Environment and Rural Development Committee, 28 Jun 2005

Meeting date: Tuesday, June 28, 2005

Official Report 256KB pdf

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European Issues

Agenda item 3 is European issues. Members will recall that we considered a quarterly update on European issues at our meeting on 1 June and that we agreed to take oral evidence from the minister before the summer recess on priorities for the forthcoming United Kingdom presidency of the EU. We have asked several questions about current EU issues and we wrote to ask the minister for further information before today's session. We have a response from him, which we have circulated. I thank him for responding in such depth. Of course, there is always the danger that we have read the response in depth and that we will ask even more detailed questions.

I am conscious of that danger.

It is useful not just for committee members but for external people who scrutinise European issues to see the Executive's response to several major issues. I thank you for that and I invite you to introduce your officials. If you want to make a short opening statement, that would be welcome.

David Wilson, who is here wearing his rural policy hat, is also head of fisheries and therefore has a crucial role. Dr Ingrid Clayden is in charge of the rural development regulation and is well versed in European matters.

I will try to bring committee members up to date. As members will know, we achieved political agreement in Luxembourg last Monday on the rural development regulation. Funding decisions have yet to be made and concerns remain about the overall budget for rural development, but the agreement paves the way for us to begin work on the next Scottish rural development programme.

There are a number of dossiers, some of which are less significant to Scotland than others are. The reform of the sugar regime is critical because of its costs and its impact on the World Trade Organisation Doha round that will take place in Hong Kong in December.

The animal health and welfare agenda in Europe is likely to be confined to the issue of avian influenza and what might be done to control it and to contain its spread. That has major implications for all of us and not only people in the poultry industry. I know that the Minister for Health and Community Care is very concerned about it.

Lifting controls on beef exports remains one of my key priorities. I hope that progress will be made during the UK presidency of the European Union.

Other dossiers are of importance to us. Proposals for the labelling and definition of spirits concern vodka mainly, but we must ensure that Scotch whisky is protected. Recent proposals on the control of potato cyst nematodes were not acceptable to us. There have been changes to organic farming regulations in that sector.

I hope to be able to return to the committee later in the year with more details of where the Scottish Executive wants to be in the context of the autumn fisheries negotiations. Those negotiations will, of course, take account of the conclusions emerging from scientific evidence on fish stocks.

The Executive will play a full part in contributing to a successful UK presidency, which is just about to begin. The work of the fisheries council will be critical. We have identified three or four priorities. First, there should be better regulation and simplification of the common fisheries policy. That will include improving the process for the autumn fisheries negotiations, in which there should be genuine front-loading and a proper assessment of impacts. Secondly, we should build on the improvements in recent years in stakeholder involvement. Critically, that will include making much better use of the regional advisory councils. Thirdly, there should be sustainable fisheries. That will involve the taking of effective action to ensure the recovery of stocks—cod stocks in particular.

On the environment, seven key issues have been listed for the UK presidency. They are climate change; REACH—the registration, evaluation and authorisation of chemicals; environmental technologies; the seven thematic strategies that are expected from the European Commission; the sustainable development strategy; energy efficiency; and the aquatic environment.

The UK presidency has been working with the outgoing Luxembourg presidency and with the Austrians who will follow us. The extent of the agendas that we inherit will be known only after next week.

The Executive's priorities include climate change. They also include medium and longer-term strategies and targets, which will be a continuing theme, as will our work on REACH, to which I have referred in our correspondence. The EU's sustainable development strategy will impact on the Scottish input to the overarching UK strategy. We will also have to link our work to the Lisbon goals for sustainable production and consumption.

We look forward to seeing the seven thematic strategies. If their promise is realised, they could allow more imaginative forms of policy making.

My letter of 14 June gave a fairly full briefing on my intended direction of travel on marine matters, so I will not dwell too long on that. However, after last year's consultation, I know from a range of sources that we need to take a more strategic approach to the management of coastal and marine resources. My coastal and marine strategy will not supplant existing sectoral policies but will provide bonds, and an overarching framework, so that we can make progress.

As part of the development of that strategy, we are committed to introducing a coastal and marine national park, as members know. I have asked Scottish Natural Heritage to report to me early in 2006 with a refining of possible sites and on what powers and structures might be required to manage a park. We certainly intend in 2008 to designate the first coastal and marine national park, which will be a new approach in the UK and internationally.

I do not wish to single out Maureen Macmillan for special treatment but, to pre-empt a question from her, I repeat that my aim in my discussions with the Department for Environment, Food and Rural Affairs at Westminster is to agree what we believe, purely from a Scottish perspective, to be necessary for marine policy and to gain a better understanding of the policy that DEFRA is promoting. At that stage, we will address the issue of whether separate marine legislation is required. There are complexities in relation to who has authority over various aspects of marine policy, therefore, I do not rule anything out or in. I am much more concerned to get agreement about policy before I start getting into the constitutional niceties of who and where and what acts might be required.

You mentioned that agreement has been reached on the new rural development regulation, but said that the budget has still to be decided. Have you or the Government in Scotland made any representations on what that budget should be?

The discussions have now moved into a slightly different phase. The settlement that was reached for the United Kingdom in 2000 in effect gave us 3.5 per cent of the element of spend that was being moved from pillar 1 to pillar 2 for rural development purposes. A subsequent independent analysis showed that the UK share should have been nearer 8 per cent or 8.5 per cent. We have argued consistently that the spend should be reallocated, but I have never been confident about achieving that, because that would need other member states to agree to a reduction in their allocations. You and I are politicians, so we know that it is always tricky to get turkeys to vote for Christmas.

Another aspect that has been threatened is our ability to use voluntary national modulation to augment our rural development programme. The situation now is that a minor adjustment to the allocation may be made but, more important, we have secured our ability to use national modulation. Therefore, the totals are now not quite the issue. We have secured a formula that will ensure that our projected spend on rural development is protected, unless the finance mechanism of the European Union, by majority, decides that there ought to be a reduction. However, we were clear that there should not be any reduction—the position that we argued in Europe was for the permission of minor expansion.

The matter will be determined not by the Council but by the Commission in the EU financial perspective discussions. We have made our case clear and secured a formula that we believe will allow us to continue to develop our spending on rural development and to protect key issues. However, I cannot give absolute guarantees, because the financial perspective discussions will now overlap on the matter. We will continue to make our argument in a different place, although I am not involved in those discussions. However, the Scottish ministers will continue to argue that we need to spend increased sums on rural development.

Could Tony Blair's recent debate with Europe about the EU budget and Britain's rebate have any impact on Scotland?

I do not think so. Those are discussions about the different views on how Europe ought to be managed and run in the medium to longer term and about what Europe ought to do about its economic performance. The financial perspective discussion will be driven much more by how we take forward the present budget of rural and agricultural spend, which was previously pretty much capped by the Berlin agreement. I do not expect that people will expand those budgets, so the question will be more one of allocation. Looking across the member states, I do not think that their views will necessarily have an adverse impact on Scotland.

I have two quick questions on the fishing agenda during the six months of the UK presidency. My first question concerns reform of the common fisheries policy. Although Ross Finnie and I may have our disagreements on the common fisheries policy, we tend to agree that the status quo is not an option. The minister is on record as calling for further reform. To what extent will the Executive be able to use the UK's presidency of the EU to take forward that reform?

It must be understood that, in effect, presidency agendas are set two or three months in advance. Such agendas are also dependent on the Commission carrying out the proper preparatory policy papers and analyses.

Given my clear view on the desirability of a greater degree of regionalisation within the common fisheries policy, my priority is to ensure that the North sea regional advisory council is not just up and running but operating effectively. We need to demonstrate that, despite limited powers, regional advisory councils are capable of making a serious contribution to discussions on how the agenda for such fisheries can be run better by fishermen, scientists and communities.

I also have an obvious interest in ensuring that the pelagic regional advisory council is set up, so that the vast majority of Scotland's fishing interests are covered by two main regional advisory councils. To that extent, I have been encouraged by the approach of fellow member states, especially those that have fleets operating in the north North sea. Also, following the recent discussions that David Wilson and I had with the Norwegian fisheries minister in Norway, I think that even Norway, curiously enough, now has a greater appreciation of the need for the collaboration, which would be one impact of having a regional advisory council. It is quite encouraging to get that kind of external support for more devolved management.

It is not so much about driving forward and demanding things as about trying to produce evidence that will allow us to say that the regional management approach is working and that it is therefore time seriously to consider reforms that encapsulate a much more regionalised approach to fisheries management. I am encouraged by the way that things are going, but the situation is pretty new.

My second question—

You must keep it brief.

I do not have time for a longer question.

To what extent will the impact of climate change on fish stocks be factored into the negotiations, given that several recent reports have highlighted the impact of climate change on the location and nature of fish stocks in the North sea and other Scottish waters? Clearly, the industry is crying out for that to be taken into account in future negotiations.

I think that we need to take that into account, although I think that some element of that is factored in by the International Council for the Exploration of the Sea.

Two recent reports have suggested that climate change has resulted in a dramatic northerly movement of cod. When I was in Norway, I took the opportunity to ask the Norwegian minister and his officials and advisers whether any increase in cod stocks in Norwegian and northern waters had been observed, but they said that that was not the case. You and I have read scientists' very clear view that climate change and the increase in water temperature is moving plankton feedstocks and therefore breeding stocks north, but we might have shared the expectation that, if that were the case, Norwegian scientists operating beyond the North sea would have been observing at least some change to the cod stocks. I will not give a definitive answer to that question, which is a very good one and one that we are asking and are channelling through the scientific bodies. The issue must be taken into account.

It is an issue that we will have to come back to.

What is positive is that a lot of the scientific work that is being done on the issue is being done by Scottish scientists, in particular by Fisheries Research Services up in Aberdeen. As the minister said, the key point is that it is currently difficult to draw definitive policy conclusions because the science is uncertain, but we are doing good work on it. The conclusions that can be drawn from the science are not unambiguous. Some of them point to a potential for more fishing and others point to a need for less fishing. We must examine the evidence carefully and ensure that we have the best science possible.

The committee would be very interested in that analysis when you have carried it out.

We can provide a note now to set out what we are doing.

That would be useful.

I have two land-based questions. First, on the redefinition of less favoured areas, I note that the European Court of Auditors has accused people of overcompensating and of continued application of outdated socioeconomic figures. It is trying to harmonise the criteria by reference to constant natural conditions. Is the idea of mountainous or island areas included in those natural definitions? Secondly, could you provide us with a map—like the one for single farm payments—of the payments to LFAs by parish in Scotland, so that we can look at it over the holidays?

I will make no comment on the sad reading habits of members of the Environment and Rural Development Committee. I will raise two points that I hope Rob Gibson is aware of but which he has perhaps not picked up on. The discussion on objective criteria for less favoured area payments has become fraught. I will come back to the detail of those discussions. As a consequence, although we have agreed the rural development regulation, it is now also agreed that there will be no effective change to the current procedures on LFAs until 2010. If the change is to be implemented in 2010, we will have to have agreed revised criteria by 2008.

The criteria are where we got into difficulties. From the Scottish perspective, we said that there should be some broad themes, because a one-size-fits-all approach does not work. We suggested that, under those broad themes, member states should be allowed to come up with ways in which they would recognise remoteness, rurality, island status and so on. However, because everyone was nervous about the Court of Auditors, they persisted in trying to produce a more detailed list. You mentioned, for example, altitude. That works in parts of Scotland, but if we were to combine that criterion with the island status, we would end up with, for example, Orkney having very little support, because Orkney does not have many islands.

Mountains—not islands.

Sorry. I meant mountains—an altitude criterion might not help areas such as Orkney. We need a great deal of flexibility to enable us to direct support appropriately—whether it be to the Western Isles, Shetland, Orkney or much of the Caithness, Sutherland and western coast. We need flexibility to be able to direct the support. The way in which that discussion was developing was fraught. I am not happy, as I would like to have had the matter wrapped up but, to be honest, I am content that we will have another round of discussions to try to establish the criteria. Therefore, we can continue the current level of support through to 2010.

I have a brief question on protected geographical indication, which is an issue that was raised at the royal highland show. The issue of having Scotch beef protected is important. According to the UK Government, the aim of the WTO ministerial talks in Hong Kong is

"to achieve an outcome which promotes trade liberalisation, including better access to markets for developing countries".

Will that approach make it more difficult for us to maintain protected geographical indication status for Scotch beef, for example?

I do not think so. There is confusion about physical barriers such as levies, subsidies or regulations. No one is suggesting that because Scotch beef or Arbroath smokies have PGI status people cannot import beef or smokies—the importers' only problem is that they cannot call their smokies Arbroath smokies because they do not come from Arbroath and they cannot call their beef Scotch beef because it does not come from cattle that were born and reared in Scotland. We could have an interesting argument with the WTO about the matter, but that would be ridiculous. We are not suggesting that people should not trade; we are saying that the labelling should be honest and open. The product should do what it says on the label—as the advertisement says.

Maureen Macmillan wanted to ask a question, but perhaps it has been pre-empted.

I have lots more questions.

She has six more questions to ask.

I was interested in what you said about the possibility of marine legislation and of course consideration will have to be given to exactly what we should do. What interaction will there be with fishermen's organisations about the proposed coastal and marine national park? I recently attended a conference of the Moray Firth Partnership and when I mentioned the proposed park there was great interest in the project, but the fishermen's organisations that were present did not show much enthusiasm for it. Do you foresee difficulties in that regard?

We need to reach a stage at which there is more detail about the location of the park, but we are conscious, particularly in the context of the inshore fisheries strategy that we developed, that we must engage closely with all the fishermen's organisations.

We are keen to set up a coastal and marine park that has as its basis the legislative approach to national parks to which the Scottish Parliament agreed because, as the Rural Affairs Committee argued forcefully at the time, not only are we in the business of conservation and ensuring proper regulation, but we are keen that there should be public access to the park and that the park should be alive and vibrant, rather than a fossilised exhibition centre whose natural life has been cut off. We must try to strike a balance that meets all those objectives. If fishing can take place in a context in which there is respect for the conservation characteristics of the habitats of whatever site is chosen, we do not as a matter of policy have a view that fishing activity should stop just because the area is a marine national park. However, much will depend on the location of the park. David Wilson is head of the fisheries and rural development group in the Environment and Rural Affairs Department, so he has been much exercised by the need to bring the fishermen alongside in relation to the project. The fishermen think that the park will be a no-go zone, but we are much keener for it to be a live area.

Concerns have been raised, but they relate more to suggestions for marine protected areas than to suggestions for the marine national park. That is an important distinction, because marine protected areas are more to do with no-take zones, whereas a marine national park would be more balanced, as the minister said. I am in discussion with inshore fisheries representatives—I will visit the Clyde Fishermen's Association to discuss the matter next week. We want to ensure that everyone who has an interest is part of the discussions that Scottish Natural Heritage will hold before it provides advice to ministers. We hope that the inshore fishermen will be fully involved in the consultation and that they will regard the park as a measure that will benefit them.

That is helpful.

I welcome the development of the marine strategy and hope that the Parliament will soon be able to debate it.

I want to ask about the proposed marine framework directive. Matters need to be brought together at the Scottish, United Kingdom and European levels. A good example of that is the current stramash over ship-to-ship oil transfers, to which a strategic approach is not being taken. I understand that your marine strategy would not necessarily cover such activities and that doubts have been expressed about whether the UK strategy would cover them.

Your letter says that the UK does not intend to make the marine framework directive a priority while it has not seen the Commission's green paper and that, until the issues have been aired, the presidency would be reluctant to support a marine framework. How do we make progress? The need for the framework directive is crucial, so how do we ensure that the issues are aired through a green paper and that we can take decisive action through the presidency to unpick the mess in the legal framework that governs the seas?

You are right about the overarching marine framework and the European dimension, but as for discussions on marine matters between us and the UK, I am pretty clear about the UK's responsibilities for governance over merchant shipping and marine matters, so I would be disappointed if its proposals did not deal with ship-to-shore transfers.

The example was of ship-to-ship transfers.

I meant ship-to-ship transfers within waters. Briefly, the issue is that control of the 200-mile zone is a reserved matter. Within that are marine shipping, Royal Naval shipping and some offshore structures. Then there is legislation that gives the Scottish Parliament powers over certain offshore structures, and we also have exclusive jurisdiction over fisheries management—we in Scotland have exclusive jurisdiction over the Scottish 12-mile zone, and the English 12-mile zone is controlled by Westminster. That is what I mean by messy; I do not mean that the situation is impossible.

Members can see why I say that we should forget the overlay for the minute and agree a policy framework for the outcomes that we want to protect inland waters, coastal regions and whatever uses them, whether they are merchant ships, fishing vessels, offshore oil structures or offshore wind or other renewable energy structures. That is the object.

Your other point was about how to drive that by advancing papers and policy documents. The UK and others are keen to take the idea forward but, as with all such matters, our worry is that the consultation—even that at member-state level to produce the green paper—is not proceeding quickly. David Wilson might want to expand on that. Without a positive framework, it is difficult to drive a policy through the Council.

I agree. The European discussions on the marine framework directive are unpredictable and the directive's precise implications are unclear. The strong view is that we want to have a clear framework for marine policies in UK and Scottish waters; whether that must be driven by a marine framework directive from Europe is a different matter. The framework could be non-statutory or in UK statute, as opposed to being prompted by a European marine framework directive. We must examine carefully the precise proposals. I pick up the minister's point about being clear about the compliance costs and the implications before taking a view on the UK's precise position.

I understand the need to have clarity on the implications, but the framework is important and timely and we need to drive it forward. One argument for bringing activities such as ship-to-ship oil transfers inshore is that inshore activities are more regulated, whereas a similar framework does not exist in the waters beyond 12 miles. A clear need exists to bring together the framework in Europe. How do you intend to achieve more clarity on the implications of the framework during the next six months?

That is why the UK presidency will make a particular commitment to ensuring that the Commission has clear proposals. A marine framework is indeed being developed, and Commissioner Borg, in addition to his fisheries responsibilities, is developing a maritime policy. I do not want to criticise in any sense, but it is not entirely clear how those will fit together or what exactly the proposals are. The UK will want to ensure that there is absolute clarity before taking a view on driving forward any aspect of the proposals during its presidency. There is certainly a drive to ensure that we are clear about what exactly the emerging proposals are.

I have a question about climate change. I note from the minister's letter that, following the Luxembourg presidency, we are now exploring the possibility of

"emissions reductions in the order of 15-30% by 2020".

That is welcome. There will need to be a discussion about the target, but there will also need to be a discussion about what policy initiatives are needed across Europe to drive progress. What specific measures or ideas will the UK presidency bring to how we deliver the reductions?

There are issues around energy production, reducing energy consumption and transport. At a European level, the UK is particularly vexed about air transport. The UK has made an opening shot for the second stage of carbon emissions trading and has supported aviation being brought into that second stream. In its presidency, the UK will want to ensure that we do not duck out of that. If people have a better idea, that is fair enough, but that is the starting point: phase 2 of the carbon emissions trading scheme must include aviation. It would be a major step forward if that could be achieved at a European level.

I wanted to ask whether there would be anything on energy, which you have mentioned.

I have not seen any dossier on energy specifically in relation to meeting the targets. If we get any information in that area, we will pass it on to the committee.

The minister will be aware that I am not particularly supportive of the idea of promoting organic agriculture much further than is the case at the moment. I see from our papers that, although you seem to have achieved a delay in any review of the rules governing agricultural imports, that applies only until the end of this year. Is it not inevitable that, after the end of this year, products will appear on Scottish shelves that are described as organic but which are produced to less rigorous standards than those that are applied in this country?

That will depend on what, precisely, is or is not achieved during the period of the delay. I would wish to promote organic developments, but there is a concern—which I share—about the uniformity of standards. Competitive issues, rather than simply organic issues, come into play. There is also a perception of products being sold that might not do what they say on the label. I am a great supporter of uniformity when it comes to the consumer having equal access to information and being aware of the way in which a term as universal as "organic" is used.

The issue has been fraught, and I am not necessarily confident that, in the time that has been allowed to address it, we will get the degree of uniformity that you seek. It is important to consumers that labelling is clear. On the other hand, I am not keen to dampen down developments in organic farming.

I was about to ask for an assurance that there will be clarity and that you will do all that you can to ensure that there are meaningful standards.

That is certainly our commitment.

I am not sure that Alex Johnstone is expressing the committee's majority view if he thinks that the position with regard to organic produce has reached the peak of desirability. Quite a few of us, for all sorts of reasons, think that a lot more could be done. As a result, I welcome your lengthy description.

I have observed that Alex Johnstone champions a number of minority views.

His views do not overly concern me; your response does, because it sounds as if the matter is not cut and dried.

We are trying to do our bit in that respect. All that I am saying is that it is proving quite difficult to reach a consensus on regulations across the EU.

Finally, you have provided us with a good update on the timing of the REACH system. You say that "political agreement" might be reached this November, which is not far away. I imagine that colleagues will be interested to hear what that means in practice. Although your update helpfully sets out the key issues on the process, I wonder whether you could bring your comments to life a little more by telling us which chemicals will be picked up by REACH and what implications it will have for the environment and industry. That would certainly make things more transparent and would help the committee to track the matter for the external organisations that monitor the issues that we raise.

We will take that on board and provide the committee with an update in due course.

We will let you go now, minister. Thank you very much for attending the meeting and for staying so long this afternoon.

It is always a pleasure. One of the reasons why I am keen to stay in this job is that I do not want to miss my appearances before the committee.

We are obviously delighted that you are still here.