European and External Relations Committee, 13 Mar 2007

Meeting date: Tuesday, March 13, 2007

Official Report 203KB pdf

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Scottish Executive European Union Priorities 2007

Our second item is to take evidence from the Scottish Executive on its European Union priorities. I have pleasure in welcoming Tom McCabe MSP, the Minister for Finance and Public Service Reform, who has come along to present the Executive's priorities. He is supported by Lynne Vallance and David Ferguson from the EU strategy and co-ordination unit in the Executive's Europe division. I thank them for attending. I ask the minister to make an opening statement, and then we will move to questions from members.

Thank you, convener, and good afternoon, everyone. Thank you for the opportunity to come along, share our thoughts and discuss some of the key European issues that we have identified for 2007.

It has become something of a regular occurrence for me to come along and have an exchange with the committee.

Can I interrupt you? I am aware that you are facing sunlight, which must be difficult. Are you okay? Do you want to move?

I am okay.

The end blind is not working, so we cannot close it.

It is fine, convener, but thanks anyway.

As I said, it has become a bit of a regular occurrence for me, on behalf of the Executive, to come along and discuss the key European issues with the committee. We think that the exchange has been useful and I hope that the committee, too, has found it useful. It seems to me a good way to continue the necessary dialogue between the Executive and the Parliament.

As the committee will know, in the six-month review of the key issues Executive officials and ministers identify current and forthcoming EU issues of importance to Scotland. Some issues are removed during the review process and others are added. Issues can be removed, for example, because we think that, over a period, their importance to Scotland has been minimised and other issues are taking over. Given that the EU is a moveable feast, other issues come into play at times.

The list that members have before them is a result of Cabinet consideration of the issues in February this year. As the committee will be aware, we have removed seven issues and added nine. The majority of the issues that we removed were removed simply because negotiations in Brussels had ended. Specifically, on the working time directive, the Germans made it clear that they will not put a great emphasis on that during their presidency, so we removed it. That is not to say that the issue could not come back to prominence at some point in the future.

I will not go through in detail each of the nine issues that have been added to the list, but it is worth stressing that we have introduced dossiers on health, agriculture and financial services. EU institutional reform has also been included because the Germans have made it clear that, during their presidency, they want to progress that issue at the European Council in June, at which we want to ensure that our interests are covered.

The list of key issues was well received by Parliament and our external stakeholders. We have gone slightly further on this occasion than simply identifying the key issues; we decided to try to identify what we regard as the main priorities at this time. Obviously, those are judged against the priorities of the presidency. We have said that climate change, the strategic energy review, structural funds, sea fisheries and the spirit drinks regulation would be of particular importance to us. However, that in no way diminishes the importance of the other issues in the 24 dossiers.

It is pleasing to see that the committee's EU work programme for 2007 largely complements the list of dossiers. It is important that a range of voices puts across Scotland's point on issues that could have an impact on life in Scotland and our interests here. The more that the Executive, the Parliament and external stakeholders work together, the more value and weight we will add to what we say we believe are our main interests in Europe.

I will say no more at the moment, convener. I will try to answer any questions that members have. If there are detailed questions about a specific portfolio that we cannot answer, I will get the relevant portfolio colleague to write to the committee on the specific point.

Thank you, minister. I will go first to Dennis Canavan, who told me that he has a specific question.

Thank you, minister, for your opening statement. One of the Executive's key dossiers relates to structural funds, and the Executive states in that dossier that

"all that remains is the submission and negotiation of the individual Operational Programmes with the Commission."

Can you update us on the Executive's response to our committee's report on the potential for tripartite co-operation under the EU's structural funds co-operation objective? I am talking in particular about the potential for tripartite co-operation between Scotland, Northern Ireland and the Republic of Ireland.

I ask Lynne Vallance to give you more detail on that.

I have been working on that issue with our structural funds colleagues in the Executive. I can confirm that we are working closely with Northern Ireland and the Republic of Ireland on getting together programmes that we are considering. We have engaged with Scottish, Irish and Northern Irish stakeholders on looking at potential programmes for the future.

In relation to co-operation, can you give us an idea of which stakeholders in Scotland have expressed an interest, and the areas in which they are interested?

It is fair to say that matters are still at an early stage. The Executive's structural funds division organised an event with the main stakeholders towards the end of last year, so they are being involved. That was their first opportunity to put down their blue-skies ideas for future work. Matters are at an early stage, but all three parties are working together to get something more concrete.

It is fair to say, too, that the evolving situation in Northern Ireland will perhaps have an impact as elected politicians in Northern Ireland start to have more of a say in the future direction of the work.

I have three points to make, convener, but you may want to limit me to a couple initially.

Do you intend to take overlong with any of them?

Well, we will see.

My first point, minister, concerns comments in the sea fisheries dossiers. To be honest, they are fairly depressing in light of the fishing talks that will go ahead in, I think, December. Given the concerns about cod, what scientific information has been gathered on changes in temperature, and particularly in sea temperatures? We have heard that warm-water fish are moving into west coast fishing areas, so it could follow that cod are moving north out of our waters for similar reasons. There is a reference in the Executive's documents to the marine climate change and impact assessment scorecard. In what way have we drawn the European Union's attention to those issues?

An awful lot of scientific investigation is going on into the way in which the ecosystem is changing. There is much focus on that issue. It makes perfect sense to us to review the cod recovery plan continually, given the science behind the assessment of the level of stocks and the great concern about the changes taking place in our ecosystem over a particular period. We have focused our attention on that to try to reassure ourselves that the science on which decisions are based is as sound as it can be. It depends on where people are in the argument—some people pose more questions about the science than others do—but there is a growing consensus about how changes in our ecosystem and climate change in general are starting to impact on cod stocks.

I welcome the emphasis on the science, but I understand that the haddock and prawn fisheries in the North sea in particular are reasonably healthy at present—the problem is with the cod stock. Do you agree that, if the science indicated that sea temperatures were rising and that cod were moving northwards, it would be unfortunate if further restrictions in relation to cod stocks were put on our fishermen?

I certainly agree that it is important that, as we represent Scotland's case in Europe, every set of circumstances is properly taken account of. If Scotland was further disadvantaged because of the circumstances that you describe—I do not know the exact thinking behind them—I am sure that that would form part of our arguments about what represented, in the light of changing circumstances, the best possible deal for Scottish fishermen.

Thank you. I will change the topic, if that is all right.

You referred to institutional reform and to the key issues of energy and climate change. However, energy does not fall within the competence of Europe at the present time, although it would if constitutional reform led to the introduction of a European constitution. Do you agree that the co-operative way in which Europe seems to have made progress on energy and climate change suggests that there is no need for any constitutional reform in respect of energy?

I would not necessarily make such a direct link. It is highly encouraging that the European Union has, for a number of reasons, taken a co-operative approach to energy and, in particular, to energy efficiency. As you know, at the spring Council meeting, a target was set to reduce the EU's energy consumption by 20 per cent by 2020. In general, it is helpful that a far more co-operative approach is being adopted.

However, given the changing nature of the demands that we will place on energy resources in the future, I would not necessarily want to rule anything out. It is in the interests of the Scottish public for us to ensure that there is a stable and sustainable supply of energy. If that means co-operating much more closely with our partners across Europe, I do not think that many people would object to that.

I will leave my third point until other members have had a chance to question the minister.

I will let you back in later.

Thank you, minister, for your opening comments. I endorse what you said about the value of partnership working between the Executive and the committee. I put on record my view that the EU dossiers paper is extremely helpful to the committee.

I have a general question about the process of exerting influence and ensuring that the Scottish case is made, both at United Kingdom level and in the European Commission. How does the Scottish Executive go about doing that? When we took evidence from your deputy, he said:

"The UK is the member state, therefore submissions are made, by and large, on a UK basis. The arguments about what the UK position will be occur within the UK. That is our constitutional position."—[Official Report, European and External Relations Committee, 13 February 2007; c 2421.]

I cannot but think that, when commissioners such as Commissioner Hübner come here, we take the opportunity to articulate interests of particular relevance to Scotland and, in doing so, ensure that our voice is heard. How do you ensure that you have influence when it comes to getting the Scottish case heard at UK level and in the Commission?

We do that in two main ways. You are right to highlight that we have been fortunate in having some quite high-profile European visitors recently; I think that six or seven commissioners have visited us over the past year. Such visits do not come about by accident and, clearly, the opportunity is always taken to put forward issues that we believe it would be in the best interests of Scotland to pursue. You would expect that to be the case; the commissioners expect that, too. When people with a specific interest or responsibility come to Scotland, they have items that they wish to discuss. We try to ensure that Scottish interests are represented to the full in the discussions that take place. It is necessary to ensure not only that we maximise those opportunities, but that we create them in the first place. We work quite hard at that.

The other way in which we go about ensuring that we have influence is through participation in the joint ministerial committee on Europe, which is convened regularly down south. I do not think that I have missed a JMC meeting for quite some time now. When there are specific issues in relation to which we think that emphasis must be placed on the Scottish interests, we always seek to ensure that that point is made to ministers. There is continuing dialogue at different levels and I think that we have made quite a good fist of maximising the opportunities.

That is not to say that we should stop thinking about the issue—we should always seek ways of increasing our influence and of ensuring that our presence is felt in Brussels. Sometimes we do that through ministerial visits. When I go to Brussels, I am always impressed by the fact that we punch above our weight. We have an effective office in Brussels that links well with the United Kingdom permanent representation to the European Union. There are a variety of strands to the work. We are never complacent, but we are doing our best to take the opportunities that present themselves and to create others.

Are there opportunities through the JMC on Europe for some of the issues that are raised in the dossiers with which you have provided us today to be presented at UK level? If there is a difference of opinion about priorities, how do you go about pursuing the Scottish interest?

We intend to go about matters in exactly the way that you described. I am not saying that we have not done that to date, but we have been giving thought to how we can structure better our input to the JMCs. In future we will try to base any items that we put on the agenda on the key issues that we have already identified. There are also opportunities to air the Scottish perspective on the general items that are placed on the agenda, to ensure that people are aware of it.

I would like to pursue the issue of the JMC on Europe. A recent parliamentary question suggested that it had not met for quite some time, although I cannot remember the answer that was given.

No. The joint ministerial committee on Europe is probably the JMC that meets most regularly. I stand to be corrected, but I think that I have attended about three meetings of the JMC on Europe in the past four months. We always try to ensure that we attend the JMC's meetings. If I cannot make it and there are points that we want to make about items on the agenda, another minister is invited to attend.

Is there a mechanism by which this committee and members of the Parliament can learn about some of the outcomes of the JMC's meetings?

That is not in my gift, as the JMC meets at Westminster. It is a committee of ministerial discussion, and I do not think that the minutes are published. Without overstepping the mark or crossing quite proper lines, I will explain to the committee our input to the JMC, when I have the opportunity to do so. However, the JMC is convened in another place and natural courtesies, apart from anything else, mean that it is for the Westminster Government, rather than for me, to decide exactly how meetings should take place and which outcomes should be put into the public domain. The JMC on Europe is a high-profile meeting of ministers from a range of portfolios in Whitehall. It is also attended by Northern Ireland ministers and by my Welsh counterpart.

For various reasons, there has been a concern, especially over the past couple of months, that the Scottish case is not being presented as strongly as it might be. If the Executive disagrees with the UK position, how, within the existing settlement, does it go about arguing Scotland's case?

We do so predominantly through direct portfolio-to-portfolio ministerial contact. There are regular, on-going discussions and exchanges between Executive ministers with different portfolios to hammer out a position. We have already discussed the joint ministerial committee. We also have a representative office in Brussels, which is there for a purpose. The office feeds into and works very closely with UKREP. I think that it does a good job of ensuring that people are aware of Scotland, its concerns and its interests within the wider United Kingdom.

Can you highlight any examples from the dossiers that you have given us as good illustrations of relatively early Scottish input?

The spirit drinks regulation provides an example. The Scottish interest in vodka production is strong. I do not want to go too far, but I think that we are making good progress on that. The points that we have made, and how we have made our representations, have had an impact that will benefit considerably an important industry in Scotland. I could sit here all day and give examples, but that is probably one of the most recent instances of a high-profile concern that shows where progress is being made.

You said in your introduction that seven items that are not in the current list were in the 2006 list. Will you say for the record what they are and explain why they were dropped? Are they no longer seen as pressing priorities because they provide examples of progress on which you can report?

The items are the aquaculture health directive, the groundwater daughter directive, the framework on mutual recognition of bail decisions, the services directive, the working time directive, public service obligations in land transport and the European Community regulation that governs airport slot allocation.

Those items have been removed for a variety of reasons. Some were dropped because negotiations have concluded. As I said, the Germans have made it clear that they will not emphasise or push the working time directive during their presidency, so we have decided to step back, but the issue is not resolved and might come to prominence again. Negotiations on the services directive have largely concluded. A good compromise on that was found. Such reasons apply to most of the items.

In your reply to Mr Gallie about energy, you referred to the spring European Council meeting last weekend. Do you have anything to add usefully to the dossiers, which we received before that meeting took place? Will you bring us up to date on energy and on better regulation, the 25 per cent target for which was up for discussion?

Regulation is pertinent and will become even more so in the next few weeks. We wholly endorse the target of a 25 per cent cut by 2012 and we would like a European Union approach to governance that is more concise and imposes less of a burden, without necessarily removing proper emphasis from matters that need to be considered, governed and subject to some regulation. We were pleased by the spring Council meeting's outcomes on regulation, which chime well with what we are doing in Scotland—as members know, the Crerar review is considering regulation and inspection. As I have said, the proportionality of regulation and the burdens that it places on business will be discussed in the weeks before the election.

As for energy efficiency, the target is to reduce energy consumption by 20 per cent by 2020. That chimes well with targets that we have set ourselves, so we endorse that approach. We hope to go further if possible.

It was pleasing that the main issues that were focused on—energy efficiency, climate change and better regulation—are at the forefront of the debate in Scotland. As much as we can, we are leading in Europe. We are prepared to be part of a wider effort but we are also showing that we are not just paying lip service to these matters. We are interested in making serious progress of our own accord as well as in conjunction with Europe.

I might ask about specifics later, but I will let others speak first.

I return to a matter that the convener and Irene Oldfather explored with the minister. A few weeks ago, we heard about the Aron report, which I have heard described as a number of things, such as a mature draft and an early draft. It has been said that the report will be published and that it will not be published. Will the minister confirm the status of that document?

On a more important matter for the future, how can we improve Scotland's impact and ensure that its relationship with the European Union is as positive as it can be so that we get what we require from it? Regardless of the make-up of the Government after 3 May, would it be useful for the future minister and the European and External Relations Committee to have a discussion—in private, if necessary—so that there is more understanding of the complexities that are involved in negotiations? It might be useful to discuss how the committee might be able to add helpfully to the process after 3 May.

I will deal with your final point first. I have said that having a range of stakeholders adding to the overall Scottish voice is always in our interests. The more discussions that take place between the Executive and our colleagues in the Parliament, the more we will be aware of the difficulties that are encountered, what will and will not be in Scotland's best interests and whether having a particular approach to lobbying could be in our interests. On the other hand, it may not be in our interests to have people popping up when sensitive negotiations are taking place in Europe. There is never any harm in having mature—I stress the word "mature"—discussions about the best approach to our engagement with the European Union. We are all politicians here. There are times for political point scoring and there are times when people need to have a long, hard think about what is in our longer-term interests. If a private discussion between the Executive and the committee can aid our longer-term interests, I would be the last to say that such a discussion would not be useful.

Members will expect me to say that we do not comment on leaked or draft reports. I have penned many letters in my life, decided to sleep on them and substantially changed them the next morning—I am sure that many people have done the same. From what I have read in the press reports, I think that the issue is not mature drafts or whatever, but something that is simply inaccurate and that does not reflect my experience over the past two years.

Are you saying that the leaked report does not reflect your experience?

Definitely, if what I have read in the press reflects what is in the leaked report. What I have read in the press does not reflect my experience, and I assume that, in its wisdom, the press accurately reports such matters, although that may be a triumph of optimism over experience. I do not know.

I thank you for responding to Bruce Crawford's question, which was on something that you are not here to talk about. Your answer is much appreciated.

Do you have anything further to ask, Bruce?

In the light of the caveat that has just been given, probably not.

Do you want to probe anything else with the minister?

I will return to other issues once other members have had the chance to ask questions.

We talked about seven items that were removed from the Executive's list of priorities. When I became a member of the committee some three to four years ago, the Executive exerted pressure on bodies such as health service trusts around the country to prepare for the euro. All the ideas about adopting the euro have now been dropped. What did that exercise cost the Government? Perhaps you will not be able to answer that question now; if you cannot, perhaps you can drop me a line about it.

You are right—I cannot answer your question right now. Furthermore, given that considerable investigation would be required in order to answer it, I would not want Phil Gallie to hold his breath while he waits for a note from me. However, we can see what we can do for him. We are talking about on-going governance, and I do not know whether anybody has costed what he has asked about. However, if there is any information that can be supplied, I would be happy to supply it.

Is there any on-going activity to prepare for the euro, or has the matter simply been passed to the back? Is that not a priority any more?

That is ultimately a decision for our colleagues in Westminster. It is not for me to say what their priorities are at any given time.

I am asking about the Executive's priority with respect to preparation because it was a requirement of the Executive that various bodies made preparations.

We have indicated 24 areas in Europe on which we want to focus and, within those areas, we have indicated our top priorities for the next six months. That should answer your question.

I am quite happy that you have top priorities.

What is the difference between priorities and very top priorities? How do you decide what are top priorities?

A wide range of issues impact on Scotland. I appreciate that question; I have commented on the point myself in the past. However, it is just a reflection of, for example, the different six-month presidencies setting their priorities and deciding what will be their focus. That is why I said what I did about the working time directive. That could have a major impact on huge parts of our society, but the German presidency will not emphasise it during the next six months, so it would not be the best use of our time to prioritise it now. It will certainly come back, however.

I was pleased to hear what the minister had to say about the better regulation agenda and what was agreed at the weekend. The "Implications for Scotland" section of the better regulation agenda dossier says:

"the UK Government is concerned that any target is clear and credible, leaving no room for subsequent argument about responsibilities".

I concur. However, it then goes on to say:

"On subsidiarity grounds the Executive also believe that Member States should be allowed to set their own targets for reducing administrative burdens deriving from purely national legislation."

Does the Scottish Executive have a target in mind, or is work being done to quantify that?

I do not know if we will get to setting a target, but work is in progress. I said earlier that we are very happy to play our part in a wider European initiative, whether it be on better regulation or anything else. We would also like to set ourselves challenges that go beyond what has been set elsewhere.

Jim Wallace will know as well as anyone that whenever we talk to business it puts great emphasis on the regulatory burden. There is some pretty convincing evidence that, despite the best of intentions, business entrepreneurship and expansion can be stifled. We are interested in ensuring that we have appropriate regulation, but that is not to say that we want to walk away and allow things to develop in their own way. We are increasingly conscious that, even though our intentions are good, we can put burdens on business that cause a bit of a stranglehold. As we have said many times, growing the Scottish economy is our number 1 priority. The way in which we frame our regulation and the proportionality that we achieve in that will be a very important part of any progress that we can make. Our own ambitions will sit beside, and perhaps on top of, any other European ambitions.

I have one final detailed point, and I accept that if the minister cannot answer it, he might pass it on to Mr Finnie. It relates to the anti-dumping measures against Norwegian farmed salmon. There is an indication that the anti-dumping committee undertook a consultation to determine whether there was sufficient justification for the measures to be suspended—I think that five member states requested a suspension—and that a decision was expected at last month's meeting. Is there an update on that?

We are waiting for a report from the World Trade Organization. That will be a strong determining factor in the decision about whether the measures should be suspended. It goes without saying that the issue is tremendously important to us in Scotland because of the number of people employed in the industry and in processing. It has a big impact on us and I know that Mr Finnie is very much alive to the issue. We will pay considerable attention to ensure that our interests are protected.

I am sorry that I missed the first 20 minutes of the meeting—I explained why I could not be here—so I am sorry if this question has already been asked, although I am sure that the minister will tell me if it has been.

Thank you for the briefing papers, minister. They were helpful in enabling me to understand some of the things that are on-going in the Executive and the Executive's position.

First, with regard to the Scotch whisky industry, the

"clarification of the definition of whisky and enhanced protection of geographical indications"

are a significant step forward. However, there are on-going negotiations with the Poles with regard to vodka, and we do not know what the outcome might be. Given that those negotiations are on-going, is the situation regarding whisky cemented or is there a danger that, if the Poles do not get what they want and do not agree with the other member states, the whole agreement might be unpicked?

Secondly, your paper on the draft policy statement on the annual internal and external EU fisheries negotiations states:

"As in previous years, the Executive will ensure that the EU Commission is fully aware of what is at stake in Scotland."

You might not be able to tell us about that today, but I would like to understand that process a bit better with regard to negotiations with Norway.

We are comfortable with the situation regarding whisky, and we feel that we have got that agreement settled. We are comfortable with the enhanced protection of geographical indications, and we feel a lot safer about that than we ever have before. As I said before you arrived, we have made considerable progress with regard to vodka. We are not there yet, but we are much more hopeful of reaching a position that safeguards the interests of vodka producers in Scotland.

Phil Gallie wishes to come in.

There was another question.

Sorry, Bruce. I thought that you had finished.

We impact most heavily on the fisheries negotiations through the provision of scientific expertise. Depending on what position they take on the subject, some people raise questions about the science. We want to ensure that decisions are made on the basis of the most robust scientific evidence that is available, and we think that, given Scotland's position, our history and the facilities that we have here, we can play a large part in ensuring that decisions are based on sound science.

That has been the Executive's position all along. However, the paper states that the Executive

"will ensure that the EU Commission is fully aware of what is at stake in Scotland."

It is the process of that, as much as the science, that I am interested in, especially with regard to our relationship with Norway.

We have direct meetings with the Commission. That is, if you like, the short route in. Also, as I explained earlier, strong portfolio-to-portfolio discussions take place between Mr Finnie and his counterpart. There are a range of other mechanisms, such as the joint ministerial committee in Europe and our Scotland office, through which a concerted effort is being made.

It is useful to know about the direct negotiations with Europe. At a later stage, perhaps you can give us some detail on those negotiations, such as how often they have taken place, so that we can better understand the area, which is important in the relationship between the EU and Scotland.

As I said earlier, six or seven commissioners have visited Scotland this year. During such visits, various discussions take place—they are not here just to see the castle.

I am sure that they would enjoy seeing that as well.

It is a rather nice castle.

I have inadvertently been awfully hard on Bruce Crawford this afternoon. Is that you definitely finished, Bruce, or do you want to ask about something else?

I am fine, thanks.

You have been awfully good to me today, convener. This is the third time that I have been allowed to ask a question.

Something is seriously wrong.

You will agree, minister, that fishing tends to attract the greatest interest in European matters, especially when December is approaching. The current discards system and the waste that is associated with it is very emotive. Has the Executive examined any means of reducing the waste from that system? Have you had any new ideas about how to stop the dumping and, at the same time, control the amount of fish that fishermen take?

That is definitely an issue on which I will ask Mr Finnie to write to you directly. You are going into details of which I have no knowledge.

I acknowledge that that is not your area of expertise, but I thought that the Cabinet might have discussed the matter. However, I am happy for Mr Finnie to respond.

As we have no more questions, I thank the minister and Lynne Vallance for the depth and graciousness of their answers, and David Ferguson.

As this is my final appearance before the committee in this session of Parliament, I want to say how much I have enjoyed our engagement and the way in which we have gone about our business. Thank you, too, for the courtesies that I have been shown.

My goodness—what is going on? Thank you, minister.

Meeting suspended.

On resuming—