Euro Zone Developments
Good afternoon. Item 2 is an evidence session for the committee’s inquiry into recent developments in the euro zone, particularly in relation to the December 2011 European Council and the resultant fiscal compact. I welcome the Rt Hon David Mundell MP, who is the Parliamentary Under-Secretary of State for Scotland, and Aidan Liddle, who is the deputy head of the Europe directorate (internal) at the Foreign and Commonwealth Office. I invite Mr Mundell to make an opening statement.
David Mundell MP (Parliamentary Under-Secretary of State for Scotland)
Thank you for inviting me to give evidence to the committee. I served as a member of the committee in a previous parliamentary session, so it is a particular pleasure to appear before it today.
I am sorry that I am unable to attend in person. As the convener mentioned, I am joined by Aidan Liddle, who is from the Foreign and Commonwealth Office. I am glad that we could facilitate the evidence session by videoconference. I am also glad that David Lidington, the minister of state who is responsible for European issues and NATO, was able to give evidence directly to the committee in February on the specifics of EU policy. I hope that the committee found that evidence session helpful.
The UK Government is keen to engage openly and constructively with the devolved Administrations and legislatures on matters of mutual interest and it has found that exchange of views useful. I do not have to tell members of the committee that Europe is vital to Scotland in many ways, and developments in Europe have an enormous impact on our economy. European reforms also impact on many sectors of the Scottish economy, from the regulation of financial services to product labelling for Scotch whisky, and from agricultural subsidies to fishing quotas and structural funds.
As members know, international relations is a reserved matter and, as the UK as a whole is the member state, the UK Government takes the lead in negotiating on behalf of the constituent parts of the UK to secure the best possible deal for the whole country. I am sure that David Lidington offered insight into how those concerns are represented across the piece. As a Scotland Office minister, my focus is on ensuring that the relationships between the Administrations are functioning effectively and that Scottish interests are considered during the course of deliberations on negotiating positions.
As David Lidington said in February, the UK Government works extremely closely with all three devolved Administrations on the development and implementation of EU policy. It has various formal and informal mechanisms to ensure that the interests and views of the devolved Administrations are taken into account in the formulation of the UK’s EU policy and in the negotiations with our EU partners that concern devolved policy issues.
Extensive consultation and co-operation at official level on a daily basis in the UK and in Brussels ensure that all parts of the UK receive the best possible deal in European negotiations. At ministerial level, there is a wide range of regular contact that includes the joint ministerial committee on Europe and bilateral discussions with the lead Government departments in London and Edinburgh. When appropriate, the Scotland Office becomes more directly involved, and I maintain good direct relationships with the various UK ministers who have portfolio responsibilities in areas that are of particular concern to Scotland. From a Scottish Government perspective, I am in regular contact with Richard Lochhead, for example, on issues such as common agricultural policy reform and fisheries concerns.
I am ready to answer as best I can committee members’ questions on intergovernmental relations as they relate to the euro zone and to listen to any concerns or issues that committee members may want to raise with me directly or to channel to the appropriate UK Government minister through me or Aidan Liddle.
Given my portfolio of responsibilities, I am interested in any suggestions that the committee might have on how we can improve working relationships between Administrations on EU issues. I am particularly keen to hear the committee’s views on that.
Thank you, Mr Mundell. I will take you back to before the December 2011 European Council meeting. Were you involved in any discussions in the lead-up to Mr Cameron going to that meeting?
The Scotland Office was involved in the meeting of the joint ministerial committee on Europe, which took place before the European Council session. A topic of discussion at the joint ministerial committee was the fact that treaty changes would be discussed at the European Council meeting, which the Prime Minister would attend.
Recently, we took evidence from the Cabinet Secretary for Culture and External Affairs, who was at the joint ministerial committee meeting. She said that no reference was made at that meeting to the use of the veto. Can you say why the veto was not discussed at the JMC?
The veto was not necessarily discussed, but the UK Government’s position was discussed, as was the fact that we would not want any compromise of the single market. This committee is aware from Mr Lidington’s evidence that the Prime Minister did not go into the European Council meeting wishing to use the veto. He put forward proposals that, had they been accepted, would have meant that the veto was not required. Ultimately, those proposals were not accepted by the other member states. Therefore, he used the veto, as we know.
When David Lidington helpfully gave evidence to the committee, he was open and honest and suggested that communications could be improved. He said that he would take that suggestion back for discussion. Has he discussed that with you? Have any resolutions been made on how to improve communication to avoid the feeling that the devolved Administrations were ignored, as happened with the process that led to the use of the veto?
I met David Lidington directly after he gave evidence to you, which he found to be a useful session. We have discussed how we might improve on-going dialogue. I was encouraged by the evidence of Fiona Hyslop, the cabinet secretary, in which she said that she had a good working relationship with me. I want to build on that and perhaps use the approach that I deploy with Richard Lochhead and Bruce Crawford, with whom I have regular, scheduled meetings.
I am in almost weekly contact with Mr Crawford and I have a monthly scheduled discussion with Mr Lochhead on issues of concern. Those meetings are scheduled; they are not reactive to circumstances. That arrangement has been conducive to good and close working relationships. I undertake to go back to Fiona Hyslop and seek to work with her on that basis. That is not to say that we do not have other on-going dialogues, because we do. However, a regular, scheduled discussion would assist greatly with improving communication. That is one thing that could happen immediately.
That would be welcome. I thank you for that. I will now open up the discussion to committee members.
Thank you for joining us this afternoon, Mr Mundell. You will be pleased to know that Scotland has sunshine.
Excellent.
I have two questions. The first relates to trade and industry. Can you shed light on the possibility of any industry coming to Scotland in the near future?
We want to work closely with the Scottish Government to make the best case for Scotland in terms of economic development. That is an important area on which the two Governments can work together—for example, I recently met Fergus Ewing and John Swinney.
The Scotland Office will participate in this year’s tartan week events in the United States along with the Scottish Government and we want to project a team Scotland approach to maximise the opportunities for Scotland. When we do that, we are at our strongest, and we want to continue that approach.
I cannot, during the course of this discussion, make a specific announcement about jobs that may be announced in the near future but, in my experience, the Scottish Government and the UK Government are successful when they work together on initiatives. One relatively recent development relates to the excellent support in the Scottish Parliament in favour of locating the green investment bank in Edinburgh. The Scotland Office was able to promote that support to try to influence the decision to bring the green investment bank to Scotland, which has tremendous potential for the Scottish economy.
I am a little concerned that we are not inviting companies to the level that we should.
My second question is about colleges. I am not sure whether you are aware that the UK Border Agency has refused to renew a number of licences for Scottish colleges, with the direct result that they will not be able to attract students from overseas. Frankly, the ability to do so is crucial to some colleges’ resource and income base, particularly since there have been such cuts. Can the Scotland Office provide assistance to overcome that difficulty? Although students are being headhunted and people are being encouraged to come to Scotland for further education, our own team is putting obstacles in the way.
On your first point, an important event is taking place next week in Scotland, in which the UK Government, the Scottish Government and the agencies that encourage trade—Scottish Development International for the Scottish Government and UK Trade and Investment for the UK Government—are involved. John Swinney and Lord Green, who is the UK trade minister, will also participate. The event is to encourage small and medium-sized enterprises in Scotland to get into the export market, which is an important way to develop growth in the Scottish economy. People often expect the Government to target big companies, but I cite that as a specific example so that people see that we can grow the small and medium-sized sector and create employment in that way.
I take on board your comments about the college issue. The Secretary of State for Scotland and I have been involved in a number of specific cases. We will always speak up for Scotland’s colleges and other organisations that have issues with the UKBA but, fundamentally, colleges must stick to the rules and, if there are breaches, the rules must be enforced. However, if there are mitigating circumstances or other issues for particular colleges, I am happy to consider them. Not too long ago, I had a face-to-face meeting with Damian Green, the immigration minister, along with Fiona Hyslop, at which the issue was discussed.
15:45
Good afternoon, minister. My starting point is my growing concern that Scotland’s voice in the EU, through the UK, is being diminished. I speak as someone who worked in the European Parliament in Brussels for many years to try to ensure that Scotland’s voice was heard in the EU’s corridors of power.
My concern stems primarily from a pattern of events that seems to be emerging. First, there was a complete lack of consultation with the devolved Administrations about the UK Government’s use of the veto and its potential impact on Scotland’s EU relations. The whole point of the 1999 concordats was to ensure no surprises and a relationship of trust between the UK Government and the devolved Administrations.
Secondly, when the UK Europe minister, David Lidington, gave evidence to the committee, he said that he regarded the key strategic meetings of officials that take place every Friday—the so-called Cunliffe-Rogers meetings—as
“official preparatory meetings for the United Kingdom Government.”—[Official Report, European and External Relations Committee, 20 February 2012; c 387.]
In other words, officials from devolved Administrations are no longer invited to those meetings. I appreciate that the UK minister for Europe is trying to make a number of improvements to communications between the devolved Administrations and the UK Government at official and ministerial levels, which I have welcomed, but the Friday meetings were key to giving officials early warning of issues that might require ministerial involvement.
Thirdly, there is a lack of adequate representation at EU council meetings. Instead of having an automatic right to attend those meetings, the Scottish Government must be invited to be part of the UK delegation. We would like the Scottish Government and not the UK Government to decide whether the Scottish Government needs to be present at such meetings.
My concern is real, because that is all happening while key negotiations are under way in Brussels, such as those on the multi-annual financial framework, the CAP reforms, the common fisheries policy reforms, the EU structural fund reforms and the horizon 2020 programme on research and development.
This is an important phase of any EU policy and legislative cycle. How can communications be improved between the UK Government and the devolved Administrations?
Tremendous progress has been made, and I do not recognise your interpretation of events. In my opening statement, I said that I was a member of the then European Committee when I was a member of the Scottish Parliament. At that time, no engagement took place between the UK Government and that committee, and very little engagement took place between the UK Government and the Scottish Administration.
Since this UK Government’s election, we have seen willingness to work together to ensure that we are aware of the devolved Administrations’ concerns and views and that we take into account Scotland’s interests. Obviously, there is a fundamental difference between Aileen McLeod and other Scottish National Party members and me on the direction of travel.
We want, and have sought, to involve the devolved Administrations of Scotland, Wales and Northern Ireland. The involvement that, for example, the Cabinet Secretary for Rural Affairs and the Environment, Richard Lochhead, has had since the coalition Government was elected has been significantly greater than before. I recently attended a meeting between him and Caroline Spelman during which there was full discussion of the process by which Scotland inputs into CAP discussions and agreement on how that process will work.
Things have moved forward considerably, although that does not mean that the Scottish and UK Governments will always agree. We have different political views on certain issues, so the nature of things is that we will not always agree.
I remain confused about exactly what the SNP Government’s position is on the veto. I have read Fiona Hyslop’s evidence to the committee and various communications from the First Minister, but I am not clear that the Scottish Government did not agree with the use of the veto. I most certainly do not agree with Aileen McLeod’s proposition that the veto has damaged the UK’s or Scotland’s interests in the intervening period. As she knows, at the time, the First Minister and others suggested that the use of the veto would greatly damage our ability to negotiate at the forthcoming fisheries council, but that was not the case. It was a difficult meeting, but the UK Government, working with the Scottish Government, achieved a better outcome than we had hoped for. In those efforts, we were supported by France—contrary to the situation that had been suggested ahead of the meeting.
The Cunliffe-Rogers meetings are internal Government meetings to determine the Government approach to such matters. I am sure that Scottish Government officials meet to consider the Scottish Government’s approach to Europe, the constitution and a range of other issues that it faces and which it is appropriate that the Government and its officials consider. That is how we see the Cunliffe-Rogers meetings.
Our approach is open. We want to have dialogue, but we recognise the practicalities of the situation. For one meeting—it was a dinner—a European commissioner had asked for one representative of each country. Richard Benyon pressed extremely hard for Richard Lochhead to be allowed to attend, because he felt that Mr Lochhead had specific issues to raise, but the answer from the Commission was no. We have a good record on the issue. In my regular call with Richard Lochhead, we discuss issues when they arise. If it is felt that there has been an exclusion or that a point has not been listened to, we take that back and try to improve things for the next time.
Until a few years ago, the devolved Administrations attended the Darroch-Cunliffe meetings, as the Cunliffe-Rogers meetings were then called. Given that we are no longer invited to those meetings, what is the structure for consulting the Scottish Government on key strategic EU issues such as the multi-annual financial framework? The joint ministerial committee on Europe does not meet very frequently, so how do you intend to ensure that Scotland’s interests are represented in discussions?
As I said in my opening remarks, there is an on-going dialogue between officials, on a daily basis, and with ministers, on an almost daily basis. Part of our role in the Scotland Office is to make specific representations in relation to Scotland’s interest, but we also listen directly to representations that are made to us. As David Lidington indicated, he has an open door in relation to representations from the Scottish Government.
We all accept that there is a lot of bluster that goes on in day-to-day political life in relation to what politicians say about one another. However, in practical terms, there is a good working relationship between the Scottish Government and the UK Government, and it is possible to ensure that the Scottish Government’s perspective is known and acted on.
Another development reminds me of when I was a member of the European Committee in the first session of the Scottish Parliament, as we also highlighted the issue of getting involved early as being of great importance. The UK Government now has a much better approach to what is being termed “upstreaming”, which means getting involved early in European issues and influencing the debate at its very early stage rather than arguing about decisions that have already been made. That approach will also benefit Scotland.
Is the Scotland Office represented at the Cunliffe-Rogers meetings?
The Scotland Office is not represented at those meetings, but if we want to input into those meetings, we have the opportunity to do so.
Who represents Scotland’s interests at those meetings?
They are internal meetings in which the Government’s position is evolved. The devolved positions are known to the people who participate in the meeting. The meeting does not come to the definitive view on the UK Government’s position. For example, on a daily basis, I sign off, on behalf of the Scotland Office, our response to various EU directives and initiatives. In doing that, I always ensure that the Administration in Scotland has been fully engaged in the process to the extent that its views are known. Where there is a distinct Scottish interest, in areas such as whisky, for example, we take that further to ensure that the Scottish interest is fed into the process. We are able to point to many circumstances where that arrangement has influenced the process.
The Prime Minister has been adamant about his intention to safeguard the single market. He said:
“The EU treaty is the treaty of those outside the euro as much as it is for those inside the euro, so creating a new eurozone treaty within the existing EU treaty without proper safeguards would have changed the EU for us, too.”
Is it the case that the Prime Minister used the veto to help to protect the single market, especially the financial services sector in the UK and Scotland, which is vital to the economy, and that opinion polls suggest that the majority of Scots back the Prime Minister’s view?
16:00
Obviously I agree with that analysis. However, as I indicated earlier, I am not clear as to whether the Scottish Government disagrees and whether the use of the veto is the issue of concern. I think that the Prime Minister was quite right to use the veto; after all, he had not achieved the necessary safeguards for the financial services industry. Given that industry’s disproportionate importance in Scotland, I believe that, like the rest of the UK, Scotland has benefited from his decision. There is absolutely no evidence to suggest that the UK’s relationship with the rest of Europe has been diminished or that Scotland’s interests have in any way been prejudiced as a result.
Do you think that Scotland and the UK have been protected from the worst effects of the euro zone crisis by not being in the euro?
I am absolutely clear that it was the right decision for the UK to stay outwith the euro. However, that does not mean that what happens in the euro zone is not important to us; indeed, the committee has recognised that and we in the UK Government have sought to work with others to the fullest extent of our involvement to ensure that there is stability in the euro zone, particularly in relation to Greece and other countries that have been in difficulties. That said, there is no doubt in my mind that it was the right decision to stay with sterling and not to join the euro, and the Prime Minister has made it clear—if indeed it was in any doubt—that Britain will never join the euro during his term of office.
You have made it very clear that we will not join the euro, but would an independent Scotland have that choice, or would it be forced to join the euro? What is your understanding of the situation?
My understanding is that the position is very uncertain. The EU has never dealt with the break-up of a member state and no assumptions can be made as to whether Scotland would be permitted to remain in the EU without joining the euro. Many academics have argued that unless it was able to negotiate some other arrangement Scotland would be required to join the euro. I am afraid to say that, from my perspective, this is one of the great uncertainties that surround the independence debate. Instead of having the current lengthy discussion on the process of the independence referendum the UK Government would rather move on to the substance of the debate around independence, including the fundamental questions about Scotland’s relationship with the EU, whether it would be able to be a member of the EU and to retain the various opt-outs and other arrangements that the UK negotiated and, of course, the currency.
Before we move on, I ask that members concentrate on euro zone issues.
On that last point, I should say that towards the end of last year Iain Mitchell QC set out in The Scotsman his professional opinion that Scotland would be obliged to join the euro because the treaty stipulates that all new member states must do so. As you say, minister, the question is whether, after secession, we would be regarded as a new member state or an existing member state. However, I will leave that sticking to the wall.
Let me return to the important issue of process. Aileen McLeod and the convener, Christina McKelvie, have made an important point, and I agree with them, as does Carwyn Jones. He signed a letter with the First Minister, Alex Salmond, in which the point was made that there should be consultation with politicians about the process. You have made the point that officials speak regularly. It is good that they do so, but politicians are very important. We are elected to represent our people, and we feel that we have a case to make on behalf of Scotland. It is right that you should have a process in place in which not only officials but politicians are consulted in the way that both the First Minister and the Labour First Minister in Wales, Carwyn Jones, have asked for.
I would like your reaction to those comments, please.
Of course it is important to hear directly from politicians, and a number of politicians are directly elected to Westminster from Scottish constituencies—constituencies that overlap with your own. From the point of view of the UK Government and the Westminster Parliament, politicians from Scotland who are directly elected to Westminster are able to make the case very eloquently for Scotland and Scotland’s relationship with Europe. Mrs Eadie will be very familiar with Mr Ian Davidson, for example, who is chair of the Scottish Affairs Committee at Westminster and makes regular contributions in debates on Europe. That political dynamic must not be overlooked.
Of course we want to have a good and constructive relationship with the devolved Administrations. I noted the letter that Carwyn Jones and Alex Salmond sent. From the UK perspective of dealing with the devolved Administrations, it should be noted that the First Minister of Northern Ireland declined to send that letter; indeed, he advocated and supported the Prime Minister’s use of the veto.
Of course we want to have on-going dialogue. That is important, but the other side of the coin is that political posturing is inevitable when politicians are involved. I have read Fiona Hyslop’s evidence. Some of her rationale for the Prime Minister’s actions was clearly political. I do not think that any objective person who read the First Minister’s letter would say that it was not framed with an eye on politics. We must be realistic and take that into account.
We want to ensure the best possible communication between the devolved Administrations and the UK Government—I give the committee a commitment on that, and David Lidington clearly gave such a commitment, too—but communication is simply not possible in moments such as that when the Prime Minister was on his own without officials in a meeting with other Prime Ministers and had to make a decision about the veto on the spot. Under current United Kingdom constitutional arrangements, that is his decision to make.
I want to come back to the point about the process. The committee has heard in evidence that, during meetings of the various councils in Europe, an official will take the seat when a Westminster parliamentarian leaves it, although there can often be a member of a devolved Administration present.
Throughout my time in the Parliament, I have campaigned for all our parliamentarians and cabinet secretaries to take European matters more seriously. How can it be right that, despite the fact that politicians are present, officials can take the seat at the European level? Irrespective of whether the politicians come from the devolved Administrations or from Westminster, their value should not be diminished. I ask the minister to comment on that.
I hope that we are moving away from such situations. I am afraid that there is evidence that that occurred under the previous Government and that, on occasion, steps were taken to ensure that anybody but devolved Administration ministers participated. That is not our policy. Our view is that devolved Administration ministers can chair sessions—in fact, they have done so. I will send the committee a note that sets out the pattern over recent council meetings. The record since the coalition Government came into being is a good one. We want to involve those ministers as far as possible. I have explained some of the parameters, such as when there is only one place available, but we have worked hard to ensure that devolved Administration ministers get their place and are able to chair sessions when that is appropriate.
The one proviso is that, when the United Kingdom position is presented, it is necessary for the person who is presenting it to present the UK position as a whole. It is not of benefit to the UK’s negotiating position to present divisions within the UK openly to other member states.
May I ask one last question, convener?
A few other members want to ask questions. We will come back to you if there is time.
I want to return to the financial services sector, which the minister said is of “disproportionate importance” to Scotland’s economy. On his use of the veto, Mr Cameron said that he had been attempting to establish
“a level playing field for open competition for financial services companies in all EU countries”.—[Official Report, House of Commons, 12 December 2011; Vol 537, c 250.]
I do not know whether you are aware, Mr Mundell, that this morning the Scottish press reported the publication of “The Global Financial Centres Index 11”, which is a survey of finance professionals. Both Edinburgh and Glasgow have slipped in the rankings by a considerable amount and there is concern that the financial sector seems to have been more badly hit in Scotland than in the rest of the UK. If there were a level playing field in the UK, we would have expected those cities to have had parity of position with London, even if that meant that London had slipped as well. However, the Scottish financial centres of Glasgow and Edinburgh are the ones that have slipped. What are you doing to protect the financial services sector in Scotland under the current constitutional arrangement?
16:15
I take it that you are not suggesting that the use of the veto led to that slippage. The Prime Minister recognises the importance of the financial services sector in Scotland—as does the whole Government—not just because of its significant contribution, but because of the levels of skill and expertise that it brings, which were an important factor in the decision to locate the green investment bank in Scotland.
I am unashamedly political in saying that the best possible thing for the financial services sector in Glasgow and Edinburgh is for Scotland to remain in the United Kingdom and to have the benefits of the UK’s resources and collective expertise to promote those financial services in Europe and beyond. If, in the short term, we could lift the uncertainty about the future of Scotland’s constitutional arrangements, that would considerably benefit the sector.
I was a wee bit surprised when you mentioned earlier that the Prime Minister was at the December Council meeting by himself and had to make up his mind very quickly about whether to go forward with the suggested fiscal compact or to use the veto. The idea that the Prime Minister of one of the member states of the European Union should have to act on a moment’s whim on whether to enter into such a major potential treaty change or to decide that he wanted nothing to do with it because it might damage the financial services sector in the UK seems rather unlikely to me. He could have done any number of things. Should he have been sitting there by himself? If he was—unlike you, as you have a colleague with you—I suggest that that was rather foolish on his part.
To have been the representative of the whole of the United Kingdom, as the Prime Minister was, but not to have considered the input that could have come from the devolved Administrations was a failure on his part in his duty to the whole United Kingdom. As far as I am concerned—I hope that you do not mind my saying so, as you have been quite free with your own opinions on constitutional issues—Scotland’s financial, industrial, economic and cultural representation would be better if Scotland had the opportunity to sit in in such meetings.
You said earlier that you were unsure of the Scottish Government’s position on the use of the veto but, according to the BBC, the letter from the First Minister, Alex Salmond, to the Prime Minister, supported by Carwyn Jones of the Welsh Assembly Government, stated that he was displeased that the Scottish Government and other devolved Administrations were not even consulted on the use of the veto. We know that the British Parliament overrides the devolved Administrations, but surely the views of the other Administrations should at least be taken into account. I do not accept the idea that the Prime Minister had no option but to make his mind up on the spot and to decide to use the veto. Could you comment on that?
There is a lot there but, on the fundamental point, the Prime Minister had sought to negotiate certain opt-outs from the proposed treaty, but the other participants did not agree to those. In any negotiation, there comes a point at which you have to make a decision on whether you agree or disagree. If the First Minister of Scotland were party to such discussions, I am afraid that he would have to be able to make a decision on that basis. That is the nature of negotiations and discussions at the highest level. I am old enough to remember when the nuclear disarmament discussions were conducted directly between President Reagan and President Gorbachev. As I recall it, they were locked in a room and had to make the decisions there and then. That is what you do in such negotiations if you are the leader of a country.
The Prime Minister took a decision on the basis that it safeguarded Britain’s and Scotland’s interests. I have read the letter from the First Minister in which he made the point that he had not been consulted about the use of the veto, but he did not say anywhere in the letter—and, as far as I am aware, he has not said subsequently—whether he thought that the use of the veto was a good idea. He did say that the use of the veto could prejudice Scotland’s position in future negotiations in which the UK Government was involved. However, that has been comprehensively disproved; there is not a shred of evidence to suggest that Scotland’s position has been in any way prejudiced in any discussions or negotiations subsequent to the use of the veto.
I am sad to say that I am older than you, Mr Mundell.
At any level of politics or business, something that is important to all participants will be discussed by all. At the December Council, it would have been possible for the Prime Minister to negotiate a period of time for further thought, during which it would have been incumbent on him to consult fully with all the participants in the United Kingdom. That would have done no harm and might have allowed him to carry more people with him if he had still gone for the veto.
Mr Mundell, you have been at great pains to impress on us that communications have improved and that you personally have taken that forward, which is very welcome. However, given that Scotland felt sidelined in the run-up to the December Council, will you explain why Scotland was once again sidelined for the 30 January informal Council meeting? Was that part of the improvement programme, or was it just a blip, to be followed by improvement?
I do not accept at all that Scotland is sidelined. There is no evidence to suggest that. There has been considerable improvement in the way in which the UK Government has closely co-ordinated with the devolved Administrations. I have said to Mrs Eadie that I will write to the committee on the arrangements for specific council meetings in which the Scottish Government has been involved, which I will do. However, it is completely wrong to say that the Scottish Government has been sidelined.
There are occasions when the UK Government and the Scottish Government do not agree about matters, but that is part of the political and democratic process that we must accept. However, all the evidence demonstrates that we respect the Scottish Government’s position on matters and that we seek to proceed in Europe on the basis of achieving the best outcome for Scotland.
I have been listening to you and my colleagues very carefully and I can see that feelings are running quite high. It is fair to say that we are in changing times, in which democratic accountability is far greater than it has been historically. Those nations around the world that have not bent with the times are paying a high price. Libya and Syria are examples that come to mind immediately in that regard. Democratic accountability is important, so the requests that are being made for greater discussion and communication are reasonable. Persistently refusing to engage is unreasonable and unhelpful. Therefore, I strongly urge and recommend that Scotland Office and other ministers take seriously the serious concerns about the lack of accountability, discussion and participation.
You rightly pointed out that we have MPs at Parliament who engage as well. However, we too are accountable to constituents and are expected to engage and ensure that our constituents’ wishes are carried out. Therefore, it is incumbent on us to impress on people such as you the point that we must try to maximise the opportunities that are available to us. We do so.
Rather than focus on the veto and other issues, I simply want to add that we need to engage a bit more fully and take on board the comments that people are making, because they are important.
I agree. I also agree that perception is important. I hope that I have not in any way given the impression that I reject calls for greater dialogue, because it is quite the opposite. I want to encourage it and, in earlier remarks, I said that one step that I had identified that I could take would be to have a regular communication with Fiona Hyslop on the same basis as I do with Mr Crawford and Mr Lochhead. That is something that we can do to ensure continuous dialogue.
When David Lidington gave evidence, he made it clear that his door was open to the Scottish Government on any issues and concerns that it wishes to raise on Europe. I have stressed the official dialogue, which is an important part of the way in which the two Governments work, but the committee’s work is also important. When I was in the Scottish Parliament, I wanted to be a member of this committee because I thought that it had an important role to play in flagging up Scotland’s specific interests in Europe.
I am glad that you are conducting an inquiry such as this, because it is important that you hold the UK Government to account. That, of course, does not necessarily mean that we will agree on the course of action, but I respect the committee’s right and wish to conduct the inquiry and I assure you that I will do anything that I can to facilitate better communications between the two Governments.
Two members want to come in with quick points, but I need to check with you that you have enough time to take them, Mr Mundell. I know that your schedule is tight.
Yes, I do.
I understand that the UK’s voting strength within the EU relates to the size of the national population. An example of the strength of the UK negotiating position arose in the most recent negotiations on the common cultural policy, in which the delegation produced four different delivery systems for Scotland, England, Wales and Northern Ireland in accordance with the wishes of those separate nations. Do you agree that that was the result of extremely strong negotiation? Will the UK be able to achieve that in the forthcoming talks on the common agricultural policy in 2013-14?
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The UK Government regards the common agricultural policy as important and recognises the distinct issues in Scotland. My colleague Jim Paice recently gave evidence to the Scottish Parliament committee that is looking at the CAP. As I indicated, I recently met Richard Lochhead and Caroline Spelman to discuss the process by which the Scottish Government will have input into the on-going process. We very much want to achieve the best outcome for Scotland, working in conjunction with the Scottish Government.
On the wider point, it is important to acknowledge that the UK is one of the four major nations of the EU and therefore has a degree of influence in the EU commensurate with its size and population. Although a couple of committee members alluded to the fact that Scotland might want to independently pursue a different approach on certain matters in the EU, there is no evidence to suggest that it would be able to influence events to the same extent as the UK can at the moment.
On the matter of the involvement of Richard Lochhead and Fiona Hyslop in your meetings, had Nicola Sturgeon not been very much involved in the cross-border healthcare initiatives, Scotland would have had to write a blank cheque. The same applies to Kenny MacAskill on justice issues such as the Schengen agreement and trafficking across Europe. Why do you mention only Fiona Hyslop and Richard Lochhead? When wider European issues—of which there are many—arise, you could involve Scotland’s cabinet secretaries a great deal more. We just need to look at the programme of priorities for Europe. Why do you not have that wider approach?
I am very happy to have a dialogue with all members of the Scottish Government. I was giving the example of our close dialogue with Richard Lochhead because it is acknowledged that agriculture and fisheries are of particular import to Scotland, and with Fiona Hyslop because her portfolio as cabinet secretary includes European issues. I am happy to work with all members of the Scottish Government whenever they think that the Scotland Office can take forward their views within the UK Government. As I said, part of my role is to ensure that, when there are formal governmental deliberations on directives, EU regulations or EU initiatives, Scotland has been consulted and there is on-going dialogue with the relevant ministers in Scotland. I am happy to work with all ministers in Scotland and ensure that we present the best possible case for Scotland and get the best possible outcome for Scotland.
Will you write to the committee and tell us what risk assessment, if any, the UK Government undertook of the impact of its veto and decision on investment into Scotland and the UK, and on negotiations affecting key Scottish industries?
I think that Mr Lidington dealt with that issue when he appeared before the committee. I think that he set out the UK Government’s position on the matter, but I will check the Official Report of that meeting. I have undertaken to write to the committee on the issue of participation in council meetings.
Will you write to the committee specifically on that matter, please?
On the issue that you have just raised, I will look again at what Mr Lidington said to the committee, but I understand that he gave a full response on the UK Government’s position, in which case there would be nothing further that I could add in a letter to the committee.
Aileen McLeod has a final question to put to you. I promise you that it will be the final question.
As someone who has worked in the European Parliament in Brussels, I have seen close up the very real influence that countries of a similar size, as well as countries that are smaller than Scotland, can exert through being at the EU negotiating table and being able to put forward their own strategic interests. That also allows them to work together to build coalitions of support and strategic alliances with other member states that share similar objectives with regard to EU legislative and policy developments. I just wanted to put that on the record.
What is the latest thinking in the UK Government on its plans for repatriating powers back from the EU to the UK? What discussions, if any, is the UK Government having with the devolved Governments about the powers that it is considering repatriating?
The consideration of those issues is set out in the coalition agreement. They are issues that will be pursued in the course of this Parliament, which is due to extend until 2015. When discussions on those issues are pursued, we will consult and work with the devolved Administrations on the basis of the commitments and the factual analysis that I have previously set out.
Thank you for your evidence. It is not always easy being on the receiving end of a committee. It was good to have you—or, at least, your voice—back.
We may write to you if there is anything that we want you to clarify following today’s evidence session. We hope that that will be okay with you.
Yes, I would be happy to do that. I thank the committee for its indulgence in allowing me to give evidence by way of videolink.
Thank you.