European and External Relations Committee

Meeting date: Tuesday, February 23, 2010

Official Report 437KB pdf

---

European Union 2020 Strategy

We appreciate the fact that the 2020 consultation is happening. The EU faces a number of major issues, but that should not prevent consultation on the strategy for the future. We share your concerns about the timescale. We share the concerns—which were articulated very nicely in the Scotland Europa submission—about insufficient regard being given to the role of regions. In addition, insufficient regard has been given to the role of social partners—the EU has been particularly strong in that area in the past. I hope that the overlooking of that area in the consultation is not a signal that the role of social partners at EU level or member state level will be diluted in future. Furthermore, insufficient regard has been given to the key issues that face the EU and which will largely determine economic and social policy making over the next 10 years.

I have read most of the submissions, and the underlying issues of the smarter, greener energy perspective and its delivery are missing from the general picture. The proposals before us involve a 10-year timeframe, but most of the infrastructure that we are concerned with has a life cycle of 40 to 50 years. If we are considering changing the architecture of the whole infrastructure, it is important to understand those issues.

I agree with Stephen Boyd. There is effectively a four-layered paradigm: technical, economic, environmental and cultural. Our discussions on each of those tend to be based in silos, and the joined-up activity that would enable us to have an impact on the 2020 targets does not come through in the consultation. There are lessons to be learned from that perspective.

I am sure that Morag Keith will agree with many of those comments.

The committee hopes to make a useful contribution through its report, in which we will raise a number of those issues.

In its submission, Scottish Enterprise suggested that there needs to be a greater focus on providing a framework for what a successful EU 2020 strategy might look like. Donald, what are your thoughts on that, from a Scottish Enterprise perspective? My second question—which may not be for Donald MacInnes; it may be for other panel members—is whether you have any comments on the Government’s response to the Commission’s consultation. Again, that response was made according to a short timescale, and probably suffered a little because of that. From the perspective of your various organisations, was anything in the Scottish Government’s response particularly helpful or missing? However, before we come to those questions I invite Donald MacInnes to make some opening remarks.

On what success would look like, nothing in the document says whose responsibility it is to deliver the strategy and what that means, so that needs to be strengthened. The failure of the Lisbon treaty had a lot to do with the fact that people did not know who was responsible and who had ownership. Although there were many actors, nobody took responsibility and nobody set out at the beginning a framework to measure what success would look like. If we are to embark on another 10-year strategy—as Duncan Botting said, that is a short time in which to make long-term investment in infrastructure—we need to have milestones, know who is taking responsibility and probably build in some flexibility. The strategy is being written against the backdrop of a recession almost as if that recession were going to last for 10 years, but it will not. We need to be able to be flexible as the strategy develops.

I think that your submission mentioned moving away from strictly economic indicators, such as gross domestic product, to more sustainable indicators, such as wellbeing. That is an interesting point, which I hope the committee will reflect on. Does anyone else have any comments?

Ted Brocklebank will discuss priorities and targets in a little more detail.

I agree with the point about the Lisbon strategyy being all things to all men—and to all women as well, presumably. The challenge for Scotland is to drill down into some of the sub-sectors and niche markets that are important for us, and to build up from there. We are talking about a top-down perspective, but we also want to look from the bottom up. We want to work on projects and do things that align with that view so that the strategy does not preclude us from doing the things that are important for Scotland.

There is an argument that the approach has to involve a bit of motherhood and apple pie, if you like, in that it almost invites us to set the challenges and recognise the weaknesses that we would like the EU to address on our behalf. However, there is another aspect. There are some things that only Europe can drive forward throughout the entire 27 member states, and it is important that we recognise them. Regardless of what happens in the general election, we will face the situation that the UK is more Eurosceptic than Scotland is, so driving forward towards the EU 2020 strategy’s ambitions for Scotland will be an opportunity for us to ensure that we stay on that path rather than step back a bit or take our foot off the accelerator.

The concepts of fairness and equity have to come from Europe. It is then a matter of embedding them within individual member states. Europe’s role is to drive the agenda to ensure that individual member states embrace such things.

Yes, although there is also an opportunity. After the previous depression—as opposed to recession—America managed to drag itself to the point of having a world leadership role. Times of depression present an opportunity to deliver huge step change if things are dealt with correctly.

I think that it was Scottish Enterprise that said that small and medium-sized enterprises are not getting properly involved in the strategy. Scotland is a nation with many small businesses. We should also consider Morag Keith’s comment that universities and colleges can be seen as a conduit between small businesses and the strategy. How could SMEs play a bigger part in the process?

Yes. We believe that a lot of innovation comes from SMEs and that there should be more concentration on that. Europe and member states ought to have more cognisance of the importance of SMEs. There is a lot of talk about public procurement, for instance, yet Governments and the EU always procure from the big players—they should put their money where their mouths are. They should also support SMEs to get involved in some of their large funding programmes. That is a practical way to help SMEs. The old adage is that SMEs want contracts rather than grants. That is important. The Government and the EU ought to get SMEs involved in projects that will help them to grow, flourish and internationalise. The internationalisation of small businesses is hugely important to Scottish Enterprise. The strategy should be aligned with helping us to achieve that aim.

12:15

You probably share the view that the Scottish Government should introduce procurement laws, but could not possibly comment on it.

The west of Scotland colleges partnership submission says that the colleges and universities could make a difference.

We have a couple of issues on SMEs. First, we would like there to be a more relaxed interpretation of innovation. That is crucial. Duncan Botting commented that there is no one-size-fits-all answer in EU 2020. In the same way, we must acknowledge that innovation means different things to different people. We need to ensure that the concepts of innovation in the EU 2020 strategy recognise that innovation need not necessarily be scientific; it could be a production innovation, for instance. We need a breadth of interpretation in the strategy.

We also propose that the EU’s corporate social responsibility agenda be driven forward. It binds together the concepts of social justice—equal opportunities, social cohesion and sustainability. That is about not only ethical investments but procurement. For example, in Glasgow, significant advances have been made when social benefit clauses are used in the procurement for the Commonwealth games. That is corporate social responsibility in the EU sense.

We must try to find a way within the procurement legislation that allows us to recognise and accept the need for local employment benefit clauses and local supply of goods and services to be built into the delivery of contracts. If that flexibility within procurement can be found, it would make significant steps towards addressing the fairness issue to which we come back.

All the procurement issues reside at the Scottish level. The European legislation already provides sufficient scope to procure intelligently and to introduce the community benefits that we have described. That has happened in Scotland and, although that has at times sailed close to the regulations here, we should not let that stop us. No other member states let that stop them—they always procure in the best interests of their industry and their people and we should do likewise.

Stephen Boyd talked about small and medium-sized enterprises that complain about red tape and bureaucracy without being able to give examples of such problems. In your submission, you suggest that red tape and bureaucracy are a barrier to action by civil society and should be removed. What is good for the goose is good for the gander, so I suppose we ought to ask you the same question. Can you give examples of how red tape and bureaucracy are preventing civil society from playing a full role?

Your submission, in which you suggested that there should be a move away from the geographic aspect, was incredibly interesting. Scotland has sometimes been disadvantaged because we are a maritime country; even the UK is a maritime member state. We do not have the cross-border links that other member states have. I can therefore envisage very strong arguments that would work in Scotland’s favour to broaden some principles beyond the geographic or transnational perspective. For example, there are the Interreg programmes, and we work with Northern Ireland and Ireland and so on. I can see real advantages in developing some of your arguments about having thematic as opposed to geographic areas. That is an interesting point, which I hope the committee will consider further. Did you have any specific examples in mind? I note that your submission was made by Dugald Craig. Thank you very much for the submission—it is very good and has lots of interesting ideas. If you have any examples to share, that would be relevant to the committee.

You made another interesting point regarding third-party agents and the recruitment of doctors and dentists and so on. You said that there could be ways of promoting education programmes and throughput via the universities and colleges rather than by recruiting people in areas of skills shortage through third-party agents. I thought that that offered quite a lot of scope for development, too. Do you wish to comment on that?

One of the many hats that I wear is that I am a member of the shadow board for the national skills academy for power, which is one of three national skills academies that are now up and running. The key is that the whole power community has come together for the first time, from supply and generation right the way through transmission and distribution to end users. On the ability to leverage funding from Europe, the burden of administration has rightly been identified as the usual reason why people do not go for the funding, especially in universities. Full economic costing and so on is a barrier to that. There is a raft of areas where, if groups come together, the administrative burdens could be reduced—there could be socialisation across the sector. There is a number of ideas around that, which might be worth pursuing.

It would be useful if we could have some explanation about the policy areas in which you feel that better and more coherent collaboration between the EU and member states would be helpful. You could perhaps let the committee have that information.

Thanks very much. I will let Stephen Boyd in on that point and then ask everyone to make any final comments. We are short of time again.

The narrow definition of innovation is a longstanding issue for the STUC. Many successful Scottish businesses have managed to keep jobs—the type of middle to low-income manufacturing jobs that we have been told should be going to low-cost countries—in Scotland because they have radically improved their productivity by overhauling the way they work and changing how jobs are designed and how the workplace is organised. That is fundamental to pushing the innovation agenda.

In the late 1990s, Europe did an awful lot of work on that agenda and produced stacks of reports about the changing European workplace and so on, but it never associated funds with that work to try to support the type of workplace change that we think is necessary. A number of other member states have their own interventions; for example, Ireland tries to support workplace innovation through the National Centre for Partnership and Performance. Unfortunately, although we invest a lot in the stock of skills in Scotland, we are still in the early days of trying to ensure that those skills are utilised effectively in the workplace. That type of intervention at member-state level should be supported from some central EU fund.

The strategy is welcome in that it uses the words “industrial policy”, which have all of a sudden become popular again after three decades in which one could not utter them. The idea was that the Government should not try to intervene to support industry in that way. However, the strategy does not go nearly far enough.

Other member states understand instinctively, more than we do, that the kind of emerging technologies with which Duncan Botting is working closely need to be supported and nurtured in their early stages and that an industrial policy is needed to support such development. In Scotland, we are moving some way towards that, but we have to recognise that a lot of the powers associated with an effective industrial policy remain at UK level. Over the past few months—since Mr Mandelson’s tenure began at the Department for Business, Innovation and Skills—the whole language of the Government’s support for industry has changed. That is welcome, but again, we need to see the funds being applied to make it work.

Yes, just one, which is about balance more than anything. The document about vision and the use of structural funds is very much to do with jobs creation and using skills development in that respect. However, it would be good to see some balance in there to recognise issues of underemployment as well and the effects that it can have on people’s life chances. If we were looking at having some sort of framework with priorities or targets, it would be good to see the kind of balance that improves job opportunities but at the same time recognises the skills utilisation of people who are already in the workforce.

I hope that the committee will emphasise in its report the social dimension that we have all been talking about today and pick up on Jamie Hepburn’s question to me about what processes could be improved. We have to ensure that whatever the successors to the social open method of co-ordination and the other processes, they are much better linked in to regional and national parliamentary processes. One of the key reasons why they have disappeared into civil service bureaucracy is that they have relatively little profile either here or at Westminster. We need to ensure that this Parliament has a role in on-going monitoring.

It is significant that the thrust of the discussion has been about large projects and how we deliver them. That ought to be the way forward. I know that the consultation period was short, but the sooner we get from talking to acting the better. There are some great big projects on the go, such as those that Duncan Botting and others mentioned. The sooner that we get on with that the better.

I want to discuss how learning and education are expressed in the 2020 Strategy. We would like them to be expressed much more in terms of connectivity between learning and work, which could be enabled through the development and use of skills. Our take is that the strategy views skills as almost temporary—they get people between jobs or take them to other learning. We would like skills to be represented as much more lifelong, important and vital in relation to social and career mobility and to be used far more effectively.

We all know about the paradox that even when people are well qualified, that does not always translate into the growth and productivity in the workplace that we would like there to be in Scotland. We would like that point to be strengthened. The development and use of skills should not be treated just as a crisis intervention. Instead, we would like skills development to be taken on as a long-term ambition. We should be far more aspirational in that regard. That is key to driving social inclusion, and learning itself, and it is also an economic development driver. That is my big message about how learning and education are expressed in the strategy and how we could do a little bit more in that regard.

The SCVO shares the general feeling of disappointment in the consultation document’s vision—or lack of vision. I do not want to go on about the consultation process, but, given that the evaluation of the Lisbon strategy or agenda came out after the consultation document, not a lot appears to have been learned from the various aspects of Lisbon that have not delivered—they do not seem to have found their way into the consultation document.

We have higher levels of poverty than we had at the start of the Lisbon agenda while our employment levels have increased—the STUC contribution on that point was useful. There are significant deficiencies in our progress towards reaching our targets. The lack of reference to civil society in the consultation document is a big problem. I echo Scottish Enterprise’s point that among other stakeholders there is a general lack of engagement in looking at wider civil society, whether at the regional level or beyond the usual social partners. There are a lot of gaps in the document, although I know that there have been discussions since it was published. Again, we are running to catch up with a process that seems to be moving quickly. However, developments at the informal Council earlier this month might indicate that some of those concerns have been taken on board. The concerns reflected around this table have also been reflected at European level.

One interesting thing about the Scottish Government’s response is its emphasis on social cohesion, which reflects some of the issues that we have already raised and which were not given nearly enough profile in the consultation document. That is useful, and it highlights the approach that we are trying to take in Scotland of joining up the various policy elements around poverty, intervention in the early years and health inequalities. The Scottish Government’s response was useful but—as was probably the case for everyone else—it was done in a rush.

At the recent European Council meeting, the Commission president suggested that the 2020 strategy should be based on three major themes: growth based on knowledge and innovation; an inclusive, high-employment society; and green growth. To this observer, that seems a wee bit like saying that we are in favour of good things and against bad things, but are those the right priorities? Are they the principal priorities? Does anyone have an idea of what the real priorities should be for the next decade?

In a sense, the strategies are set at such a high level that you could disagree with almost nothing in them. However, when we look underneath the three principal areas in, as we should now be calling it, Europe 2020—I am sure that that is a significant phrasing change, but I do not know why—we see something emerging. I do not know whether it has come out of the consultation or whether President Barroso has been thinking about it for a while, but under the area of an inclusive, high-employment society—I should say that I also represent the European anti-poverty network—there is an interesting sense of prioritising the fight against poverty in a different way than was the case with Lisbon. Things appear to be being brought together.

The language and tone of the informal Council in February was interesting. Repeated statements were made about not going back to business as usual, and there seems to be some recognition that the Lisbon strategy did not deliver all that it should have done—far from it. I therefore think that the priorities are right.

Interesting issues are also coming out about whether to set Europe-level targets that have a bit more bite in some of those areas, and whether EU flagship policies will drive forward some of the key concerns. That might be a useful development. The problem is that it is hard to argue against some of those points.

Are you therefore in favour of binding targets that must be met by 2020?

The idea is that there are 27 different starting places and that a single silver bullet will fix everything, but that is not the case. Companies use stretch targets all the time to reach their ambitions. Targets are good in that sense, but to give each member state the same targets and expect them to ensure that 3 per cent of GDP is spent on research and development, or whatever, is unreasonable. We need stretch targets for each member state rather than single targets for Europe. That is the fundamental issue around the failure of much of what has gone before. People believe that the targets fundamentally are not within their reach or are not appropriate to their economy.

That might be Donald MacInnes’s area.

No, I could not possibly comment. The comment about going for the safe option rather than the more important option of supporting growing businesses applies right across the public sector.

There being so many small and medium-sized enterprises, they are major employers. Morag Keith—poor Morag, I keep focusing on her—suggested that the focus of the EU and the Scottish Government on some priorities is slightly narrow. Do other witnesses share that view?

I return to the public procurement point that Morag Keith raised and which you followed up. You said that we missed the boat with the public procurement directive. Does EU 2020 offer scope for us to build in something on the effects on communities?

I have a couple of questions for Peter Kelly. The SCVO’s submission suggests that

“There is much that Scotland could have gained, and contributed, from a more active participation in the relevant processes”

of the Lisbon strategy and that civil society technical expertise could have been used. Why does the SCVO think that Scotland failed to participate in the relevant processes? How could that change with the advent of the new strategy?

I will take your second question first. Not much in the consultation document or in what has emerged since suggests that much thinking has been done about the governance of any new strategy. One innovation as a result of the Lisbon strategy was the open method of co-ordination for the employment strategy, social inclusion and social protection. That provided opportunities to learn from other member states about how things worked, what could be done better and what did not work as well. Such processes are limited by the resources that member states can put into them, but our sectors—civil society in general and the voluntary sector in particular—have not been able to find out nearly enough about those processes, which have had a fairly low priority in the UK and Scottish Governments. The social dimensions of the Lisbon strategy have continued to go down, rather than up, the political agenda over the relevant period. If there is an opportunity to increase that dimension within the new strategy, we should consider taking it.







One of the areas in which we have done quite a bit of work is the national reform programme. If you talk to most people in our sector and beyond—people in the trade unions and the private sector—about the national reform programme, they do not know what it is. It is fundamentally important and should be driving large parts of our economic policy, yet we have no input into it. Similarly, I mentioned the open method that has been used since 2000. There is a lot to be gained there and a lot to be learned from other member states. My knowledge is strongest in the area of social inclusion and social protection. That method is not being used nearly enough. Stephen Boyd mentioned having a debate about the fundamentals. It needs to be a genuine debate. We need to do more to engage civil society much more widely in that kind of debate because those fundamentals influence the economic and social policies that we will adopt over the next 10 years.

Some SCVO members feel that they are constrained by regulations. I am not sure that those regulations necessarily have their origin in Europe but there is certainly the perception that some level of red tape is inhibiting action. While it is not clear to me that that red tape especially emanates from Europe, where it exists it is not seen as beneficial—that probably needs to be looked at. SCVO probably needs to do more to provide specific examples and identify where they come from. Is it regulation—or rather, unnecessary regulation, because I do not think that anyone is against necessary regulation—of the voluntary, community and social economy sector? We need to identify the source of any problem. Europe is a convenient target. When something goes wrong, we blame Europe. When it works, it is usually a result of our own actions.

That sounds familiar.

I think that it has become a truism. We need to be clearer on what the reality is.

The STUC has engaged in the Scottish Government’s regulatory review group on the better regulation agenda. The model at Scottish level could perhaps be transferred more widely. It is very proportionate in Scotland. It is focused on specific legislation, and specific issues that are facing businesses. The whole obscure debate on business burdens and red tape is entirely unhelpful. We all spend too much time talking about it.

The voluntary sector probably suffers, as the trade unions do, from the bureaucracy associated with the funding programmes, which has certainly been a barrier to the STUC’s efforts to access funding in the past. We would welcome any reduction in that, and I am sure that the voluntary sector would feel the same.

Civil society in Scotland is alive and well and, in European terms, compares very well to the rest of the UK. The Scottish Parliament has caused us all something of a problem in that organisations such as ours now spend a great deal of resource engaging with this place. It is quite right that we should do so—we have worked hard for the Parliament and we want it to work—but we have suffered in going beyond that at UK and European level. Working with each other was something that we did very successfully before the Parliament was established but, despite that being important, we now struggle to find the time to do it.

12:30

I have specific examples of where the red tape stops us. In the structural funds programmes, the administrative burden that has now been passed on to applicants is such that about 25 per cent of costs can be administrative costs for ensuring that there is an audit trail. The Commission has brought in simplifications, but we have been unwilling to adopt them here. We can learn lessons from very good projects that have been operated by community planning partnerships and others. It is time that we rolled out such good practice so that we do not have lots of projects bound up in red tape. Audit Scotland now has responsibility for most of the players in the structural funds programmes and is also responsible for auditing the structural funds programmes, so there could be better co-ordination of Audit Scotland checks on public bodies so that it does not duplicate its checks under the different responsibilities.

That is a valid point about balancing the administration side, while ensuring that there is a proper and necessary audit that will satisfy the Commission and ensure that you get money next time round.

I want to look at some of the evidence from the colleges. From your sector’s point of view, Morag, can you give us examples of how the EU 2020 strategy can address some of the Lisbon strategy’s failures?

We would probably be better to follow that up with Scotland’s Colleges. The colleges have only recently moved in to develop further their knowledge transfer. The university agenda on knowledge transfer is much more scientific and research oriented, while college interaction and knowledge transfer is much more about productivity levels. We would like that to be recognised as a contributory element. It is not just about the high-end stuff, but about work across the board.

Thank you. I will take any final comments from round the table.

First, I offer an apology on behalf of the Scottish European Green Energy Centre. We are a new organisation that has just come into being, and we have been extremely successful in securing large funding from Europe. We have not responded to the consultation because we are limited by resource and we are new starts. I hope that we will resolve that situation on 1 March.

One of the key aspects of the document is that it offers a great opportunity, especially for Scotland, to utilise things that have not been mentioned yet in EU 2020, such as the strategic energy technology plan for Europe. Many of the areas that were identified in the plan for offshore wind and marine power, carbon capture and storage are huge opportunities for Scotland to move forward. It joins up numerous dots because the skills sets that are required for development and deployment of those technologies are in exactly the areas about which we have been talking. There is also an opportunity to funnel funds through innovation to wealth creation, which is normally the bit that is missing. We are usually pretty good at innovation, but the trick is getting from innovation to wealth creation. SEGEC’s focus is on trying to provide that facilitation to deliver wealth creation. I welcome working with Donald MacInnes’s group to achieve leverage out of Europe.

The cultural delivery capability of much of what I am talking about is the aspect that is usually missing. The social acceptance of many of the technologies and transmission lines that we are talking about is the one thing that is normally overlooked in innovation development and delivery. I would welcome the committee’s urgent activity to try to boost the connectivity and joined-upness of many of those areas.

12:45

Morag, are you happy that we have covered a lot of your areas?

Yes.

We resume proceedings and move to item 4, which is consideration of the EU 2020 strategy. It is a pleasure to welcome to our round-table discussion Stephen Boyd from the Scottish Trades Union Congress; Duncan Botting from the Scottish European Green Energy Centre; Vivienne Brown from Skills Development Scotland; Morag Keith from the west of Scotland colleges partnership; Peter Kelly from the Scottish Council for Voluntary Organisations; and Donald MacInnes—who is a regular attender at meetings of the committee—from Scottish Enterprise. Thank you all for coming and for your extremely interesting written evidence. I do not want to single out particular submissions, but some interesting suggestions were made, which I hope we will explore further.

Because we are running short of time and we have such a full agenda, we will move straight to questions. You do not have to respond to every question, but please indicate if you would like to make a point. I will give each of you the opportunity to put on record your overall impression of the EU 2020 consultation document and any general points that you would like to make about your organisations’ interest in it.

I will pre-empt the comment that I am sure you will all make about the timescale. The committee agrees with the comment that is made in some of the written evidence. Regrettably and unfortunately, we are under the same time constraints in relation to making a useful submission to the Commission, so we had to impose a tight time constraint.

With that, I invite Stephen Boyd to kick off and give us the general impression from the STUC side of things.

The theme of paying greater attention to the social agenda is common to almost all the written submissions.

Yes. We endorse that view about education, particularly on recognising vocational education rather than having a narrow-minded focus on university education, which seems to be the flavour of the consultation document. We should also recognise the social elements, which are a significant omission. To underpin Europe’s ambitions on people’s freedom of movement, we need to recognise that mass migration places significant pressures on individual member states. In the EU 2020 vision, we are ignoring that issue yet again.

We will come on to priorities and targets in a minute, but, before we do that, would anyone like to comment on the Government’s response and any aspects of it that are particularly useful or missing and on which you would like the committee to reflect?



12:00

I was pleased to see in the response an endorsement of employability skills and the softer skills that people need to enter into, sustain and progress in work and learning. However, in relation to the development of career management skills, we would like people to be far more empowered to make effective on-going career decisions. There is a big connection between social mobility and career mobility, so particularly through the curriculum for excellence strategy we are trying to ensure that young people have the skills to be agile in making choices and decisions and to use career information effectively. That is also important in tackling longer-term adult and youth unemployment issues. We have used that approach a lot in ScotAction in support of people facing redundancy so that, should they face that situation again, they are equipped with the skills to handle it rather than always needing, if you like, to fall back on the agency to support them. If possible, we would like that empowerment aspect to come through a bit more.

On the energy perspective, the Government has somewhat underplayed its hand, because Scotland is at the forefront of pushing forward the energy agenda as far as the low-carbon economy is concerned. There is an opportunity to teach Europe how to set targets and follow them up.

My slight problem is that if the original Lisbon strategy did not work—and everyone agrees by common consent that it did not work—how much more difficult will it be to get the new strategy to work during the next decade, especially given the fact that we are in the deepest recession since the 1930s and we are facing all sorts of economic problems? Is there any real chance of a motherhood-and-apple-pie resolution and of the strategy being introduced?

The European Union remains one of the wealthiest areas on the planet, and we have scope to do things differently.

One problem with the Lisbon strategy is that the situation changed significantly during the period that it was being introduced. The 2005 streamlining process changed its focus significantly, and member states went along with that change to focus on jobs and growth, as the STUC has highlighted. That fundamentally weakened the Lisbon strategy. If there is a greater emphasis on the social dimension of Europe 2020 and more attention is paid to inequalities and to the role of civil society, we might come out with a better strategy.

The strategy can be delivered. The language being used is that we do not just want a strategy to exit the recession and the crisis; we want something quite different. However, that will depend on how well Europe engages with actors such as those who are around this table and with regional and national Governments.

I am generally in favour of a framework for what the targets will be, what success will look like, how the targets will be measured along the way, and what will allow us to change them if we have to. As Peter Kelly said, the previous targets were changed halfway through, and I suspect that the current ones will also be changed, as experience dictates.

The key is in the comments about the high-level aspirations. My problem is that the consultation seems to postpone a lot of the fundamental debates that Europe will have to have in the future. It is okay to say warm words about an inclusive, high-employment society, and it is okay to have Government targets at the Scottish level. It is also a good thing that the Scottish Government’s economic strategy contains targets for solidarity and cohesion. However, support for the Lisbon strategy collapsed latterly because people saw that the economic pillar superseded the other two pillars to a large extent, and that the deregulation of the labour markets was a major priority. It is not possible to pretend that there is no tension between that process and an inclusive, high-employment society in which we all work in decent and well-paid jobs; there is a fundamental tension there. I understand why the aspirations have to be general, given the nature of the European Union, but, to be frank, the approach just postpones the difficult debates until another day.

Does anyone else want to comment on targets?

I suppose that that is particularly the case against the background of three or four member states perhaps being on the verge of bankruptcy and therefore their minds are concentrated more on that than on what the next 10-year strategy will bring about.

Jim Hume has some questions on the engagement of small businesses.

I will answer that and the previous question, if you do not mind.

When it comes to SMEs engaging in Europe, the role of the European-level business representative organisations is fundamental. It is simply not feasible for all Scottish SMEs to influence and engage at that level. I hark back to the comments that I made at the start that, if the consultation on the strategy signals a dilution of the role of the social partners at European level, that is a concern for not only trade unions but SMEs in Scotland. I am not saying that it does signal that, but we would have preferred the language in the consultation document to be far clearer in that respect.

We are reaching a real pinch point on procurement in Scotland because there are conflicting priorities for it: value for money and delivering more contracts for Scottish businesses. It is important to recognise that the two contradict each other. Value for money will become increasingly important over the coming months and years, so we must think about how we can influence that agenda to ensure the community benefits that Morag Keith described. They have been useful, not only in Glasgow but in Stirling, Dundee and Greenock. There are many excellent procurement projects in Scotland that have delivered tangible local gains. We need to embed that.



I have discussed with the committee more than once the implementation of the public sector procurement directive in 2006, which was a major missed opportunity for Scotland. The regulations were implemented on the basis of ensuring no additional business burdens. That underplayed the additional scope in the directive for employment, social and environmental objectives to be introduced into public contracts, which would have benefited local SMEs.

That brings me on to the role of Scottish and UK representative organisations for SMEs. It is perhaps a shame that no such organisations are here today, as they could answer my criticism, but it is about time that they started to focus on the issues that would make a difference to their members, instead of going on incessantly about the better regulation agenda. They are now wasting massive amounts of political capital at Scottish, UK and European levels on trying to appease employers about a non-existent problem. I have sat before the committee with SME representatives who have moaned about the burden of regulation from the EU but who could not name a regulation that has caused them a problem when asked by committee members to do so. That is myth and orthodoxy stuff. We must go past that and start to consider the issues that really make a difference to businesses.

So the scope exists—we just need to use it a bit more. Is that your message?

We should not be too critical of the Scottish Government, which has produced excellent papers such as “Community Benefits in Public Procurement”, which was issued about two years ago. However, that was promoted insufficiently and a job of work has to be done to ensure that procuring authorities are aware of what can be done locally.

Is that not true?

From an education perspective, it is important to recognise that we have a role across many other programmes, not just structural funds. For EU 2020, we would like an umbrella policy that takes in all the different programmes that fall within the EU’s remit. Many individual funding programmes have similar themes, such as innovation, energy, sustainability and lifelong skills. We would like in Scotland to harness the potential across all those initiatives by managing them together, rather than in silos. So much that goes on is about individual departments or about policy falling within an individual area rather than about taking advantage of a cross-sectoral perspective in each and every programme.

The lifelong learning programme at EU level is worth £7 billion. Within UK member states it is worth £500 million, although obviously budgets will be reduced. If there were a deprivation direction within that, Scotland would get between 8 and 10 per cent of that amount of money, whereas we get something like 4 per cent—we are hugely underperforming. The EU lifelong learning programme is managed at UK level, but we suggest that, as such matters are devolved responsibilities in Scotland, education could have a broad perspective across all the different initiatives, rather than having to report within Scotland for structural funds programmes and at UK level for the lifelong learning programme or any of the other initiatives. That situation means that we are running all over the place, rather than using and sharing the valuable expertise that exists in all those areas in Scotland.

We can certainly follow up on that.

That is fine.

You touched on the narrow definition of innovation as being purely about scientific and technological research, the need to broaden the definition and the fact that it overlooks more pragmatic examples of inventiveness and knowledge transfer. Some examples of that would be useful. I do not know whether you want to say anything about that now or whether you want to provide us with that information later.

Is there sufficient scope in EU 2020, or should we do more to highlight issues about manufacturing and industrial policies?

So we need a bit more joined-up working between Scotland, the UK and Europe.

First and foremost, we need to recognise that industrial policy is important and that it matters; we need to hear ministers talk far more regularly about manufacturing. Underneath that, we need to start working towards a low-carbon industrial policy for Scotland that recognises not only the levers in Scotland, but the key levers that remain at UK level.

Thank you. Does Vivienne Brown have any last points?

I thank you all very much. The session has been interesting. On behalf of the committee, I assure you that we are keen to take forward many of the ideas that you have suggested. We also acknowledge and will highlight many of the problems around the lack of consultation and engagement. We will look carefully at the evidence that you have submitted.