Regional Development Funding Inquiry
Item 4 on our agenda is consideration of the Executive's response to the committee's report on the United Kingdom Government's proposals on repatriation of European regional development funding. The Executive's response to the committee's recommendations in its report has been circulated to members.
There are three brief points on which I would like to get further information. The first relates to paragraph 3 of the response, in which the Executive states:
"Through twinning support and the work of Scottish partners in disseminating Scottish good practice to several new Member States, Scotland has been very active".
Could we have more detail on that?
The second point relates to paragraph 6, in which the Executive addresses the 50:50 split that we suggest between new and longer-standing member states. The Executive seems to imply that the split should favour the new member states much more. If the Executive is so opposed to a 50:50 split, what does it favour? I would like to know roughly what it thinks the split should be.
My final point relates to paragraph 13, which states:
"The Executive plans to set up a series of consultation workshops with partnerships across Scotland."
It would be useful to have further information about where and when those will be held; some of us might like to attend them. The same applies to the analytical working group. I realise that the convener and deputy convener are members of the forum that will receive the working group's reports, but it would be good for us to hear reports back on that work—even just oral reports—as progress is made.
I congratulate the Executive on a very reasonable response. I point in particular to paragraphs 5 and 6, in which its remarks are almost identical to comments I made when I failed to support the committee's report. I suggest that all members of the committee recognise that when we make decisions we should do so with an air of responsibility, especially financial responsibility. It was an absolute disgrace that the committee agreed to pour another £18 billion of UK money into the European coffers. Once again, I make no apologies for being a lone voice against the report that we published. I am delighted that the Executive has seen through it and that it has given me the support that I truly deserve.
That was communicated with remarkable candour, in keeping with the tradition that was established in the old days by Mr Gallie and my honourable predecessor as member of the United Kingdom Parliament for North Tayside. I am sure that the committee has noted the member's comments.
Had it not been for Phil Gallie's innate modesty, he would have gone much further in his political career.
I draw attention to paragraphs 8, 9 and 10 of the response. In its deliberations and its report, the committee made clear the importance of recognising that certain nomenclatures of territorial units for statistics do not reflect the difficulty and poverty that we face in some pockets of deprivation in Scotland. During the summer, more detail of the financial perspective has been made available. I will make two comments that would probably be echoed by lobby groups throughout Scotland. The first relates to a difficulty with the geographic units that the Commission appears to be proposing, which would leave Scotland in some difficulty. The second concerns the indicators, which I understand are based solely, and significantly, on gross domestic product.
It is important that we raise those two points, because if things go ahead as looks likely, and given the detail that has emerged over the summer as the committee has written the report, the committee would want to follow up on those issues with the Commission. I am sure that in having discussions with the Commission I would have the support of my colleague Phil Gallie, who would want to ask difficult questions about the detail of the submission. It is worth our having another look at that.
Perhaps we could task the clerks with producing a paper that analyses some of the responses. I know that we received today a report from the south of Scotland alliance; the West of Scotland European Consortium has also produced a paper. I echo Keith Raffan's point about the importance of keeping in touch with the analytical working group. I would be happy to report back to the committee. I believe that the group has not met since early May—perhaps the clerk can confirm that. Background research is being done, but I believe that the analytical group is doing work on the basis of a 1.24 per cent budget. I have concerns that if the agricultural budget is fairly settled—it appears that it might be—and there is agreement between the member states and the Commission to reduce the 1.24 per cent, the squeeze could be on regional funding and structural funds, which would have a significant impact on Scotland. A number of issues arise from the paper and from developments over the summer, which it would be helpful for the committee to have another look at and to keep a close eye on.
Mr Gallie—round two.
It is not round two this time. What I said was slightly tongue in cheek, although the comments that I made previously and to which I referred were serious. I fully appreciate what Irene Oldfather said, but at the same time the paper that we considered showed that the UK Government made a commitment in respect of the funding that is available in Scotland and other areas of the UK. I remind members that we were talking about repatriation of funds, which it was said could result in internal money being used in relation to the issues that Irene Oldfather raised. Perhaps we could take that up with the Executive and ask it to pursue the matter.
Does anyone else want to say anything before I close the discussion?
Paragraph 10 of the paper refutes the point about repatriated funding. The main point that I meant to raise earlier relates to the issue in paragraph 5—about which the Executive is vague—about the difference between 1 per cent and 1.24 per cent of EU gross national income. The paper states:
"the higher UK contributions might be partly borne through reductions in the Scottish block."
We need to question the Executive about the word "might". It says that it has no influence over the UK Treasury, but it does not seem to know whether the cost would be borne through reductions in the Scottish block.
I want to draw the discussion to a close. When I read the paper, I did not feel that we had got much further forward in understanding how the issues had been addressed. Some of that might be to do with the point that Irene Oldfather made, to the effect that we are talking about a moveable feast, because different things were happening at European level over the summer. We have to keep a watching brief in relation to what is going on in order to ensure that structural funding in Scotland is not reduced without our knowing exactly what is going on and what representations the Scottish Executive is making.
It would be helpful for us to get more information from the clerks. I do not think that we should rule out asking for a formal response from the Executive as negotiations take their course, particularly if there is a change in the dynamics of the negotiations over the coming period.
I am happy to share with the committee any information that comes out of the analytical working group. In the first instance, we should take the points that Keith Raffan raised, together with the general comments that I have just made, and formulate them as a letter to the Executive, asking for its response. Is that acceptable?
I have a couple of points to raise. Paragraph 17 of the response mentions
"the ability of those states to absorb efficiently and effectively such large injections of aid."
We were quite critical of the idea of a flat 4 per cent cap that would be applicable to all new members, and we called for flexibility based on countries' ability to absorb the sums involved. I do not accept the reasons why the Executive has rejected our recommendation. It claims that it could be "politically invidious", that it could "introduce considerable complexity" and that it would
"lead to a much higher overall budget".
I do not think that the Executive has given any justification for those claims.
My other point relates to paragraph 34. It states:
"We recommend that the Scottish Executive discuss this matter with UK Ministers to find ways of encouraging UK Ministers to explain these views to Scottish parliamentary committees."
You will not recall this, convener, as you were not on the committee at the time, but we made several invitations to UK ministers to come to the committee and give evidence, formally or even informally. They refused. That contrasts starkly with, for example, Malcolm Chisholm, a Scottish Executive minister who went down to London recently. He was almost summoned, not by a parliamentary committee but by a group of Labour MPs and was almost publicly humiliated in the press the following day. That was about a devolved matter—it was utterly ridiculous.
Refusals by UK ministers also contrast starkly with the very polite reception that was given to Hilary Benn, the Secretary of State for International Development, who gave an excellent address to all interested MSPs and to other members of the cross-party international development group. I believe that that is the first time that a UK Cabinet minister has spoken to such a gathering in the Scottish Parliament. I commend Mr Benn for that. We should try to pursue the matter, bearing in mind the fact that we are a European and External Relations Committee whose remit includes relations with the Westminster Government. We should try to pursue such matters so that UK ministers can be persuaded to give evidence to us, or at least to meet us informally on matters of mutual concern.
I listened carefully to what my friend, Dennis Canavan, had to say. I am sure that Dennis will recall that two UK ministers have appeared before Scottish parliamentary committees: Dennis MacShane and Peter Hain. I believe that Peter Hain was the first UK minister to appear. Mr Benn was here last week. It is worth reminding ourselves that UK ministers are elected to the UK Parliament, and that it is their duty to answer to that Parliament and its elected members, not to be subjected to the demands or wishes of this or any other committee of the Scottish Parliament.
That said, in the context of what Dennis Canavan said in relation to our investigation, I agreed with and signed up to the part of our report that said that it was less than helpful that ministers do not co-operate. I reiterate, however, that it is always worth remembering that UK ministers are elected to and answerable to a different Parliament.
Let me draw this discussion to a close. We have put on record the points that we will pursue in relation to our report. On the last issue, which has been discussed by Dennis Canavan and Alasdair Morrison, I would say from what I have observed of the committee's practices that when it is relevant that we make a request to a United Kingdom minister to come here to inform our deliberations on such issues, we can do so.
The Executive will not be the sole decision maker on an issue like European funding; the Treasury will be enormously involved, as will ministers from other departments including the Department of Trade and Industry and the Foreign and Commonwealth Office. It is relevant for us to make that pitch, if that is the wish of the committee. Indeed, it is a practice that I want to continue.
As time goes on, I hope that the UK Government forms the view that, if there is to be proper discussion and debate of such important and complex issues, committees of the Scottish Parliament must be informed effectively. I am sure that that is a view with which most members would be comfortable.
I agree with Alasdair Morrison and other members that it was disappointing that we failed to have that dialogue—it would have improved our report. We did not only invite UK ministers to come to Parliament to speak to us; we also suggested various compromise solutions whereby one or two committee members could travel to London. Even those suggestions were rejected, which was disappointing.
Although I was not party to the discussions, I have read the committee report and the Executive response. I get the feeling that a great deal more is required to bring about an informed view of the issue. The actions that we have agreed to take will help in that respect.
Irene Oldfather made reference to the south of Scotland alliance papers that were tabled today. The papers address a slightly different issue, which is the south of Scotland's qualification for European structural funding. Although the papers were made available to members only today, we can reflect on them in the course of our future deliberations.