European Committee, 08 Feb 2000

Meeting date: Tuesday, February 8, 2000

Official Report 204KB pdf

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Petitions

We have two petitions to consider, PE61 and PE62, both coming from the National Farmers Union of Scotland. PE61 calls for the allocation of national funds to compensate Scottish arable producers for the introduction of the euro. Both petitions ask the Parliament to ask the Executive to fully compensate certain agricultural sections for the fluctuations in the value of the euro against sterling. Agrimonetary schemes are available, but those require matched funding from national funds.

I propose that we ask the Executive to give details of its plans to the Rural Affairs Committee for detailed consideration. That committee has spent some time considering the problems of the rural economy. Given that this is a problem that may affect other sectors of the economy in Scotland, I suggest that we ask the Executive what plans, if any, it has for compensation. Those plans should be passed to the European Committee for our consideration.

I agree with the two points you make in the paper—they give us a useful focus—but the biggest question that needs to be addressed is that which was raised by the NFU on matched funding, proposed by the European Commission, for compensation for fluctuations in the euro.

As you said in your opening statement, convener, there is an issue concerning matched funding—which is potentially worth £30 million or £40 million—from the UK Government. Although the EU will pay £19 million into the system in the first year, the UK Government must match the £9.5 million from the EU that will be provided the following year.

The Government must still agree to put in additional money under the compensation scheme available to UK growers for the fall in the value of the euro. The committee might want to take a view on progressing this specific request from the NFU.

Furthermore, would not it be appropriate to ask the Executive if it is in favour of the euro compensation schemes, and whether it will ask the UK Treasury to match the EU's proposed support? Although monetary policy is a reserved matter, the Executive could press the UK Treasury on behalf of Scottish farmers, and the committee should be actively involved in that process. As a result, I suggest that we take the two steps that I have outlined, which are additional to those that you have rightly recommended.

You are asking us to reach a conclusion, Bruce. Perhaps we should get information about the Executive's plans and proposals before we do. I certainly want to be informed of the Executive's views if it does not intend to find out what the implications might be, and why. Thereafter, the issue is whether the matter simply goes back to the Rural Affairs Committee or back both to us and that committee. I am open to the suggestion that it would be appropriate for this committee to consider the matter.

I listened carefully to what you said, convener. However, with respect, we must try to feed into the decision-making process before the Executive makes decisions. If the committee believes in principle that there should be a generous response to the farmers' petitions—particularly to PE61—we should ask the Scottish Executive now to make representations to the UK Government to be as generous as possible with its matched funding. Although there might not be a majority in the committee who wish to commit to 100 per cent of what the farmers request, time is of the essence if our representations are to be meaningful. Instead of being a reactive committee, we should be making our views known to the Scottish Executive now and urging it to take appropriate action.

Equally, if we are not to be a reactive committee, we should have all the information that will enable us to make a decision, instead of simply reacting to a petition. At the moment, all we have are the details in the petition. If the committee's decisions are to carry any weight, we must find out what the Executive's proposals are and the implications of those proposals—that will help us make to an informed decision. Although I take your point about time being of the essence, Dennis, we have to be able to make such an informed decision if we are to do justice to this issue.

Jack McConnell's letter to me about structural funding gave me information about the euro and payments from Europe into the Treasury. On the matter of fluctuations in the euro, the euro is paid into the Treasury's account; the Treasury then works out the exchange rate and passes that on. I wonder whether the committee should make representations to John Reid, as the UK Secretary of State for Scotland, to lobby the Treasury, because the Scottish Executive might not be able to pay compensation.

Although that might be a legitimate course of action, it reinforces my point that we need information before we jump to a conclusion.

I would have thought that we have all the information, unless farmers have written only to me with serious facts and figures about the possible bankruptcy of great sectors of the agriculture industry and the threatened suicides that some of us are trying to avert. I am not exaggerating when I say that; we have just narrowly averted a suicide in Moray.

We have the facts and figures. The committee wants the money that is on offer—which I believe is £19.5 million—to be matched by £9.5 million from the Government. That is not a lot to save an industry. Welsh farmers have reached the point of backing a vote of no confidence in the First Secretary if he does not agree to match EU funding for them.

Frankly, I would be appalled if we waited for more information on this issue or for the matter to go to this or that committee. If we do not ask for matched funding now, we put great sectors of the industry at risk, particularly the vulnerable areas in the Highlands and Islands.

The difficulty with your suggestion—and it comes back to my point about needing information—is that the petitioners are not asking for the petition to be passed to John Reid or whoever; they are asking the Scottish Parliament to allocate sufficient national funds. Ben Wallace rightly said that the solution might not be entirely within the gift of the Scottish Executive. We need further information to find out whether that is the case and I have suggested a course of action that will help us do that.

From letters and lobbying by the NFU and people in my constituency, I am well aware of the difficulties faced by farmers and I genuinely want us to make progress on the issue. However, I do not want us to agree to something we cannot deliver. Ben Wallace's point about that is important.

On the convener's second recommendation, we should ask the Scottish Executive to examine the issue across all sectors, because other industries have suffered in that respect.

Although I support both petitions in principle—indeed, the committee could give such support today—another step must be taken if the matter is to be concluded to the farmers' satisfaction. There is clearly a reason why the action they want is not being taken.

Aye.

We know the reason.

We need to find out why the Scottish Executive is not taking that action. We can pass all the resolutions that we want, but unless we deal with petitions reasonably, the committee system will be devalued. Although I am happy to support the petition in principle, it should be referred to the Rural Affairs Committee, which is dealing with the other six petitions: the two petitions before us are from a series of eight. The petition can then be dealt with in context, instead of the committee taking it in isolation and passing on a meaningless message of support for it.

I am a farmer, but I do not have any cattle. If members have read as far as Richard Henton's briefing note, they will notice that for the years 1999, 2000 and 2001 it refers to compensation payments for suckler cows, bulls and steers.

Jim Walker, the president of the National Farmers Union in Scotland, presented the petitions to John McAllion, the convener of the Public Petitions Committee, in Parliament Square. Colleagues who were there heard Jim Walker say clearly that the NFU and the industry want the Parliament to make clear that it cares about rural issues. They want the Parliament to put rural issues at the heart of its debates and, crucially, to put pressure on Westminster. The point that Jim Walker made is that this is a matter on which the Westminster Government and the Chancellor of the Exchequer must decide.

David Mundell's point about the Rural Affairs Committee is right. It is dealing with a range of petitions that have been presented to the Parliament and relate to its work. It is important to find out the Scottish Executive's line on the petitions. It would be in the interests of all members to know what the Executive thinks. If the Executive supports the aims of the petitions, presumably members will agree with it. If not, however, presumably they will disagree. We need to give the appropriate committee the chance to deal with these petitions correctly.

I agree with Tavish, but I have just realised that another six petitions were submitted. We need to ask the farmers whether they will consider targeting particular areas, as I notice that the petitions deal in averages or worst possible scenarios. Presumably, their other petitions are the same. It might be a good idea to tease out where money should be directed. If average earnings are zero, some people are still making money and others are losing a lot. We need to find out where the areas of greatest need are.

If the Rural Affairs Committee is to consider the issue in a broader context, what you suggest will probably be done best as part of that debate.

We have enough information in the petitions that we have in front of us. Even someone such as me, in whose constituency there are not many farms, understands that there is a crisis in the farming industry. It would not be out of order for us to do what David Mundell suggested and give our general support to what is being asked for. The petitions seem to be about a very basic question, which is—if you will excuse me for mentioning it—additionality. Is not it simply a case of the committee saying to the British Government that the rules of the game demand that once the European Union has allocated money for whatever purpose, the Government must match that? Is not it as basic as that?

I agree with what Tavish Scott said. We must do what is within our power. I also agree with Winnie Ewing that, for the purposes of Westminster, we are a lobbying committee. Far be it from me to correct members of the NFU, but there is some inaccuracy in the petitions. The ratio of matched funding is now 71 per cent to 29 per cent, 71 per cent being provided by the UK Government.

That is not true.

Under the Fontainebleau agreement, the ratio was 50:50 after the first payment. It was then reduced to 71:29—which is a concession, as in most cases it is 75:25. The bulk of the money to aid our farmers will come from the UK Government at Westminster and the Treasury—29 per cent will come from the European Union.

We need to tell the farmers that.

I agree with Tavish Scott that the right way to proceed is to lobby the ministry at Westminster, through the Rural Affairs Committee. As the chairman of the NFU said, that is where the funding will come from. We should not think that there is a pot of European money that amounts to 50 per cent of the total to save our farmers. I would love there to be one, but there is not.

Tavish Scott and Ben Wallace have made their point effectively and I support their proposition. If the Rural Affairs Committee were to be the lead committee in such matters, it would be appropriate to refer back to it the information that was sought. I agree with you, convener, that we need first to seek and receive the information, so that we can make a judgment on the merits of the petitions.

There is also merit in what Ben Wallace, Margo MacDonald and others have suggested—that we look more generally at the issue of additionality. I do not believe that anything is being hidden in respect of Scotland's interests, so I support fully examinations of additionality, the Barnett formula and how public expenditure works in Scotland's favour—possibly with John Reid or another representative of the Scotland Office. However, that is a matter for future consideration. I support the convener's recommendations on how we dispose of the two petitions that are before us.

I do not know whether anything that we can add to those recommendations has come out of the discussion. We have a slightly different view—

I want to respond to some of the things that have been said and to make a suggestion. I accept that the Rural Affairs Committee must take a more holistic approach than this committee can to the various petitions that have been submitted. However, petitions PE 61 and PE 62 have been referred to the European Committee because they raise specific issues about matched funding and the euro. This committee should take a view on those petitions. I accept that we might have to return to this issue because members have different information and different understandings of the processes involved but because of the time constraints, I suggest that we consider the petition again in two weeks' time, with the information to hand. We can then act as a lobbying group—if necessary, as Ben Wallace says, we can directly lobby John Reid. I recognise that this is a reserved matter, so I would be happy if the committee could get straight to John Reid without going through the Executive. We could agree to proceed in that way.

Allan Wilson's last point was about additionality and the Barnett formula. I would be grateful if you would agree to that being put on the agenda shortly, convener, as a formal piece of business.

We will consider that separately.

There are two separate issues. First, we need to consider what we should do immediately in response to the crisis in our rural communities and industries. As Tavish Scott and others have said, the Rural Affairs Committee is considering that crisis broadly and should investigate the issues that are raised in the petitions that we have discussed.

Secondly, I suggest that we change the wording of our recommendation and ask the Scottish Executive "to provide the European Committee with information on forms of support available to sectors of the economy affected by fluctuations in the value of the euro". We should deal with the specific issue of the effects of such fluctuations on farmers by referring the petitions to the Rural Affairs Committee, as I do not think that that issue can wait.

To sum up, all the issues relating to fluctuations in the euro should come back to this committee, but the first paragraph of my recommendation should stand and the petitions should be referred to the Rural Affairs Committee. Is that agreed?

I am with you almost 100 per cent. However, David Mundell raised the issue of the lobbying role of the committee. While the Rural Affairs Committee might be examining the issue in depth, there is nothing to stop the European Committee coming back in two weeks to say, "Here is the issue fleshed out and here are the facts." As Ben Wallace said, we want to press John Reid to find a way forward on the issue of matched funding.

That is the second part of it.

Explain that to me.

We will consider those issues as they affect every sector in this country, not just the rural sector.

I accept that.

If there is an issue that we need to take up with the Scottish Executive, we will do so. If there is an issue that we think is a matter for the Scotland Office and John Reid, we shall refer it to them. This committee will return to the problems caused by the fluctuations of the euro. On the first point, however, we will ask the Scottish Executive what its proposals are, specifically in relation to the rural sector and the effect on arable producers and farmers. Once the Rural Affairs Committee has that information, we shall ask that committee to take it into consideration in examining the broader problem.

In that case, I am afraid that I do not agree with you.

If your recommendation is accepted—and I assume that it will be, with a small amendment—it must be dealt with in a realistic time scale. It would not be unfair to ask the Scottish Executive to respond before the next meeting of this committee. It will be able to take information such as this down off the shelf from the departments in Westminster that are already dealing with it; it is not as if it is entirely new territory.

We will work on that as soon as we can; I shall ask Stephen Imrie to get on to it this afternoon. If the information on the second part is available for our next meeting, we will consider it then. However, we are also asking the Scottish Executive to stipulate proposals in relation to arable producers and farmers, and we are asking for that information to be sent to the Rural Affairs Committee. With the amendment that I have proposed, is that agreed, or is there an alternative that—

I am sorry to interrupt. May I suggest an alternative to the committee?

You may.

I understand that we need to consider the effects of fluctuations on all sectors of the Scottish economy. That must be considered in a progressive way in the longer term. However, compensation for farmers under the matched funding scheme is a matter of such importance to Scottish farmers that we could not do it justice by considering it only in the longer term.

I suggest that we bring back to the next committee meeting a paper that shows the position of the UK Government, through the Scottish Executive, on the whole issue of the euro fluctuations, so that we can discuss that and, if necessary, take up a lobbying position on behalf of Scottish farmers.

The point that we have tried to make is that it is not just farmers who are affected by the problem. I accept your point that this committee should have a lobbying role if we feel that there are problems caused by fluctuations in the value of the euro. The committee intends to consider that very point. We will make those points both to the Scottish Executive and to Westminster, if appropriate.

On the first part of the proposal, we are asking for the views of the Scottish Executive, and we are asking the Rural Affairs Committee to take the matter into account as part of its consideration of other petitions. I believe that we are dealing with the petition appropriately by asking the Scottish Executive for further information on producers and farmers. We believe that the matter is best dealt with by the Rural Affairs Committee, but we do not have the information at present to comment on that. This committee will consider the problems caused by fluctuations in the value of the euro in all sectors of the economy.

I do not accept that.

Bruce Crawford's point was about timing. All that he is asking for, as I understand it, is that the position papers be submitted by the Scottish Executive in time for our next meeting so that we can come to a view on the matter.

I addressed that point. In fact, I addressed it before Bruce spoke. I said that, if the information was available, the matter would be on the agenda for our next meeting. However, we do not control the Executive. We cannot guarantee—

We are supposed to.

No. We are here to hold the Executive to account.

Yes.

But we do not manage it. You may manage them separately, but that is a different issue. We do not manage the staff of the Scottish Executive, so I cannot promise that the information will be available in two weeks. As soon as it is available, it will be back on our agenda. This discussion is going round in circles.

But will you ask for that specific information to be available for our next meeting?

Yes, we will ask for it to be available.

That is clearer, convener.

Convener, we are asking for specific information. We know about that information already and we think that the time scale is one of horrendous urgency. With the greatest respect, convener, rather than following the mealy-mouthed approach that you suggest, we could ask the Scottish Executive about the time scale. We can say, "This is absolutely urgent, in respect of this sector, so when we meet in two weeks, we would like to have your answer." What is wrong with that sort of approach? Are we so mealy-mouthed that we cannot even do that? If we cannot, we are wasting our time.

No, we are not wasting our time. We are asking for the information to be brought back to the committee. If it is available, we will have it at the next meeting. You are asking me to guarantee that it will be available, and I am sorry—

No. I am asking you to ask the Executive to bring forward the time scale, which is entirely different.

Winnie, I have said about three times that we will ask for that.

No, you have not.

Committee members have before them my recommendation, as amended. I now ask whether that recommendation is agreed to, or are there—

No.

Right—we will put it to a vote. What is the procedure for a vote?

Convener, perhaps I am being slow on the uptake—it could be the process of interpreting what you are saying. Your explanation of the position to the committee was not clear. Although I am clear about the situation now, your explanation was not clear—it was not clear that information would be coming back to the next meeting. You have now said that you will attempt to get that information to the next meeting. I am sorry, convener, but the two recommendations in the paper, to which you have continually referred, do not reflect that position.

I have said on a number of occasions that we will attempt to get that information. I do not know whether it will definitely be available, as we are in someone else's hands.

I am trying to help you, convener, and I accept that point.

Right. Are we going with the recommendation?

Convener, may I be helpful?

That would be a first, Dennis, but never mind.

It may help to bring unanimity to the committee if we were simply to add a third sentence to your recommendations. The first recommendation begins:

"To ask the Scottish Executive to stipulate its proposals".

The second recommendation begins:

"To ask the Scottish Executive to also provide the European Committee with information".

I suggest that we add a third recommendation, asking for the above information to be in the hands of the committee for consideration at our next meeting.

I have already said that.

No, you did not.

I think that we should put it in writing.

Fine. We can specify that if you think that it would help that the information requested in the second recommendation should be before the committee at our next meeting. We will do so in our letter to the Scottish Executive. Is that agreed?

Members indicated agreement.

We are agreeing that we will ask the Scottish Executive to stipulate its proposals for use of funds to compensate eligible sectors for the effects of fluctuations in the value of the euro and for it to discuss with the Rural Affairs Committee any proposals that affect arable producers and farmers.

We are also asking the Scottish Executive to provide the committee with information on forms of support available to all sectors of the economy affected by fluctuations in the value of the euro and to outline what plans there are for the use of any available funds. As far as the committee is concerned, we are asking for that information to be available for our next meeting.

Dearie me—I am awful sorry, convener, but you have broadened your second recommendation, which referred to

"other sectors of the economy".

Our point was that information on the sector referred to in the petitions is required urgently—more urgently, perhaps, than information on the other sectors. While I am in favour of Cathy Jamieson's suggestion that we broaden out our request, we want an answer on this particular sector now.

Wait a minute, Margo.

I apologise if I have misled the committee. However, right at the beginning, we said that we should consider how fluctuations in the value of the euro affect other sectors of the economy. I said that consistently, as did other committee members. That is what we said, Margo.

I know, but my point is that we do not need that information for our next meeting.

Is it being proposed that we should take decisions on the relative merits of the farmers' petition and the effect of the euro on other sectors of the economy without the relevant information being available on what those precise effects might be?

I do not see myself principally as a lobbyist for the National Farmers Union. I want to take a balanced and considered approach, on the basis of information that is available on the effects of the euro on the economy as a whole. I believe that the action that you propose to take, convener, would give us that information.

I intend to stick with that recommendation, and we will move to a vote if one is required. Is a vote required?

I wish to make a suggestion that might assist matters with regard to paragraph 2. You said that we should ask the Scottish Executive to provide the European Committee with information on any other forms of support available to other sectors. If we said "all sectors", which would include a comprehensive cross-section of all sectors, that would mean that farmers could be considered in relation to structural funds, for example. Would that be agreeable to committee members?

I thought that that was what we said—that the text would refer to all sectors of the economy. Is a vote required?

Fluctuations will be a Treasury issue, so one size will fit all. I will support you on "other sectors".

Are we voting on "all sectors" or "other sectors"?

The wording that I read out was "all other sectors". We will take out "other" and make it "all sectors".

I was agreeable to that but, listening to what is being said, I am not sure where I am now.

Is there an alternative to that? Are we agreed?

Members indicated agreement.