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Chamber and committees

European and External Relations Committee, 28 Feb 2006

Meeting date: Tuesday, February 28, 2006


Contents


Scottish Executive European Union Priorities 2006

The Convener (Linda Fabiani):

Good afternoon, everyone, and welcome to the third of our committee meetings this year. I have received apologies from Irene Oldfather and Margaret Ewing, as well as from Dennis Canavan, who is in Dublin in connection with his reporter's inquiry.

I apologise to the minister and those who were waiting outside for the late start. We are now quorate with the help of Mr Gallie and Mr Wallace. The plan was to start half an hour earlier than usual because it is likely that this will be a longer than average meeting. However, we have managed to start 23 minutes earlier than usual.

I am delighted to have with us for the first two agenda items the Minister for Finance and Public Service Reform, Tom McCabe. The first agenda item gives Mr McCabe the opportunity to present the Executive's European Union priorities for 2006 to the committee. This is the first time that the Executive has reported to the committee looking at the year ahead rather than within the six-monthly terms of the European Council presidencies.

The priorities have been presented to committee members in the form of a one-page summary for each of the 22 issues identified; the summaries state the policy issue and what the Executive proposes to do. Members have also been given a copy of the forward look for 2006 from the Executive's EU office in Brussels. I thank the Executive for providing that excellent document, which gives a lot more background and discussion of the Executive's priorities.

The committee has been linking its European Union workload directly to the Commission's annual work programme and that longer perspective seems to be a useful development that will benefit us in the future.

I invite the minister to introduce his team and then present the Executive's priorities paper. We will then move on to questions.

The Minister for Finance and Public Service Reform (Mr Tom McCabe):

Thank you and good afternoon. As you can see, I am accompanied by Nikki Brown and Lynne Vallance.

Thank you for the opportunity to come along this afternoon. As the convener said, I intend to speak about what we see as the priorities for the European Union in 2006 and to follow that with a discussion about the G8 economic impact report.

As the committee is aware, the European Union has a significant legislative impact on Scotland. It goes without saying, therefore, that it is critical that the Scottish Executive has an effective strategy for engaging with the EU across all policy areas. I am therefore very pleased to have the opportunity to present the Scottish Executive's new approach to engaging with the European Union. Members may remember that, last year, I discussed the new approach with the committee. I explained that the key issues paper would replace the current practice of individual ministers outlining their EU priorities within their portfolios.

"Key EU dossiers for the Scottish Executive" is an overarching paper that highlights 22 EU dossiers that ministers have selected to have the highest priority for the Scottish Executive in 2006. Members will see that those dossiers cover a wide range of policies and are all of key importance to Scotland's interests. As I mentioned, all ministers support the 22 dossiers that have been selected and are committed to pursuing them in the next 12 months.

I am more than happy to answer the committee's questions. As I am sure that members are aware, my Cabinet colleagues will be happy to give more detail as they report to the committees that deal with their portfolios.

Phil Gallie (South of Scotland) (Con):

I thank the minister for the 22 objectives that are set out and for the information that lies behind them. With the convener's consent, I will pick up on one or two objectives in a moment.

The minister talked about the major impact that European Union legislation has had on Scotland. We are now under the Austrian presidency of the EU. Is the Executive disappointed by the Austrian presidency's concentration on revitalising the European constitution?

Mr McCabe:

It is clear that the Union is in a period of reflection on the constitution, to which two countries voted no. That reflection continues. Our discussions with the United Kingdom Government have reflected a joint desire to continue to search for a solution that meets all European Union members' requirements. Different members have different views. The Prime Minister has made it clear that he thinks that a strong debate is needed about the future of Europe. How that is conducted—whether it relates to the constitution or whether member states are prepared to look more comprehensively at what requires to be done to secure a viable future for the European Union—remains to be seen. The British Government will continue to make its representations and to do what it believes is in the best interests of citizens of this country.

Phil Gallie:

I will ask about a couple of specifics—I have more questions if nobody wishes to speak later. The first issue, which is important for the Scottish agricultural industry, is lifting the EU beef export ban. Your paper notes stringent opposition to that from a few EU countries—France and Germany to name but two. If agreement is not reached, does the Executive have a plan B to fall back on?

Mr McCabe:

The United Kingdom Government is working hard and we are working as hard as we can with it to do our best to secure a positive outcome. As you know, the EU Food and Veterinary Office published a favourable report last year. Discussion will take place and it is hoped that decisions will be taken in the first week of March. People are working hard to secure a positive outcome.

I will not speculate on the possibility of failure. Each member state needs to sign up to the decision. Much progress has been made and we will do our best to capitalise on that progress when the vote is taken in the first week of March.

Given the emphasis that you have placed on the excellent report, have you any idea why the two nation states to which I have referred oppose the British beef return?

Mr McCabe:

I am sure that they have read the report in detail and might have concerns about particular aspects of it, but I can only speculate, because I do not know the exact detail. Their concerns might be linked to the main issue or to other issues. As I am sure you are aware, sometimes that is the nature of how the European Union works. You might even say that some people are unhappy about other agreements that have been made recently and are expressing their view on them in other ways.

I will come back to Phil Gallie, but I have a quick question on that issue. Some time ago there was discussion about whether Scottish beef, as opposed to British beef, could get back into Europe. Is that topic still under discussion?

It was considered, but it was shown that that would cause considerable difficulties because the two markets are intrinsically linked.

The summary of the dossier indicates that there was a block on lifting the ban in late January, but it is now anticipated—although not guaranteed—that the ban will be lifted in April. What changed to cause that anticipation?

Mr McCabe:

As you know, discussions go on all the time. As a result of the discussions that have taken place, people have a higher degree of confidence that we might be able to secure a positive outcome. A lot of those discussions take place in a particular way and I am not necessarily party to all the details. However, the indications that we have received are that as representations are made and discussions are held between member states there is a feeling that progress is being made and that people are more confident today than they were at the turn of the year.

Mr Wallace:

Mr Gallie mentioned the opposition from France and Germany. It is interesting that the one country from which there is opposition that he did not mention is Austria, which holds the presidency. Given the number of times that UK and Scottish ministers told us of the importance of being in the chair and holding the ring when we held the presidency in the previous six months, are ministers disappointed that Austria is being so partisan?

I am sure that a diplomatic form of words will be found to suggest to our Austrian colleagues—in a way that is not about trying to teach our granny to suck eggs—that there is a way in which one conducts the presidency.

Mr Wallace:

I hope that the Austrians read the Official Report of the meeting.

I think we would all agree that that issue, and the others that are identified in the paper, are all important. Having had to present such reports in the past, I think that what has been done is a welcome step forward. The reports are much clearer, succinct and focused, which is to be welcomed.

What was the process for identifying the 22 priorities? Was it an entirely internal, Executive process, or was there engagement with key stakeholders?

Mr McCabe:

There was a process whereby individual portfolio ministers were asked their view about areas that are of importance to them. How they went about their business is an issue for them. In line with the way in which the Executive works, we have demonstrated since 1999 that we are interested in ensuring that we take the pulse of Scotland and people who have specific interests in subjects. I am sure that my ministerial colleagues were interested in securing the views of external stakeholders about what would be the most important issues during 2006.

Are the dossiers ranked in any particular order?

Mr McCabe:

No. There is a fairly wide span of interest across the 22 dossiers. There are a lot of papers, which are simply numbered 1 to 22. As time progresses, other issues can come up. It might well be that other issues of significance emerge, in which case ministers would deem that they required to focus on them. The picture can change and will always be fluid, given the nature of the European Union. We have identified these 22 dossiers. The last thing that we want to do is give the impression that we are concentrating on them to the exclusion of any other developments that take place.

That is helpful. I would like to ask one final—

Is it about specifics?

Mr Wallace:

I will, perhaps, come back to the specifics but I have one general question left.

The helpful way in which the document is set out suggests to me that it would probably lend itself to a report back on the progress made on each of the issues. Is that anticipated?

Mr McCabe:

The papers that you have before you have been seen by the Cabinet recently. After six months have passed, I intend to go back to my Cabinet colleagues for an update report. I would be more than willing to share with the committee the details of any progress that we think we have made in that time.

We used to have six-monthly reports. It might be useful to have a half-yearly report now that we are doing the year-ahead round-up.

We are always happy to be as helpful as we possibly can be to parliamentary committees.

I would never have doubted it.

The committee might want to consider whether it would want to receive the six-monthly report in person from a minister or through correspondence.

We will reserve judgment on that.

Phil Gallie:

One of the papers refers to the working time directive. I point to a recent decision in the European courts that stand-by hours for doctors in hospitals should be included in the calculation of working time. Obviously, that has massive implications for the health service and for some private employers. What is the Scottish Executive's stand on that matter? I recognise that the matter is reserved, but the document says that you are in contact with the Department of Trade and Industry in relation to the matter.

Mr McCabe:

We are, indeed, in contact with the DTI. In the joint ministerial committee on Europe, which meets in London regularly, Scottish ministers have offered their support to United Kingdom ministers as they pursue the opt-out in relation to the working time directive. We made it clear that we see that opt-out as maintaining maximum labour market flexibility in the UK. We did not agree with the court judgments that put what we regarded as an extremely elastic interpretation on the legislation.

I welcome that support. Strangely, I think that the Labour Government is absolutely right on the issue. Nevertheless, the courts have made a judgment. Will we be forced to implement their decision?

Mr McCabe:

We are pursuing the opt-out and think that we are making good progress. As I said, the Executive strongly supports the UK Government's position and we think that we can make positive progress with regard to what we consider to be a situation that would be in the best interests of the British labour market.

We are confident that we will not be forced into the position that you describe. However, as with anything else, until a conclusion is reached, there is always a degree of uncertainty.

Do any other members want to chip in before I ask about another issue?

We are all generally concerned about that issue and I am glad to hear the minister say that the word seems to be that it will be okay.

Mr McCabe:

Certainly, we think that significant progress has been made. Closure has not yet been reached but, through the forum that I referred to, Scottish ministers have expressed their views about the detrimental impact that the proposal would have on our public services, especially our health service.

Phil Gallie:

I would like to ask about the groundwater daughter directive—I do not know where that title came from. I recognise that this is not your area of speciality, minister, but you will realise that there has been an on-going debate about the use of sewage sludge to fertilise useless ground for forestry growth. It seems that that use of sewage sludge has been unsupervised. That is emphasised by a current court case in which SEPA is involved. On the wider issue, can you assure us that the use of sewage sludge for such purposes will not contravene the groundwater daughter directive in the long term?

Mr McCabe:

I assure the committee that the United Kingdom has advocated a risk-based approach to the subject. We recognise the technical difficulties with using the type of sewage sludge that you mention and we are trying to advance the position that groundwater is important. It accounts for some 5 per cent of drinking water in the UK but it accounts for a substantially higher proportion of drinking water in other countries. Some people advocate a purist position—pardon the pun—or an idealist position, but we need to take a more realistic approach that is risk based and proportionate and which does not place unnecessary burdens on the various sectors of our economy.

One matter that you have not covered in the 22 dossiers, as far as I can see, is the disposal of sewage and other waste products by burning. Should that be covered, given that there is interest in the matter in Europe?

I am not aware of any forthcoming directive on that, but if one is published we will consider it and give it the appropriate attention.

Phil Gallie:

I am thinking about the situation at Longannet because questions have been asked about the burning of sewage sludge there. Perhaps the dossiers cover new directives rather than the implementation of old directives. Would it be worth while for the minister to take just a little bit of interest in the matter?

I will certainly note the matter. If there is anything that we can report back to you in writing, we will do so.

Thank you.

Mr Wallace:

One of the key dossiers is on the internal market in services. The tenor of the paper is that that is a reserved matter, but it has considerable implications for Scotland's service sector. Has the Executive done a strengths, weaknesses, opportunities and threats analysis of the draft directive and considered how it will impact on Scotland's service sector?

Mr McCabe:

Our most substantial concern was perhaps about the country of origin principle. As you know, recent decisions in the European Parliament removed that principle and a refreshed directive will be published in the near future.

The directive will increase flexibility and market opportunities and we broadly support it.

Mr Wallace:

Your concern about the country of origin principle was widely shared, but have you picked up any intelligence—since the European Parliament voted on the matter—about the likely response from the European Commission? Is the principle a dead duck or will there be attempts to introduce it by the back door?

I do not have definite intelligence on that, but our firm impression is that it is a dead duck.

The Convener:

I am aware that the proposed European institute of technology does not fall within your brief, but I understand that, during the past week, further progress has been made on the form that the institute will take. Have you heard anything about that?

Mr McCabe:

As I understand it, the Commission published its proposal within the past week. The concerns that have been expressed from the UK perspective are centred on the funding of the institute. There is concern that, however the institute is funded, it should not detract from the overall quantum of research and development funding that is available.

So the Executive is still considering the institute's potential for Scotland, even in the light of what was decided last week.

The proposals are in their very early stages, but the issue is on our radar and we will make appropriate representations.

Good. Thank you.

Phil Gallie:

I would like to press the minister on that matter. The idea embraces all the higher education institutions in Europe, but such an institute would need headquarters—it would need a base from which to oversee activities throughout Europe. Does the Executive want such a base in Scotland?

Mr McCabe:

Before deciding that, we must be satisfied that setting up a separate institute is the right way forward and that we will not simply create another bureaucracy that detracts from the quantum of research and development funding. That question is open and we must consider it further before we reach a conclusive view.

Given their comprehensiveness, perhaps it is unfair to point out that there is an omission in the dossiers—unless I have missed the issue.

You have kept the hard question until the end.

Mr Wallace:

Mr McCabe said that new issues could emerge over six months. The Executive's forward-look document states:

"The directive on avian influenza was concluded at the end of 2005."

That is clearly an important issue. Is there any updated information on it that the minister can share with us, perhaps from the relatively recent agriculture and fisheries council meeting?

Mr McCabe:

I think that the meeting to which the member refers was held in December last year. We are concentrating hard on ensuring that we implement the avian influenza directive properly in Scotland. Avian influenza is clearly an important issue with which people throughout Europe are struggling, and we want to ensure that we can demonstrate that we have done all that we possibly can to address it. We are taking a strong interest in the matter and concentrating on implementing the decisions that were taken in December.

Phil Gallie:

I refer to the dossier on the applicable law and jurisdiction in divorce and would like to pick up on an issue to do with general principles. There seems to be a European law harmonisation process. Even within the United Kingdom, Northern Ireland, England and Wales and Scotland have different legal systems. Is not the Commission's interest in trying to harmonise laws throughout Europe a step too far? There are totally different cultures and attitudes towards such issues throughout Europe.

Mr McCabe:

The area is undoubtedly extremely sensitive. The proposals are at a very early stage and it would be premature to try to predict what the United Kingdom Government's stance will be. The proposals are being considered, but it goes without saying that, given the sensitivities on the issue, it may be some time before conclusions are reached or progress is made here or elsewhere.

We should note that the Justice 1 Committee will consider the issue.

Will it?

Yes.

That is interesting.

The Convener:

Thank you for giving evidence on the Executive's EU priorities, minister.

The clerks have suggested that we could consider the Executive's EU priorities at our next meeting with the benefit of a paper that compares them with the priorities that the committee previously agreed to track. Such consideration would be useful for our forthcoming trip to Brussels. Do members agree that we should do that?

Members indicated agreement.

I suspend the meeting for a couple of minutes to allow a changeover of Executive officials. I believe that the officials will metamorphose any minute.

Meeting suspended.

On resuming—