European Union
I am happy to commend motion S1M-258 to the Parliament.
Before I come to the meat of my speech, I must make an apology. Because of unexpected, but important, commitments, I fear that I will have to miss the end of this debate. I would not usually do that, but by the time it became clear that calls were being made on my time, it was a little late to spill the engagements or the debate into other hands.
I will begin by considering the amendments. Rather uncharacteristically perhaps, I start with a congratulation to the Scottish Conservative party, whose amendment shows some evidence that it is learning from past disasters. The art of dissembling is not dead, perhaps, but I prefer to assume charitably that the amendment is an attempt at tact.
Sweet reason is to be the order of the day—I hope, although we have not heard the speeches yet—and a moderate face is being constructed to mask the Conservatives' true position on Europe. We should encourage that sort of manoeuvre and offer it some recognition and reward. As my contribution to that process, I promise not to tell William Hague what the Scottish Conservatives are doing.
I regret the fault line that has been built suddenly and brutally into Scottish and British politics on the question of our future in Europe. It is damaging and it is created for the worst sort of cynical purposes by the official Opposition in Westminster.
I watched with horrid fascination—in the same way as one watches horror films late at night— proceedings at the Conservative party conference in Blackpool. The picture of Lord Tebbit appearing in our midst, confessing that he had been an unhappy Conservative for many years, but that this year he was a happy Conservative again, can—modestly, I think—be described as bad news for us all. I can only assume that William Hague is working on the assumption that his current stance will do something to rally the hard-line faithful—the blue-rinse brigade—and, frankly, is not worrying too much about the rest of the country. As Chris Patten delicately put it, enthusiastic support from Lord Tebbit
"might not be enough to sweep the country".
Most of us would endorse that view.
Does not the First Minister agree that there is some evidence that the Conservatives are sweeping the
country? We did very well in the European elections.
I never thought that I would see the day when I would say that Phil Gallie's ambitions were over-modest. If he thinks that the Conservatives are sweeping the country now, Lord knows what he would do if they ever did. Fortunately, we will not have to put that to the test, at least in the foreseeable future.
The heart of the Scottish Conservative party's amendment is that it
"does not believe that it would be in Scotland and Britain's interests to consider joining the single currency until its economic and political consequences have been properly assessed".
On the face of it, I do not greatly disapprove of that statement, although I must point out to the Conservatives that it is hardly the gospel according to St Margaret. I fear, however—I hope that people will not think that this is too cynical— that the real position of the Conservatives is very different. The national leader of the Conservative party says that he does not want to join the euro in this Parliament, he will not join it in the next Parliament and he will not change his mind. For him, it is a case of damn it and never mind the circumstances or the argument.
The interesting thing, as I have hinted, is that that position has been well and truly rumbled by some rather unlikely people. John Major was once famously reported as saying that he could not see a certain group of Euro-sceptics without hearing the rustle of white coats. Tragically, on the evidence of recent events, the patients have taken over the asylum, leaving many distinguished Conservatives to rue and lament.
Speaking of lunatics taking over the asylum, does the First Minister recognise this quote:
"The EEC will take away Britain's freedom to follow the sort of economic policies we need"?
It was made by his colleague Tony Blair in Beaconsfield in 1982.
If ever we needed evidence that the Conservative party was not exactly keeping up with the pace of modern developments, there we have it. I would be interested in swapping anecdotes about political archaeology, but I do not think that that would advance the cause. Instead, I will take up the challenge to give the chamber one or two excellent up-to-date quotes.
I hope that they are not yours.
This one comes from 5 October; it was said by Kenneth Clarke. I will not keep people in suspense any longer.
"Everybody knows you can't re-negotiate all those obligations which Conservative governments have entered into over the last twenty-five years without effectively bringing our membership of the EU to an end."
John Major said:
"Those people who think we can pull out need to realise that huge swathes of people in this country depend on Europe. But we are in the European Union, we are going to stay in it and the belief that you can renegotiate is absurd— mad."
His party, of course, is trying to renegotiate.
I will finish this passage with a quote from Chris Patten, because I liked it. He is a man of some civilisation, so I am not surprised, for example, that he was particularly worried about what happened to poor old Michael Heseltine—I think it was him— at the Conservative party conference. Chris Patten said:
"I didn't think I would ever read a report about a former Deputy Prime Minister being pelted with cocktail sausages and peanuts at a Conservative Conference."
I take the view that peanuts are probably at the quality end of what is on offer at Conservative party conference, but that is as may be.
More seriously, Chris Patten said:
"We are crossing a river and it is going to be very difficult to get back from the other side."
He is right. It would be tragic if that happened. My considered advice to David McLetchie—and to his colleagues—is that he should not get his feet wet on this occasion. Mr Hague would be well advised to pause and listen. If he is remotely interested in building a coalition or even links with the people of this country, it is time that he thought again about his position.
At the other extreme is the nationalist party, to whose arguments I will, of course, give due attention. The nationalists positively insist, not on joining the euro now, because they are not in a position to do that, but on joining as soon as it possible for them to act. They have one thing in common with the Tories—they are largely uninterested in rational argument on the issue and are driven by political expediency.
Yesterday, Alex Salmond—I am a great student of his activities—said to a small, but not necessarily select, gathering in Brussels that the pound was a millstone around the neck of Scottish industry. That is a strange theory, because the economy in Scotland is interconnected with and built into the United Kingdom economy. That is why Margaret Ewing, Alex Salmond and other senior nationalists—to be fair to them—have always argued that the Scottish pound would shadow the English pound while they conducted negotiations to allow them to join the euro in the unlikely circumstances of independence. That is why—as they would be the first to agree—
Scotland in the euro and England out of the euro would represent an enormous economic difficulty. Indeed, it would be unthinkable.
Our main market is not mainland Europe, as is often said—important though that market is—but the rest of the United Kingdom, to which we sell more of our goods and services than to the rest of the world combined. The nationalists argue—I think a little quaintly, but no doubt their position will be defended with spirit by Alex Salmond—that they are prepared to have exchange and interest rates set in Frankfurt on a European scale. However, they baulk at the same areas of economic affairs being managed from London because—as Alex Salmond puts it—that involves decisions being made in the south-east, for the south-east and by the south-east.
I understand the argument; it is one that the SNP always produces. "Ah," SNP members say, "We don't need to worry about it all being done from Frankfurt. We don't need to argue about it all being done from a European perspective, because at the moment interest rates are lower in Europe than they are in Britain." That is because we are at different stages of the economic cycle. At the moment, interest rates in Europe are low but unemployment is high. At different points of the cycle, different measures are required.
I suggest that a strong pound is often a measure of success. It is an indicator of very low inflation and of caution in case inflation starts rising again; it is an indicator of a service sector in which employment is growing and of a manufacturing sector in which employment is growing, as it is in Scotland. Those members who are looking at me sidieweys from the Scot nat benches might want to look at the Bank of Scotland economic report that appeared the other day. It recorded—to take a fairly typical example—that employment in the manufacturing sector was now rising faster than at any point since the bank started conducting its surveys. We in the United Kingdom have a very strong economy and that is important to us.
Let us consider the consequences of arguing from the premise that because, at the moment, there are rather lower interest rates in Europe, we ought to be part of the euro. If there were a role reversal and if, as the cycle played itself out, we found that interest rates in Europe were higher than those in the United Kingdom—using current parallels—would the Scot nats recommend that we apply to rejoin the United Kingdom? That would seem to be the logic of their position.
If the difference between European and UK interest rates is the result only of cyclical factors, as the First Minister suggests, will he tell the Parliament in how many years during the past quarter century deutschmark short-term interest rates have been higher than sterling interest rates?
This is a moment for honesty—I cannot tell the member that, as I do not have the precise figure.
One year.
Being a cautious man and not a gambler, I will check that later, but I am prepared to take that on board.
The fact that at the moment we have higher interest rates than the rest of Europe reflects the parallel advantages that we have, such as lower unemployment and a very strong economy with growth. By and large, a weak pound means a weak economy. I would rather have the problems of a strong pound and a strong United Kingdom economy—in which, as I have said, we sell the majority of our goods and services. That market is to our advantage; it will increase productivity and will drive the strong economic recovery that we have experienced in this country.
I must push on.
I am not frightened, apologetic or in any way put out by the prospect of a strong pound, because I know what goes with it. The strong economy of the United Kingdom is a great bulwark, a great safeguard and a great advantage for the economy of Scotland.
I said that I thought it likely that the SNP's position smacked of expediency. I make my next point a little tentatively, because perhaps I, and not Mr Ben Wallace, will now be open to the charge of going back a little way in history. I remember Jim Sillars, who, of course, is now a non-person in the SNP, as I understand it—
Some of us still love him! [Laughter.]
Of course, I realise that he has left a rather substantial shadow behind him. [Laughter.]
That is outrageous. That is ungentlemanly conduct.
If David McLetchie is outraged, his experience is narrow.
The point that I was going to make about Jim Sillars is that, when he persuaded the SNP to move from being an anti-European party to being a European party, he wrote—and Margo MacDonald will remember this—a very famous pamphlet. One of the key arguments in it was that the SNP should not bother to look at the arguments. He wrote that the SNP would be classified and damned as a separatist party for
ever unless it embraced Europe as camouflage and cover to get over the disadvantage of such a classification. It had nothing to do with the arguments of the matter—it was a political necessity. I therefore think that there is still a touch of opportunism about the position of the Scot nats on Europe.
Speaking on behalf of my husband and I—[Laughter.]
It is the only time that you have done it.
My memory goes back even further than the First Minister's. I campaigned alongside my husband—although we were not then married—and Teddy Taylor. We campaigned as Scotland United, because we were opposed, for our different reasons, to entry to the EEC. I cannot remember what Jim wrote in a pamphlet, although if the First Minister sends me a copy, I will verify whether he has got it right.
Oh yes I have.
However, I remember campaigning with the slogan "No voice, no entry", which is very similar to the position of the SNP today.
Well, there is a happy conjunction of coincidence. Perhaps I am being a little unfair, because I do not think that Margo MacDonald ever campaigned for the Labour party, but Jim certainly did, in those early days. My point is simply that the pamphlet that he wrote in the early 1980s, just at the point when the SNP came out strongly for Europe, put the case very clearly indeed.
I will now turn to the positive case, and the Labour party's position—[Interruption.] I am being barracked, but I do not want the protection of the chair.
Mr John Swinney (North Tayside) (SNP)
rose—
No, I want to move on.
I have a point on the positive case.
When Mr Swinney has listened to the positive case and appreciated it, he can come back to me.
What we have seen over the past two years is a remarkable transformation in Britain's standing in Europe and in Britain's ability to achieve and deliver in Europe. No one is going to try to convince me, and no one is going to suggest, that the Labour party stands simply for accepting what Europe does and says. Of course, it is enormously important that a British Government and, indeed, a Scottish Parliament are prepared to stand up and argue the case for our industries, our commerce and our vision of social policy. That is done much more effectively if the country is engaged and seen as fully involved in the growth and development of the European Union.
The change has been remarkable. I travel only occasionally, but I go to Europe and I get involved to some extent in negotiations and talks. As anyone who travels will know, our leverage in European arguments has advanced enormously since 1997. We can therefore look backwards with pride and forwards with hope to continuing improvements and reform.
Unemployment is endemic in Europe and very high by our standards. We in Scotland have the lowest unemployment claimant count for 23 years. Unemployment has been pushed up the European agenda through the energy, commitment and passion that Gordon Brown and his colleagues have brought to the European debate.
At the meeting of the European Council in Berlin, we capped the growth on European spending in a way that the Tories were unable to do in 1988 and 1992. We worked together with other member states to win a good deal on European structural funds, including, of course, the special arrangement and financial equivalent of objective 1 funding for the Highlands and Islands. We were able to protect our rebate to ensure that our contribution to the European Union budget fairly reflects our relative prosperities.
We have worked together to promote devolution in Europe. I am proud that, in that field, Britain is practising very much what it has been preaching. From my now-extensive contact with European leaders below national Government level, I know that the range of powers open to this Parliament is envied by many of our colleagues.
The First Minister has made great play of the UK's negotiating success in Europe. Will he give some guidance on UK negotiations about support to businesses that are interested in exporting to European Union countries? For example, because of the UK's great success, a language training project has delivered resources to the UK economy in Luton, north London, Sheffield and Wolverhampton. What success have the Executive or UK Government had in delivering such exporting support to companies in Scotland?
I must ask the First Minister to come to a close.
Hear, hear.
That is the man who once crossed this floor to shake my hand. What a shame.
Although I cannot answer Mr Swinney's question in detail, I have to say that it does not show much
vision. If he cares to examine the assisted areas map and the objective 2 map for the allocation of structural funds, he will find that Scotland does extremely well. I hope that that situation will continue under Commissioner Barnier. strongly believe that we have got to get Scotland the best possible deal out of Europe. Although I accept that there are other legitimate arguments about how we do that, I submit—with overwhelming evidence in my support—that the best way is to remain within the UK and, as the documents on the concordats made clear, to be fully and directly involved in every way possible in the formulation of UK policy to ensure that that policy is tailored where necessary to Scotland's interests. We shall then be able to push and achieve advances and we intend to continue to do so.
Because we now have a constitutional base in the devolution settlement, we are able through Scotland House in Brussels to interrelate, to use our influence and to add to the influence of similar areas such as the Spanish autonomous provinces, the German Länder and Italian provinces such as Tuscany and Lombardy. I welcome the fact that Alex Salmond was able to visit Scotland House during the week. We can begin to pull our weight in this increasingly important area of European activity and bring home results and rewards.
The Parliament must be ever vigilant. This is not a matter of a head count at every European Council meeting; it is a matter of our success in influencing policy and in ensuring that the interests of Scotland are not forgotten at the margins of European meetings. We have done that successfully in the past and will continue to do so. It is better to do that within the UK than leave the strength of being a big player and go out on our own into the increasingly patchwork structure of Europe.
Scotland's future is important in Europe. That future will be a shared one based on mutual trust and respect; it will be a celebration of diversity and it will mean a pooling of political power. Scotland will have growing influence, an effective profile and increasing prosperity. The right way forward is not to create the nation states of the past. The right way forward is the flexibility, the imagination and the integrity that Scotland has shown in working within the UK for both the UK and Scotland.
I move,
That the Parliament endorses the Scottish Executive's policy of continued positive engagement within the European Union; recognises that our full participation in Europe is vital to our present and future economic success and prosperity; and believes that Scottish businesses, communities and families are best served by our working together in leadership in Europe with the rest of Britain.
Although the First Minister's motion talks about a positive attitude to Europe, the balance between the negative and the positive in his address was somewhat askew. We had 15 minutes of negative attacks on other parties before we had the five- minute positive bit.
As for that positive bit, when Donald was challenged about the deal that Scotland gets from Europe, he said that we get a good deal from structural funding. Indeed, we do get a good deal from structural funding. Unfortunately, as we have heard in previous debates, the funds are promptly deducted from the Scottish block because of the Government's refusal to respect additionality—the good deal that we get from Europe is promptly deducted by the United Kingdom Treasury.
Responding to Donald directly, I have to apologise to him. In a question, I said that deutschmark short-term interest rates had been above those of the United Kingdom in one year of the past 25. Looking at the table, I realise that I should have said one year in the past 27. None the less, that still makes the point that Donald's claim that what is happening now is a short-term aberration—that European interest rates might at some point in the future be above those of sterling—is not confirmed by the experience of the past quarter century.
I remember Donald Dewar's life history. Although I accept that he has been making up for lost time over the past few weeks, he got his first passport at the age of 50.
That is totally untrue.
These things appear in the press, on Ceefax, on the internet and in other places. [Laughter.] He accepted that he was not the greatest international traveller. That is certainly the case when he starts talking about developments in the European Union.
I want to examine the Scottish Executive's performance in Europe, how their objectives have been either confirmed or not achieved in the past few months and the initial impression of that performance. I want to discuss the euro, a subject which—given that the Government is meant to be committed in principle to the euro—Donald Dewar mentioned only en passant. I wonder why.
I want to discuss the SNP's perspective of Scotland as an independent nation in Europe. In judging the Executive's performance to date, I remind the chamber of what the Secretary of State for Foreign and Commonwealth Affairs—then shadow foreign secretary—said, at a meeting of the Scottish Grand Committee early in 1997, would be the benchmark. He said:
"Labour's plans for devolution will create a Minister for European Affairs in a Scottish Administration, set up a Scottish European office in Brussels accountable to a Scottish Parliament in Edinburgh, confer on Scottish Ministers the same observer status as that of the German Länder".—[Official Report, House of Commons, Scottish Grand Committee, 13 January 1997; c 29.]
I accept—and the First Minister acknowledged— that Scotland House is a welcome development. I indeed visited it yesterday. I notice that it is styled as the office of the Scottish Executive, and not, as Robin Cook said it would be, as an office
"accountable to a Scottish Parliament".
The First Minister should, given his speech last night, remember that the Executive is accountable to the Parliament, not the other way round.
Nevertheless, as I said, Scotland House is a welcome development. It is one of 150 lobbying offices that the various regions—I use the First Minister's term—have in Brussels. It will do a good job for Scotland and it is better than what we had before. However, I do not think that it is adequate for Scotland's representation within Europe.
I was wondering who could be the Scottish minister whom, according to Robin Cook two years ago, we were meant to have in Europe. I had recourse to the Scottish Executive website. I know that the First Minister uses it and that the Minister for Enterprise and Lifelong Learning uses it all the time—the entire Administration must now be internet compliant. On the website, I keyed in, "responsible minister for Europe". I got the answer, "various". I was then offered the chance to search, only to be told:
"Specific information is not yet available."
There does not seem to be a Scottish minister for Europe, as Robin Cook claimed there would be, unless we are to believe that every minister in the Scottish Executive is responsible for Europe.
Incidentally, I took a printout from that website. It tells us, very helpfully:
"The information . . . is Crown Copyright".
It obviously must not fall into the wrong hands. I do not know that I should be holding the printout at all.
The Scottish Executive website demonstrated the fact that there is confusion and that Labour has moved away from the idea of having a minister for Europe. What I am about to say will show why it might be a good idea to reverse that position.
During the past six months, since this Parliament was established, there have been 30 meetings across Europe—formal and informal—of the Council of Ministers. The Scottish Executive, and by implication this Parliament, has been represented at one of those meetings.
There have been three meetings of the Agriculture Council in Brussels and Finland since July. At a time when food and meat safety has been top of the agenda, European ministers debated those issues, but no Scottish Executive minister was present at any of those meetings.
With excessive petrol and diesel prices, surely members of this Parliament know that transport and environment are key issues. Those issues were discussed at three meetings of the Transport and Environment Council in Luxembourg and in Helsinki; no Scottish Executive minister was present at any of those meetings.
The claim is made—we heard it earlier today— that social inclusion and anti-poverty strategies are at the top of the Scottish Executive's agenda. When employment was being discussed at the Labour and Social Affairs Council in Luxembourg last month, no Scottish Executive minister attended the meeting.
Central to European discussions over the past few months has been justice reform, which will have a direct effect on Scotland's distinctive legal system. Roseanna Cunningham will address that later in this debate, but of three Justice and Home Affairs Council meetings, the Scottish Minister for Justice has attended none.
If Scotland is to play a role in Europe, even as a devolved region—to use the Scottish Executive's term—it might be helpful if we had been represented at more than one of 30 meetings during the past six months. The concordat that the Scottish Executive signed with the Foreign and Commonwealth Office states:
"In general, it is expected that consultation, the exchange of information and the conventions on notifications to EU bodies will continue in similar circumstances to the arrangements in place prior to devolution."
They certainly have. In general, Scottish ministers were not represented at meetings of the Council of Ministers—formal and informal—before devolution and they are not represented after devolution.
Playing a role in Europe is not just about having a lobbying office, or a week of festivities and lectures at Scotland House—where I was given a helpful brochure yesterday—excellent though that was, and much enjoyed as I am sure the week was by all the Scottish Executive ministers who attended. It is about turning up to the key meetings, representing Scotland, having the information and being involved in the nuts and bolts of European decision making. The Executive's record over the past six months shows that its idea of Scotland in Europe is a week in Brussels for Scottish Executive ministers, but no representation for Scotland at meeting after meeting at which issues are discussed, even
issues that directly affect this Parliament's legislative programme.
On the euro, I must say to the First Minister that we are involved in a joint campaign—the Scotland in Europe (part of the Britain in Europe campaign)—and, as I understand our mission statement, we have to make a positive case for the euro. We will win the argument that we are meant to be trying—collectively—to win only if we actually make that case and try not to let that case go by default.
Is Mr Salmond suggesting that the First Minister is not onside in the campaign to take Scotland into the euro?
I am merely reflecting that I would like to see more enthusiasm from Labour members and from ministers—not just the First Minister, but the Labour ministers at Westminster—if we are to believe that they are fully on board in the campaign. Liberal sources said only yesterday, in the London papers, that they had tried to tone down Charles Kennedy's statements on this matter. I am sure that no such thing could happen in the Scottish Executive. [Laughter.]
Will Mr Salmond give way?
In a minute, Phil; I want to make progress.
The First Minister says that we should welcome the fact that sterling is a strong currency. I wish he would tell that to the Scottish farming industry. The most important reason for the general recession in Scottish farming is a 20 per cent over-valuation of the pound sterling. That is more important than BSE—dreadful though that has been—and more important than the on-costs, because the farmers are directly in competition in a single marketplace and directly responsive to developments across Europe.
The First Minister should also try telling it to the Scottish textile industry. I do not know whether he has noticed, but that industry has been decimated by the lack of competitiveness and the exchange rate of sterling. We have had closure after closure.
The Minister for Enterprise and Lifelong Learning (Henry McLeish) indicated disagreement.
The Minister for Enterprise and Lifelong Learning is in denial. The first thing that his department says when there is a closure is that the closure has nothing to do with the exchange rate. How on earth can it have nothing to do with the exchange rate? How on earth can a 20 per cent over-valuation of sterling—compared with the average over the past 10 years—have nothing to do with the competitive position of Scottish industry? What nonsense.
Sterling is a uniquely volatile currency—99 per cent of its value is denominated by capital flows and not by trade movements.
I will give way to the First Minister on a subject on which he has substantial expertise.
I certainly have not been employed by a bank, as Alex Salmond was a long time go. I want to be clear about what Mr Salmond is saying. He says that the pound is badly overvalued by the market. He is, by implication, saying that the proper policy to pursue at the moment would be somehow artificially to undermine the market's confidence in the pound and drive it down. To what level would he drive it down and how would he propose to do that?
The last time that I heard a minister argue that case was in the House of Commons when Lady Thatcher told the Labour benches that the market could not be bucked over sterling.
Answer the question.
I would converge the interest rates of the United Kingdom with those of the euro area. I would then watch sterling move down to a more competitive level.
The First Minister indicated disagreement.
The First Minister may shake his head—he should, perhaps, talk to the Deputy First Minister, as that case is made daily from the Liberal benches in the House of Commons in London. Is he saying that there is some sort of split over the economic policy of the Scottish Executive? Interest rates should be brought down to European levels; sterling will then fall to a competitive level.
The First Minister says that the market has determined the value of sterling. I do not know whether he has had time to look at the statement that the Chancellor of the Exchequer made yesterday. The chancellor anticipates a £12 billion trade deficit in the current account of the balance of payments every year for the next four years. That is a substantial trade and balance of payments deficit and yet sterling remains at a very high level. What does that tell us, if not that capital movement, not the movement of underlying trade and our competitive position, determines the value of sterling?
Scotland exports far more of its product to Europe than to the UK and has 60 per cent higher productivity in manufacturing exports than the rest of the UK. The argument for being in the euro is that it will get us out of the position in which a
capital denominated over-valued currency is doing severe damage to the Scottish economy, despite the denials of the First Minister and the minister for industry.
Does Mr Salmond think that the First Minister lacks enthusiasm for euro because he thinks that joining the euro will eventually mean tax harmonisation? To go down that road would be bad for Scotland, given that our current tax take against gross domestic product is very low.
Mr Salmond, I must ask you to wind up now, please.
I do not believe that the euro will lead to tax harmonisation. Oskar Lafontaine argued that it would—he did not last long as German finance minister. I agree with the First Minster and he agrees—he will be disappointed to hear—with Phil Gallie. I do not believe in tax harmonisation across the euro area; it is not an inevitable result of the single currency.
In summing up, I will talk about a different perspective of Scotland's position in Europe—not the regional perspective that the First Minster shares with the Conservative party, but the perspective of Scotland as an independent nation in Europe. As an independent country, Scotland would have 99 per cent control of fiscal policy compared to this Parliament's 10 per cent control.
I want to talk about the advantages of Scotland having real access to the Council of Ministers and being part of the decision-making structure. As an independent country, we would have double the number of seats in the European Parliament. We would have nine seats on the Economic and Social Committee and more seats on the Committee of the Regions. Scotland would be able to take a turn in the presidency of the European Union—leading Europe, as small countries are doing now and have done many times. We would be part of the decision-making structures of the Community; we would be a full member of the Community and we would have equality of status in that Community.
What underlies the difference between the First Minister and me is not simply a disagreement about what the key bodies in the Community are or whether a lobbying office or a seat at the table would be best for Scotland. What underlies the difference between us is a different perspective on what Scotland is and can be. The First Minister wants regional status for Scotland in Europe. I and the SNP want equality of status—Scotland as an independent nation in Europe.
I move amendment S1M-258.1, to leave out from "Scottish Executive's" to end and insert:
"view that Scotland should play an active and positive role within the European Union; recognises that our full participation in the EU and early entry into the Euro is vital to business and jobs and the future economic success and prosperity of Scotland, and believes that Scottish businesses, communities and families will be best served by an independent Scotland playing its full and proper role in the EU."
The Scottish Conservatives, along with our colleagues in Westminster and Strasbourg, remain committed to British membership of the European Union as a partnership of nation states coming together for common purposes, in pursuit of common interests, but retaining independent freedom of action over many areas of social and economic policy.
That is the vision that we offered people at the European elections in June. It swept us to significant victories across Britain and wiped a complacent smile from the face of the Prime Minister. It is why we support the first part of today's motion, and is also why our amendment seeks to focus the debate on the key issue of the single currency rather than the wishy-washy words in the motion.
Of course, our political opponents try to misrepresent our position and attempt to portray us as extremists who are determined to take Britain out of the European Community.
Will the member give way?
I will do so soon.
The First Minister has tried to misrepresent our position today, in some of the most patronising terms imaginable.
The election on 10 June showed that the Conservatives have struck a blow for the mainstream opinion that we should be in Europe, not run by Europe.
Will the member give way?
Mr Lyon is first, sorry.
The message from the electorate to Britain's politicians was clear: they should stop undermining and compromising our national sovereignty.
Does David McLetchie agree with Douglas Hurd, who stated on 13 October that Conservative policy in Europe is increasingly based on caricature, not reality?
I do not agree with Mr Hurd, who is no longer a member of the parliamentary Conservative party and whose opinion is out of step with the mainstream opinion of the party.
Will the member give way?
I am sorry, but Mr Dewar is
next.
I ask this question in a spirit of genuine inquiry. Mr Hague has indicated that he wants to renegotiate many of the terms of the present treaty. Famously, he suggested that any country should have the right to opt out of decisions that are made on the basis of qualified majority voting. Is that the position of the Conservative party, or is Mr McLetchie overruling Mr Hague?
Mr Dewar has again misrepresented the position of my party. The party's position in relation to flexibility applies to new legislative proposals for developing the Community further that might emerge. The Conservative party will not renege on any of the treaty obligations that this country has undertaken.
The Conservatives want to renegotiate.
We have not agreed to renegotiate the mainstream treaties. Mr Dewar should be aware that there are fundamental common policies in the European Union that will come up for renegotiation in the next few years: the common agricultural policy will inevitably be renegotiated as a result of the accession of new members; the common fisheries policy will be renegotiated when the derogation ends in 2002. Many fundamental policies are up for renegotiation and this country requires a flexible approach that will retain more decision-making powers in this country. That is in the best interests of our fishermen.
The confusion of the First Minister seems to be shared by Malcolm Rifkind, whom the Scotsman of 7 October reported as warning Mr Hague that the Conservatives must back away from demands to renegotiate as they were
"little more than a euphemism for us to quit Europe".
Mr McLetchie has already defied Douglas Hurd. Will he now defy Mr Rifkind?
I am sorry, but that is a further misrepresentation of the party's position. We are not renegotiating the fundamentals of the commitments that we have entered into with the European Union. That is the party's position. The flexibility option relates to new treaty obligations and new common policies, on which we genuinely believe—as in matters that relate to the common fisheries policy—that we need a great deal more flexibility than is currently provided in the European Union framework.
Mr Keith Raffan (Mid Scotland and Fife) (LD)
rose—
I am sorry, Mr Raffan. I must make progress.
It is our opponents who are out of touch with national sentiment. It is they who are the extremists, not us. It is Labour, its Liberal Democrat subsidiary and the nationalists who ignore the wishes of the vast majority of the people in this country, by relentlessly pursuing an agenda of surrendering our currency, economy and, eventually, our nationhood to European institutions of dubious democratic credentials, in which vital national interests could be subordinated to those of other member states.
With the European Union's enlargement looming ever closer, the question that faces Scotland in Britain is not whether the European Union needs to change, but rather how the European Union will change. That has long been recognised by the Prime Minister and his federalist friend Signor Prodi, the new President of the European Commission. Those who want an inflexible, centralised, federal Europe have set out their stall, as is their right. A committee of the so-called wise men, which was established by the President, recommended a large increase in qualified majority voting, the abolition of the national veto, a single European defence capability, a written European constitution and new powers for the Commission. Under those proposals, a single nation would no longer be able to exercise its veto to block other states from imposing policies on it against its will.
That, if I may say so, illustrates beautifully the folly of the Scottish National party and its laughable policy of independence in Europe—not so much a slogan as a contradiction in terms. It is that party's headlong rush into a federal European super-state that will sound the death knell of Scottish independence, not its birth, as it fondly imagines. It is the Scottish Conservatives who recognise that every EU member must accept the rights and responsibilities of the single market and the core elements of an open, free-trading and competitive Europe.
It is for those reasons that we welcome moves to enlarge the European Union and to extend free trade areas to other economic zones throughout the world; for example, in a new relationship between the European Union and the North American Free Trade Area. In doing so, we welcome the opportunity for greater flexibility and diversity in decision making in the institutions of the European Union. That is why we advocate new treaty provisions that will allow member states to opt out of new legislative proposals that they, as member states, want to handle nationally.
Our flexibility policy would not block other member states from going ahead in co-operation with new initiatives, if that is what they want to do, but it would stop much new legislation from being foisted on people in Scotland without their prior
democratic consent.
If Mr McLetchie believes in flexibility, how can he support Mr Hague's policy of firmly ruling out a single currency for the whole of the next Parliament? That is not flexibility.
That is a very sensible policy, because it would allow a judgment to be made that would stand throughout the duration of the economic cycle. It seems to me, after reading the press reports, that that is a policy for which the Chancellor of the Exchequer has a good deal more sympathy than he had a few months ago. It seems to be an eminently sensible solution.
It is time to acknowledge that the diversities that are undoubtedly manifest throughout Europe are natural and desirable. They are not something to be ashamed of, to be brushed under the carpet. It is our challenge to reflect Europe's diversity in European Union flexibility. That is why we have made it clear that, if the next EU treaty does not contain a flexibility clause, our party will oppose signing up to it.
Will David McLetchie give way?
No, I have already given way.
Labour, the Liberal Democrats and the nationalists are the real unholy alliance in this party—[Laughter]—this Parliament. Those parties would go along with the federalist movement, to the changing nature of the European Union. The Prime Minister did so in 1997, by accepting the extension of qualified majority voting at the Amsterdam conference. Now he is preparing to do the same again next year. The position of the Scottish National party is particularly curious. Yesterday, in Brussels, as the First Minister has already intimated, Mr Salmond said that the pound was a millstone round Scotland's neck. That is a clear indication of his personal unequivocal support for early entry into the euro, although, as I understand it, official SNP policy is to consult the people first, in a referendum.
Mr Sillars, whose name was taken in vain by the First Minister earlier, in a much more recent warning than the pamphlet dating back around 20 years ago that was dug up by Labour researchers, issued a strong warning about the dangers of entering into the euro in a recent article in The Times:
"It is a major stepping stone to a federal superstate . . . removing one of the core aspects of national sovereignty".
Yesterday, Mr Salmond criticised the Bank of England's action as
"economic policy made in the south-east of England by the south-east of England and for the south-east of England".
If he believes that the Bank of England is too distant to serve the interests of Scotland, how can he argue that the solution is to surrender control of the economy and interest rates to unaccountable bankers in Frankfurt? If what works for people in Aldershot will not work for people in Aberdeen, how on earth will they have anything in common with people in Athens? It is seriously irresponsible of the nationalists to deceive the people of Scotland in this way.
The Conservative party is committed to British membership of the European Union, and we are determined that it should work in the best interests of the people of Scotland. The issue of flexibility is at the core of this debate. Some may choose to focus the debate only on the economic criteria. We want it focused on the political implications of joining the single currency. It is a curious irony that while the other parties here are hell-bent on stripping Scotland's Parliament of its sovereignty, within only months of its inception, by handing over more powers to a European federal superstate, it is the Conservative party that is committed to maintaining the powers and responsibilities of our first ever democratically elected Parliament.
I move amendment S1M-258.2, to leave out from "recognises" to end and insert:
"but does not believe that it would be in Scotland and Britain's interests to consider joining the single currency until its economic and political consequences have been properly assessed and believes that we should keep our independence in decision making."
I was thinking about which government handed over most sovereignty to the European Union in the past. Never have so many Tories been misunderstood as today.
The Liberal Democrats support the motion in the name of the First Minister because it is positive about Scotland's engagement with Europe. An outward-looking Parliament is part of a positive approach to promoting peace, to protecting the environment, to opening up trade opportunities and to assisting the stable development of less fortunate regions.
We oppose the SNP and Tory amendments. The SNP calls for an independent Scotland. People voted for devolution and rejected independence and want Scotland to play a constructive role in Europe as part of the United Kingdom. We oppose the Tory amendment because it is a contradiction in terms: is it never, or never say never again, on the euro?
A party with an objective that would damage our economy, fishing and farming, which created the beef war and which now wants a European opt-out on anything they do not like, is not a party fit to
take forward our engagement with Europe.
The only thing the Tories like less than Europe is themselves. On the BBC recently Chris Patten warned his party that it is
"making no sense on Europe, and risks losing mainstream support through its policies".
I further quote:
"Let me be quite clear. Britain does not dream of some cosy, isolated existence on the fringes of the European Community. Our destiny lies in Europe, as part of the Community."
That was Margaret Thatcher, in Bruges in 1988. That is still true.
Scotland needs to benefit from the European drive to create opportunities to secure new jobs, ensure stable prices—
Will the member give way?
If I must.
You quoted Margaret Thatcher—
Someone who is dear to you, Brian.
Does Mr Scott see any difference between what she said and the slogan we used in the European elections, "In Europe, but not run by Europe"? That slogan helped us win—if we look at it on a constituency basis—in all the Liberal seats bar Orkney. Mrs Thatcher was right then and we are right now and your party has got it wrong.
Mr Monteith gets so many things wrong. The constituency is Orkney and Shetland.
Scotland needs to benefit from the European drive—I know that the Tories do not like it, but that is what happens in the real world, not in the world that they live in—towards opportunities to create jobs. Presumably, the Tories are against that as well. Scotland needs to benefit from the drive towards stable prices, greater wealth creation prospects, increased security, an extension of democracy and a clean environment. However, we need a better debate, which raises the stakes on the euro. The Liberal Democrats are committed to joining the single currency to prevent Scotland and the United Kingdom being marginalised by an unstable and uncompetitive currency, to prevent even higher costs to business and to prevent risks to investment.
Mary Scanlon (Highlands and Islands) (Con)
rose—
Forgive me, but I must move on.
Adopting the euro will improve trade with our nearest neighbours, reduce costs and deliver lower interest rates. As a farmer who exports lambs to southern Mediterranean countries, I appreciate from a business perspective, which may be alien to some Tory members, the need for stable exchange rates. Scotland's agricultural organisations, particularly the National Farmers Union, have argued for and supported the euro. Liberal Democrats are taking a positive approach—
Does Tavish Scott accept that the NFU's support for the euro is support that is based on entry at the correct exchange rate, which implies a substantial devaluation? Is that his policy as well?
The NFU has supported the euro for a considerable time. Its aspiration is to ensure stable exchange rates so that we can export to markets that are the future for Scotland's agricultural industry. I support that position.
Liberal Democrats are taking forward a positive approach and setting a positive agenda to reform the EU, confront the concerns about fraud, reduce the democratic deficit and diminish our people's intransigence about what goes on in Brussels and Strasbourg. Liberal Democrat MEPs are demanding the creation of a European anti-fraud office, which is independent of the Commission, to be the European citizens' champion to tackle fraud and incompetence. Tory MEPs are opposing that measure. Liberal Democrats also have called for a constitution for Europe to help tackle waste and inefficiency. A constitution would define and limit the powers of Brussels.
MSPs such as myself who represent constituencies in the Highlands and Islands seek co-operation from Europe on the problem of infectious salmon anaemia, which is a viral disease that is causing severe damage to a Scottish industry that employs 6,000 people, mostly in the Highlands and Islands. In Norway, the disease is managed in a sensitive way, to keep it under control while maintaining the industry. Within the EU, ISA is classed as exotic and as a list 1 disease. Attempts have been made to eradicate ISA, but recent news of the spread of the disease to new areas shows that that attempt is not working. However, the controls that have been imposed have been so draconian that, if left in place, the eradication policy may eradicate the salmon farming industry.
The UK Government, led by the Scottish Executive, has been working in Europe for a relaxation of ISA controls. Now the Executive has clear grounds to push for the end to list 1 status, and for a move to follow the more realistic Norwegian practice. That must happen, because the industry cannot afford to wait. At times like these we need a co-operative relationship with Europe. We cannot expect to be given a sympathetic hearing if, like the Tories, we use the EU as a punch-bag. The UK's 10 votes gives us a
Scottish voice backed by Westminster, which speaks louder than Scotland's voice on its own on vital Scottish interests.
Europe has given stability to formerly unstable countries, democracy where there was none and prosperity where once there was poverty, but greater than all those achievements must be peace. Europe must make up for its failure to respond adequately to the Balkan crisis by building a stronger, wider, peaceful Europe. When so many people in the world are stateless, I want a Europe where I, as a Shetlander, a Scot and a Briton, can also be a European.
Opening statements overran significantly, which means that speeches will now be limited.
All parties have agreed, more or less, on the importance of constructive engagement with Europe, but the question that divides us is the terms on which we do that.
I hope that recent events have concentrated minds, and reminded us of the importance of our European trading partners to Scottish businesses and jobs. Before we joined the European Community, EC countries accounted for less than a quarter of our manufactured goods exports; now they account for nearly two thirds. Of course, much of Scotland's inward investment comes here because we are a gateway to Europe. For example, a number of multinational oil companies are based in my constituency in Aberdeen, where they have their European headquarters, not just their Scottish or British headquarters. The same is true of other industries.
The north of Scotland perhaps relies more than any other part of Britain on trade with Europe, whether that is the export of fish, lamb, whisky or many of the other quality products that depend on our continuing constructive engagement with Europe. For that reason, we should reject the Tories' instinct for disengagement from Europe. I was interested to hear Mr McLetchie—and I am sorry that he is no longer here—define his concept of flexibility as something quite different to disengagement. I am sure that his colleagues will pass on to him my request that, in summing up, the Conservatives should explain whether their policy on the common fisheries policy is so flexible that they seek Britain's withdrawal from it. If that is their position, is that practical politics?
The Conservatives' amendment does not oppose constructive engagement with Europe and, as far as it goes, I welcome that. However, the party line that it adopted at its recent conference is different. The question of what it means by a flexible Europe is one to which we have not really heard an answer yet. It seems to be a pick-‘n'-mix Europe; not constructive engagement, but a code for disengagement.
The Scottish National party is not so daft. It knows that it does not make sense to pull out of a union that works, brings great economic benefits, is vital to our trade and provides a framework within which progressive social policies can be agreed across the board. The SNP does not want to pull out of Europe, but instead it wishes to pull out of the British union—a union that also works, brings great economic benefits, is vital to our trade and creates a framework for social justice and policies for jobs.
Nothing could be more illogical than to say, "A single currency is a good thing. We have one already, but let us walk away from it." The logic of pulling out of Britain to engage more fully in Europe is not logic at all. By all means, let us enter the European single currency as early as it is in our economic interests to do so, but surely it makes sense to do that as part of the single currency area to which we already belong rather than to pick one or the other.
The Tories offer us a Britain on the edge of Europe, the logic of which is a Britain that will sooner or later slip out altogether.
If Lewis is so keen to join the single currency almost instantly, does he feel that the euro zone interest rate of 3 per cent is appropriate for the United Kingdom at this time? If so, have the First Minister and others made representations to the Chancellor of the Exchequer and the Bank of England Monetary Policy Committee on that point?
I did not suggest to the chamber that we should move into the euro zone immediately. In principle, it is the correct place to be. However, we should reject the Conservatives rejection of that for at least a whole Parliament, and turn down the opportunity offered to us by the SNP, that Scotland should be in one currency zone while England is in another. Rather, we should go for a positive vision of a Europe growing closer together on terms that suit our interests. The correct way forward is Scotland in a devolved Britain as part of a Europe of the regions.
I want to thank the First Minister and the Executive for holding this debate, as it is the first opportunity that the Scottish National party has had to debate its flagship policy of independence in Europe. Like Alex, I want to be inside the room when the Council of Ministers makes the decisions. I want to be part of all those institutions,
not just a lobbyist outside the room. Luxembourg—without a single bit of fish in its small but excellent country—is inside the room, even on fishing. I am happy about the extra clout in Europe that I concede that the Parliament has given us. Scotland House—to which I was not invited but which I will visit on my own—has had the same effect. That clout is demonstrated by the many delegations that wish to talk to or hear about the European Committee. Consider all those new consulates that are opening up.
I would like to deal with some false claims. First, from time to time the claim is made that the SNP does not want the Parliament to work. Logically, we of all parties must want it to work, because we see it as a step on the road to independence. We want the people out there to say, "This is a good thing. It is an improvement. Let us have more of a good thing." We of all parties want the Parliament to work and we will pledge ourselves to make it work.
Another claim that is sometimes made, but which seems to be made less often now, is that Scotland would not get into Europe. That claim was made during many of my numerous European election campaigns, but it was refuted by the top legal expert in the European Union, Lord Mackenzie-Stuart, the head of the Court of Justice—the EU was not called the EU in those days, of course. That refutation was also repeated by the head legal expert of the European Commission, Dr Noe from Italy. Both of them quoted international law, saying that, when a treaty breaks up two countries that have been together in a union, both those countries will continue to be covered by the umbrella of the EU treaties.
International law bears out that legal opinion, as can be seen in the case of Norway and Sweden earlier in the century, in the case of the Czechs and the Slovaks and even in the case of the Republic of Ireland, which remained part of the Commonwealth for many years after becoming independent.
The First Minister claimed that the day of nation states is past. Looking at the map of Europe today, I find that an odd claim. Perhaps he should repeat it to the Czechs, the Slovaks, the Estonians, the Latvians, the Lithuanians and many of the other nation states that have re-emerged. He also claimed that for Scotland to be in the euro and England to be out would be a disaster. Perhaps he should discuss that claim with the Irish at ministerial level, as Alex Salmond and I have done. If independence in Europe is daft, as the Conservative party in Scotland claims, the Danes, the Irish, the Swedes and the Finns must all be daft.
I am not clear about the Executive's position on the euro, even after listening to the First Minister's speech. Gordon Brown's attitude is summed up rather well in one of the heavy London papers, which said that it was like proposing marriage while saying to the girl, "I can't marry you for some considerable years. I don't know when I can exactly and, when I do, there will be conditions, but I can't tell you what they are." That seems to be new Labour's position on the euro. At least the Tories' position is clear and, to be fair, so too is the Liberal Democrat position. Our position is clear: we want a referendum on the subject.
It is claimed that Scotland benefits from having the United Kingdom as its big brother. After 24 years in the European Parliament and after seeing the desecration of Ravenscraig, which the Commission admits would not have closed if Scotland had been independent, all I can say is that big brother's achievements do not look very impressive. Nor has the UK helped us to avoid the sell-out of our fishing industry to Spain. I seem to remember that there was a manifesto promise about quota hopping, but we have not—
Will Dr Ewing give way?
She is winding up.
Do I have to wind up now? I am sorry, but I cannot take Ben Wallace's intervention.
I want to mention the alcohol regime that is unfair to wine and beer industries. It was always said that the regime should regulate alcohol according to its strength, but the UK does not apply for a lot of the funds that are available. We did not get any funding for the Chunnel because we did not apply. Nor did we get lots of the available training funds or the funding that is available for small and medium enterprises. Our loss of objective 1 status was hailed as a great victory instead of a defeat, and the UK Government allowed lots of unsuitable legislation to be passed for the lack of having an independent voice to stop ridiculous legislation that does not suit Scotland.
I am pleased to be able to speak in the debate today on a subject that is close to my heart: positive engagement in Europe.
As a member for the past two years of the European Committee of the Regions, I have been fortunate enough to experience at first hand the European decision-making process. Working as it does in a multicultural, multilingual environment, the committee is able to address the everyday problems of Europe's peoples together.
I felt that it would be appropriate today to look to the future. I have therefore chosen to address my comments to a key area of policy that is inherent in the evolution of the European Union— enlargement. I do so for a number of reasons. This week sees the 10th anniversary of the tearing down of the Berlin wall. Yesterday, we made history in the European Committee with the first ever visit of a delegation from a European region, Saxony-Anhalt, whose members addressed us in their native language.
It is important that Scotland, too, should embrace the concept of enlargement. Although that poses a challenge for us, it also offers us opportunities. Not least of those is the single market, which will be boosted by some hundred million consumers from new, largely untapped and previously unreachable, markets. That will take the number of job opportunities in the single market to 500 million. The effects of free trade and investment with the seven largest applicant countries would add 0.2 per cent to national incomes across Europe and, in Britain, it would add £1.75 billion a year by 2006. The Parliament needs to promote positively enlargement and the opportunities that it represents.
Those opportunities include the possibility of growth in both our SME sector and our export market. Members will be interested to hear a success story that often inspires me. A Glasgow- based distributor—I will not mention the name for fear of incurring the wrath of the Standards Committee—of satellite television equipment attended a trade fair in the Czech Republic in September 1993. The ECOS-Ouverture programme of interregional aid sponsored the company, which was successful in securing several orders from central and eastern Europe. From no export sales in 1992, the company made £500,000 from foreign sales in 1993 and tripled that amount by 1995. It now trades to nine countries in central and eastern Europe.
Given appropriate assistance, I am sure that firms across Scotland can repeat that success story. I hope that all relevant authorities, including Scottish Enterprise and local enterprise companies, will take active steps to ensure that Scottish companies benefit from this expansion, particularly those in the weaker sections of our economy. I hope that the Parliament's European Committee will look for ways to consider the opportunities that are offered by enlargement.
Europe is continuing to change and evolve and enlargement is both a major and inevitable element of that. I believe that, for the first time in the United Kingdom, options are open, not closed, that the approach is constructive, not destructive and that decisions are based on pragmatism, not on outmoded ideology. I urge members to support
Scotland's place in Europe and to support the motion.
It is refreshing to hear from another party that is clear on its aims and objectives in Europe. The SNP would join the euro at the first possible opportunity; that goes for the Liberal Democrats, too. The SNP's single U-turn on Europe in the 1980s pales into insignificance beside Labour's seven changes of policy position on Europe since the European Community was established.
Obviously, Mr Salmond sees entry into the euro as part of his grand plan for independence. However, he must be aware that, by joining the single currency, he will abandon any hope of Scotland being able to control its own interest rates, currency and, ultimately, fiscal policy. He would be weakening the independence for which he strives. He seems more interested in the trappings of a region within a federal Europe than in allowing Scotland's people to be able to run their own future.
The Conservative party's policy is clear: in Europe, not run by Europe. We believe that entry into the euro is not in the best interests of the people of Scotland. We believe in an expanded, less regulated European market: a Europe with fewer regulations, not more; a Europe with fewer powers being given to bureaucrats, not more; a Europe where the citizens of each member state feel secure in their identity and are able to change their political masters when they feel like it.
By staying out of the euro—
I will not give way to Mr Raffan. I never like to. He goes on and on.
By staying out of the euro, we will be able to set interest rates appropriate to our situation. Contrary to the Labour spin, we will be more influential, not less. Instead of being one vote out of 12 in matters that affect European Union economies, we will have power over our economic affairs. We can continue with the low social costs, the flexible labour laws and the competitive corporation tax regimes that have allowed us to enjoy—
Mr Wallace talks about flexible labour markets and lower costs. Does that mean that he would continue to support the Conservative party's policy of not introducing the working time directive or some of the other social benefits that Europe legislation has introduced on working conditions?
There are many aspects of the
working time directive that still need to be sorted out. In its present form—
Fishing.
Yes, fishing is one example.
We will not lose out on trade. The City of London trades more dollars yen and dollars deutschmarks than Frankfurt and New York combined. Those will not be lost if we were to stay out of the euro. Canada, which neighbours the most powerful economy in the world, has never felt it necessary to rid itself of its own currency.
The future of Europe in the euro is one of a further step towards political integration. In November 1997, the then Chancellor of Germany, Helmut Kohl, said:
"We want political unification of Europe. If there is no monetary union then there cannot be political unification of Europe. If there is no monetary union then there cannot be political union and vice-versa".
We do not want to be dragged into a federal Europe, behind a federal currency.
The existence of the Scottish Parliament can be put down partly to the frustration of Scots who felt so removed from the decision making in Westminster that they brought the politicians back home. Perhaps that is why Mr Salmond is so keen to support the idea of the euro and a more distant Europe.
The Executive must come clean. Does it want the euro or not? When will it enter the euro? Will it let the many Labour members who oppose it— Donald Dewar talked about the past, but at present, 22 Labour MPs are part of the save the pound, euro guard and new Europe campaigns— speak against it. A few weeks ago, I spent some time with Frank Field, discussing those very problems. Frank Field is not in the Labour party's past. The party should come clean and allow its members to speak out.
Can Mr Wallace clarify whether the Tories are for ever and a day against the euro, and therefore against the federal state that he claims will follow? Does the word "until" in the amendment imply that, one day, they will be in favour of the euro?
Please clarify and close, Mr Wallace.
I will state the policy. We believe that, for this Parliament and the next Parliament, we will oppose the existence of the euro. We believe that the euro will lead to a federal European state and we oppose it.
The Executive must come clean. Will it let the Labour members who do not agree with the euro speak out, or will those members be made to keep quiet, like the six Labour MEPs who suddenly disappeared off the proportional representation list at the last election?
The Conservative party is pro-Europe, and if it were not for the fact that Labour's agenda of euro membership is being hidden from the electorate, I am sure that all members would have supported the motion. However, like the 5,000 extra policemen, one always has to dig a little deeper to find the truth behind new Labour.
In supporting the amendment in the name of my friend Mr Salmond, I am not—as some might think—breaking the habit of a lifetime. Rather, I am giving voice to an opinion that I formed almost 40 years ago, when I listened to the voices of the British establishment—the members on the front benches of the House of Commons—debating their duty to join the then Common Market, to see it through, to follow the path of righteousness and to do things the British way.
At that time, the finest products of Eton and Oxbridge were wrong to think that the French and the Germans would simply stand aside and let them take over. Similarly, the camp followers of the Blair crusade to do it the third way are wrong and arrogant to assume that they can claim leadership of the EU.
It is true that the Tories can claim some leadership. Mrs Thatcher, along with Mitterrand and Kohl, developed the single market. I know that the Tories will not thank me for reminding them of that, but she did, and they have to live with the consequences. Roy Jenkins went native in Brussels, when he was president of the Commission, and the Labour party went in a huff. I remember the opt-outs from the socialist manifestos for the European parliamentary elections in the 1980s and 1990s.
I wonder whether Donald Dewar, as an old Jenkinsite, will thank me for asking whether he considers that record strong enough for the Executive to claim the right to lead the European Union. What does he think of the fact that the EU is moving ahead to consolidate its political development, now that the penultimate stage of its economic development—the euro—is in place, without the superior leadership qualities of the British Government?
The motion shows that although the Brits may have lost an empire, they have still not found a role big enough for their delusions of grandeur. It would be much better for the people who live in Scotland, and in England for that matter, to be represented in Europe by Governments without delusions of grandeur, which would approach the EU nations in a spirit of equality and fraternity.
That would be unlike our own dear, gifted and sensitive Foreign Secretary, who urged people in Scotland to stick with the leadership and power of Britain in Europe, as a region, rather than join the smaller nations which—according to him—have no clout in the EU. Today, even Donald Dewar, a sensitive man who has visited Europe loads of times, stated that we would be leaving the strength of the big player behind us in going out on our own.
We would not be going out on our own—we would be joining the other small nations of Europe. Perhaps when he sums up, the Deputy First Minister can tell us which small countries do not have the clout that Donald Dewar and Robin Cook want us to have. Is it Ireland, is it Finland, which currently has the presidency of the EU, or is it some of the applicant nations? Is the EU kidding on those nations that they will amount to anything if they join this club of the nations?
As the amendment says, Scotland as an independent country can play a full and proper role in Europe. I urge members to support the amendment.
The question was asked, in relation to some of the former Labour MEPs who are no longer with us, if I can put it that way, whether Labour members are allowed to speak out. As the former election agent for one of those former MEPs, I can safely say that I intend to say my piece. I am living proof that the Labour party, old, new, call it what you like, is here and is ready to engage in the debate in a positive and constructive manner.
This is the beginning of a debate on Europe— not the end. It is not the case that today we will vote on whether we join the euro. The UK Government has made its position clear. It will look to join at an appropriate time, when it is in the best interests of the country and when the people agree that that is the case. I think that means that the debate still has a considerable way to go.
As a member of the European Committee, I get loads of paperwork and I sometimes find interesting snippets of information. The UK is doing well on employment creation. That is reflected in the 1999 joint employment report from the European Union, which examines employment in the various member states. However, the report highlights a warning that is particularly relevant to my constituency:
"Against this relatively favourable background in the EU context, the UK labour market continues to display a significant share of young people, especially male, out of work or education, persistent pockets of long-term unemployment and/or inactivity among older people".
That is the agenda which we ought to address with the other member states. How are we to tackle the unemployment that has persisted for a substantial length of time? How will we regenerate local communities, and how will we do it in a way that balances the needs of inward investors with those of the indigenous community?
It has been said repeatedly today that we must be in control of our own destiny and that the Tories would opt out of certain matters if they had their way. Let me tell members, if they have not already worked it out: it is not as simple as that, as we live in a global economy. That was made clear at a meeting that I attended at lunchtime today.
That meeting was arranged so that some of the issues that will be on the agenda at the forthcoming World Trade Organisation conference could be addressed. One was:
"Trade agreements already have an impact. Narrow commercial issues are being allowed to overturn rules on public health, the environment and support for small farmers. The WTO rules are failing to protect EU consumers from imports of hormone-injected beef; failing small banana farmers in the Caribbean and failing to conserve the environment. Even the EU's regulations on genetically modified crops and labelling for GM foods are likely to come under threat from a challenge at the WTO by the US."
That is the reality of our global economy. We ignore it at our peril.
We now come to the winding-up speeches. I ask members to adhere to their time limits. Keith Raffan will wind up for the Liberal Democrats.
It is over 30 years since I spoke at my first pro- European rally. I was perched somewhat precariously on the sloping base of Nelson's column in Trafalgar square. There were a number of senior Tories alongside me on the base of the column. All of them, bar one, have now left the Conservative party because of Europe, and almost all of them are members of the Liberal Democrat party. Those are the divisions on Europe that have afflicted the Conservative party over the past 30 years.
I am not surprised that Ben Wallace did not give way. He did not give way because he could not answer the question that I was going to ask.
How could he have known what the member would ask?
He never does answer questions, so why should he change now?
One must admit that there is a neat symmetry
between the Conservative party and the Scottish National party. The Conservative party was passionately pro-Europe back in the early 1970s and it took us into Europe. Now it is bitterly hostile; it is a party of bunker Toryism.
No, I am not giving way. I have a very short time.
That phrase—bunker Toryism—is used by the president of the Conservative party in Scotland, Sir Malcolm Rifkind. He now describes Conservative policy on Europe as bunker Toryism because so many of the Conservatives want to renegotiate membership of the European Union and they are intolerant of those who are pro-euro. A former Prime Minister describes their policy as absurd and crazy. Douglas Hurd, as George Lyon said, describes current Conservative policy as a caricature not in touch with reality. He must have been gazing on Phil Gallie at the time. That is what the Conservative party has been reduced to.
The Liberal Democrats are the most consistently pro-European party in the chamber, and we are proud of that. We are proud of it because, passionately and consistently, we have been pro- Europe. That is one of the principal reasons why I joined the party and why I am proud to be a member. The Liberal Democrats are not uncritical supporters of the European Community and the European Union.
I am sorry, but I do not have time. I would like to give way, but I have only one minute left. I will try to give way. Mr Salmond has given way to me in the past.
Tavish Scott made the crucial point about our policy in Europe. Earlier this year the then two Liberal Democrat MEPs, Graham Watson and Robin Teverson, were the first to put down a motion censuring the two commissioners who were principally responsible for mismanagement within the Community. We have called for action against fraud, and to tackle waste and inefficiency. My colleague and friend Andrew Duff, MEP for Eastern England, has been taking the lead on the setting up of the European anti-fraud office, OLAF, to which Tavish Scott alluded.
I am happy to give way to Alex Salmond.
Can Mr Raffan tell me whether the Liberal Democrat policy on the euro is the same as the Labour party's policy? If not, what are the points of difference?
You have one minute, Mr Raffan.
We have been consistently pro the single currency. We believe that the convergence criteria must be met, and we want to go in at the earliest opportunity. We have been consistent in that policy.
I would like Mr Salmond to explain how the SNP went from being bitterly hostile to Europe to being pro-Europe. That was a very convenient conversion. "It's Scotland's Oil" failed, so the SNP now uses the slogan of "Independence in Europe". It hopes that that will get it over the separatist problem that it faces as a political party. [Interruption.]
Order.
The SNP never mentions Ireland now as the great example of what it would like Scotland to be. With the enlargement of the Community and the reform of structural funds, the SNP knows that we will not get the kind of support that it always claimed we would get if we were independent within Europe.
Please close, Mr Raffan.
Another reason why the SNP never alludes to Ireland is that it is a high-tax economy. That is exactly what Scotland would be under the SNP.
Will Mr Raffan give way?
Mr Salmond need not ask the Liberal Democrats about policy. He has a lot to do to explain his own—not least his interest rate policy. He will not let the Bank of England set interest rates, but he is ready to let the European Bank set them.
Please close, Mr Raffan.
Let Mr Salmond tell us about his policies before he questions us about ours.
I have never looked up at the Church of Scotland's motto, "Nec tamen consumebatur", with such feeling. The classics obviously desert Mr Raffan, like reason and most other attributes.
I wind up with pleasure for the Scottish Conservatives in this debate. In a positive mood, I am minded to look again at the terms of the motion and to remind the chamber of what we are supporting. The motion begins by saying:
"That the Parliament endorses the Scottish Executive's policy of continued positive engagement within the European Union".
We have made it clear that we do. The purpose of our amendment is to express concern about one aspect of European policy, which is, of course, the
euro.
The Conservative party sees tremendous opportunities in Europe and has never pretended otherwise. Interestingly, the advent of this Parliament provides a positive European dimension for Scotland, as does Scotland House—I share Dr Ewing's view on that.
I have to make those points clear because in the hurly-burly of the debate, naturally, much abuse and vitriol have been slung at my party. We acknowledge that, but reserve the right to defend our position and to make it clear that there have been misrepresentations and calumnies.
On the euro, it is fair for the Conservative party to observe that the Liberal Democrat policy, as outlined by Mr Raffan, is not entirely clear and does not align with the policy of the Labour party. As Dr Ewing says, the policy of the SNP is clear: it wants to go into the euro now. We do not share that view.
The Labour party's policy is the most interesting—it is spoken with all the enthusiasm of the suitor. The policy is that the euro is a wonderful proposition—"Let us go in, in due course, at some unspecified point in the future, when we think that it might be all right, but do not ask us when because we do not really know."
It is much more honest to adopt the Conservatives' position. We say clearly that we do not think that it is safe or in the interests of the UK to go into the euro just now, and that we do not think that we should go in during this Parliament or the next. That provides clarity. [Laughter.] Members in other parties may laugh—if I were in their position of embarrassment, I, too, would laugh.
The Scottish Conservatives' stance is not, "Non, non, non." It is, "Nous pouvons faire mieux." In case the language skills of my friends in the chamber are on a par with their Latin, that is the French for, "We can do better." By "we", the Scottish Conservatives mean not just this chamber, or Scotland, but the United Kingdom.
We contend that we can do better. We believe that within Europe we can press for enlargement to be made a top priority, not from some doctrinaire view, but because it is an historic opportunity to advance free trade, free markets, deregulation and co-operation.
Ben Wallace's view was that the euro inevitably meant a federal state, which implies that the Conservative party could never be in favour of the euro. What is the Conservative position? Does the euro inevitably mean a federal state? Does that imply that the Conservatives can never support it?
Those are not the terms of our amendment. Ben Wallace made the fair point that the euro clearly has constitutional implications that point to a federal state. We do not know whether that will be the outcome; hence our preservation of flexibility. We are not rushing this country into anything, but are standing back to see what happens. We can then take an informed decision, rather than one into which we are bullied by some form of political dogma.
We want Europe to work and have no interest in Scotland being in a weak or unsuccessful Europe. We believe that Europe can work better if there is greater openness in decision making in Brussels and if there is improved ministerial accountability, with new procedures at Westminster. Above all, the British citizen wants to know what is being agreed to in Europe. There is some merit in investigating whether Euro-budgets can be reduced and whether spending priorities can be reformed. We would certainly oppose any attempt to abolish UK frontiers or any further erosion of the British veto.
We believe that, although every member state must accept the rights and responsibilities of the single market and core elements of an open, free- trading and competitive Europe, Governments should have greater freedom in deciding which other aspects of European policy to adopt. That is why we advocate the flexibility clause. This is not a party—
Will the member give way?
I am terribly sorry—I am just winding up.
The Conservative party is not opposed to Europe—very far from it. This party has the courage to examine Europe objectively and vigorously and to suggest changes because we want Europe to work and want to remain in Europe.
We have heard lots today about the European Union's importance for Scotland, but I am intrigued by the length of time that we have spent debating it. It is the same amount of time that we plan to spend tomorrow debating the Maximum Number of Judges (Scotland) Order 1999. The allocation of so much time to such an issue has short-changed the Parliament. It may be that there are big issues to settle tomorrow. The right hon Menzies Campbell QC MP may be raised to the bench. Given her performance at Scottish question time in the House of Commons yesterday, the Advocate General for Scotland, Dr Lynda Clark MP, most
certainly will be raised to the bench fairly soon, if my judgment is anything to go by.
I regret that today's debate has been shortchanged, as many of my colleagues wanted to speak, as I am sure many other members did. My colleague and friend Dr Winnie Ewing made a substantial speech on the real issues for the future of European relations and their importance to various sectors of the Scottish economy. I would have liked the opportunity to hear more members make contributions to the debate of the sort that she made, which was based on her many years of distinguished service in the European Parliament.
There was controversy during the debate about how well the Scottish Conservative and Unionist party performed in the European elections on 10 June. The Conservatives did not do as well as they claimed. They did not come first in all the Liberal Democrats' seats. The SNP beat the Liberal Democrats in Argyll and Bute, Ross, Skye and Inverness West, Caithness, Sutherland and Easter Ross and Gordon. Perhaps Conservative members should check the points that they make in interventions before they come to the chamber.
The First Minister's opening speech set an unfortunate tone for the debate. Of a speech lasting some 21 minutes, 15 minutes and 32 seconds were spent attacking the Conservatives and the Scottish National party, before we heard him spend six rather rushed and chaotic minutes trying to promote the Government's position.
Does the member accept that the leader of his party, Mr Salmond, spent 14 minutes and 50 seconds attacking the Executive and one minute and 35 seconds promoting the SNP's policies?
I believe that to be absolute rubbish, but we will wait to see the Official Report tomorrow to determine whether that was the case.
The explanation of the Conservative party's position has left many people rather bewildered. I certainly am not clear after the various exchanges today whether the Conservatives rule out membership of the single European currency for ever, although I listened carefully to the debate. I suspect that they do not rule it out for ever, because they realise that they cannot. That reality affects even the Conservative party.
Sir Malcolm Rifkind has sent siren warnings to the Conservatives recently. He has referred to the current Conservative position as
"little more than a euphemism for us to quit Europe".
We need to know whether the stance on Europe of Conservatives in the Scottish Parliament is identical to the stance of Conservatives in the House of Commons and, if it is, whether that is because there is a voluntary agreement between the two parliamentary parties, or because Scottish Conservatives have been told to do what William Hague and his colleagues in the House of Commons believe is appropriate.
The other major issue that has been debated today is representation. The First Minister said that he wanted Scotland to be fully and directly involved in the European Union. I could not agree with him more. That statement is on a par with the statement about being at the heart of Europe. We know that such one-liners can sometimes go horribly wrong when the soundbites are not supported by action. It is lamentable when the First Minister tells Parliament that Scotland is to be fully and directly involved in the European Union and then fails to explain why, of 30 council meetings, Scottish Executive ministers were present at only one. Luxembourg, with a population of 429,000, Ireland, with a population of 3,600,000, Denmark, with a population of 5.3 million and Finland, with a population of 5.1 million, have all been fully involved in Europe during all the time that Scotland has been represented at one council meeting. That is a lamentable performance by the Scottish Executive and one for which it must be held to account.
We have heard a great deal in today's debate about the euro and interest rates. The points that Mr Salmond made about short-term interest rates over the long term were neatly dodged by the First Minister. He, perhaps along with other ministers, should tell us—I am sure that the Deputy First Minister will touch on this in his summing up— about the concerns that have been expressed by organisations such as the Scottish Council Development and Industry. In its most recent survey of manufacturing exporters, that organisation found that 87 per cent of all businesses surveyed believed that their business had been badly affected by the high value of sterling, and that 69 per cent of them had lost export orders. Those are real pieces of statistical evidence for companies based in Scotland, and they cannot be disregarded as cavalierly as ministers have done today.
We in this Parliament have high expectations. The concordat said:
"Ministers and officials of the devolved administrations should have a role to play in relevant Council meetings, and other negotiations with EU partners."
In today's debate, the performance of the Executive in that regard has been found to be lamentable. The Executive has been represented at one meeting out of 30, a performance that is unacceptable to this Parliament and which should be unacceptable to the Executive. That leads me to the conclusion that the Executive is not pushing the interests of this Parliament or this country within the UK negotiating position. Instead, it is
leaving it to others to represent—or should I say misrepresent—the position of this Parliament and the Executive that is supposed to serve it. Normal, equal relations and a strong voice for Scotland will be delivered only when we have direct representation in the European Union, through independence. That is what the Scottish National party will argue for.
I welcome the opportunity to have this debate today. I will not spend time bandying around how many minutes speakers spent attacking others, but I note in passing that Mr Swinney spent a minute talking about tomorrow's debate before he got on to talking about today's.
Today's debate clearly demonstrated one or two things. I think that a majority in this Parliament shares our view that the Scottish Executive should continue to pursue a close positive relationship with the European Union. That was the view expressed by a number of speakers. I think that it is the general view of the SNP that we should have a close involvement with the European Union. Tavish Scott expressed that wish on behalf of the Liberal Democrats. Lewis Macdonald made the same point. Irene Oldfather talked specifically about the importance of enlargement and the additional markets that it can bring to Scotland. Cathy Jamieson talked about the need to tackle unemployment and deprivation on a Community- wide basis.
It is important that we remember that yesterday marked the 10th anniversary of the fall of the Berlin wall and the opportunities that that created for enlargement in Europe and for the peoples of Europe to come together. Tomorrow, of course, we will remember the armistice of 11 November 1918. What inspired the founders of then European Community in the aftermath of the second world war was the need to bring together the nations of western Europe in particular. The fact that we have had more than half a century of peace in western Europe is a great tribute to the vision of those who set up the original European institutions, which have developed over the years.
It is also important that the work that Scotland House is doing was acknowledged. Alex Salmond said that he had sought to discover from the Scottish Executive website who was the minister responsible for Europe.
I will give way in a moment.
All ministers have responsibility for the European dimension of their departmental responsibilities, but the First Minister and I take the lead, as we have done today. Jack McConnell co-ordinates policy over the whole range of European issues, deals with European financing and is a member of the UK ministerial steering group on Europe.
I am grateful to the minister for advising us that all the ministers in the Executive have European responsibilities with regard to their respective interests. Can he provide the Parliament with the details of his attendance at the informal justice ministers meeting at Tampere on 16 September, or was he not there? What about the justice and home affairs meeting of the Council of Ministers on 4 October in Luxembourg or the European summit at Tampere, or was he not there either? Is not the truth that the ministers of this Executive are not attending any of the relevant meetings?
I thank Ms Cunningham for her speech. The point is that, through the United Kingdom, Scotland has indeed been represented at all those meetings. But more than ministerial attendance is required—our officials have also been heavily engaged in preparing for the meetings. I met Jack Straw last week and he said that he would look forward to and encourage my involvement in European matters.
European Council meetings are not always relevant to us. I am told by Mr Finnie that the next meeting of agricultural ministers will be on the subject of flax and hemp. I hope that the Parliament will be sensitive, and not criticise Mr Finnie too much, if he does not think that attending a European Council meeting on flax and hemp is the best way of spending his time.
No, I have given way to the lady already and she made a speech.
The other point that we—
Will the minister give way?
No. Well, all right.
The next meeting of the agricultural ministers may be about flax and hemp, but a meeting two months ago was about animal diseases such as the one affecting the salmon industry in Scotland. Why were ministers from the Scottish Executive not there?
I have already made it clear that Scottish ministers and officials have a direct input to those meetings. For example, Mr John Home Robertson not only attended the most recent Fisheries Council, but led for the United Kingdom.
Sarah Boyack has also, I think, taken part in an important informal meeting of ministers, as has Mr Sam Galbraith. The statements being made are not a fair reflection of the involvement of Scottish ministers, who, in addition to attending those meetings, have met many of the senior commissioners, especially during that week in Brussels. Our involvement in the European Union is quite considerable. I am sure that it will grow, develop and deepen as this Parliament continues.
Another clear point is that, because the European Union is the largest single market, we need to be part of it. For too long, this country has had a somewhat ambivalent attitude towards Europe. The ambivalence of the Conservative party came through today—a flexible approach that seems to be an opt-out approach. Mr Chris Patten described that kind of opt-out approach as incomprehensible. It says something about the state of the Conservative party when someone as distinguished as Douglas Hurd is swept aside and dismissed as was done by Mr McLetchie in his speech.
The forces of anti-Europeanism, if unchallenged, will do real and fundamental damage to our national interest. That is why I am happy to play my part in Scotland in Europe (part of the Britain in Europe campaign).
As the First Minister was so coy about it at question time a couple of weeks ago, will Mr Wallace please tell us the next planned activities for Britain in Europe—sorry— Scotland in Europe (part of the Britain in Europe campaign), which is the only campaign in Scottish political history that requires A3 paper just to accommodate its letterhead?
A very clear campaign is going on, to spell out the advantages of a positive engagement by Scotland and the United Kingdom in Europe. That contrasts greatly with the negative attitude that we see from the Conservative party, which takes the line of, "Lord, make me pure, but not yet." We never hear whether it actually wants British membership of the euro. As a Liberal Democrat, my position is clear: I favour early entry by the United Kingdom to the single currency.
On that point, will the minister give way?
I am in my last minute.
Oh, please. [Laughter.]
I welcome the fact that, at United Kingdom level, the Government is being positive about Europe and has declared itself, in principle, in favour of a single currency. It is important that we go in on terms that will bring long-term stability to the United Kingdom and to Scotland. When we consider the volume of exports from Scotland to the European Union, it is clear that our interests— the interests of business and the interests of our people—are most safeguarded by a much more positive involvement in the European Union and, indeed, in the euro, than has been the case until now.
Will the member give way?
I do not accept the Scottish National party's point that somehow or other we would be better off as an independent country within the European Union. I will not accept that because it foresees us breaking our single currency link with the rest of the UK although more than half of all exports from Scotland go to the rest of the UK, which is, at more than six times the size of the next largest market—France—the largest market for manufactured exports.
One party wants Britain out of Europe; one party wants Scotland out of Britain. The Executive proposes that Scotland's interests are best served by playing a positive part within the UK and by Scotland and the UK playing a positive part in Europe.
Will the minister give way now?
The minister is winding up.
People are more likely to be able to buy their own homes, to go on holiday or to enjoy a comfortable retirement with Britain playing a full and involved part in the European Union instead of an isolated Britain or Scotland trying to go it alone. I commend the motion to the Parliament.