European and External Relations Committee, 26 Sep 2006

Meeting date: Tuesday, September 26, 2006

Official Report 250KB pdf

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Scottish Executive European Union Priorities 2006

Under our second item of business, we will take evidence from Tom McCabe MSP, Minister for Finance and Public Service Reform, on the Scottish Executive's European Union priorities. Those are the priorities that inform the Scottish Executive in the European aspects of its work.

Members will recall that the minister first presented the priorities at our meeting on 28 February. Since then, the priorities have been revised by Cabinet—members will note the new priorities in the paper that is before us. The minister has agreed to speak about the amended priorities this afternoon. He is accompanied by Lynne Vallance, the head of the Scottish Executive's EU strategy and co-ordination unit, and by David Thompson, the EU parliamentary liaison officer.

Minister, I understand that you would like to make some opening remarks. You have the floor.

I thank the committee for giving me the opportunity to say a few words about the dossiers.

As the deputy convener rightly said, I am here to talk about our mid-year review of the European Union dossiers that we think are most important to Scotland at this time. As the committee is well aware, the European Union continues to have a huge impact on Parliament's legislative programme and on the general economic welfare of Scotland. It is crucial that the Scottish Executive has an effective strategy for engaging with all the institutions of the European Union across all policy areas.

We have limited resources, though, so we need to prioritise our efforts so that we can secure the best possible outcomes for Scotland. As the deputy convener said, earlier this year the Executive identified a number of key European Union dossiers that we believed would have the most significant impacts on Scotland during 2006. We also presented the committee with summary papers on each dossier, outlining why we believed that they take such priority and what we intended to do about them. The papers have now been revised; I understand that they have been made available to the committee.

We have decided to withdraw a couple of dossiers and to introduce four new dossiers that were recently launched by the Commission. The export embargo on United Kingdom beef was lifted on 2 May and about £1 million of Scotch beef was exported to continental Europe in the first six weeks of the ban's being lifted. Accordingly, the dossier that is associated with that issue is no longer as important as it was when we spoke six months ago. However, other issues have come to the fore that we believe are of significant importance to Scotland.

The European strategy for sustainable, competitive and secure energy touches on a number of devolved areas of responsibility, as this committee identified during its inquiry into the paper. The Commission's green paper on maritime strategy is also likely to have significant implications for Scotland. We are looking forward to debating those implications during the stakeholder event that the committee is holding in December.

My ministerial colleagues and I are committed to pursuing all 24 priority dossiers. The Deputy Minister for Enterprise and Lifelong Learning has only recently returned from Strasbourg, where he lobbied MEPs on the EU spirit drinks regulation that is currently being considered by the European Parliament. His visit was welcomed by Scottish and UK MEPs and industry representatives, and has helped to promote the UK line on a dossier that is of key importance to Scotland and the UK, given the major economic importance of the spirits industry.

I will be happy to answer any questions on our key dossiers.

It is good that the committee and the Executive seem to be working in parallel on a number of dossiers—that will be helpful to both.

Do members have any questions?

Thank you for presenting us with useful papers, minister.

I would like to ask about how you think matters might develop in two areas in particular. It is evident from the paper on the dossier regarding the definition, description, presentation and labelling of spirit drinks that the Executive and the UK Government are doing a reasonable job of trying to protect the Scotch whisky industry in that regard, and that some progress seems to have been made. However, with regard to the Polish argument on vodka, I should say that vodka production is also quite important to Scotland, particularly to Fife and Leven, which I represent. Can you tell us how that argument might develop and what the timescale might be for any developments?

Another important dossier relates to the European working time directive. I think that people at all levels of government were culpable in the failure to foresee the policy's impact on the national health service. I am not pointing at anyone or any party; I am simply saying that it took a long time for the original directive to come into being, which meant that no one expected the cost to be as grand as it turned out to be. I hope that you can reassure us that we will not find ourselves in the same position as a result of the directive this time.

I would also like to touch on some issues that are not listed as priorities at this stage. If the minister cannot help us with them today, perhaps we can get something in writing. There are 31 outstanding proceedings against the United Kingdom and Scottish Governments in respect of environmental infringements and failure to transpose environmental law from 31 different directives into Scottish or UK law. There might be reasons for that, but I am not in a position to have any knowledge of what those reasons might be. Are you able to talk to us about some of the areas? I can list some of them, if you wish. I know that the Executive has already commented on the environmental impact assessment directive. There are also the directives on shellfish waters, urban waste water, wildlife and habitats, the waste framework, hazardous waste, and waste electronic and electrical equipment—although that last one is primarily a reserved matter.

My problem is that I do not know which of the 31 directives are wholly reserved, which the Executive is involved with, what stage the proceedings have reached, and what the Executive proposes to do in order to overcome the difficulties. They are important issues in regard to which we cannot be seen to be infringing environmental law. The minister may want to talk to us about that later.

Yes. You raised quite a few points.

It is a big area. I just want to know where the Executive's priorities sit.

To assist other members, I should explain that the first point that Bruce Crawford raised was on page 12 of committee paper EU/S2/06/13/1. The other point was on page 14 of that document, which relates to the working time directive. The minister has said that those are the Executive's priorities, which he is here to discuss. I am sure that he would be willing to put that in a general context, but on the detail that Bruce Crawford asked about, we can invite the minister to get the relevant department to respond later.

I am here primarily to speak about the 24 dossiers, which range over a fairly wide area. I do not want to undermine myself, but adding another 31 to those 24 would make it an even more challenging task. It is difficult for me to comment on specific environmental dossiers, but I am happy to raise the issue with Mr Finnie and to write to the committee in due course, if that would be helpful.

That is fine, thank you.

On the proposed spirit drinks regulation, we have said that we welcome the Commission's proposal. It will enhance consumer protection and prevent some of the deceptive practices that we are all concerned about. I know that the whisky industry has found the updated definition of whisky to be extremely helpful. I ask Lynne Vallance to deal with the issues around the other spirit that was mentioned.

Bruce Crawford mentioned the problems that the Poles are having with the definition of vodka. It is fair to say that the UK Government—which we are giving strong input to—is working closely with the Finnish presidency to bring the matter to a head. As you will see in the key dossiers paper, Allan Wilson went to Strasbourg to lobby on behalf of Scotland's interests and the UK position on what we consider to be the definition of vodka. We will continue to pursue that. One of our ministers will meet the Finnish ambassador tomorrow, and the issue will be raised then. We realise that the definition of vodka is of key interest to Scotland.

Are you happy with that, Bruce? The Finnish ambassador will be coming along to the committee and we can pursue the matter on Thursday.

Yes, that is useful. I am glad that the Executive is going to take the matter up. I think that we should do the same when we get the opportunity.

With regard to the working time directive, the Executive supports the line that has been taken by UK ministers. We want to retain the individual opt-out and to secure a workable and sustainable solution to the SiMAP/Jaeger judgments. We also want to address the multiple contracts issue. It may be helpful for the committee to know that on Thursday afternoon I will meet the Finnish ambassador and will discuss the working time directive, among other things.

Thanks. Are you happy with that, Bruce?

Yes.

My first question is also about the working time directive. The committee paper states:

"The regulation of Employment is a reserved matter and DTI takes the lead but"

Executive

"officials remain in close contact with the Whitehall leads".

The Department of Trade and Industry has recently issued a consultation document that relates, in some way, to the working time directive—particularly the stipulation on the minimum amount of annual leave for workers. In that consultation document, there is a suggestion that bank holidays should be in addition to the minimum 20 days annual leave. Has the Executive responded to that consultation, and can the minister give us an indication of the Executive's thinking on the matter?

The responsibility to respond to that consultation document would lie with the Deputy First Minister. I do not know whether he has responded; I imagine that he will respond in due course.

Could you please find out and inform the committee?

I will certainly do that, yes.

Thank you. My other question relates to the proposal to establish a European institute of technology.

What page of the committee paper is that on?

It is on page 8. The committee paper states that the headquarters of the European institute of technology is

"expected to be small in size, with most of the EIT existing as a network of researchers in their home institutions."

Nevertheless, the headquarters will be pretty prestigious, so I hope that the Executive will be proactive in either preparing a Scottish bid or in encouraging universities or other institutions of higher education to prepare bids. The paper states:

"Measures of research intensity in the university sector in Scotland are amongst the highest in Europe".

Will the Executive be active in preparing or encouraging the preparation of a bid to have the headquarters in Scotland?

I reassure Mr Canavan that we are in close contact with the universities and are working with them to maximise their involvement. If, through that discussion, the universities feel that they are in a position to bid for that headquarters, we will encourage that.

My main questions are based on pages 31 and 33 of the committee paper. However, I first want to pursue Bruce Crawford's question on the working time directive. I was interested in the minister's reply and I welcome the fact that the Executive seems to be backing the national Government, especially with respect to the opt-out for individuals who choose that. Is the minister aware of whether that is being given any support by Scottish MEPs? Has there been any communication on the issue?

We communicate with our MEPs as regularly as we can. As Mr Gallie well knows, as recently as Thursday evening we held the latest European members information and liaison exchange—EMILE—network meeting with our European Parliament colleagues. The issue that Phil Gallie raises was not discussed at that meeting, although I am happy to clarify the position of our colleagues in the European Parliament, both from Scotland and from the United Kingdom.

Thank you. Let us turn to another issue. You will be aware that the committee is considering the UK Government's energy review. For reasons to do with the devolved settlement, we have centred our attention on efficiency matters. The committee paper states:

"The review document initiated a consultation on the UK government's proposed policy framework for the development of nuclear power".

The closing date for that response is 31 October. Given that almost 50 per cent of Scotland's generating capacity comes from nuclear energy, what pressures has the Executive placed on the national Government, bearing in mind the proximity of the response date?

We are in close contact with the Department of Trade and Industry. I do not want to give details of the conversations that are going on between us at the moment, but we are ensuring that the Scottish point of view will help to shape the eventual UK position.

Can you enlarge on the Scottish point of view?

I do not want to do that at this time.

I am very disappointed, but never mind. I am not surprised by that.

Let us turn to another issue that I take very seriously: justice and home affairs priorities. In Europe, pressure has been applied to introduce qualified majority voting on common justice issues. I understand that that proposal may have been rejected by other Governments in Europe. Can the minister advise us what Scotland's stance has been to date and what information we have passed to the UK Government, given the independence of the Scottish judiciary and justice system?

Clearly, that would be a major aspect of our response to the UK Government and what we feed in. It is part of the review of the Hague programme. The move away from unanimity to qualified majority voting is significant and we would want to make known our views about it, because it could create a situation in which we were more vulnerable. We want to ensure that the Scottish legal position is protected to the maximum extent.

My question is about the review of the cod recovery plan. Paper EU/S2/06/13/1 points out fairly that the Scottish fleet has been significantly reduced in order to bring fishing capacity more in line with fishing opportunities. I know that the review has some way to go, but will the minister assure us that the full impact of the sacrifice that the Scottish fleet has already made will be given proper weight and that we will not be trying to heap additional pain on top of that which has already been experienced?

I can give an absolute assurance on that. We want to try to introduce measures that are better targeted and more effective and which reflect the historical situation. We want to ensure that the fact that the Scottish fleet has made sacrifices is taken into account fully, whatever the conclusion of the review.

It is a perennial problem that the negotiations with Norway, which have a material impact on the sharing-out of stocks in European waters and our own fleet, are conducted—and have been conducted for years—by Commission officials without any obvious direct political input. I know that the minister raised that point in last year's debate and that members have been expressing concern about it for some time. Are you confident that there will be any improvement in this year's bilateral negotiations with Norway and that there will be much more political input rather than just input from EU officials?

Commissioner Borg will visit Shetland later this year, when we will have an opportunity to put our points across and ensure that the Commission is well informed of the view that we in Scotland take. The negotiations with Norway are acquiring ever-increasing importance for Scottish interests, so ministerial engagement has increased over recent years and will remain at the appropriate level, given the importance of the negotiations.

I want to raise two issues that are not in the dossiers but which the minister would, I am sure, acknowledge are important. When the committee visited Brussels in March, one of the key issues that we identified was the importance of the seventh framework programme for research and development, which might provide more opportunity for Scotland in the coming years than the revised structural funds programme. I think that that was discussed yesterday at a competitiveness council meeting. I would welcome the minister's comments on the Executive's approach to engagement in the seventh framework programme and how you hope to capitalise on it.

The other issue, which is highly topical, is the imminent accession of Bulgaria and Romania. I acknowledge that immigration and work permits are matters for the UK Government, but I am sure that there is, given the fresh talent initiative, a distinct Scottish Executive perspective on the matter, so I would be interested to hear what representations have been made to the UK Government on the consequences and implications of the accession of the two new states.

We are in discussion with the UK Government on the framework on research and development and are feeding into the line that it takes. It is important to stress that although we have identified 24 dossiers as being of importance, the position is fluid. The fact that the situation has changed since I visited the committee six months ago demonstrates that—two dossiers have been dropped and four have been added. I do not mean to suggest that the 24 dossiers are the sole extent of our focus on the activities of the EU, but they reflect the fact that we have limited resources. We try to prioritise. As you know, we have the office in Brussels, so we are well represented. There is a continual horizon-scanning and involvement process, which will also be the case with the framework directive on research and development.

As Jim Wallace rightly said, matters of immigration are reserved to the Westminster Parliament, so it would be remiss of me to try to predetermine the view that the United Kingdom Government will take on Bulgaria and Romania. However, it is fair to say that, not only on those countries but over a considerable time, we have made it clear to the UK Government that we wish Scotland to be a welcoming country. We are happy for our doors to be open, and we have actively promoted the fresh talent initiative, which is still in excess of any initiative that is in play in the UK. As the committee will know, a similar initiative is in play down south, but it operates for only one year rather than two after graduation and covers a narrower range of subjects. We have made clear to the UK Government what our approach has been in the past and what it will be in the future; we hope that it will be taken into account when the UK Government eventually takes a decision.

You have partly answered one question that I wanted to ask, which is how often you review the agenda and how things get on and off it. It is a little more evident how things get off the agenda. For example, with the conclusion of the beef ban, that is a rather obvious dossier to remove. How do you monitor which dossiers to include? For example, it would be remiss of me not to mention the fact that today is European modern languages day—I believe that there is a celebration in the chamber. That fits in with many of the Executive's key priorities in skills development and equipping young people with the abilities that allow them to compete in a modern European economy. How do you identify such issues?

As you know, we have a very active and well-regarded office in Brussels, and our officials are continually horizon scanning. They use the forward look to assess the Commission's work programme. The office makes its recommendations to policy leaders here in Scotland, which are then discussed. I consult my ministerial colleagues on emerging conclusions, and eventually I put a paper to Cabinet for approval. As happened with the current 24 dossiers, Cabinet then approves the content. That is a rolling programme, which we undertake twice a year to ensure that the content of the dossiers has continuing relevance.

I want to make a point about Romania and Bulgaria. I should declare an interest that I was involved through the Westminster Foundation for Democracy in helping Romania's application for European Union membership. I welcome Romania and Bulgaria's entry, but there is likely to be quite an influx of people from those countries. I asked the First Minister about that recently in the chamber, although he dismissed the basis of the question. Will social, health and education services be up to par if there is mass immigration from those countries following their entry to the EU?

I must say again that those matters are reserved to Westminster, so I do not want to be any more expansive than the First Minister was a few days ago. I have made the situation clear, and our approach to previous accession countries through the fresh talent initiative is well known. We have been welcoming, and we have said publicly on many occasions that immigration has made a contribution to our economy. That remains our position, and the UK Government is clear about it. Before the UK Government takes any final decisions on Romania and Bulgaria, I am sure that it will take all relevant matters into consideration, including those that Mr Gallie just mentioned.

The dossiers are comprehensive and helpful, but on page 13, on structural funds, reference is made to a proposed visit by Commissioner Hübner. Can you tell us whether that visit has taken place? If it has, did it go well, and what implications, if any, has it had for finalising our approach to the funding period ahead?

Before the minister answers that, I should mention that Linda Fabiani and I had a brief meeting with Commissioner Hübner, in which we reflected on issues relating to structural funds. That came in advance of her meeting with the First Minister. She did not reveal to us anything in particular, but we made some points about the Commission clawing back some of the proposed money. Interestingly, I had intended to ask the minister the same question. Has there been any progress following the commissioner's meeting with the First Minister on whether the Commission still intends to claw back the money. Will the Executive vigorously pursue the matter?

The first part of the question has been answered: clearly, the visit has taken place. It would be remiss of me to go into too much detail. However, I am quite happy to say that we regarded the visit as successful. I will full-stop it at that, however.

I understand the minister's position, and I do not want to push him on this, but can he confirm that the clawback was discussed? I do not necessarily expect the minister to say any more than whether or not it was.

I can certainly confirm that it was.

We will no doubt hear more about the matter in due course.

I think, minister, that you are going to respond on the environmental points that were raised by Bruce Crawford, perhaps via your colleagues in the appropriate departments. Dennis Canavan also had one or two points on bank holidays, in which he has a particular interest. We would appreciate your writing back to the committee on that matter, too.

The information that is contained in the dossiers is very helpful. It shows the considerable progress that has been made since we started a year or two ago. I hope that we can continue to work in partnership in this area. Thank you for your attendance.

Thank you—I am glad to hear you say that. The information reflects the hard work that has been done by our officials, who I am sure will take heart from your comments.

Meeting suspended.

On resuming—