European and External Relations Committee, 22 Mar 2005

Meeting date: Tuesday, March 22, 2005

Official Report 249KB pdf

---

G8 and Council of the European Union Presidencies Inquiry

Good afternoon. I open the sixth meeting in 2005 of the European and External Relations Committee. I have received apologies from Iain Smith and Irene Oldfather, who are unable to join us today.

We have a busy agenda, which splits into three component parts. First, we shall take evidence on Scotland's contribution to the G8 summit and the United Kingdom presidency of the Council of the European Union from the Minister for Finance and Public Service Reform and, by video link, from the United Kingdom Secretary of State for International Development. There will be a break in the committee's proceedings at 3 o'clock to enable the technical arrangements for that video link to be established. At 4 o'clock, we shall take evidence from Mr McCabe again, on the European Union Bill.

The first item on our agenda is our inquiry into Scotland's contribution to the G8 summit and the UK EU presidency. The inquiry will examine both those political initiatives, on which the Government is currently focused. With us to address points relating to that is Mr Tom McCabe, the Minister for Finance and Public Service Reform.

I invite you to make any opening remarks that you wish to make and to introduce the colleagues who are with you.

On my left is Ian Walford, who is perhaps known to the committee. On my right is Tim Simons and to his right is Jane McCloskey, both of whom have been at the committee before. They will assist me this afternoon.

Thank you for inviting us along today. The committee has asked me to speak on a variety of subjects, the first two of which are the G8 summit and the United Kingdom presidency of the Council of the European Union. I shall begin with the G8 summit, then move straight to the UK presidency. I shall then take members' questions.

The committee will be aware that, during the recent parliamentary debate on the G8 summit, I attempted to set out the Executive's objectives for the summit. Among those objectives were our determination to showcase Scotland to a worldwide audience and to demonstrate a contemporary Scotland that is vibrant and thriving, and to welcome visitors and show that Scotland is determined to play its part in the wider world. I am delighted that we are hosting such a major world event.

We also said that we wanted to maximise the economic benefits to Scotland from the summit, not just during the period of the summit but in the years following it. That is the experience that other countries have had. The advice that we have received is that the benefits of such a summit can last for a considerable time.

Importantly, we have said that we wish to engage the Scottish public in debate on the critical issues of Africa and climate change. We want to take the opportunity to make people in Scotland more aware of our climate change programme, to encourage people here to think more deeply about how we can protect our environment and hand over a better legacy to future generations, and to build on the historic connections that already exist between Scotland and some African countries. There is in Scotland great affection for that continent and there is awareness, perhaps because of our natural instinct to empathise, of the challenging situations in which people find themselves in some African countries. We want to build on that and on those historic links to ensure that we make the maximum contribution that we can to ensuring that other countries enjoy the prosperity that we sometimes take for granted.

We want to ensure, through the G8 summit's being held in Scotland, that the views that we hold in the Scottish Executive are transmitted to the United Kingdom Government and are reflected in the approach that it takes to the summit. Naturally, we want to generate a sense of pride in the fact that we are, once again, able to host a major world event. We will do our very best to ensure that we do that successfully, to showcase our country and to be seen as a welcoming nation. We are confident that we can achieve all those things.

We have been enormously impressed by the willingness of organisations in the public and private sectors to join in the effort. We have also been impressed by the level of interest that has been shown so far in the two main themes, which are climate change and Africa. Many people have shown willingness to make their views known, which bodes well for our hopes and aspirations to engender deeper awareness, deeper debate and greater commitment to assisting in tackling those two huge challenges in the world.

As members may know, the First Minister will visit Malawi later this year. He will also shortly announce more details of the events, which will take place in April, May and June, that we are planning around the G8 summit. The summit is a great opportunity to welcome a large number of individuals to our country, including journalists, delegates and people who want to come and make known peacefully their views on the direction of the world and the condition in which some countries find themselves. We see the summit as being an opportunity to have thousands of ambassadors for Scotland leave our country saying very good things about how we conducted the summit and presented our country and the opportunities that exist here. We would like thousands of ambassadors to leave with an image of contemporary Scotland as a thriving modern nation that is able and willing to play a part in the developing world.

It is only fair to say that we are aware that there may—I stress "may"—be some individuals who would like to come to Scotland and abuse the hospitality, perhaps by behaving in a way that would disrupt people's daily lives. We sincerely hope that those individuals will be dissuaded from taking such a course of action, but we are absolutely confident that, if anyone is determined to try to disrupt either the summit or the daily lives of individuals in Scotland who are going about their peaceful business, adequate plans are in place to deal with that.

In summary, our hope is that the Gleneagles summit will go down in history as a meeting of world leaders that made a marked difference, and from which point in history there was greater determination to tackle climate change and hand over a far improved legacy to future generations. We also hope that it will mark the start of a greater willingness, through the demonstrable actions of leading countries, to address the terrible challenges that are faced in some of the countries that make up the continent of Africa. As members would expect, we intend to carry out a post-event impact study. Once that study is completed, we will be happy to share it with the committee and discuss it at the appropriate time.

I move on to the United Kingdom presidency of the Council of the European Union. In the second half of this year, the United Kingdom will assume the presidency for the first time since devolution. As members would expect, the Scottish Executive wants to ensure that Scotland makes a full and active contribution to the presidency.

Our main objectives for the UK presidency are to assist the UK Government in delivering a successful and effective presidency and to make full use of the opportunity to promote our country as a vibrant and welcoming place that is determined to play its full part in Europe. We believe that we can do that by supporting the many presidency-related events that will take place in Scotland. We aim to ensure that those events are a success, both for visitors and in terms of the content of the work that is carried out. As members will be aware, Scotland will host a significant number of presidency-related events—at the moment, more than 30 are planned, but that list could grow—that will cover a wide range of policy areas, formats and bodies.

We also want to assist the overall effort by providing support to United Kingdom ministerial colleagues. As members will know, I attend the joint ministerial committee on Europe, meetings of which are held in London. I have previously taken the opportunity to stress to the Foreign Secretary that Scottish ministers are keen to assist the UK delegation wherever that is required. The offer was warmly received. We will also help out at official level, by chairing EU working groups when official-level meetings take place.

It is important to stress that the role of the presidency is to work for the benefit of the European Union as a whole. Whichever country holds the presidency must operate impartially and not focus unduly on its own national interests. Successful presidencies are those under which EU business is taken forward in an effective, impartial and business-like manner.

It is important to be realistic about what we can achieve during the presidency. Obviously, it would be wrong to assume that the outcome of EU negotiations will be more favourable to the UK or Scotland just because we hold the presidency, because that would obviously impact on our impartiality. However, I stress that the Executive has been fully consulted on the joint United Kingdom-Luxembourg operational programme. We will continue to work closely with the UK Government both on planning for the presidency and, more generally, on relevant on-going EU business to ensure that Scottish views and interests are taken fully into account.

I have given an overview of our approach to the G8 summit and the United Kingdom presidency. As I said earlier, I will do my best to answer any questions that members may have.

I thank the minister for his opening remarks. We will deal first with the G8 summit, then with the UK presidency.

You mentioned the Executive's desire to engage the public in debates on Africa and climate change as part of the G8 summit. You also said that the Executive's views were transmitted to the UK Government. In your comments on the presidency, you mentioned the JMC on Europe as a forum for discussion on presidency issues. What mechanisms does the Scottish Executive have for transmitting its views—and, consequently, the views that it elicits from the people of Scotland and the views of Scottish Parliament committees—to the UK Government to influence the agenda for the G8 summit?

That is done in two ways: at official level and at ministerial level. At official level, there is substantial contact between officials of the Scottish Executive and those of the Westminster Government. There are also ministerial contacts. For instance, when I met Denis MacShane during a visit to Brussels not too long ago, we discussed various EU-related matters. Obviously, Scottish ministers—usually either me or my deputy—also attend the JMC on Europe. On those occasions, we do our best to ensure that the views of the Scottish Executive are not only transmitted to the United Kingdom Government but reflected in the position that the United Kingdom Government takes.

Did I understand you correctly as saying that the JMC on Europe is the mechanism through which the Executive can influence and provide input into the agenda of the G8 summit?

I am sorry—I missed you there.

Do I understand you correctly as saying that the mechanism for conveying issues concerning the G8 summit from the Executive to the United Kingdom Government is the JMC on Europe, or is there a different structure in Government that has been established for the purposes of the G8?

You have misunderstood me. In your opening remarks, you said that we would discuss the G8 summit. When you asked the question, however, you mentioned both the presidency and the G8. The JMC on Europe deals specifically with matters relating to Europe, and it has ministerial attendance. As far as the G8 is concerned, there is obviously contact between Scottish Executive ministers and United Kingdom Government ministers—conversations take place. There is also substantial contact at official level between Scottish Executive officials and United Kingdom Government officials.

What messages have been conveyed from the Scottish Executive to the United Kingdom Government about the priorities that the Executive would like to be pursued at the G8 summit?

We have stressed climate change. We are very happy with the priorities that the Prime Minister has set out with regard to climate change and Africa, and our First Minister has substantially picked up the agenda on Africa. As I mentioned, he will visit Malawi later this year. Through other international development work, some of which is carried out by Patricia Ferguson, we will do our best to maintain that contact and seek out ways to assist the development of the countries concerned.

In essence, in that case, the Executive is able to influence the agenda where its priorities coincide with the priorities of the United Kingdom Government.

Yes, it is able to do that, but I add that if the Executive had priorities outwith those of the United Kingdom Government we would—of course—not be prevented from expressing a view.

I will pursue the point about the structure of involvement in relation to ministers in Her Majesty's Government. You have said that there are official contacts and informal conversations. How are those minuted? How could people—such as the committee—access indications of what the Scottish Executive lays on the line as being important issues from a Scottish dimension, for the G8 summit?

On climate change, for instance, we have a very close working relationship with the Department for Environment, Food and Rural Affairs at official and ministerial levels. The Executive communicates with DEFRA on its review of climate change—we have our own climate change programme here in Scotland—and dialogue on that subject continues at ministerial and official levels. On the Africa initiative, the committee will be speaking to Hilary Benn later this afternoon. Hilary has made it clear publicly on a number of occasions that he welcomes the Scottish contribution to the work in Africa.

The Executive is closely tied to the Foreign and Commonwealth Office on planning for the G8 summit. Scottish Executive officials are regularly meeting FCO officials in London to develop plans for it.

Are the details of those meetings published?

Details of meetings and so on are subject to the usual freedom of information rules. There is nothing in particular that has been published on that front. As Mr McCabe says, there is a great deal of to-ing and fro-ing day to day and week to week.

Could the details be published?

You would have to apply to the Foreign and Commonwealth Office under the usual freedom of information rules as far as its meetings are concerned.

I have a question about access to details, the line of questioning that has been apparent from the outset at this meeting and the typical statements that have been made from a particular party-political perspective. Is not the reality that the run-ups to both the G8 summit and the EU presidency take years of planning and that it is not simply a matter of people rolling up three months before the event and asking to put X, Y and Z on the agenda?

In general terms that is true, but I stress that there is no agenda in the Scottish Executive not to reveal details of conversations that we have with the United Kingdom Government. We have been open about the fact that here in Scotland we have our own programme for climate change. It would be strange if we did not make representations to UK ministers in pursuit of that programme and express the hope that not only here in Scotland but in the UK as a whole the Government steps up its effort to make a positive contribution on climate change.

There is no secret about the historic ties between Scotland and countries in the continent of Africa. The First Minister will visit Malawi in May this year. I represent Hamilton South, which includes Blantyre. David Livingstone left there to do the very impressive work that he carried out as a missionary in Africa. Such ties have existed for a very long time. I would not like the impression to be created that there is anything secretive about contact between us and the UK Government. We are pushing at an open door when we speak to the UK Government about the Africa initiative and climate change.

You referred to climate change on several occasions. Will there be any opportunities, both in the run-up to the G8 summit and during it, to highlight Scotland's good performance on climate change? I cannot think of any other part of the UK, nor of many other countries in the world, where the majority of electricity is generated without emitting carbon dioxide or greenhouse gases. That is the case partly because of what the Executive is doing on renewables and also, very importantly—members would expect me to say this—because practically half of our electricity comes from nuclear power stations, which are not a threat to the environment.

A number of different events are taking place. I said earlier that the First Minister will announce details of other events that will take place in April, May and June. On that theme, Perth and Kinross Council will hold a climate change conference in Crieff on 6 June, which is obviously complementary to the summit. I mentioned how impressed we were by the willingness of organisations—public and private—to join in the effort to ensure that we emphasise the two themes and make the summit a success. This is a good opportunity to say that Perth and Kinross Council is doing its very best to ensure that the summit is successful. It is playing a leading role; the fact that it is holding the climate change conference is a good demonstration of that.

You indicated that there are adequate plans to deal with any threats to disrupt the G8 summit. Could you give us details about the cost of policing? I presume that Tayside police will have exceptional extra costs, but other police forces—Lothian and Borders police in particular, as there will be extra costs for security within and around the capital—will probably also have significant additional costs. I am told that the additional money that has been allocated so far for that purpose is not enough to cover all the additional costs. Who will pay the balance? Will it be the Scottish Executive, the City of Edinburgh Council or the joint police board?

First, we have devolved responsibility for policing here in Scotland and we accept that fully. Therefore, when an event requires policing we recognise that we have a part to play in that and a responsibility for that policing. The overall costs of the summit will be met by the Foreign and Commonwealth Office, but clearly policing costs will arise here in Scotland. It has already been confirmed that £20 million has been made available to meet some of the costs. We are delighted with that, but here in Scotland we accept that we will have to cover some additional costs. It is only right and proper that, as an area within the UK that has a devolved Government and devolved responsibilities for policing, we pay our share of the policing costs.

The City of Edinburgh Council has made representations on policing costs for the demonstration and we have asked for a more detailed breakdown of those costs. Perth and Kinross Council has also made representations on costs and, again, we have asked for a detailed breakdown. We will consider the representations and have indicated that we are willing to offer financial assistance.

Do you know what the total consequential cost to Scotland is likely to be? You mentioned the offer of £20 million from the United Kingdom Government, but has the Executive settled on an overall estimate?

Not yet. Obviously, the operational details of the required response have yet to be finalised. It would be inappropriate to identify an overall sum before the summit because to do so might indicate to some individuals our preparations for the summit and for anything else that might happen to do with the summit.

I understand your difficulty in giving all the details, but has the Executive made a commitment to pay the additional costs that other public authorities incur?

Yes, but I have not given a commitment to write anyone a blank cheque. I do not think that you would expect me to.

That was not what I asked.

No, but I am just qualifying my statement. I want to be sure that you understand the assurances that we have given the public authorities. If people have said that they expect to incur additional costs, we have asked for a statement of those costs. We will consider those statements and respond appropriately.

We all accept that the Prime Minister has concentrated on Africa in particular, but has the Scottish Executive made any representations on wider trading issues or the involvement of the World Bank? Irrespective of the way in which the Prime Minister wishes to guide us, I suspect that there will be other pressures—external and internal—on the G8.

I am not sure that I understand what you are trying to get at. Obviously, the World Bank is involved in the G8 summit.

There are issues about the World Bank and issues about trading around the world. The G8 will certainly wish to address those issues, so I wonder whether the Scottish Executive has an established position on those matters in its contacts with the UK Government.

We have said that we are pleased with the expansion of free trade around the world, and we have said that we would like trade not to disadvantage the developing countries of the world. That is also the point of view that the UK Government will put across. However, although we endorse the development of free trade around the world, we have to ensure that it does not disadvantage some of the more challenged areas of the world.

You mentioned a post-event impact study—it will be wise to carry out such a study. What particular areas will you consider?

The scope of the study will be quite wide; Mr Walford might be able to give more details. It will clearly be important to consider long-term economic benefits. As with any major operation, we will want to learn from how we planned for the event and from how we responded while it was taking place.

The study will consider the economic impact in the short term and, mainly, in the long term, as Mr McCabe says. One of the potential benefits of the summit will be the opportunity for Scotland to put its companies, its products and itself as a tourist destination in the frame. We will want to consider the long-term benefits as well as the short-term financial impact. As Mr McCabe says, we will also consider what other lessons we can learn for large events.

The G8 is obviously a major international event. Could any of the lessons that will be learned be useful in, for example, attracting the European championships to Scotland? Will we be able to assess our international pulling power?

We already have some experience of handling major international sporting events—for example, open golf championships—although, unfortunately, we do not have a great deal of experience of winning them. If holding the G8 summit helps us to make progress towards winning any of those events, that will be just another spin-off benefit.

I have a quick follow-up. Leaving aside sport—which it would be wise to do at this stage—I believe that there must be a possibility that, if the summit runs well at Gleneagles, Scotland could be seen as a potential venue for future international conferences. We all know of small countries around the world—Switzerland is the obvious example, I suppose—that have a long history of holding major events. If the G8 goes well, surely there must be opportunities for building up Scotland's prospects of attracting similar events, whether on the G8's themes of Africa and climate change or on other themes. Does the Executive have that in mind?

The fact that the summit is being held here in Scotland underlines the fact that we are recognised as a country that is able to hold such events. It shows that, when many countries look at the way in which our new constitutional arrangements are developing, they regard Scotland as an exciting place of the future, regardless of the number of people who are determined to talk us down. The fact that we can hold the summit is a good indication that we are a country that is on the up and is looking to the future.

It is clear that we would want to build on the experience that we gain. That is why it is so important that the summit is successful, that we are seen as a country that warmly welcomes people and that we do our best to showcase contemporary Scotland and all the best aspects of our country. We want all the people who come here, for whatever reason—whether they are journalists, visitors, delegates or protesters—to leave convinced that this is a place of the future, to which their children could perhaps think about coming to study or to live and work in. We have opportunities to promote our country on the world stage. If the summit is as successful as events that we have held in the past, that will justify the argument that we should hold other events in the future.

Perhaps in this building.

The number of people who show an interest in the building on a daily basis reflects the growing realisation that it is an iconic structure. Whether at this end of the Royal Mile, at the other end, where Edinburgh Castle sits, or in between, Scotland has many assets that people are extremely impressed by when they come here. I hope that we will use the further asset of the Scottish Parliament building to impress people with Scotland's benefits.

Mr Walford, you talked about assessing the economic impact and how companies would benefit in the future. Will you elaborate on what is happening on that side? How are companies being encouraged to plug in? What is the dynamic of that? How do they plug into, and respond to, what is happening? How is that working?

The Executive's Enterprise, Transport and Lifelong Learning Department has brought together a group of the main business organisations, which includes the Confederation of British Industry Scotland, to consider how any procurement opportunities can be maximised and what the longer-term benefits might be. Scottish Enterprise is heavily involved in the group and the Foreign and Commonwealth Office is represented on it as well. The organisations are working closely together on the group, which has met a number of times. Both short and long-term issues are being considered.

Are major Scottish players plugging into the opportunities that the G8 will offer? Are they really getting involved or is there a certain reticence because they are not sure about the situation?

Many discussions are still going on about a range of issues, such as sponsorship, procurement and opportunities to help with particular events. At the summit itself, VisitScotland is running the saltire village, which will be an area where companies and others can showcase products. There is a lot of interest and discussions are taking place with a range of companies of all sizes.

Have any Scottish companies taken up opportunities for sponsorship of G8 events?

The sponsorship contracts are awarded jointly by the G8 and the EU presidencies and the matter is being handled by the Foreign and Commonwealth Office, which has retained a sponsorship consultancy company. Moreover, a lot of work is going on through the group that I mentioned, involving the Executive and Scottish Enterprise. Discussions are going on, but because of commercial confidence I cannot say any more about them.

The summit is not terribly far away. I would have thought that you would have been able to say whether any Scottish companies have been successful in taking up sponsorship opportunities.

That is for the Foreign and Commonwealth Office, which is taking the lead. When it feels able to announce the companies that have been successful in offering sponsorship, it will do so.

Let us move on to procurement, on which I have a similar question. Have any Scottish companies successfully tendered for the delivery of services that are to be offered as part of the G8 summit?

Scottish companies have been able to tender for any of those services. At the moment, I cannot give you a comprehensive list of those that have been successful, as the Foreign and Commonwealth Office is taking the lead. Nevertheless, we are constantly updated on the position and will be updated in the near future.

Yes. Announcements will be made by the Foreign and Commonwealth Office, but we are working with it.

When do you expect those announcements to be made?

As you say, the summit is not very far away. Announcements will be made fairly soon. However, as the minister said, the contracts are awarded by the Foreign and Commonwealth Office and I cannot commit to any dates.

But a list will be published of the companies that have been successful in the procurement exercise.

Yes. The process has been carried out in accordance with the rules of the Official Journal of the European Union. Tendering has taken place in the proper way and the announcements will be made in the normal way.

Okay. As members have no other points to raise on the G8 summit, let us move on to consider the UK presidency of the Council of the EU.

We recognise that there are differences of opinion about the way forward in the EU. During previous presidencies, there has been massive concentration on getting approval for the constitution. How would the Scottish Executive work with the UK Government if, come the next general election, the make-up of the UK Government changed and referendums elsewhere determined that the EU constitution was not going to be approved? Is there a plan B?

I do not know whether it is a good use of the committee's time to talk about hypothetical and highly unlikely scenarios. I leave the matter in your hands, convener. We are planning on the basis of the present Government at Westminster continuing. It is not for me to comment on the timing of a general election; that is for the Prime Minister to announce.

I felt that it was only fair that you had a chance to reply to that question.

I would still like to press ahead. You must accept that, under some circumstances, change can come about and I do not think that everybody around the table is totally reassured that the constitution will get the approval of people throughout Europe. The French referendum is coming up and there will be one in the UK sometime after our presidency of the EU if the present Government continues. The Executive has taken a fairly strong and vigorous position on the constitution and I think that it would be reasonable for it to consider alternatives, in case its wish is not fulfilled.

One either holds a principled position or one does not. If our principled position is that the constitution would be in the interests of the people of Scotland, we hold to that position irrespective of what may or may not happen in other places.

In your opening remarks, you mentioned that the Executive was fully consulted on the priorities of the UK and Luxembourg presidencies. When the committee visited Brussels a couple of weeks ago, what was striking in all our discussions was the preoccupation of all EU institutions with the current budget debate and the financial framework. It is hoped that those issues will be resolved by 30 June, before the UK presidency. I am asserting that that is the hope of the UK and Luxembourg presidencies, but is that the expectation?

We always hope that agreement can be reached as soon as possible on any aspect of EU policy.

Equally striking was the fact that the principal budget heading that appeared to be under pressure was structural funds, which are fundamental to a number of public sector programmes in Scotland and on which this committee has expressed its views. Can you outline the Scottish Executive's input to the UK presidency preparations on the financial framework, the budget and any potential impact on structural funds?

We are contributing to the plans for the presidency in three ways. First, we are represented on the UK presidency co-ordinators group by our Europe division. We have attended every meeting of the group since it was set up in January 2004. Secondly, we are part of the new presidency planning group, which replaces the Grant/Darroch meetings from March. We are represented on that group by David Crawley, who, as you know, is the new head of the Brussels office. Thirdly, we are represented at ministerial level on the joint ministerial committee on Europe, to which I referred earlier. Through those three channels, we make our views known and we contribute to the overall planning for the presidency.

Has the EU budget been discussed at those different levels?

Mr Simons will comment on the discussions, particularly at official level.

The budget was discussed at some of the Grant/Darroch meetings, which preceded the presidency planning group meetings, but it has not as yet been discussed at the joint ministerial committee on Europe.

Is the Grant/Darroch group made up of officials?

Yes.

What view has been expressed at that group by Scottish Executive officials on the budget debate and the potential impact on structural funds?

I am not the expert on the future financing negotiations—that is for colleagues of mine in the finance group—but, to my knowledge, the Scottish Executive supports the UK position on the future financing negotiations, which is broadly to restrict the EU budget to 1 per cent of gross national income.

The UK Government and the Scottish Executive have made it clear that we are committed to regional development, whether that is funded through structural funds or the resources that come to the Scottish Executive. We are committed to the continuation of the kind of regional development that has been possible through the application of structural funds.

What consideration has been given to the view that was expressed by most organisations in their evidence to us that they had no confidence that, if the budget were to be restricted to 1 per cent of GNI, the UK Government would deliver the type of support for regional policy that you have suggested is required?

I cannot speak for other organisations and I do not know what evidence they predicated their views on. From a Scottish Executive perspective, we have every confidence that the UK Government will retain a commitment to regional development throughout the length and breadth of the United Kingdom.

Those were the issues that we wanted to discuss in relation to the G8 and the UK EU presidency, Mr McCabe, so thank you for your attendance today. We will see you again at 4 o'clock in relation to the Sewel motion on the European Union Bill.

I suspend the meeting until 3.15 pm.

Meeting suspended.

On resuming—

I welcome our next witness by video link, Hilary Benn MP, the Secretary of State for International Development. Can you hear us?

I can indeed.

This is John Swinney, convener of the European and External Relations Committee of the Scottish Parliament. I am joined by Dennis Canavan MSP, Phil Gallie MSP, John Home Robertson MSP, Margaret Ewing MSP and Alasdair Morrison MSP. It is a pleasure to have you with the committee today. I ask you to make your opening statement to the committee; we will proceed to questions thereafter.

Thank you for giving me the opportunity to join the committee in what I hope will be a lively and interesting discussion about the development challenge that we face in 2005, particularly in the run-up to the Gleneagles summit in July. As I am sure you are all only too well aware, 2005 is a unique year for development. Five years on from the adoption of the millennium development goals and with 10 years to go to the date that the world set for making progress in lifting children out of poverty, in ensuring that all children go to school, in reducing infant and maternal mortality and in halving the proportion of the world's population who live in absolute poverty, we know that we are not making enough progress.

That is particularly true in Africa, which is why the Commission for Africa report, which came out a couple of weeks ago, is so important. We all face the challenge of determining what we will do. How will we take advantage of this unique year for development to help to change the lives of billions of our fellow human beings? That is the task. The Gleneagles summit will be an important moment during the year, as will the millennium summit in New York in the autumn and the world trade talks in December.

With those words of introduction, I am looking forward to the questions and our discussion this afternoon.

Thank you. You made the point, with which we all agree, that not enough progress has been made towards achieving the millennium development goals. What is the Government hoping to achieve from the Gleneagles summit that will intensify that process? What will make a quantum difference to the steps that the UK Government has taken so far?

We are looking for three things. One is on the question of the volume of aid. Jeffrey Sachs's report was published at the beginning of the year and we now have what the Commission for Africa report says about the need for additional aid for general development throughout the world, but particularly in Africa, where least progress has been made. Therefore, we are talking about increasing the volume of aid, but the issue is also the quality and predictability of that aid. If a finance minister, a health minister or an education minister in a developing country wants to get children to school, to employ doctors and nurses or to put people on antiretroviral treatment for the rest of their lives, they need to know whether the money will be there to enable them to do that now, in six months and in the years ahead.

That brings us to the second issue, which is debt relief. As you know, Britain is now leading the world with our new multilateral debt relief initiative, which we launched on 1 January. We are currently paying 10 per of the cost of the debt owed to the World Bank and the African Development Bank by the poorest nations in the world. One of the great benefits of debt relief is that it provides predictable finance. If someone is no longer having to service part of their debt, they know that they can rely on that money to spend on other things this year, next year and the year after.

The third issue is trade. Unless we can open up the trade system and make it fairer, enabling developing countries to trade their way out of poverty, we will deny those countries the most important means—through contributing to economic growth and economic development—of making a real change to the lives of their citizens.

Those are the three priorities for the G8 presidency and for the summit. However, as the Commission for Africa report makes clear, in some countries we will not see the benefits of any progress that is made on the first of those priorities if there is no peace and stability, if people continue to fight one another, if there is a problem with corruption or if there is a lack of good governance in its broadest sense, which is one of the weaknesses from which Africa and some developing countries elsewhere have suffered.

Is it possible to quantify the difference that you hope to make as a result of the G8 discussions and in what you have described as a unique year for development? What quantum difference are you hoping to make to the development issue as a result of decisions that are taken this year?

In the end, that depends on what other countries choose to do, as well as on what the UK is doing. For our part, since the current Government was elected in 1997, we have doubled the aid budget. We have also launched the new multilateral debt relief initiative and there is the proposal for the international finance facility. A doubling of aid to Africa, which is a recommendation of the Commission for Africa report, would be an important outcome. Agreement on multilateral debt relief would represent real progress, as would a strong political commitment from rich, developed countries at the world trade talks in Hong Kong in December to make decisions that will help to open up world trade so that the system is much fairer for, and will make a real difference to, developing countries.

In the case of Europe, there was a commitment in the framework agreement last July to set an end date for export subsidies. That is the first time that Europe has made such a commitment, which I welcome. However, we have to turn that into progress at the world trade talks on market access and on tariffs, because those are the issues on which developing countries want progress if they are to take advantage of greater opportunities for trade in the world market.

My final question relates to the involvement of the Scottish Executive in the development issue. We heard last week from Patricia Ferguson, the Minister for Tourism, Culture and Sport, about the Scottish Executive's commitment to international development issues, for which she has responsibility. Her priorities are widely shared in the committee. What is the general view of the UK Government on the involvement—with wide political support—of the Scottish Executive in international development issues, even though the matter is primarily reserved?

As you point out, international development is a reserved matter, but I very much welcome the Scottish Executive's international development policy, the commitment of money and the expression of interest from all parties in the Parliament. Towards the end of last year, I had the opportunity to address the Scottish Parliament's cross-party international development group. From the number of questions asked and from the people whom I talked to, I know that there is great passion on the subject in Scotland, as there is in all parts of the United Kingdom.

We were consulted about the development of the Scottish Executive's policy, which I welcome unreservedly, above all for the following reason: the task that we are all engaged in, wherever we live in the UK or elsewhere in the world, of trying to change for the better the lives of our fellow human beings is one on which we need all the help that we can get. I very much welcome the interest and the commitment of the Scottish Executive, MSPs, non-governmental organisations and others in Scotland—such as the Network of International Development Organisations in Scotland, representatives of which I met during my visit towards the latter part of last year—because that is a sign that they are considering practical ways in which Scotland can contribute to a task that is of concern to every one of us.

I wish you well in your efforts, Mr Benn, but how optimistic are you that the G8 countries will reach consensus on an action plan that will include action on aid, trade and debt to assist people in developing countries? Have there been any pre-meetings with G8 partners in which you have had the opportunity to encourage or persuade them to accept your point of view? If so, what response has there been?

I am sure that you know that a wide range of discussions is taking place all the time through the sherpa network, which represents all the G8 countries. At the ministerial level, there was a meeting of ministers with responsibility for the environment and development in Derbyshire at the end of last week. Financing for development and debt relief in particular was discussed at the G7 meeting of finance ministers that was chaired by Gordon Brown in London about a month ago. Some countries have expressed support for increased aid volume through what they do and more countries are setting themselves timetables to reach the United Nations 0.7 per cent target—as you know, the UK Government did exactly that as part of the comprehensive spending review settlement last July. That was a huge step forward and was the first time that any Government in the history of the UK had set a date for achieving that target.

The chancellor has proposed to raise additional development finance now, when we need it, through the international finance facility, for which France and Italy have expressed support, as Gerhard Schröder did at Davos. We have received support from Sweden for the pilot project that we want to launch to get more children and adults vaccinated and immunised.

There is a range of views on debt relief. Some people are not persuaded that there should be a blanket approach to multilateral debt relief for the poorest countries and some countries would like progress on a case-by-case basis.

Therefore, the straight answer to your question is that a lot of dialogue is taking place. In all honesty, none of us can say what the outcome of the discussions will be, but I assure you that, by putting Africa on the agenda and making it one of the priorities for the G8 summit, and having established the Commission for Africa, the British Government is putting a lot of political weight behind the process to persuade and encourage others to do more.

Three years ago, the Monterey financing for development conference was successful in getting countries—including the United States of America and countries in Europe—to commit more money for development. In Europe, we are currently discussing setting a new EU aid target, which I hope will contribute to the process of persuading people that we should make a big push forward at Gleneagles in July and that we should seize the opportunities that we have this year.

Gordon Brown has hinted that, even if the US Government opts out of an agreement with the other G8 countries, it might still be possible for the other countries to proceed. However, how meaningful would assistance be to people in developing countries if the US opted out?

By definition, any progress is meaningful. One of the great merits of the international finance facility in particular is that it does not require every country to sign up to it in order for it to be launched and to raise additional finance for development now. We are working hard to persuade our partners to back the idea, but we could go with a coalition of the willing. As I say, not every country is required to support it.

We must also recognise that, in the end, the mechanism that is used for raising additional finance matters less than the idea that additional development finance should be provided. If countries decide that they will use another route to provide additional money for development, we should welcome the fact that they are prepared to do more. After a decade in which finance for development declined throughout the world, a sharp increase in such finance is now occurring and we are nearly back to where we were before—indeed, we have overtaken where we were previously in some areas.

That shows a greater recognition on the part of the donor countries that this is a challenge to which we must respond, because it is not acceptable that so many of our fellow human beings do not have the things that we take for granted. Here we are on world water day reflecting on the fact that 1.2 billion of our fellow human beings do not have access to clean water and 2.6 billion do not have access to sanitation. That is a good reason why we need to make faster progress. We are working hard with our colleagues to enable change to happen. Any progress will be welcome, but we want big progress to be made this year.

I have a final quick question. Will the G8 respond to Kofi Annan's proposals for reform of the United Nations, particularly in relation to the implications for international development?

Undoubtedly the G8, and indeed all countries, will discuss that. The main place where the discussion will take place is at the millennium summit in New York in September.

I very much welcome a number of aspects of the paper that Kofi Annan published yesterday, such as the support that he expressed for the international finance facility for the UN 0.7 per cent target and the welcome that he gave to some of my proposals for reform of the international humanitarian system on the basis of my experience in Darfur and what happened in the wake of the tsunami on boxing day last year. We should all welcome our having a more effective international system for helping our fellow human beings when they are in trouble. The report that Kofi Annan produced is important and it will be the subject of discussion in all forums—the EU, the G8 and the millennium summit in September.

Thank you for sending the delegation that recently visited South Africa and Malawi a copy of the Commission for Africa report. It is a substantial tome and well worth reading, and I thoroughly recommend it. I believe that our report is winging its way to you as we speak. Obviously, we in Scotland are concerned about the issue; you spoke about the passion here. How do you see the G8 summit ensuring that the 0.7 per cent target for international aid is reached? Some countries have reached and indeed exceeded that target, particularly the northern European countries, but we are still lagging behind.

One of the things that I noticed on my visit—I do not claim to be an expert—was that the African states are beginning to think about a southern hemisphere system of trade. They were looking to the Asian Pacific areas rather than to the northern hemisphere. Would it be beneficial if we could in some way involve Africa in bringing representatives to the G8 summit in order that they can explain what they see as the problems in trade imbalance and how we can resolve them?

Thank you for what you said about the Commission for Africa report. I look forward very much to reading the report of your visit.

The fact that an increasing number of countries have now set timetables to achieve the 0.7 per cent target represents progress. The club of those that have already achieved that is growing and we will join it in due course. That is a sign of progress and hope and it shows the increased interest in development—increased public attention, letters, lobbying and so on—which is reflected by all the political parties and demonstrates our capacity to progress.

Trade is an extremely important issue. In part, it is about the opportunities that we open up to developing countries by changing world trade rules to make them fairer. However, as you will have seen, the Commission for Africa report has strong points to make about the capacity and potential in Africa to develop trade within the region. The process has begun in some parts of Africa with the development of, in effect, common markets. The process has been long and slow. One of the problems that African countries face is that they are small, their economies are small and it is difficult to get economies of scale. By joining other countries in developing economic integration, they have a chance to create bigger markets that will, in turn, encourage more economic development.

A second important issue for Africa is the cost of transport, which is phenomenally expensive. In the commission report, the point is made that it costs $1,500 to transport a car from Japan to Abidjan, but that it costs $5,000 to transport the same car from Abidjan on the west coast of Africa to Addis Ababa. That one statistic makes the point about the high cost of transport, which acts as a disincentive to economic development in Africa.

You asked about African representation at the G8. A number of African leaders will have the opportunity to join the G8 summit, as they did last year at Sea Island. It will be important to hear their views and voices on the challenges that their countries and continent face. I hope that their voices will be heard loudly in the run-up to the Gleneagles summit, because it is important that Africa says what it thinks. In particular, it is important that Africa continues to demonstrate the leadership that it is now giving and to take responsibility for progress on the continent, through peace and security work, good governance and the Africa peer review mechanism, which is an extremely significant development.

Earlier, you referred to some of the objectives that you rightly have for Africa. You mentioned sanitation, and I suspect that you were also thinking of education and health. Do you envisage the application of debt relief to the African countries being linked in any way to those issues? If so, how does that fit in with the self-determination of each country?

I see an important link between debt relief and progress on health, education, water and sanitation. Along with other countries, we have been trying to move the debate about debt relief on from what the heavily indebted poor countries initiative has achieved. So far, $70 billion-worth of debt relief has been delivered by that initiative. Fifteen years ago, there was no debt relief for developing countries, so real progress has been made. Politics has shifted that issue, because people would not take for an answer the statement, "We are really sorry. It is a big problem, but we cannot do anything about it." People campaigned and lobbied, including at previous G8 summits, to make progress.

It is important that people see the product of debt relief being used for progress on health, education and other issues. That helps me in the United Kingdom and colleagues in other countries to win the argument for doing more on aid. We are strong supporters of developing countries' being in the lead in the process. That is why, where we can, we are moving increasingly towards direct budget support, which involves our backing the judgment and decisions of developing country Governments in setting priorities for making progress.

We must deal with the fact that poverty reduction and strategy plans give great priority to health and education, but not to water. However, we all know that clean water is fundamental in reducing the number of children who die of diarrhoeal diseases and in getting girls, in particular, into school. Girls spend a lot of time fetching and carrying water, and if they are doing that they cannot go to school. Earlier today I made a speech at the Royal Geographical Society, in which I indicated that, over the next three years, the Department for International Development will double its spending on water in Africa. We will focus on a number of the countries in which we have development programmes and will be much more forward in our discussions with developing country partners to ensure that water and sanitation get the priority that the local communities with which I have spoken—for example, in Tanzania and Ghana—want them to have. Those communities say with one voice, "We want clean water."

Your question goes to the heart of the fact that there will always be some tension between developing country ownership and our being able to demonstrate how our aid is making a difference on the issues about which people care.

Thank you for that clear answer. I want to vary the theme slightly and to look to the future. Debt relief is all important at present. How do you see aid to the countries that we are discussing being provided in the future? Will they lose the facility to obtain loans? Will we simply provide development aid to them? What can be expected in the longer term?

In the short, medium and longer term, I hope that we will see increased development finance, given that the Sachs report, the Commission for Africa report and other studies have clearly shown that there is capacity to absorb more aid.

The UK's development programme for 2005-06 aims to spend 90 per cent of bilateral assistance on the world's poorest, or low-income, countries. We took that decision because, although middle-income countries—those with a gross domestic product per head greater than about $750—contain 30 per cent of the world's poor, they currently receive more than 40 per cent of the world's aid. We decided to go for 90 per cent of bilateral aid expenditure in low-income countries in an attempt to deal with that imbalance in the international system.

Let me mention another big challenge. Although some relatively stable developing countries have Government capacity but simply lack resources to make progress—from a development point of view, those are easier places in which to work—a large number of the world's poor live in fragile countries that are emerging from conflict. We need to be involved in those countries as well, even though they are more difficult.

The paper on security and development that we published yesterday makes the fundamental point that, as development organisations, we need to be interested in security and dealing with conflict. Without peace and stability, there will be no progress on development. One need only look at Darfur in Sudan to see that. If we provided debt relief, trade and aid overnight to Darfur, there would still be no development while fighting continues.

Working in more difficult places and countries is a big challenge, but we must rise to it. Such work is not without risk—we must be honest about that—but we would miss a lot of poor people if we did not take on the challenge that is presented by supporting those countries as well as the countries that are on their way, such as Tanzania, Ghana and Mozambique, where stability is turning into tangible progress.

Previous G8 meetings have tended to look like groups of powerful politicians—

I have lost sound at my end. I do not know whether you can hear me, but I cannot hear you.

Secretary of state, can you hear me? I shall try another microphone. Can you hear me now?

We look for guidance from our sound engineer.

Surely I have not been gagged at this stage of my career.

You should not take it personally.

He has been cut off in his prime.

Not again. I blame it on the Holyrood project.

Convener, how much time have we got with the secretary of state?

I understand that he has a commitment at 4 o'clock. As there seems to be no sound contact, I suspend the meeting while we try to restore the link.

Meeting suspended.

On resuming—

We lost our videoconference link with Hilary Benn, but I place on record the committee's appreciation of the Secretary of State for International Development's high-quality input during that fascinating evidence-taking session.