European Union and Scotland
For agenda item 3, I welcome Ian Hudghton MEP and Catherine Stihler MEP to the committee via videoconference. I assume that you can hear us all right.
Loud and clear.
You will both make short introductory statements, after which we will be pleased to question you. Do you want to start, Ian, since you were there first?
Thank you, convener. I welcome the opportunity to say a few words before we move on to questions. I will outline some of the events that are taking place or that will take place soon and over the next few years.
The big headline issues that you have just discussed with Ian Duncan are the subject of much chat, gossip and horse trading around here. We are all waiting with bated breath to see not just the outcome of the proposal for an EU president—assuming that the Czech court clears the way and the Czech President signs up to the Lisbon treaty, as seems likely—but who will be nominated for Commission membership and which members will be lined up for which portfolio. The big issues are the reform of the common fisheries policy and the common agricultural policy and the budget issues, which we mention in the special edition of the "Brussels Bulletin". The individuals who are nominated for those portfolios will be very influential in those processes. They will be among the most sought-after portfolios by member states that have a strong interest in those areas and a strong political commitment to those sectors. We are waiting for those decisions to be made.
In the meantime, we have already started in our Committee on Fisheries. Tomorrow we will have a second exchange of views on the green paper on CFP reform and that will be followed by a public hearing early in December. There is also a proposal to have a hearing with members of national Parliaments, to which I referred in my article. Around here, "national Parliament" normally means "member-state Parliament", but the co-ordinators of the Committee on Fisheries will consider and, I hope, agree that Parliaments from fishing nations can be involved in that, including the Scottish Parliament, which clearly has a predominant interest so I expect that somebody from there will want to take part in such an event here in Brussels. I will stop there.
Thank you, Ian. Good morning, Catherine Stihler.
Catherine Stihler MEP (Lab):
Good morning.
I invite you to make a few opening remarks to the committee.
Thank you, it is a pleasure to be with you this morning. I hope that we can have meetings like this more often because they are useful. I will talk about the work of the two committees of which I am a member—the Committee on Internal Market and Consumer Protection and the Committee on Economic and Monetary Affairs. You asked us to raise numerous issues that are relevant to Scotland, so I will put some of those on the committee's agenda.
The big issue dominating the Committee on Internal Market and Consumer Protection is the consumer rights directive. The proposal is to bring together four pieces of legislation, which sounds good if we are trying to mainstream and harmonise. However, some of you might have read the Sunday papers in which Consumer Focus and Which? were quoted as saying that as it stands, the consumer rights directive would undermine people's consumer rights not just in Scotland but across the United Kingdom and other countries. As MEPs who want to defend consumer rights, we are working hard to monitor the directive, which is in its early stages at first reading. I bring that matter to the committee's attention as an issue that concerns us and on which we have to work. We will have to amend the directive thoroughly unless it is withdrawn.
The other issue is about late payments, on which we are having a mini hearing tomorrow. The idea has arisen because public services in many countries have terrible records of making late payments between different public authorities. The United Kingdom and Scotland have a good record and a good story to tell in that regard. However, there is concern in local government that although 93 per cent of payments are made within 30 days, 7 per cent are not. There could be hefty fines for those who, for simple reasons, misaddress an invoice or for whom something just goes wrong. Again, the late payments directive is at an early stage. One of my colleagues, a German Social Democrat MEP, is leading on it. I bring it to the committee's attention because local authorities and the Convention of Scottish Local Authorities have been lobbying us about it.
I am the rapporteur on construction products and I am leading for my group on an initiative called SOLVIT, which tries to help individuals and businesses who feel that EU law has been misapplied to access information and get redress within 10 weeks. We support the initiative.
On the economic committee, I bring to the committee's attention the AIFM directive, which for those who do not know is the alternative investment fund management directive. It is sometimes known as the hedge funds directive. It is an all-encompassing directive that impacts on Scotland's investment trust companies in a damaging way. The committee has probably taken evidence on the financial crisis. As it stands, the directive is not just about hedge funds and private equity but includes charitable trusts. We have been lobbied heavily about the fact that investment trust companies in Scotland, which have been pillars of sense and risk management and could be models for how we conduct ourselves in the future, could be completely destroyed by the proposal.
I hope that we will get sense and that we will ensure that those companies are not destroyed, but I bring to the committee's attention the fact that the alternative investment fund managers directive could have severe implications for Scotland. We have raised the issue with John Swinney and Mike Russell when they have visited and we must watch it. The directive is at first reading and we will have a hearing on it next week.
The final issue that I will bring to the committee's attention is about the solvency II directive and the illiquidity premium, which concerns insurance policies. The directive treats insurance companies the same as it treats banks in relation to risk, which will have severe implications for Scotland's insurance industry. We are trying to look into that and to get sense on that.
You have probably answered almost all our questions about your committee's work programme, but that is fine.
I have just heard that the Czech court has cleared the objection to the Treaty of Lisbon this morning, which is interesting. That will have implications for our inquiry on the treaty, which we will discuss later.
That brings me neatly to asking both of you what the treaty's major implications for Scotland are. On devolved matters, will the treaty change the architecture of relationships for policy development between regional Governments, national Parliaments and the European Commission? I would welcome your thoughts on that.
I will make one more point, as videoconferencing is always subject to a delay. I have no doubt that you know that recommendation 4.18 in the Calman commission's report was that there should be closer involvement between Scottish MEPs and the European and External Relations Committee. What could "closer involvement" mean? The commission suggested that MEPs could attend committee meetings but not have a vote, but perhaps that was suggested by someone who does not understand the practicalities of our timetables. Achieving such attendance would be difficult. How could we increase engagement between us?
The news about the Czech constitutional court is welcome. I hope that the Lisbon treaty will be ratified, so that we will have clarity about how the European Union's structures will work. I also hope that we can move away from constitutions and institutions to talking about issues in which people in Scotland are interested—the issues to which Ian Hudghton referred, consumer protection and all sorts of matters. With the Lisbon treaty ratified—as I hope it will be—we will have the new set-up of a president of the Council and the high representative for foreign affairs. The European Parliament has a new president—Jerzy Buzek—and José Manuel Barroso has been reappointed.
I am concerned about the gender representation in Commission appointments. At the end of the "Brussels Bulletin", Ian Duncan has kindly listed the people whom we think have been nominated to be commissioners. In the next few weeks, the commission candidates will become clear. I am concerned that female representation will drop and that no one from an ethnic minority will be appointed. To be frank, in 2009, we must push José Manuel Barroso and the member states on that as he puts his team together. He has been so worried about the issue that he has written to ask every member state to consider gender when nominating candidates. As the committee knows, the UK has an excellent commissioner in Baroness Cathy Ashton. However, if the UK had the foreign high representative post, we would no longer have a commissioner—the high representative would have to be the UK's one person. The situation is being debated and many of us have concerns about it.
In my mind, the Lisbon treaty makes the way in which we work more efficient and effective. In terms of the work that the committee does, it means that there will now be more co-decisions on fishing and agriculture, which Ian Duncan touched on. That has severe implications for the way in which MEPs work. Before, we were just consulted on those issues although, as we know, agriculture takes up about 50 per cent of the EU budget and will have big implications particularly as we go through to the budget review post-2013. That is where I think the committee can come into play.
The UK will have to get to grips with how we can ensure that Scotland's voice is heard in the consultations of national Parliaments, and the committee can play an important role in that. If, during the consultation, enough national Parliaments reject a piece of legislation before it came before the European Parliament, it will have to go back to the Commission. That is a very good check in terms of democratic accountability.
As for how we can work with you, I think that we should have more of this type of hour-long conference call. You have heard only from me and Ian Hudghton this morning, but I am sure that my other four colleagues would welcome the opportunity to take part. It is not only Scottish MEPs who have taken part in previous videoconferencing. For example, my colleague Brian Simpson MEP, who represents the North West of England, is now the chair of the European Parliament's Committee on Transport and Tourism. I am sure that the Scottish Parliament could call on his expertise. There is lots of talent within the European Parliament that could be utilised through videoconferencing and the work that Ian Duncan and others are doing, whether in Scotland House or Scotland Europa, to involve people in promoting Scotland's perspective.
Thanks very much, Catherine. Do you want to add anything, Ian?
The implications of the Lisbon treaty will roll out over time. The options, according to individual opinion, are that it is either just a tidying-up exercise or the drawing away of another list of umpteen powers from member-state Parliaments and Governments. The reality is usually something in between. The tidying up is necessary, but I have anxieties about some aspects of the treaty. I do not want to harp on about fisheries, but it is of great importance to Scotland that we examine exactly what is meant when the Lisbon treaty says that the CFP or the conservation of marine biological resources should be an exclusive competence in what are now treaty terms as opposed to relatively simple legal terms.
Of course, as Catherine Stihler said, we will share decision-making powers with the European Parliament in a host of new areas. The reality of the so-called stealing away of vetoes from member states is that, in the first instance—this must be understood, but it is not often clearly understood—the member states themselves have agreed to that. Also, the application of it will mean that there will be more majority voting among the member-state Governments in the council and there will be co-decision making with the European Parliament, which will mean that our view cannot be ignored and that we can genuinely make a difference. On the occasions when we fail to reach agreement, we will be able to prevent things from happening, which is a useful thing to be able to do from time to time.
On fisheries and agriculture, it will be a new experience for us to share the decision-making power on the policy side. In fisheries, that comes at an important time because it means that we will have co-decision input to the proposals for reform of the CFP as they develop over the next two or three years.
One of my anxieties is that that brings with it one of the problems that the member states have faced over the years, namely that some MEPs come from countries that are extremely interested in, and place high political priority on, fisheries management and conservation, and some have not the slightest interest because they are landlocked or have relatively little economic interest in it. How that plays out here under co-decision is something to watch out for.
It certainly gives Scotland an opportunity to argue the case for the sensible, hopefully root-and-branch type of reform that Commissioner Borg referred to when he launched the green paper some months ago. I certainly look forward to taking a constructive role in that. It is in all our interests—none more so than Scotland's fishing communities—to achieve a management system that works and conserves the resource for the long term.
On past occasions, we have agonised over the question of how the Scottish group of MEPs, the European and External Relations Committee and the Scottish Parliament should relate better to each other. What we are doing today with this videoconference is one relatively easy way to do that, and with the facilities here, it could be done at any time the committee's programme permits it. You would probably get more of us. I am not sure why there are only two here today; normally there would be more of us, I am sure.
Although we have not been good at it in the past—I plead guilty to this—we could volunteer to feed information to you from our offices either through Ian Duncan, directly, or however the committee thinks would be appropriate, because things are happening all the time. The committee has already had an update from Ian Duncan on general matters, but so much is going on here now, and will be going on here during the next few months and years that I suspect we could all contribute a little bit more. I volunteer to try to do that myself.
The bit in the Lisbon treaty about the greatly enhanced role for national Parliaments means member-state Parliaments, so from Scotland's point of view, it will be important for the Scottish Parliament and, I presume, the European and External Relations Committee in particular, to strike up some sort of deal and get some kind of guarantee from the UK Parliament that referral will be made to the committee and Scottish Parliament on the issues. There will be a short time for action to be taken by however many member-state Parliaments wish to object to something, and I imagine that most, if not all, will set up scrutiny systems that will mean that members will be able properly to look through proposals as they come across the table. It would be useful to the UK Parliament if Scottish Parliament back-up were available to point out issues that are of special interest and importance to Scotland.
Thank you. I call on Michael Matheson, the committee's deputy convener.
Good morning from Scotland, although I suspect that it might be afternoon in Brussels. I have questions on two areas; I will ask them together to save time. The Committee on Fisheries in Brussels is due to take evidence from different national Parliament committees with a view to reform of the common fisheries policy. Will the relevant Scottish Parliament committee be part of those evidence sessions? Can you do anything to ensure that that happens, given our clear interests in that important industry?
The second area is the European energy programme for recovery. Given that the Scottish Power bid for the carbon capture initiative at Longannet has not been successful, what other initiatives in Scotland do you believe will benefit from that fund in the coming financial year?
The Committee on Fisheries proposes to have a hearing with national Parliaments. That was the concept that was outlined originally. When that intention was stated, I made the point that there are national Parliaments with a strong interest in fisheries that are not member-state Parliaments. The jargon normally confuses national Parliaments with member-state Parliaments. I will be hoping and pushing for the principle to be agreed that Parliaments of fishing nations ought to be represented. Particularly, no Parliament has a stronger bid in that regard than the Scottish Parliament, given that Scotland is home not just to 70 per cent of the UK's fishing industry, but to something like 20 per cent of the European Union's fishing waters.
There is a strong case for that. However, the initial recommendation to the committee on the format will be made by the co-ordinators of the committee, which is constituted of one member from each of the political groupings. I think that they will meet on that subject this week. I have submitted a reasoned statement that backs up the idea—the necessity, I would say—that Parliaments such as the Scottish Parliament should be invited to take part. If that is agreed, I assume that it will be for the Scottish Parliament to determine which committee or which individuals it would be most appropriate to send. The principle is the important thing.
Scotland has much to gain from developing our potential in renewable energy and all things to do with that. Although it is disappointing that we will not be the carbon capture leaders because of the failure to secure European funding, other areas could be bid for—interconnectivity, the grid connections, and so on. There is European support for that, so that the wind and wave power capacity that we have in northern Scotland can be harnessed and sold to a needy European market. A lot of effort needs to go into putting the case for Scotland's interests in general terms and in specific projects.
I have a few comments to add on the carbon capture and storage issue at Longannet. We are obviously disappointed that we missed out narrowly in the first round of funding opportunities. I have written to the Commission for a clear explanation of why that was the case when we were all very supportive of the Scottish Power bid. My understanding is that the money was available only because of an underspend and that the big money is coming through the emissions trading scheme. Therefore, although failure to secure funding in the first round is a disappointment, all is not lost. We must look at what is happening with the emissions trading scheme and take the opportunities that arise through that. I will visit Longannet on Friday.
Last week, I visited Trondheim as part of the Iceland-Norway-Switzerland delegation. Some fantastic work on carbon capture and storage is being done there. In fact, the Scandic renewables energy centre is in Trondheim, which is twinned with Dunfermline, where I live. That is a lovely link. If there is any way in which we can use that know-how on carbon capture, it is important that we work together on such things.
I hope that the deputy convener is reassured that all is not lost. Although the Longannet decision was disappointing, we must work towards the next round of funding.
If the committee can do anything to assist with that, let us know. We would certainly welcome an update on any progress and the response that you receive from the Commission. That would be helpful.
I am disappointed, but I accept what was said about Longannet. I understand that it was a favourite but it had continuously been put on the back burner, if you will pardon the pun, by the German Government's interventions. I would be happy to look at that, and I hope that we get the bid.
That brings me neatly to what I wanted to ask about EU budget reviews and European regional development funding, which is very important for Scotland's future. What is the nature of the current discussions on the budget review? How will the next multi-annual framework look?
On the discussions, there is a working paper to which members on the budget committee have had access. However, on structural funds, there will be the same debate as the one that took place in the previous round of funding discussions, which was about trying to ensure that we get something from the pot and that it does not all go to central and eastern Europe. There will also be debates over renationalisation and the funding pots.
Many MEPs support the structural fund programme. Because of the money that we have received for the Highlands, we know that we will not get as much in the next round. However, we must keep fighting for the principle that structural funds make a difference in our communities, and that we still want that to be part of the European framework.
We are running very short of time. Iain Smith would like to ask a final question. Perhaps colleagues could make their responses brief.
I am being a bit cheeky, because I am a substitute member. However, as convener of the Economy, Energy and Tourism Committee, I am interested in the issues around the financial crisis that the EU is facing. We have heard today's announcements about state aid for Lloyds TSB and RBS and the divestments that they will have to make to meet the requirements for state aid. Could you say a bit more about that? Catherine Stihler mentioned the fund management regulations, which might be of particular interest to Scotland.
Ian Hudghton says that I should go first because I was named in the question.
How is the European Union looking at the financial crisis? First, we have a temporary committee of which Alyn Smith is a member. That committee will examine the reasons for the financial crisis, but the de Larosière report will form the basis of much of the legislation on regulation that is coming through.
Next week, there will be a hearing on the alternative investment fund management directive. We will get the report at the beginning of December and table amendments in January; the report will probably be voted on in committee in February or March, if everything goes smoothly.
In between all that, we will have commissioner hearings to decide whether we say yes to the Commission candidates. Timetables for many of our reports might therefore be put back a little bit.
The AIFM directive is a specific issue for investment trust companies in Scotland, and we must monitor it closely. As we discuss the issue in the European Parliament's Committee on Economic and Monetary Affairs, the Council will also discuss it with representatives from various treasury departments across the European Union. It is almost as if there are two parallel discussion processes going on.
The European Parliament discussions are at a very early stage. If Iain Smith is interested, next week's hearing will be streamed on the web, so he could listen to the discussions. If anyone is interested in that piece of legislation, it might be useful for them to monitor that.
As for the de Larosière report and the supervisory architecture, the Economy, Energy and Tourism Committee will probably be most interested in what will happen with banking, insurance and securities. Those reports have just been allocated to various groups and will work their way through Parliament.
You mentioned today's announcements. Neelie Kroes has been worried about competition and consumer rights. I have been reading about how the announcements affect RBS and Lloyds HBOS—it is very interesting. As someone who is interested in consumer rights I hope that, at the end of the day, that will provide more consumer choice and better competition in the financial services market.
If the committee is interested in any of the legislation that is working its way through the Parliament—especially in relation to the Committee on Economic and Monetary Affairs—please get in touch with my office. We are very keen that there should be engagement with the Scottish Parliament on issues that directly affect it. Around 200,000 people in Scotland are employed in financial services and much of the new legislation will have a direct impact on them. We need to monitor the situation very carefully.
Catherine Stihler talked about parallel processes. Such processes are going on in the European Parliament as well, in that the temporary committee that is looking into the reasons for the crisis will eventually make recommendations. However, without waiting for that, we already have important proposals on the table and perhaps others will materialise with the new Commission. We need to be on the ball.
We should look constructively at anything that would help to give better transparency, particularly from the point of view of consumers across the European Union. We do not want to go too far in making overarching European legislation that would limit the flexibility of individual countries to put in place their own regulatory arrangements and to be flexible and able to encourage and nurture their financial sector and other sectors.
Thank you. I am afraid that I have to bring the meeting to a close. I thank Catherine Stihler, Ian Hudghton and Ian Duncan for taking time to give evidence to the committee. It has been a constructive session.
I am sure that you know that we are coming to Brussels at the end of November. We look forward to continuing our discussions then. It has been helpful to know that it is quite easy for you to arrange these sessions in Brussels. The committee might discuss how we could programme more regular meetings into our timetables. If such meetings were in the diary, more MEPs might be able to attend.
Thank you again. With that, we move into private session.
Meeting continued in private until 11:56.