that we have had discussions with MEPs. Dr Rigg has just pointed out to me that representatives from COSLA and Scotland Europa are attending the forum at the end of the month. I cannot imagine that there would be an issue about members of the Scottish Parliament attending if the committee wanted.
The Commission set out who should be invited. We will be represented through the UK delegation, and it has to follow the guidelines. I cannot recall anything in the Commission’s guidance to say that it is looking for representation from national or regional Parliaments. I know that the UK is not sending a minister. I think that Wales is, but that invitation is a follow-on from when Rhodri Morgan was First Minister and led on the cohesion policy with a speaking slot at the forum the last time around. I am not aware of any member states sending a minister.
We will examine the question and give the committee a swift response as to whether there is any opportunity to do that. I am happy to explore and identify areas in which there can be parliamentary and governmental co-operation.
We had a meeting of the UK delegation here in the Parliament two weeks ago and there was a meeting of the Scottish membership. One of the criticisms that was levelled was that, for example, no one knew what Scotland’s submission on the cohesion policy would look like or what innovative ideas we would bring. People who are on different committees and the Committee of the Regions were saying that if we had a common position we could all be arguing for the same things. There was a bit of a worry that MEPs, COSLA, the committee and you, cabinet secretary, might all have different ideas and that we were not all saying, for example, “These four things will benefit Scotland.” That seemed to be a fair criticism. It was levelled at the Parliament as much as at the Government. If there are opportunities to build on joint working and look at what the Welsh are doing, that would be a good idea.
As I said, convener, I am open to pursuing that discussion with the committee. I suspect that the committee should be having this discussion with Ms Hyslop and I am happy to encourage that.
Minister, I doubt whether there is a non-state nation that does not have an interest in the reforms to structural funds. If there is one, I am sure that you could identify it, but I would be surprised. Have we made any effort to identify whether we have common interests with other non-state nations, such as the Basque Country, Wales or Catalonia, and to consider joint lobbying?
The key to that undoubtedly rests with the point on which I have concentrated this morning, which is the extent to which there is any ability to change the approach to the distribution of structural funds from one that essentially addresses economic underperformance, to a model that is more beneficial to Scotland because it highlights economic opportunity and enables a contribution to be made to the Europe 2020 agenda. We will have common ground with a number of other countries and we will actively pursue that to identify where we can secure joint interests. Dr Wilson makes the point that every player will focus on and have an interest in structural funds, and there will be different and divergent views about how those funds should be distributed in the future.
Cabinet secretary—I have got your title right this time—how hopeful are you that you can do that? There will be a lot of opposition and certain nations will want to see some form of GDP threshold. I make the small aside that I do not like GDP as a measurement of anything, but we can ignore that.
Yes, I am surprised to hear you talking about GDP, Dr Wilson, but there we are.
There will obviously be a group of countries that will want to stay in that situation and I imagine that there will be another group of countries that will agree with your idea of looking for the opportunities to meet climate change targets through renewable energy, for example. Realistically, how hopeful are you that we can achieve that focus?
The key to this is whether the EU is serious about achieving the 2020 objectives. I do not think that the EU will be able to achieve those objectives if it continues with its current approach. There is a compelling case to be made and we will pursue it vigorously. We will find out whether we will be successful in due course. Our success will be a consequence of the discussion that we have around changing the approach.
It occurs to me that we could say that we are not expecting all nations to meet the 2020 target at the same level, as it were, and that the argument could be that the EU should be meeting the target as a whole, rather than each individual state necessarily meeting the target, with some countries coming, for example, 60 per cent above the target and other nations failing to meet it.
That would be the core of the argument.
Cabinet secretary, I have followed your career so well that I know your title accurately.
I have followed your career, too, Mr McAveety.
It has been turbulent but wonderful.
That is a fair point. There are clearly examples where countries gain an advantage by having their own nationals, who have an understanding of what is going on in their country, well placed within the Commission. Many people who are well briefed on the Scottish situation operate within the Commission and that should be encouraged. It is important that individuals in our society regard European governance and European administration seriously as a career path. Equally, we must also ensure that we take forward action on our interactions at ministerial and official levels with the Commission, so that we are able to influence agendas to our satisfaction.
Does the Scottish Government have a view on the idea that is being floated about holding back structural funds from countries that are failing to comply with the growth and stability pact?
That is not an issue with which I am familiar. I would have to explore that and give you some more detail in writing.
It occurs to me that, if the UK Government failed to comply, Scottish structural funds could be penalised. That is something that is certainly worth reflecting on.
I understand the logic of the point that you make and I will explore it further, because there could be dangers in that respect.
Everyone has had an opportunity to question the cabinet secretary and we have had a useful and productive session. I know that, if there is anything that we feel that we have not covered, you will be happy for us to write to you. We look forward to seeing the Government’s report on cohesion, which I assume will be available in the next couple of weeks.
We will make that available to you.
We will suspend for a couple of minutes to allow a change of witnesses.