Scottish Executive European Strategy
If the minister is happy to do so, we will move on to the next round of questioning, on the European strategy. Given the great demand, I hope that we can have at least half an hour for questions on the subject.
In my role as convener of the European and External Relations Committee, I addressed the East of Scotland European Consortium yesterday. As members will be aware, the consortium comprises local authorities that represent about 2 million of Scotland's population. Members of the consortium brought to my attention their disappointment with the lack of reference in the strategy to local government, its contribution to the strategy or the role that is envisaged for local authorities.
Having reread the strategy, I think that the consortium seems to have a point. A number of councillors—from Labour authorities, it has to be said—asked me to make the point vociferously, which I promised to do. Perhaps the minister will comment on that.
We seek to work with all agencies and organisations; in that sense, the strategy is all-encompassing. Clearly, a local authority is a democratically accountable organisation that is elected under its own steam. Perhaps a reference could be made to the fact that local authorities are part of the process. However, they have European networks and strategies that are very well developed, and they work well in their partnership areas. I can have a discussion with the local authorities to ensure that they understand clearly not only that we are seeking to work in concert with all those who are signed up to the big issues in Scotland around economic growth but how we deal with the big European issues that come our way.
Local authorities have a clear interest in the way in which the structural funds issue is developing under the third cohesion report. They are integrally involved in that process. My officials may have something appropriate to say about their contacts with officers in local government. This is just part of our work.
Alastair Wilson (Scottish Executive Finance and Central Services Department):
Obviously, the point that the convener made is noted. It is implicit in the references to working with partners that those include local government. If local government is not excluded explicitly, there is no reason why that should happen. We work with local government partners in a very structured way—structural funds are the classic example of that. It would not be possible for us to do that work in any other way. A huge amount of work is being done with local government partners.
Your comments are very helpful. The members of the consortium had all read the document and had identified the lack of a reference to local government as the glaring omission. They wanted me to highlight that to you.
The Executive document refers to
"securing economic benefits for Scotland from EU Enlargement."
What potential economic benefits has the Scottish Executive identified? Which sectors of the Scottish economy are likely to be the major beneficiaries? Which of the accession countries are likely to be partners in the provision of those benefits?
I will deal with the last question first. At our first meeting, I said that we need to match our resources to the priorities that we can afford to fund. We are examining all the accession states to identify the best place on which to focus our effort. That is not to say that Scottish Development International and other parts of public and private Scotland are not working in those states. Work is under way at the moment, but because we cannot do everything we are having a focused discussion about where best to concentrate our resources. Every minister from an accession state whom I have met is keen to have links with Scotland, but they are also keen to have links with many other parts of Europe. We need to ensure that we get the marriage and the balance correct.
What work are we seeking to do? We see huge opportunities in infrastructure development and growth, in particular. I refer to transport and civil engineering. Much work is being done, publicly and privately, with many of the accession states. Money will be spent in many of those nations to improve their infrastructure. We need to ensure that we take advantage of initiatives such as public-private partnerships and that we engage with the private sector to secure funds for the development and delivery of large projects.
In Scotland there is also huge interest in the technology sector. Financial services are another important area that Scotland can develop in those marketplaces. We must identify the sectors that are strong in Scotland and that are transferable. We have a good track record in some areas and want to ensure that those become part of our strategy.
We need to be careful when dealing with industries that may be affected by accession. There are interesting challenges for us in agriculture and food, in particular. We must strike a balance between what we are good at and want to deliver and the impact that accession could have on the Scottish economy.
What about the export of manufactured goods from Scotland to the accession countries? Have potential markets for such goods been identified?
In manufacturing, that depends on the infrastructure projects. Companies in Scotland such as the Weir Group and Rolls-Royce that have international operations are examining and being proactive about their European strategies. Many of our leading manufacturers are already involved in big water and power projects.
I have a question about Regleg.
It is pronounced with hard g's.
Sorry.
Our presidency of Regleg seems to be passing quite quietly. What are our key priorities? What is our programme? I have heard—dare I say it?—criticism that we should perhaps have prepared our programme earlier, under the troika arrangements. What meetings are planned leading up to the conference in November? The Irish presidency has shown itself to be quite imaginative in a number of single-issue conferences, and I wondered what we were doing.
I take Mr Raffan's point about the troika arrangements and getting things in place quicker. I would be happy to come back to the committee soon with full details. A draft plan is available with a series of dates, engagements and events. It has not been signed off yet; that will be for the First Minister.
I am sorry to interrupt, but we took over in November, did we not?
Yes. There are set agenda items for meetings that will happen, but individual events that we are arranging under the First Minister's leadership have yet to be signed off. Fairly substantial negotiations will be required with our partners in Regleg. There will be opportunities as soon as the programme is issued, which will probably be within the next month or so. These things will not come as a surprise to our partners, because they are all involved in discussions on what we are going to do.
I am glad that you support my pronunciation of Regleg—with soft g's—and not Irene Oldfather's. I do not know which is correct though.
On page 5 of the strategy document, you talk about using our presidency to influence positively various developments in the follow-up to the IGC—to do with pre-legislative consultation and impact assessments of draft legislation. Could you say some more about that?
I also want to ask about building relations with other regions. At the moment, the document talks about
"Catalonia, Tuscany, North Rhine-Westphalia and Bavaria".
There are two regions in Germany but France seems to have been missed out.
You will remember that I have spoken to you before about the fact that the Welsh, instead of having bilateral arrangements as we have, have one single agreement—the motor regions agreement—with Rhône-Alpes, Baden-Württemberg, Lombardy and Catalonia. Catalonia is the only region common to both our agreements. How do you see us building relations with other regions? We have the existing four, but which others are next in the queue? Building our influence in Europe is important. That theme runs right through the strategy document.
Earlier, I spoke about the decisions that we have to make based on our priorities and resources, to ensure that we do things effectively. We must first ensure that the partnership arrangements already in place—with the focus on trade and industry, culture and other areas—are working effectively. To be blunt, we have to pick our partners very carefully and ensure that, in this second session of the Parliament, we use our partnerships effectively. There is nothing worse than partnerships that do not deliver. We have to make appropriate choices if we are to be influencers in Europe and are to be recognised as major players.
I will have to come back to the committee. I do not want to move into these matters, because enough is going on in our efforts to influence other aspects in Europe. We may need to expand the number of partnership arrangements, but we need to be careful. Should we be looking to the accession states, to the existing member states, or to both? Real resource implications arise. I am therefore not prepared to say how many arrangements there should be, or with whom. However, members can rest assured that part of the strategy is to do more. We need to ensure that we pick the right players to get the best benefit for Scotland.
In the anniversary year of the entente cordiale, it would be good to forge that missing link before the French get too upset. After all, we have partnerships with Spain, Germany and Italy, so it would be a good idea to have one with France as well. We have long-standing connections there—even longer-standing than our connections with Poland or Lithuania.
That is true. The First Minister had a very successful visit to France last week in relation to the entente cordiale. He had a very successful meeting with senior French politicians and senior players in the business community. There is recognition of Scotland's role in the world, especially in France. However, whether we cement that through a formal relationship is another matter.
To pick up on Keith Raffan's theme, you mentioned that you have limited resources and that you think that there is nothing worse than partnerships that do not deliver. In that case, how do you prioritise whom Scotland should be trying to build relationships with? Should we prioritise the accession states that will come into the European Union through enlargement? Should we build on the four co-operation agreements with Tuscany, Catalonia and so on? We have the Scotland in Sweden week, the Scotland in Holland week, the entente cordiale with France and so on. Whom do you consult when you determine the priorities?
Apart from the informal way in which we work with business organisations, civic Scotland, local government, various people who have ideas and representatives of other nations who visit the Executive and the Parliament, the primary source of consultation would be through the Scottish international forum, which I chair. Its sub-groups seek to identify opportunities related to events or anniversaries and where the best economic impact might be made.
The forum represents the best way of making those judgments in public, but there is also an informal way of making such judgments that involves people making visits to Scotland, engagements abroad and, indeed, ideas that are raised by politicians—Keith Raffan has made his case forcefully and we will need to consider it.
I am sure that we will explore that in our inquiry into promoting Scotland worldwide. However, given that Parliament could help in the forming of relationships, it would be helpful if Parliament knew exactly what the priorities are.
A lot of work is being done in that regard, particularly in our relationship with Catalonia and Tuscany. Schools in my constituency are twinning with schools in Tuscany—indeed, kids from extremely deprived areas are attending an art school in Pisa. The practical benefits of such partnerships will sell the idea of Europe to those children's grannies, grandpas, aunties and uncles. It is important to follow through such work—clearly, such projects promote the twinning of ordinary young people rather than politicians.
The minister has said that it is important to work with key stakeholders in Europe and that he wants to maximise the benefits of Scotland being a key player in Europe. It seems to me that cohesion policy will be extremely important in the next year or two for everyone, not just the Irish presidency. At a meeting of the Committee of the Regions a couple of weeks ago, I raised a point with Commissioner Barnier about the fact that regional policy and competition policy should not run as two parallel lines but should integrate and work together. Too often, competition policy has worked against regional policy and not in partnership with it. Commissioner Barnier fully agreed with me and said that people are keen for that point to be developed in the cohesion discussions over the next year to ensure that the two policies work together. I wanted to raise that with the minister so that the Executive can keep a close eye on the matter when it has discussions with the United Kingdom and the European Commission.
On the back of that point, I want to ask about the European Commission's decision about Charleroi airport. Has the Scottish Executive had any input to UK ministers on that issue? At last week's meeting of the Committee of the Regions, the Irish made it clear that they are not happy with the situation. I do not know whether it is still possible for the issue to be examined, but it is an example of a situation in which competition policy and regional policy should be working hand in hand instead of running along two parallel tracks.
Secondly, a number of things will come on to the agenda in the future. The UK will be a key player in 2005, when we will have the Council presidency. Regleg will also have an end-of-year conference, which will no doubt be hosted here in Scotland by the First Minister. I want to ensure that we work in partnership with the Executive to increase Scotland's profile in Europe and Europe's profile in Scotland. Colleagues on the Committee of the Regions have already asked me whether a fisheries council meeting will be held in Scotland during 2005. There would be quite a bit of support for something like that.
What are the minister's views on those issues?
You have pointed out the contradictions in policy. Bluntly, such contradictions sometimes occur at European, UK and Scottish levels and it is right and valid for you to point them out—especially the contradiction between cohesion policy and competition policy. I take that point, which will colour our thoughts and discussions.
The point is further highlighted by the Ryanair decision, which was of great concern to us. The Minister for Transport is working on the issue. The decision is not as bad as it seemed at first because of the specific aspects of the case. Nonetheless, it will have an impact on our extremely interesting work in providing support for connections to certain destinations. Although the decision is much more limited in extent than was originally thought, which is somewhat reassuring, we will continue to work with UK partners to ensure that the regional policy aspect of air travel is recognised in the discussions.
I take your point about Regleg—which I will pronounce as "redge ledge". Through whatever we do in Europe and through the profile that one gets as a result of events such as the Regleg conference, we want to sell Scotland and maximise the economic impact. You can rest assured that we will make the maximum that we can of events or meetings that take place in Scotland.
One issue that is missing from the strategy document, although it is referred to in the Executive's priorities for the Irish presidency, is the Executive's plans to attract students to Scotland, particularly from the accession countries. Was there a deliberate intention to drop that from the strategy document because of the difficulties that might arise around funding those students? We need to bear in mind the fact that if students from, say, Slovenia return home, it will be difficult to claw back their graduate tax contributions. Has the minister given any thought to that?
No, I have not as yet, but I will raise the matter with the appropriate minister.
The fresh talent initiative seeks to attract students from all round the world. It is interesting to know that, for people outside Europe—for instance, in America—the cost of education in Scotland is very attractive. We offer a value-for-money environment in which to educate American kids. Therefore, the talent initiative is concerned not only with what the accession states can offer. Scottish education is a brand that is recognised worldwide and we need to ensure that it remains so. Our ability to attract students from all round the world is an area that the Executive is working on.
I must defer to my ministerial colleagues who could give a more detailed answer to your point about tax and so on.
Thanks. I thought that, as Minister for Finance and Public Services, you would be able to grasp that issue.
I want to pick up also on your earlier reference to the Lisbon agreement. The strategy document rightly refers to the importance of economic growth and to Scotland's position in the European tables and so on. The recent report to the European economic and financial affairs council meeting on 10 February indicated that Europe is just not delivering economic growth. Do you have any concerns about the effect that that is having on Scotland?
Do you feel that, within the Lisbon agreement, a conflict arises from the requirements for competition, which Irene Oldfather was talking about a few minutes ago, and the requirements to meet social objectives, creating a situation in which the economic targets are just not being delivered?
The synthesis report on delivering the Lisbon agreement indicates a number of problems with delivery of the strategy. Most commentators report that nation states that have signed up to the principles are finding it extremely difficult to deliver the strategy, and some of the indicators show variance across Europe.
Lisbon is about the way out of social exclusion, which is employment. Your second point is addressed by the first point. If people are in gainful employment, many of the ills, not just of Scotland but of countries Europewide, will be resolved. The target is to make Europe the most prominent economy in the world by 2010, with levels of employment, other than transitional levels of employment, that are extremely low. Therefore, the social objectives will be met by the fact that, across Europe, there are conditions of employment, taxation systems and social security systems that reflect nation states' desires.
I do not necessarily sign up to the contradiction that Mr Gallie presents with reference to what Irene Oldfather said. I strongly believe that the Lisbon agenda, the employment agenda and making Europe a vibrant and strong world economy will deliver much of the social agenda, which involves putting people into employment so that they can earn a living and pay taxes that can be reinvested in public services.
When you consider employment right across the European Union, you see that employment is falling and unemployment is rising. I agree with you that employment is almost certainly the key, but what can we do to change the situation in the European Union?
If we bring in 10 accession states that require substantial investment, that in itself is an economic multiplier for the other nation states in Europe. The earning capacity of people in those nations and elsewhere in Europe and the productivity of their economies will dictate the wealth-generating agenda, which seeks to address some of the problems that you have highlighted.
Another aspect of the matter is that we have had some interesting difficulties in the worldwide economy of late, in relation to international terrorism, 9/11 and the Iraq war, and those things have had an effect on trade. Obviously, we take a close interest in the US economy as well, which is a lightning conductor for the worldwide economy. I return to the fundamental point that, in Europe, accession offers opportunities for all, not just for those nation states in which infrastructure and education investment will be made, but in those economies and societies that will be drawn upwards relative to the rest of Europe. Other European nations also have the opportunity to benefit from that in terms of trade, which increases Europe's overall wealth. Again, there is a multiplier effect if people are in employment and spending, and that is what we seek to ensure through the Lisbon agenda and other European strategies.
Has there been any Scottish assessment of how our economy is doing in relation to achieving the Lisbon agenda?
I have to say that I have asked the question without getting the answer. When the synthesis report came out, I wanted to find out exactly where we sat within it, but I do not have the responses yet. It is one of those areas on which I would be happy to correspond with you.
In the face of so many initiatives, co-ordination will obviously be essential to maximise efficiency and effectiveness. How does the Executive plan to ensure that EC business is mainstreamed in the work of departments and the policy divisions in the Executive, as well as in non-departmental public bodies and other agencies? How does it plan to ensure a common approach to EU business?
I would argue—and I do not mean to be complacent—that we are effectively mainstreaming within the Executive. Every six months, we have to consider the priorities of the presidency and see exactly where our interests lie and what we seek to achieve. We need to address external influences on us, whether from the financial services directive or other sources. We have achievements to make in agricultural reform and fisheries that are important to us. We seek to balance what comes to us with what we need to do in Scotland. The bathing water directive and waste water treatment directive provide another good example of that. Those are two sides of the same coin.
The Executive addresses those issues through focused pieces of work. Andrew Welsh will not have been party to it, but we have issued to the committee a document that sets out each department's priorities on matters European for six months. I monitor those priorities, which become part of the bigger process in the strategy document. As I said, we have tried to describe the broad strategic aims and policy priorities for growing Scotland's economy, increasing trade and ensuring our position in Europe. Those matters affect us now; other issues that will affect us are external influences such as the IGC and new directives. Those issues are mainstreamed in the departments with which they sit most appropriately. I oversee those activities, to ensure that nothing falls out of the system that could lead to a large or small difficulty in Scotland. Individual departments are responsible for their work, but I try to oversee achievement of the priorities and the six-monthly presidency targets.
I appreciate having that answer. I wanted to ensure that all initiatives are focused.
The Executive's stated goals are influencing the EU process to deliver and securing economic benefits. What strategy and policy priority in Europe will deliver for the Scottish fishing industry?
A big discussion continues on some details of the fisheries deal. Allan Wilson will appear before the Environment and Rural Development Committee tomorrow and I am sure that he will touch on the issue. Many ministers have talked about some of the deal's successes, so I will leave the matter to Allan Wilson to deal with in detail.
Given enlargement and the loss of one of Scotland's MEPs, it is important to make the most of our MEPs and to use them highly effectively—the strategy document uses the phrase "team Scotland approach". Are the Executive's six-monthly meetings with MEPs sufficient? How regular are meetings between individual MEPs and ministers? That depends on MEPs' committee assignments and how they tie in with ministers' responsibilities. Is there room to develop EMILE in that regard?
Page 5 of the strategy document refers to the new public procurement directive, which will make significant changes to current rules and is important for the delivery of public services. If you cannot say now, perhaps you could send us a note on how that ties in with the Gershon report in Whitehall, which was leaked to the Financial Times a week ago yesterday, on 16 February. That report deals with public procurement and its relation to public services. We do not want to reinvent the wheel. We should learn from the Gershon report, which is a thorough and effective document that the chancellor commissioned, for which I praise him. How will that report dovetail with the important EU public procurement directive?
We can do better in dealing with MEPs. EMILE offers an opportunity for structured discussion, but that is not to say that that is all that happens. I and other ministers are in contact with MEPs. For instance, Catherine Stihler undertook a focused piece of work on the bathing water directive. As she is an individual MEP, her work was probably not noticed by many as it was going on, but it had a substantial benefit for Scotland.
The formal structures do not seem to be engaged enough and I acknowledge that we could do better. However, the physical difficulties of arranging meetings are extremely hard to deal with. We have sought diary dates, but that is becoming more difficult. I am happy to consider the issue, because I am uncomfortable with seeing the MEPs only once every six months—although do not get me wrong; I talk to them on the phone and, when I am on the continent, I take the opportunity to meet them.
EMILE is a bit like the Scottish international forum. I am trying to get a firmer grip on the international forum to make it much more action oriented and to ensure that it is not just a talking shop but delivers. We have set out some strategic work for the forum to do. We went round the forum members and asked, "Is the forum working? Is it working for you? What could be done better with regard to the frequency of meetings, timing, minutes, action points and working groups?" There is a similar job to be done in relation to EMILE. People in different walks of life are being asked to give up valuable time and we need to do work on whether EMILE is delivering value for them. I would like to do some research around EMILE. It is useful as it stands, but following such work it could be more useful.
The standard phrase is, "We never discuss leaked documents," but on Gershon and the work that we are doing in the Executive, I can say that procurement is a critical way of ensuring efficient public spend. However, the policy is perhaps contradictory. As we move to e-procurement systems and centralise procurement, we attract larger suppliers and so make smaller suppliers subcontractors of the larger suppliers. On the economic benefit, many of Scotland's companies are squeezed if we go too big, because the procurement process becomes unwieldy and the application processes and the hurdles to be overcome to get on tender lists become much more difficult. There is a balance between ensuring that we get value for money and not excluding many businesses from the procurement process. Business organisations have reminded us of that. There is a balance between the directive, the policy and the practice.
I will pick up on a couple of points before we close the session. I have two points on the relationship between the Scottish Executive and Whitehall in pursuing a UK line in Europe. First, there are a number of informal Whitehall committees on which the Scottish Executive is not represented. Have you looked into that, with a view to either making available information on what happens at those meetings or ensuring that the Scottish Executive is represented at them? Secondly, have you looked into feeding back to this committee and Parliament the agendas of meetings of the joint ministerial committee on Europe or of similar forums?
My understanding is that if we want to be on a Whitehall committee on a subject we will be. If the subject has a direct impact on Scotland or is within our locus, we will be there if we want to be. If there is anything in which we have a direct policy interest, we can and will be represented. In respect of the Wall-Grant committee and other work, we are there around the table, for instance. If we think that we should be on a committee at Whitehall, we will be there. We might not appear in the minutes as having been at a meeting, but we can be there if we want to be. The issue is about selecting where it is best to have an impact and make an input, and determining whether it is appropriate to do so.
Has there ever been a case of the Executive asking to be present at a committee and that request being refused?
Not in my time, is my understanding, but I will happily investigate and ask the system the question. In my time I have never had an official come to me and say that they wanted to go to X committee or officer working group and they were unable to go. That is my understanding of the position, but we can delve into the system and see what we come up with.
I am not sure about the status of agendas for meetings of the joint ministerial committee on Europe and whether they are public or private. I will happily look into the confidentiality or otherwise of agendas. It is not my meeting, so I would need to examine that.
With pre and post-council scrutiny, the committee gets bullet points and headings. I do not know whether the committee shares this view but I think that it is difficult for parliamentarians to understand what is discussed at meetings of the joint ministerial committee on Europe. More transparency would be helpful from the point of view of scrutiny. It would be helpful if you were willing to investigate that.
My final point relates to that: are there any plans to review the concordats between the Scottish Executive and Whitehall? After the first four years of the Scottish Parliament, do you think that the concordats are absolutely perfect, that nothing in them needs to be changed and that you got everything right the first time round? What is the score there?
We have been revising the concordats as needed, depending on the learning processes between the parliaments. The latest one to be reviewed is the one on transport. Again, I can come back to the committee with more detail on that in due course.
Are there any other questions before we close this item?
I have a quick question, I hope, on our profile in the United Kingdom. The UK presidency of the European Council from July to December 2005 could be an opportunity to showcase Scotland in various respects. Are there any plans to hold meetings of the Council or informal meetings anywhere in Scotland? Shortly we will have a rather fine building down the road.
We are having those discussions. It is fairly early days, but we are interested in pursuing matters such as those.
Finally, are you willing to offer the committee regular updates on delivering the strategy and achieving the various milestones? The committee would find that quite helpful.
Yes. I think that I would try to fit that into the six-monthly process of setting targets for ourselves for each presidency. The two documents will clearly be linked within the overall strategy, so I will try to bring them together so that we report on the implementation of the strategy as well as on the success or otherwise of our continued efforts on the presidency agenda.
On your final point, Jim Wallace promised to try to get the Scottish Executive's priorities for each presidency to us much sooner. We are already six weeks into the current presidency and we have only just received the priorities.
Okay, I will look into the timing.
On that note, I thank you and your colleagues for coming along to speak to us on the two subjects. No doubt we will hear from you again before too long. We will continue to monitor your process closely.
Thank you.
I suspend the meeting for five minutes for a comfort break.
Meeting suspended.
On resuming—