Regional Development Funding Inquiry
Good afternoon. I welcome everyone to the ninth meeting of the European and External Relations Committee in this session. We have received apologies from Keith Raffan, the Liberal Democrat member of the committee; however, Nora Radcliffe is here as a committee substitute. We will be joined later by other MSPs who want to attend the meeting for later items on the agenda.
Agenda item 1 is the committee's inquiry into repatriation of European regional development funds; it is the main item on today's agenda. The committee has previously considered the issue in detail and has taken written evidence on it in recent months. The consultation on the United Kingdom Government's proposal to repatriate regional funds closed shortly after the Scottish elections, so the committee has had to play catch-up. We sent a submission to the consultation, but it was not much more than a holding response. We decided to conduct a short inquiry, for which we took more written evidence. Today is the first meeting at which we will take oral evidence for the inquiry.
Our first witness is Professor John Bachtler from the European policies research centre at the University of Strathclyde. He will be a familiar face to some members of the committee because he acted as adviser on regional funding to the previous European Committee. We welcome him back today. Professor Bachtler will give us a 10-minute presentation to set the scene, which members will, I am sure, find helpful. There will then be an opportunity to ask Professor Bachtler questions before we move on to the next panel of witnesses.
Professor John Bachtler (University of Strathclyde):
I thank the committee for inviting me to speak. I have been asked to set in context the UK's proposals for the future of structural funds, and to provide an update on our position in the debate on reform of structural funds. The context for that debate is enlargement of the European Union, which is forcing a fundamental reappraisal of virtually every aspect of EU policy making and operation.
It is important to underline that the reform of structural funds is just one of a series of on-going debates. The constitution is very much in our minds, but a series of other issues is also being debated. The formerly sacred—if you like—roles of EU cohesion and regional policy are being challenged in the debates about making the EU more competitive, about securing its external borders and about various other security and environmental issues, all of which present budgetary challenges to the role of cohesion policy. Those debates are happening in an environment of budgetary constraint, as I will point out.
We are working within a complex timetable. The European Commission is due to publish in January a financial perspective on funding of the EU for the period 2007 to 2013, but last weekend's breakdown in discussions over the future EU constitution might well affect that timetable: there might be knock-on effects on the proposals for the future of EU cohesion policy, because the EU's major report—the so-called third cohesion report—which is due to be published towards the end of January, very much depends on the overall financial perspective.
Currently, the EU treaty provides for spending of up to 1.27 per cent of the EU's gross national product. That is now expressed in terms of gross national income, so the figure is 1.24 per cent of GNI. Although there is provision for a ceiling on spending, actual spending is nearer 1 per cent of GNI, which represents a budget of about €100 billion per year overall, for all areas of EU expenditure.
The richer countries, especially Germany, which is the main contributor to the EU budget, do not want in the future to pay any more into the budget, and would prefer to pay less. The poorer countries of the current EU—Spain, Greece and Portugal—would like to maintain after enlargement the level of EU support that they have been receiving. The new member states from central and eastern Europe that will come into the EU from May 2004 want a fair and equitable settlement and to be treated on a par with the current member states.
On structural funds, which are part of the overall EU cohesion policy, future spending during the period 2007 to 2013 can be considered in terms of options in relation to the potential ceiling on expenditure. If the EU were to spend the maximum amount—in terms of the current ceiling—on structural operations during that period, the figure could be of the order of €330 billion. However, if we were to base the figure on what is actually spent at the moment, it would be nearer €260 billion. Those figures are meant to give an indication of the range that we might be talking about in terms of EU spending on cohesion policy after 2007.
When we think about what the EU might spend, it is important to note that there is at the moment a considerable underspend on what the EU makes available for cohesion policy. We are not utilising the full budget and there is, arguably, scope to make savings on current budgetary allocations—at least, some member states say so.
In terms of the characteristics of the debate, one can see it as being polarised between two options. The first option might be called rationalisation—it is sometimes termed renationalisation—and in that scenario future EU regional policy would be limited to the poorest countries. That is the UK's view and it is the view of the Dutch Government and the Governments of one or two other countries. That is the so-called cohesion model for the future of the European Union. The view of the German Government is similar to that; it also believes that funding should be concentrated on the poorest, but on the poorest regions as opposed to the poorest countries.
What unites all the countries that advocate the cohesion or concentration models is, essentially, the view that the richer countries should be able to deal with their regional problems and should not require transfers from the EU budget. The focus on the poorer countries or regions should enable the richer countries to pay less into the budget.
Set against that is a series of proposals that would, in effect, maintain the status quo, whereby the EU would intervene not only in relation to the poorest countries or regions, but would provide funding for problems in countries such as the UK, France, Germany, the Nordic countries and so on—wherever there are problems. Those options would make up a menu of different priorities from which countries would select those that were most appropriate.
When identifying where different countries sit in relation to the various options, it is fair to say that the net contributors to the EU budget—the UK, Germany, the Netherlands, Sweden, Austria and Denmark—are arguing for rationalisation of the EU budget. Members may have read the reports about the letter that six of the net contributor countries sent to the President of the European Commission yesterday, in which they argued for budgetary restraint. At the other end of the spectrum, there are countries that argue that more money be spent on EU cohesion policy. There are also countries in the middle. Given that decisions on the future of the EU budget will have to be achieved through unanimity, one would expect there to be a coming together of views from those extremes but, as we saw at the weekend, that is certainly not guaranteed.
It is very difficult to say what we might end up with, given the imponderables. On what the Commission is thinking about and what it might publish in its third cohesion report in January, it is likely that its proposals will focus on three priorities for the period after 2007. First, there is the priority of encouraging convergence between the poorest member state countries and regions and the EU average, which is likely to get between 75 and 80 per cent of resources. Those resources would be concentrated on the objective 1 regions—those whose gross domestic product per capita is less than 75 per cent of the EU average. Other regions—those that benefit at the moment, but which are unlikely to benefit in the future—would also be allocated resources under that priority heading.
The Commission appears to think that all other regions outside the objective 1 areas would be the priority of a competitiveness objective, which might be allocated 20 or 25 per cent of resources. Half of those resources might go towards the European social fund and focus on human resource actions, and half might be allocated to European regional development fund themes. The ERDF themes that are being promoted at the moment are innovation, accessibility and the environment. The theme of co-operation under the Interreg initiative would also continue to be assisted.
On the competitiveness objective, which can be called the new objective 2, the European Commission is looking for a much simpler way of allocating resources in the future. It is thinking along the lines of allocating money to member states through what are called national envelopes, which might be defined in terms of GDP, population or employment. It would be up to member states to allocate that money within their territory and to determine the implementation mechanisms.
It is still unclear how that might work. The so-called open method of co-ordination may be used. It has been mooted that so-called tripartite contracts would be created between the European Commission, member states and regions or territories, but it is not clear exactly how it will be possible to ensure that member states meet EU objectives or achieve certain targets that the EU sets.
There is a series of imponderables relating to the competing demands on the structural operations budget. At the Brussels summit at the weekend, the Council agreed that there would be a European action for growth. Spending will be allocated to major telecoms and research and development projects across the EU. A new neighbourhood instrument is being implemented for the new external borders and there are concerns about security and asylum issues on those borders. It is unclear how rural development may be financed in the future, and whether it will come under structural funds or the common agricultural policy.
It is perhaps early to be thinking about the issues for Scotland, because we are not clear about what the financial framework will look like, let alone what cohesion policy may look like in the future. However, if the Commission's thinking prevails in some form, we will need to consider how the national envelope that is allocated to the UK will be allocated within the UK; what policy priorities the Scottish Executive will choose and what weight it will attach to those priorities; how the allocation of resources within Scotland will be determined and what kind of implementation mechanisms may be selected. Will the existing approach, which involves delivering funding through the programme management executives, continue, or will another mechanism be introduced?
As I said, we must remember that a number of other policy reforms that are important for Scotland are under way. In particular, there is a review of EU competition policy with respect to state aids, which will determine how much aid we can allocate to business under our domestic policies. There is also a review of the common agricultural policy. As we know, in parts of Scotland receipts under the CAP are more important on a per capita basis than are structural funds.
It is clear that a number of issues must be considered. However, we are still in an uncertain situation in respect of future funding, let alone the actual policy.
I remind members that we will hear from two more sets of witnesses. However, we have time for questions to Professor Bachtler, if members would like to ask any.
It is good to have you back before the committee, Professor Bachtler. I thank you for your presentation, but I would also like to pick your brains.
You mentioned a proposed budget ceiling for regional development funding of 0.45 per cent of EU GDP. I have heard here and there in Brussels that a number of member states are not convinced that that should be the ceiling and that it might be significantly lower. I am a committed Europhile, but the committee is considering the implications of any change for Scotland. If the budget ceiling were set between 0.3 or 0.35 and 0.45 of GDP, compared with the proposals that the UK Government has made, what effect would that have on local projects on the ground in our constituencies? I know that that is a very simplistic black and white way of putting the problem, but are you able to make any predictions based on that premise?
Irene Oldfather is right to say that 0.45 per cent is a very optimistic figure. Many of the poorer countries started by saying that it should be much higher than 0.45 per cent, but they are now clinging to that figure and hoping that it will not be reduced significantly, although I suspect that we will end up with a significantly lower figure. However, according to some figures that I have seen, at the moment we are spending considerably less than 0.45 per cent on regional development funding. In the past few years, we have spent between 0.3 and 0.33 per cent of EU GDP on that.
If the starting point was the current budget, or at least what the budget will be in 2006, such a figure would not necessarily be the end of the world. Given the kind of cuts that will be made to the current objective 1 regions, and given that objective 2 funding accounts for a relatively small amount of the overall budget—so savings from cutting objective 2 funding would be relatively small—Scotland may end up with a fairly sizeable amount of money, potentially of the order of half or three quarters of what we have at the moment. That is speculative.
Would that be on the basis of a revised objective 2, in line with the Commission's proposals?
That is right.
A 50 per cent reduction shall be compared with what the UK Government seems to be proposing, which is a guarantee of present funds. We have been asking for further clarification on that. Are you able to weigh up one against the other? Can you put any more flesh on the bones? I know that you have been involved with the structural funds working group.
There are two issues—one is financial and the other is the wider political situation. On the financial side, the UK has provided a guarantee. On the other hand, we do not yet know how that guarantee will work in practice or what the implications are for Scotland. Presumably, decisions would be made within Scotland, because the money would be transferred from the UK to the Scottish Executive, but to what extent is there a guarantee within Scotland that that money would be spent on the things that structural funds are being spent on at the moment?
On the other hand, although one could argue that the EU money would be guaranteed for something like seven years—if that is the length of the next financial period—we know that there are downsides to European funding, in terms of the bureaucracy and administration that are associated with it. If the EU administrative implementation process was radically simplified, and if the policy priorities that were determined by the EU were very much in our interests, that would argue more in favour of the EU model.
Wider non-financial issues are associated with the structural funds. We have benefited from a certain amount of added value from being able to use structural funds in Scotland. From research that my colleagues and I have undertaken, we know that the funds have brought many benefits in terms of internationalising the activities of many organisations throughout Scotland. Indeed, many organisations are active in central and eastern Europe as a result of the links and contacts that they have made through structural funds, which will have spin-offs in terms of trade and investment and engagement in the whole European integration process. So, in weighing up the pros and cons, it is important to look not only at the financial issues, but at the non-financial issues.
My point follows on from Irene Oldfather's. If it is thought to be desirable to increase EU spending on regional development, would it be accurate to say that there are only two possible ways to do that: either you increase the size of the cake—that is, the total EU budget—or you increase the slice of the cake that goes to regional development?
In the case of the first possibility, you said that the treaty provides for spending up to 1.27 per cent of EU GNP, which I take it is the total budget. How was that magical figure of 1.27 per cent arrived at, and why is actual spending currently about 1 per cent? Has it ever been significantly greater than 1 per cent? Is it just that it is politically difficult to increase it beyond that?
As for the other scenario, in which the slice of the cake for regional development is increased, would the member states want to shift more spending from the CAP, for example, to regional development?
First of all, we are more likely to be managing reductions than increases in regional development spending or, indeed, in overall EU budgetary amounts. The current figure derives from a compromise—struck at European Council meetings—between what the net contributors were prepared to provide and what the net beneficiaries were prepared to accept in agreeing an overall financial package.
There are several reasons why we are not spending as much as others foresaw. If I recall the European Court of Auditors' reports correctly, structural and cohesion funds form the major reason why there has been underspend in the EU budget. We know from our own experience that we might be allocated a certain tranche of funding at the beginning of a programming period and that we might expect to spend that money on certain projects; however, if those projects are not forthcoming, we might not be able to commit that spending despite the best efforts of the administering authorities. Indeed, even if we commit that money, projects that we may expect to absorb £250,000 might, because of a change in economic circumstances, be able to draw down only £200,000. The rest of the expenditure remains unused.
Over time, applying for EU funding has become more complex because it has come with more and more conditions and has been monitored and controlled more rigorously. In this country and in others, such an approach has had an impact on applicants' interest in utilising the money.
As for spending on regional development, it is difficult to see how we will maintain the existing 0.45 per cent ceiling that has just been mentioned. That is partly because we are not utilising the budget and partly because there is a lot of competition for funding. The EU does not have many pots of money; it has an agricultural pot and a structural funds pot, and a few more per cent is spread among the other EU internal policies and budget headings. At the Lisbon council a few years ago, the EU said that it wanted to make Europe the world's most competitive and dynamic economy. However, it has neither the resources for, nor a budget heading entitled "Competitiveness". Where will that money come from? At the moment, it will probably come from our current spending on structural operations. The EU council is talking about spending more on security and immigration and asylum policies, particularly in relation to external borders. Again, the budget for those policies will have to be found somewhere, which means that more pressure will be put on EU cohesion policies.
In the future, the major amount of money will go to the new member states. Structural funds are quite difficult for countries to absorb because of the complexity of the objectives and the requirements that are associated with them. As a result, there are question marks over the ability of the new member states to absorb—in other words, to utilise—all the funding that would potentially be allocated to them.
During negotiations over funding for the interim 2004-06 period at last year's Copenhagen and Brussels European Councils, money was shifted away from structural funds to agriculture because it was far easier for the new member states to get the money out the door through agricultural spending.
It is very unlikely that there will be more spending on the overall EU budget or, within that, more spending on EU regional development: it is likely to be less.
I have three quick points. First, what will happen to the underspend? You have suggested that it may go into agriculture, but will any of it come back to the net-contributor nations? Secondly, if we were to go it alone and repatriate some of our contributions, would competition rules apply—rules for structural funding or other issues—to the way in which we could spend that money? I will leave my third point for the moment.
If the EU does not spend as much in any particular year as was forecast, the money can be used—as it has been this year and in the past—to reduce the budgetary contributions of the different member states. Some money may be reallocated. The EU has recently created a kind of solidarity disaster fund and proposals for other similar initiatives are in the pipeline. Some money may be redeployed but, when significant amounts are involved, it comes back to the member states.
You asked about the rules for structural funds and the possibility of repatriation. If the UK proposal were to win through, it would be part of a broader settlement under which other rich countries would receive money back, too, or would not pay as much in, and would be allowed to deal with their own regional problems with their own regional policies. Were that to happen, we would still be subject to EU competition policy rules on the money that is spent on aid to business. It is not clear but, if the directorate-general for competition had its way, the existing rules on geographical concentration, on maximum rates of award and on other things would become stricter. There is an argument that countries that receive less in structural funds should have more flexibility to operate their own regional policies. That argument is there to be won or lost.
Is it true that no parts of Scotland will qualify for objective 1 status after enlargement?
That is a good question. We are waiting for the latest data and it is possible that the Highlands and Islands might have qualified for objective 1 status had the EU stayed as an EU 15. In an EU 25, that area certainly will not qualify. However, if it qualified in an EU 15 but not in an EU 25 it would become what is known in the jargon as a statistical effect region and would thus qualify for higher levels of funding than it would otherwise receive.
It is appropriate that my question should follow on from Phil Gallie's final point. I understand that, in the UK, only Cornwall would be eligible for continued objective 1 funding; south Yorkshire, Merseyside and west Wales and the valleys would no longer be eligible. Although they would become eligible for transitional funding, that is not the same as having objective 1 status. As a Highlands and Islands MSP, I am well aware of the objective 1 work that was undertaken. What are the implications for Scotland of the rationalisation of regional funding? That would surely impact on the Barnett formula arrangements for Scotland and on what Patricia Hewitt optimistically calls the normal devolution settlement. Has that been looked into by the unit with which you are involved, so as to ensure that in no circumstances will the deprived areas of the UK and Scotland miss out on securing guaranteed income in order to pursue all the great ideas that we have?
We have not looked at the implications for the Barnett formula. I do not feel competent to comment, except to say that, as we have seen during the current funding period, the Treasury is prepared to make exceptions to the Barnett formula—as it did in making an extra allocation to Wales—in order to manage the current objective 1 programme, if that is deemed politically desirable. In the line that it has taken with respect to the current proposals, the UK has made great play of the fact that it is guaranteeing that the various UK regions and territories will not lose out. As I said, we do not know what that means. I suspect that, even if sufficient resources would not normally come to Scotland under the Barnett formula, there would be other political means at the Treasury's disposal.
I find it rather worrying that we do not really know what might happen. I appreciate the various time scales and complications that apply in Europe at the moment, but I think that we must pursue the issue in greater depth.
Apparently, European receipts offer security for only a small fraction of regional spending. Have you any idea what that fraction might be?
In Scotland?
Yes.
I am afraid that I do not know. I know that we have attempted to calculate Scottish receipts under structural funds under the 65-plus programmes that there have been over the past 30 years. We came up with a figure of about £4.5 billion of European funding having come into Scotland since 1975. If we ally that to national co-financing, we are talking about programme spending of up to £12 billion. However, I cannot say what that is as a proportion of the overall figure.
Could you come back to us on that?
Yes, I certainly could.
Irene Oldfather has a final, brief question, so I ask you to give her a brief answer, if possible.
I want to ask about regional flexibility in state aid. The Government has suggested that the policy is one of decentralisation and devolution, and that there will be more regional flexibility. The committee has argued for that in previous years. What do you think the implications of that are?
It is difficult to speak in detail about that issue without getting very technical. DG competition avoided adopting an excessively rules-based or legalistic approach to the issue of state aids and individual aid awards. It focused more on the actual economic impact of aid or aid awards, rather than on whether they contravened certain regulations or legal requirements. It is difficult to say how things might pan out regionally, but that approach might provide us with the scope to argue that certain types of aid that relate to peripherality or insularity do not have an adverse impact per se on EU trade and competition, and therefore to argue, in a way that we cannot at the moment, that that aid is justifiable.
Thank you. That is very helpful.
I thank you on behalf of the committee for the informative presentation that you delivered today. I am sure that we will be back in touch at some point over the next few weeks.
I move on to the next round of witnesses. Karen Stirling and Bob Leitch represent the Scottish Chambers of Commerce. We have already received written evidence from the SCC but, to remind the committee, I invite the witnesses to outline their key concerns on the issue.
Bob Leitch (Scottish Chambers of Commerce):
Karen Stirling and I thank you for this opportunity to come before the committee to present some of our thoughts on an important subject that has not been highlighted sufficiently in Scotland as we move into a period of change.
Looking around the table, I think that most of those present know the Scottish Chambers of Commerce in one form or another. We have 20 affiliated chambers in Scotland; there are 35 chambers in total, and their membership covers more than 9,000 businesses and represents more than 65 per cent of the working population in the land. Therefore, we have a large geographical and sectoral representation of business throughout Scotland, which gives us an insight into all kinds, sizes and shapes of businesses. Other organisations do not always have that benefit. The SCC seeks to promote the interests of its members by giving a voice to national issues.
The importance of regional development funding in Scotland is exceptional. Past and current regional development funding is of vital importance to Scotland and we welcome the opportunity to be involved in the debate. Some 85 per cent of the country, of which half is in transitional areas, is covered by structural fund eligibility. Between 2000 and 2006, Scotland stands to benefit from about £1 billion in structural funds, of which regional development funding is a key component. Scotland has benefited hugely from past funding programmes. As members will be aware, we were the third largest beneficiary of funds in the first 10 years of structural funding. The Highlands and Islands had objective 1 status and that, along with the transitional status that the region currently holds, has allowed it to develop significantly,
ERDF funding provides investment to create or maintain jobs in Scotland. It provides assistance for people to start businesses or to grow them and to develop sites and premises for businesses or tourism facilities to attract visitors from outside the region. It helps to link businesses to research and it improves facilities in colleges and other places where people learn.
In the interests of cohesion, we appreciate that, in comparison with the regions of the accession countries, our regions will no longer be underdeveloped, and that those countries must be allowed to benefit in the way that we have benefited. However, there are underdeveloped parts of Scotland that still require aid in order to promote cohesion. As we have heard already, it is not possible to comment on the amount of funding that will be available to Scotland, as the EU's plans are not yet known. The third cohesion report, which is due to be published in January but might be delayed, will outline the Commission's thinking on future plans for fund allocation. After the member states' negotiations are completed, agreement by the Council of Ministers will take place sometime in 2005.
The UK Government's proposed repatriation of regional development funding has raised some concerns and issues. The SCC is not opposed in principle to that proposal. However, we require a promise that regions will not receive less development funding under a renationalised system than they would have received under transitional EU-led arrangements. This week, there are some indications that the latter might be the case. We are concerned about how the guarantee can be applied. If funding were to be repatriated, it would have to be clear how much of the money that is allocated to the Scottish Executive was for regional development funding, and a commitment would have to be obtained from the Scottish Executive that the funds would be used in that manner.
Thank you. I invite questions from members of the committee.
Mr Leitch, towards the end of your presentation, you raised a point about how the guarantee would be applied. Is that point more about the duration of the guarantee or about its application?
It is to do with the application of the guarantee. It is easy to set out how we might do something in theory, but the practice is often more difficult. My point is that we must ensure that the practice works efficiently and effectively.
I do not know whether the witness has been given a copy of the statement by Patricia Hewitt.
Everyone has received a copy of the statement.
I am referring not to members, but to the witnesses.
I do not think that the witnesses have received copies of the statement. The committee received it only last night, so it is unlikely to have gone to the witnesses.
Perhaps I can put Mr Leitch at ease. As the convener said, last night we received a statement from the Department of Trade and Industry. The clerks will provide you with a copy.
In paragraph 2.2 on page 6 of the paper that accompanies the statement, under the heading "Defining the Guarantee", Ms Hewitt states:
"the Government's Guarantee means that the nations and regions would not lose out as a result of adoption of the UK's proposals."
Does that change your perspective or deal with your anxiety about the application of the UK Government's policy?
It goes a long way towards doing that.
I have a brief question that relates to your written submission. As Alasdair Morrison pointed out, there has been an additional development from the DTI.
How does the SCC see chambers of commerce linking into decisions of the Scottish Executive about expenditure on regional funding? In your submission you say:
"there should be no centralisation of the work and initiatives to one overarching development agency, and the move towards centralisation would not encourage a strong local self-help philosophy."
How would that impact on Highlands and Islands Enterprise and Scottish Enterprise?
Karen Stirling (Scottish Chambers of Commerce):
I will deal with the latter question first.
In our submission, we were suggesting that one of the advantages of the current system is seen to be the partnership approach that we have applied in Scotland with the four partnership agencies. We would not want that approach to be lost. If the funds are renationalised, the effectiveness of the partnership approach should be taken into account when deciding how funds should be allocated. The Scottish Executive might not give funding to Scottish Enterprise and Highlands and Islands Enterprise to allocate in the way in which they currently allocate their budgets. Some consideration might be given to maintaining or adapting the existing partnerships for the allocation of regional development funding.
You have mentioned the partnership approach, principally with respect to the Executive. However, in many cases chambers of commerce have a good relationship with local authorities. That, too, is a partnership.
Local authorities have made submissions that seem to be strongly opposed to the Government's proposals for repatriation. You have taken the business viewpoint and have reached the conclusion that the proposals might have some benefits for business in Scotland. What conversation have you had with local authorities about this issue? How would you put their minds at ease on it?
I have not yet spoken to any local authorities about this issue. As Phil Gallie says, the Scottish Chambers of Commerce has a good relationship with some local authorities and would be willing to enter into a dialogue. However, when we made our submission, we had not taken into account the issue that he raises.
Phil Gallie asks how we would put local authorities' minds at ease about the Government's proposals. In our submission, we did not whole-heartedly welcome repatriation. We cautiously welcome some aspects of the policy—for example, the devolution of responsibility for funding to the Scottish and regional levels. We are not saying that we support whole-heartedly the repatriation of funding. As Professor Bachtler outlined, we do not yet know enough about what the situation would be if the EU system continued and what we would receive under the transitional arrangements. We have now received the statement by Patricia Hewitt, but we do not yet know fully what the UK Government's plans will be. It is very difficult for us to come down on one side or the other. I hope that local government will not be too alarmed by thinking that we are totally behind the UK Government's proposals.
Alasdair Morrison mentioned Patricia Hewitt's guarantee; she said that the nations and regions of the UK will not lose out. Given what we have heard from the professor about a possible underspend in Europe and a return of funds to the chancellor's coffers, is that something that Patricia Hewitt should be looking at? Do you think that, if that goes ahead, that money should be ring fenced for current funding programmes in Scotland and the rest of the UK?
The short answer is that, if there were to be any return of funds, we would want to ensure that they were utilised for the benefit of those purposes that were already established before the moneys went in any other direction. It is important that we ensure that that happens, and we would want that to be part of the guarantee that, I presume, Patricia Hewitt is giving in the paper. We have not yet seen the paper, which makes life slightly difficult for us right now. However, if we assume that that is the case, that is certainly what we would want.
As Karen Stirling said, we are not saying that we are 100 per cent behind what the UK Government is proposing. We are saying that the door is open for consideration and that we would wish to give full consideration to the proposals before deciding which way to go. I hope that our colleagues in local government, some of whom are sitting behind us right now, will appreciate that we are taking an open view on an open subject at a time when it is still open. Once we have more detail about how the proposal would be applied—if it were to be applied—we will take a view, and that view may well concur with what our friends in local government think.
Thank you very much.
There are a couple of references in your written evidence to frustration over the lack of debate in Scotland on the future of structural funding. Could you elaborate on those concerns? What would you have liked to have taken place in connection with that debate that has not taken place?
Until the Parliament's inquiry into structural funding, I do not think that the business organisations were engaged in the debate. Having worked for the Scottish Executive previously, I know that a lot of work and debate has been going on behind the scenes, but that does not seem to have entered the public arena. I do not have any specific suggestions as to what should have taken place, but I welcome the fact that we are now getting the opportunity to participate.
Are there chambers of commerce on the structural funds working group?
No.
No.
I thank the witnesses for coming along today and for their evidence, and I hope that they feel that they have been able to participate in the debate.
I invite our final panel of witnesses to take their seats. They are representatives of local authorities that have been particularly vocal on the issue. We have received many written submissions from local authorities the length and breadth of Scotland and I am delighted that four of those authorities are represented here today.
I welcome Councillor Tom Barr from North Ayrshire Council, Mr Alastair Cooper, who is an official from Shetland Islands Council, Councillor Eddie Carrick of Clackmannanshire Council and Dr Malcolm Green of Glasgow City Council. Thank you all for coming along today. I am happy to give all of you two minutes to set out your councils' points of view.
Councillor Dr Malcolm Green (Glasgow City Council):
Thank you.
We had a brief meeting beforehand and, because what we all want to say to the committee is essentially the same basic message, the others have asked me to make an introduction on behalf of us all.
You can have four minutes.
I promise that I will not take up all the time that would have been allocated to the others.
There have been two panel presentations, which have raised—in one form or another—most of the issues that we want to cover. Forgive me if I seem to be listing the points rather than elaborating on and justifying them.
When the UK Government first raised repatriation of funds in the early part of 2003 there were three particular areas of concern. One was in relation to the sustainability of funding that the seven years of European structural fund programmes offer: there were serious concerns about whether that would be retained under a repatriated regime. The second concern was about what guarantees we would have that the money—the quantum, whatever the total is from 2006 onwards—would be spent on those programmes and not diverted surreptitiously to other priority programmes of the Government. The third concern was about the delivery mechanisms.
I concede that all three issues are addressed in Patricia Hewitt's statement, to which Mr Morrison has referred and which we have had a look at—although it was made available to the public only when it was published last Thursday.
On the seven-year guarantee, confirmation is clearly given that under a repatriated funds regime the UK Government would commit itself to programmes that last as long as that. That is very welcome, but the devil is in the detail and as we get further into the areas of concern the aspects on which clarification would be highly desirable begin to multiply.
Ring fencing is, as I understand it, covered in the paragraph in the Secretary of State for Trade and Industry's statement that says:
"We envisage that the EU Framework would be established by agreement in the European Council of a set of high level, outcome-focused objectives".
That sounds fine and it is fine in principle, but how much detail would there be and how much flexibility would be allowed? Flexibility is a good thing, provided that it is not abused. I will come back to that point at the end of my comments, because it will, in effect, come down to how much trust we can place in the national Government to deliver consistently over seven years a consistent set of programme objectives such as we are used to with the current programmes.
The third area that I referred to was the delivery mechanisms. Again, the words that are used in Patricia Hewitt's statement are fine in themselves. She said:
"We also wanted to retain the strengths of the Structural Funds, such as multi annual funding and partnership working, but achieve significantly simplified delivery mechanisms."—[Official Report, House of Commons, 11 December 2003; vol 415, c96WS]
The argument is that if funding is under the control of the member state rather than the European Commission, the arrangements would be much simpler. That may or may not be the case; it all depends on the arrangements.
Scotland's share has already been raised and the guarantee has been given that the nations and regions of the United Kingdom will not lose out. That helps us to focus on the Barnett formula as being the usual mechanism—I presume that it is the Government's preferred one—for ensuring that the funds are made available to the Scottish Executive. We represent the tier of government below the Scottish Executive and the Scottish Parliament. We want to be sure that the funding would be targeted effectively on economic development and employment generation in the areas that need it most. We fear that what might happen under the proposed regime is that the Scottish Executive would feel free to utilise the money in accordance with its own priorities.
I do not dispute the Scottish Executive's right to have such priorities and to justify them publicly, but if it chooses to disperse the funds through the Scottish Enterprise network instead of through the multilayered involvement of a large number of partners and stakeholders—as currently exist in the programme management committees, programme implementation committees and advisory groups—we would regard that as a significant diminution of local accountability, flexibility and responsiveness compared with what we know at the moment. Our basic position is not dissimilar to that which we have just heard about from the Scottish Chambers of Commerce. We regard repatriation of funds as being worthy of debate, but we are highly sceptical about whether what is on the table will deliver the claimed advantages. At this point, we prefer to stick with what we know.
That does not mean that we cannot simplify and improve the structures that we have: flexibility has to be kept under constant review to ensure that the programme's objectives and priorities keep pace with changing economic circumstances in the different regions of Scotland. However, on the basis of what we know at the moment, we believe that the current system offers a better chance of doing that than repatriation, as it has been presented to us, does.
I have one final general point that I do not believe has been raised so far in the debate, but I believe that it is important that the committee bear it in mind. Under a repatriation regime in which the money is simply given back to, or retained by, the member states, and those states are accountable only in general terms to the Council of Ministers, the European Commission would lose the central sense of responsibility that it has at the moment for economic development and the ultimate achievement of cohesion throughout the European Union. That would be a serious disadvantage to the concept of the EU. Repatriation is not simply a rearranging of the deck chairs to make them tidier: if the idea is pursued to its logical conclusion, it could strike at the very root of the EU, to which this country is committed.
We have had many written submissions from local authorities and one of the common concerns is about the financial guarantee from Whitehall. Is the concern less about arguing with the fact that Whitehall is willing to offer a guarantee than it is about whether the current Government is in a position to offer a guarantee, especially given that there could be changes of Government?
In what I have said, I do not doubt the good faith of the Secretary of State or of the present Government. However, Government policies and priorities, as well as the individuals in charge of the spending areas, do and must alter. We believe that that is a serious risk, especially given the need for sustainability of programmes. It would be a serious discipline for a Government to subject itself to if it were to carry through what those words appear to promise. We have some doubts about the ability to do that.
Councillor Eddie Carrick (Clackmannanshire Council):
Although it is one of the smallest councils in Britain, Clackmannanshire Council has done well in the past, and we would like to continue that. I agree totally with Bob Leitch and Phil Gallie: it is not that we disbelieve the Government, but if there is any change, we would seek to have the funds ring fenced. We know that the funds will decrease because of enlargement, but we do not want them to go down too far. That was supposed to be a political answer, by the way.
Councillor Tom Barr (North Ayrshire Council):
I concur with what my colleagues have said about their major concerns. Long-term sustainability requires long-term planning and we are concerned about how the guarantee can last for the necessary length of time. North Ayrshire Council needs long-term planning for sustainability in economic growth.
Local government colleagues will be familiar with the three-year spending guarantees that already exist, and which are a reality for the UK Government, the Scottish Executive and your own fora. It is unfortunate that friends from local government have not had proper sight of the Patricia Hewitt document that I have in front of me; however, I wish to pursue a couple of issues. First, I would like to get your initial impressions on the definition of the guarantee, as laid out in the statement. Secondly, there is the matter of the duration of the guarantee. For the record, I will read out what Patricia Hewitt says on page 7 of her statement, at paragraph 2.3, which is headed "The duration":
"The Government has not specified the duration of the Guarantee because the length of the next Financial Perspective (and therefore the next round of Structural and Cohesion Funds) is not yet settled. Although the current Financial Perspective is seven years long, the previous one was six. And the Commission may decide to propose a five-year cycle to match the lifecycle of the Commission itself. But whatever the length of the next Financial Perspective, this Government will stand by its Guarantee for that period of time."
How do you respond to that? What additional safeguards would you like Patricia Hewitt to build into her commitment?
I ask you also to clarify whether you had sight of the paper previously. My understanding is that perhaps you did.
I have a copy of the statement, but I have not had the opportunity to study the accompanying papers that back it up, which go into some aspects in more detail. We would be more than happy to give a local authority perspective on those aspects in writing later, if the committee wishes it. I could address Mr Morrison's question briefly, however.
As you saw the statement only moments ago, I invite you to respond in broad-brush terms. Where do you sit in relation to the clarification that Patricia Hewitt has given to us?
While answering on behalf of my colleagues, I indicated that I welcome the guarantee, although I accept that it is yet to be decided how long it will be. We have got used to periods of six and seven years. If it were decided at European Union level that the period should be substantially shorter, we would want proper and open debate on that throughout the Union and we would wish to make our point very clear. I have accepted and welcomed the guarantee, and I have indicated that our main concerns are on other aspects: for example; the extent to which ring fencing would apply in practice for the purposes for which structural funds are given; and the delivery mechanisms. I forbore to dwell on that because of the shortage of time that I was allowed in making the initial presentation.
I was intrigued by part of Clackmannanshire Council's submission. It says:
"Without financial direction from the European Commission and the possibility of sanctions should Member State policy deviate from agreed priorities of common policies, renationalisation will pose a threat to the successful delivery of such policies. Consequently, Clackmannanshire Council believes that it is inappropriate for the funding of regional policy to be returned to the Member State in the way proposed by the DTI."
Is that view shared by all the local authority representatives who are present? Does that mean that local authorities put more faith in the European Commission than they do in the Department of Trade and Industry or the Scottish Executive?
Careful!
Could I give you a written reply to that, Dennis, given that everything I am saying to you is being reported? [Laughter.] So that I may retain my seat, I will give you a politician's answer: you're no far away. I think that that part of our submission is in line with the policy of the Convention of Scottish Local Authorities, the East of Scotland European Consortium and the West of Scotland European Consortium. The submission was produced by officers—very good officers, I might add—and we had sight of it before it came to the Scottish Parliament.
Do other local authorities agree?
Our position, as with WOSEC and COSLA, is that we agree fully with that statement. I have not seen the ESEC submission, but I believe that it is along the same lines.
Would any of you go as far as to say that, if an envelope of money was to be handed over to the UK Government or the Scottish Executive for regional development purposes, you would not trust the DTI or the Scottish Executive to give a fair share to your authority? Would you trust them to do that, or would you prefer to trust the European Commission to set out the criteria, oversee the process and—in the words of Clackmannanshire Council—direct it?
We are concerned about that, which is why we are talking about ring fencing. It is not that we do not believe the UK Government or the Scottish Executive but, if the Chancellor of the Exchequer has other priorities, he might use the money in ways that he wants. If the money comes through the Scottish Executive, it might use it in ways that it sees as being correct. We are happy with the way things are at the moment. However, we know that less money will come down to us and we do not want it to be depleted yet again in the process if the system has to change.
Alastair Cooper (Shetland Islands Council):
In the case of the Highlands and Islands, the question is one not necessarily of trust, but of experience. Experience has taught us that Europe has been kind to the Highlands and Islands.
There is a slight risk of looking the gift horse in the mouth. Given the contrast between the economies of the United Kingdom and Scotland and those of Poland, Hungary and the Czech Republic, is not there a risk that we could end up with nothing at all if we leave the matter entirely to the European Union?
My assumption is that, given that whatever the United Kingdom qualifies for will be decided at European level, the decision is not one that we, as local authorities or regional bodies, can influence directly. That is why I said that, whatever the quantum is, it will be decided on the criteria. However, we know that the criteria have yet to be finalised, as indeed has the period of the next structural fund programme, which is still under negotiation. Indeed, as we know from last weekend, more fundamental issues that should have been put to bed months ago are still uncertain.
All of that will be decided by ministers. We are concerned that the sums of money—whatever sums the regions of the United Kingdom qualify for—should be properly and sustainably devoted to the objectives that are agreed at European level.
In answer to the earlier question, if the United Kingdom Government is logical about its submission, it should ask for a different regime for the whole European Union and not only for the United Kingdom. It would be in no way consistent in the European context for the UK to have money made available to it for its own purposes, as it were. The UK cannot have an agreement for a loose framework of outcomes and objectives rather than for specific programmes, while the rest or parts of the European Union are put under a central regime. I cannot envisage that that would happen. It would be better—in terms of cohesion of the EU—for the European Commission to have proper responsibility for economic development in all 25 states, and for implementation of the cohesion report, than it would be to have the fragmentation that has been suggested.
Dennis Canavan raised the subject of trust. Some months ago, a number of us were at a UK-wide conference. I was surprised by the extent of consensus among authorities—big and small—from throughout the United Kingdom. They said that they trusted the European Commission more than they did their own government departments. We share that view. That does not impugn the integrity of individual ministers; it simply reflects the kind of short-term domestic pressures that affect member-state Governments far more than they affect the European Union.
I do not think that that was an answer to my question. It is self-evident that the balance of need in the expanded European Union will shift to the east. Anybody who considers Europe as a whole will have to understand that the bulk of the need for structural funding will be in the accession states, whether we like it or not. Under those circumstances, anything that is administered from Brussels will not allow very much for areas such as Scotland.
As I understand it, that is where the 0.45 per cent comes in. The ability of the new member states from central and eastern Europe to absorb structural funds is severely limited—and, in effect, capped—by that 0.45 per cent. Professor Bachtler can correct me if I am mistaken.
The point behind Mr Home Robertson's question was certainly going through my mind earlier this year. When we compare the gross national products and individual incomes in central and eastern Europe with the GNPs and individual incomes in the existing member states in the west—even their deprived parts—we see a huge disparity. I thought, therefore, that all the structural funds would go eastwards. However, that is not the case because of the cap—which, as I understand it, applies to member states individually. The accession states cannot absorb more than a certain amount. That will leave a significant amount—albeit a reduced amount—for the existing member states, which opens up the real probability that Scotland will still have structural funds to disburse. That being the case, today's debate is relevant. How are those funds to be disbursed in Scotland? That is the aspect that I was addressing.
That is helpful as far as it goes. However, the United Kingdom Government has gone rather further. It has given a substantial undertaking to maintain the value of structural funds. I therefore find it odd to see people from local authorities looking a gift horse in the mouth and saying, "We don't want this. We'd rather have less from Europe." That seems to be perverse, or am I being unfair?
At present, funds are disbursed through a perhaps cumbersome system of programme committees that are locally based and involve the stakeholders. If we were dealing directly with the Commission in Brussels, we would be singing a totally different tune. However, in the west of Scotland—since 1989, I think—we have had a system of local disbursement that the west of Scotland pioneered for the whole European Union. The Strathclyde European Partnership Ltd—as it now is—is an arm's-length company that administers the system. It does not spend the money itself, but works very hard indeed to get stakeholders big and small to suggest projects that are then evaluated against the criteria by their peers before going before a programme implementation committee. Everything is overseen by the programme monitoring committee. The structure has counterparts in other parts of Scotland, but is not replicated in the rest of the UK or, indeed, in the rest of Europe. We do not want to lose that structure under a repatriation regime.
My third point was about the delivery mechanism. The words in Patricia Hewitt's statement are fine, but what do they mean for Scotland? They might mean more for England, where they do not have our structure; but we want to preserve the best of what we have in Scotland, which is why we have taken our position.
I do not pretend to understand whether we are better off one way or the other or whom we trust more, but I am interested in a broader political point that Malcolm Green, as a good European, made twice. To put it bluntly, things that are coming from Brussels are announced on the notice board and the message is given that we are all part of Europe and that we all belong together. If one member state repatriates, something of that is lost, and the issue becomes the UK Government spending its own money. To me, as a pro-European, that is a concern.
I would like to ask my council colleagues whether that issue matters to councils and councillors or whether, in some ways understandably, the issue is seen in terms of the balance sheet. Does the attitude of being good Europeans and therefore operating within a Brussels context have any relevance? I can see Phil Gallie saying, "I hope not," but most of us around the table like to think that it matters.
It is a wee bit of both. It is always good to get a project up and running with the European sign above it. If the funding comes from the UK Government, no one bothers, but if it is a European project, everyone takes note that the money has been dragged in from European funding. I am always glad to see European funding in Scotland, wherever it is. It shows that local authorities, MSPs and MPs are doing their jobs.
The honest answer to Gordon Jackson's question is that we will be very good Europeans in Ayrshire if that means that we will get more money. I must be honest: we will be anybody's if we can draw economic benefits for our residents.
That is now on the record.
In the case of the Highlands and Islands, it is more important that the money is ring fenced and that we know that the pot is there for that specific area. The fact that it comes from Europe is important, but less so.
I note Gordon Jackson's comments about displaying the European sign. The fact is that, whether we like it or not, the money comes from UK taxpayers and more of it goes elsewhere than into those projects. That is done in the spirit of the European Union and the cohesion that Malcolm Green mentioned. When we debated the matter in committee some time ago, Dennis Canavan thought that that was not a reason for Europe to distribute the funds. We must find a better reason than just advertising the European Union cause.
I make the point to the councillors that whether or not we repatriate, there will be a major change in the amount of money that is available. In determining how it should be divided, the committee must consider what is best for Scotland.
I have no disagreement with the point that you make. Of course it is the member states that generate the wealth. The European Union is not a state in itself but precepts on the revenues of individual member states. In answer to Mr Home Robertson's question, we discussed the fact that we all recognise that the structural funds will have to be distributed with a significant bias towards central and eastern Europe. The first and second cohesion reports set that out starkly; with the exception of the city of Prague, the eastern parts of the continental European Union as it will be after 1 May next year enjoy—if that is the word—an average GNP of about 40 per cent of that of western Europe.
The funds that are available to Scotland will undoubtedly be significantly reduced. No one can say whether they will be reduced by 50 per cent, by 100 per cent or by something between those figures, but on the assumption that there will still be significant structural funds, which is the assumption that all the advice suggests that we should make, we must ensure that the mechanism for delivery and the priorities to which the money is applied are those that are most fitted to develop the parts of Scotland that most require those additional funds. Of course, the UK Government and the Scottish Executive are fully involved in that process. We are not suggesting in any way that they be bypassed—that could not be the case because the First Minister is the accounting officer for the structural funds and therefore through his civil servants is closely involved in the committee structures that I have described. It is essentially a partnership.
To a certain extent, the point of delivery of the funds does not matter. It is the pound in the pocket that counts and where it comes from does not matter to us. We all want to be good Scots, good Europeans and good citizens. As I said in response to Gordon Jackson's question, I am always proud when I see that a road that would not have been built otherwise has been funded in Scotland by the European Union—we know that we put the money in first to get it back out, but the important point is that we get it back out for the right projects. When we see new buildings that enhance communities, we are proud to say that we are good Europeans. We understand where the money is coming from. I am always glad to see a sign saying that a project was delivered by European Union funding but, as we all know, that is funded by the UK Government.
Councillor Green, you mentioned your reluctance to have Scottish Enterprise interjected into any distribution of funds. You suggest that if we were to go for repatriation, the existing structures for distribution of funds should remain. Would that be possible under repatriation? Why are you worried about Scottish Enterprise?
I gave Scottish Enterprise as an example. Scottish Enterprise is, of course, a very important partner in the process. It is the lack of funds available through the Scottish Enterprise network that has caused many of the shortfall difficulties that we have struggled with during the past 12 months in meeting the spending targets. As committee members know, unless we meet our spending targets within two years of projects being approved, the money is withdrawn and repatriated—if that is the right word—to Brussels. We have had to struggle with might and main to ensure that that has not happened.
The inability of the Scottish Enterprise network fully to play its part in bringing forward and supporting projects has been a continuing problem for us—one that we have raised with the Scottish Executive on several occasions. I was not singling out Scottish Enterprise with the intention of demonising it. I was pointing out that, unless under a repatriation regime special structures are devised that replicate all the advantages that we believe that we get from the current distribution mechanism, we think that we will lose a considerable set of advantages. I do not rule that out, but that is not being suggested. Therefore, our stance—as I strove to emphasise at the outset—is not that we have ruled the proposal out in principle or that we are opposed to any discussion on it. We welcome the opportunity to debate the proposal, but the lack of clarity about the detail of the repatriation of the funds causes us at this point to prefer what we know rather than the hypothesis that we do not know.
As we have been discussing Scottish Enterprise, does Alastair Cooper have any comment on Highlands and Islands Enterprise?
I support the concept of the Highlands and Islands partnership delivering a similar programme. We have no problem with Highlands and Islands Enterprise. Local authorities and Highlands and Islands Enterprise work together closely.
I want to make one point and ask Councillor Green one question. I am not unsympathetic to the point that he raises about long-term programmes, budget flexibility and so on. I am not unsympathetic either to the principle of delivery mechanisms. I am aware that the European Commission has said that Scotland is one of the flagship areas in terms of partnership on the ground. I believe that the difficulties to which Councillor Green referred can be overcome. I understand that he wants further clarification of them. I do not believe that anyone would accuse me of being anti-European or a Eurosceptic. I am pro-European, but I am in danger of agreeing with Phil Gallie on this particular point, which is that I believe that there are other ways of promoting Europe than just putting up a placard. I understand what colleagues from the councils are saying, which is that having the money is more important than having the placard. I believe firmly that there are other ways of promoting Europe through inter-regional co-operation and education programmes.
My concern comes down to the point that I raised with Professor Bachtler, At the most optimistic level, on a budget of 0.45 per cent of GDP with an optimistically revised objective 2, I believe that Professor Bachtler's best guess—if I understood him correctly—is that Scotland might achieve around 50 per cent of present levels. I just cannot understand the rationale behind that and the approach in relation to the UK guarantee. I appreciate that Professor Bachtler wants further clarification of the issues. However, if I understand correctly, it seems to me that we are looking at 50 per cent versus 100 per cent. I realise that Professor Bachtler received the accompanying papers at short notice, but I would appreciate it if he would take time to review them and perhaps come back to the committee after reflecting on today's discussion. I believe that that would be helpful.
There is one question that we have not covered that I wanted to put to Councillor Green, which is on the issue of regional flexibility and state aid. The Glasgow City Council written submission mentioned the principle of cities and regions working together. The idea is that regions that are prosperous tend to have prosperous cities attached to them. I wonder whether, in view of those comments, Councillor Green has anything to say about possible flexibility in relation to state aid at regional level.
Thank you for giving me the opportunity to respond on that point. The committee has our written submission, which it can read and re-read at leisure. I did not dwell on that because it is a kind of extension of the debate. Certainly, we welcome the fact that the UK Government has been committed for a considerable time to pressing for the maximum possible review and reduction of the CAP and, I hope, avoiding the artificial distinction between urban and rural.
Under the Eurocities banner, the cities of Europe, which are now well organised in a way that could not have been said to be the case a decade or five years ago, have given a lot of thought to the matter. Their thinking is very much in line with Glasgow's thinking, which has now been accepted by the Scottish Executive, that cities form the metropolitan heart of their region—the travel-to-work area, in broad terms—and that the prosperity, or lack of it, of a city and its region tend to go together. We believe that the concept of city plus accompanying region is a better way to view the priority for the allocation of structural funds than the increasingly artificial distinction between CAP and structural funds. Therefore, our view is a shot in support of the UK Government's stance to utilise progressively more and more of the CAP funding for the benefit of regions that depend on cities.
On behalf of the committee, I thank all four council representatives for coming today to give oral evidence. I also thank them for their written submissions. Please feel free to remain in your seats while we close this agenda item.
We were due to hear from UK ministers because, clearly, they are taking decisions about this matter. Unfortunately, despite the fact that we have been as flexible as we can with our diary, both the DTI ministers and the UK Treasury ministers have declined our invitation. They cited diary pressures as the reason. I believe that that leaves us at a bit of a disadvantage. I would not say that it leaves our inquiry hamstrung, but it is a disadvantage, given that we must hear from the UK ministers. I note that the local authority representatives are nodding their heads vigorously.
I have a couple of quick suggestions. The first is that we ask the Presiding Office to write a letter to encourage the UK ministers to give evidence to the committee. Failing that, we could ask Alistair Darling, the Secretary of State for Scotland, to give evidence. Failing that, we could send a delegation from the committee to Whitehall to meet the relevant ministers on their patch and to take evidence.
We should not forget that there are more ways of communicating with and extracting facts, details and answers from ministers than by having them physically appear here. The committee is more than capable of tabling a list of questions and using the traditional means of posting a letter—or we could even use electronic means—to ensure that the relevant ministers receive those questions. I am certain that the ministers that you mentioned will be more than happy to assist the committee and give us written responses. If we require further clarification thereafter, the whole process can begin again. The fact that UK ministers have complex commitments is not the end of the world. The committee can draw up a simple table of questions. There are only nine of us and I am sure that we can all come up with a number of questions that can be put into sections, and away we go to get the answers.
Of course, those criteria could apply to all witnesses.
I agree with Alasdair Morrison that there is more than one way to skin a cat. However, I am particularly disappointed that Patricia Hewitt is not prepared to come here. I would have thought that she would be keen to engage with us, especially as her document emphasises her commitment to devolution. That apart, there are other ways of handling the matter. There is a Scottish Affairs Select Committee operating at Westminster and there is a Secretary of State for Scotland. It might be worth while holding a joint meeting of this committee and the Scottish Affairs Select Committee to thrash out the issue. The select committee could then demand that the minister come to one of its meetings, as it is entitled to do.
We obviously need to be selective. It is physically impossible for UK ministers, particularly Cabinet ministers, to come here frequently. However, the Minister for Europe is coming here in January, is he not?
Yes.
The Government speaks with one voice—even Denis MacShane—so it might be appropriate to ensure that he gets briefed on the matter and can speak on behalf of the UK Government at that meeting, if that would help to speed things up.
I think that Mohammed should go to the mountain. If the ministers are not prepared to come to us, we should go to them. This is a DTI issue, which it will pursue on behalf of Scotland in all the negotiations that follow on, and I would certainly like representatives of this committee to meet representatives at the DTI at some point before we try to complete a report. Otherwise, we will leave ourselves exposed by not having collated all the information that we want.
I would also like to find out what the UK committees are doing on the subject at Westminster. Perhaps our clerks could find out about that. Are evidence-taking sessions taking place down there and could we share evidence with them? If we had representatives going down, we could be involved in those committees as well as in seeking a meeting with either the Treasury or the DTI.
I take Alasdair Morrison's point about writing. We are certainly not at the end of the line; we could ask lots of written questions. However, I tend to think that, logically, we could do that with every witness, but we do not because there is something about talking to people that works. I would not discount sending written questions, but I think that some kind of meeting would be important, whether that involves Alistair Darling coming here to answer for his colleagues or, as Margaret Ewing has suggested, a couple of members from here going to talk to people in Westminster. If we are saying that it is a huge issue and that the lead player is the DTI, if the DTI is too busy to meet us we must do something else to get the face-to-face encounter, even if that means that we must physically move.
I remind the committee that we will be hearing oral evidence from the Scottish minister with responsibility for the matter, Jim Wallace. The original idea was to have both ministers here at once. We will be taking oral evidence from ministers, but at the moment it will be just from the Scottish Executive.
We are taking evidence from Jim Wallace and, as John Home Robertson has said, Denis MacShane is also coming, but if Patricia Hewitt cannot fit a meeting into her diary, we must accept that. There have been countless occasions in the past when ministers have come to the committee but, because of lack of time, we have not been able to put questions and have had to follow through with written submissions. We should ask the Minister for Europe whether, in view of the fact that ministers from the DTI cannot come, he would be willing to take questions from us. We could also pursue the matter with the Scottish Executive. I think that that would be reasonable.
I recall that, on occasions in the past, the officers involved have come to give evidence to the committee. I think that officers from the Department for Work and Pensions did that when the minister was not available. That might be another alternative that we could explore.
I would like to clarify something, convener, as I think that I misheard you. I thought that Mr MacShane was not able to come; I did not appreciate that it was only Patricia Hewitt who could not come. If Denis MacShane is coming, we obviously need to have a structured discussion with him, as John Home Robertson said, and we can arrange that through our clerks. Denis MacShane is more than capable of responding and articulating exactly what the UK Government's position is, as he regularly does not only in Scotland but where it matters, in Brussels.
I appreciate your point, but it is worth clarifying that Denis MacShane will be here strictly for one hour in the evening at the beginning of January to discuss the EU constitution. It is worth bearing that in mind.
If the committee is happy, we shall take all the suggestions that have been made and e-mail members to find out which have majority support. Otherwise, we will be here all day taking individual votes, and I do not think that anyone wants that. Is the committee happy with that approach? The options are not all mutually exclusive.
Could we find out whether the Scottish Affairs Select Committee is doing anything?
Yes.
Will the clerks investigate the matters that have been raised in relation to the select committee and other possible options, such as officers giving evidence, and circulate that information to committee members so that we have the opportunity to respond before any letter goes out or any decision is made?
We shall ask the clerks to suss out the potential for all the various options that have been suggested and then seek a majority view and prioritise them. Is that agreed?
Members indicated agreement.
I now bring this item to a close. As it is Christmas, I offer the committee a five-minute comfort break. We shall reconvene at 3.45.
Meeting suspended.
On resuming—