European Structural Funds

– in the Scottish Parliament at 9:31 am on 28th October 1999.

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Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament 9:31 am, 28th October 1999

The first item of business this morning is a debate on motion S1M-230, in the name of Mr Jack McConnell, on European structural funds. The amendment in the name of Mr Tommy Sheridan has been withdrawn, so the only amendment that will be debated is the one in the name of Mr Alex Salmond.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

I am happy today to move the motion, but disappointed that Mr Sheridan has not been able to make it to the debate.

The role of the Parliament and the Executive in Europe was ably shown earlier this month in the excellent organisation of Scotland week and the formal opening of Scotland House in Brussels. I want to put on record my thanks and congratulations to everyone in the Scottish Executive office, the Scotland Europa office and the UK representative office in Brussels who helped with the success of Scotland week. A number of important discussions were held not only behind the scenes, but at some productive and positive conferences and seminars on finance, democratic renewal, the environment, education, justice, jobs and Scottish culture. We also made positive use of the opportunity to promote and market Scottish beef and lamb.

All in all, it was a successful week, which ensured that Scotland had arrived in Brussels. It put Scotland on the European map, improved our contacts and profile and made an impact. It also showed starkly the dual benefit that Scotland receives from devolution through having its own profile and role in Europe while enjoying the clout that comes from being part of one of the larger member states. In that context, I am delighted to move this motion on European structural funds.

On 11 October, during that week in Brussels, the First Minister and I saw Commissioner Barnier and agreed that the key aim for the next seven years had to be to ensure that we used structural funds to leave a lasting legacy for the future. This Parliament and the Scottish Executive are now responsible for implementing structural funds in Scotland; we work closely with the Scotland Office and other parts of the United Kingdom Government, most recently in making recommendations for objective 2 coverage in Scotland.

The forthcoming enlargement of the European Union makes it likely that this round of structural fund programmes will be the last one from which Scotland will benefit significantly, so our overall aim must be to ensure that we use the structural funds effectively, efficiently and in a way that complements our policy objectives. The programmes also serve as an important spur to ensure that our policy contributes to European policy guidelines in a range of areas. In that way, we can be sure that Scotland is playing its full part in the Prime Minister's clear objective that Britain should play a full role in shaping the future of Europe.

Our proposals for the use of European funding in the Highlands and Islands are almost ready for submission to the European Commission. Many members will recall the welcome that was given to the award of the special programme to the area in March this year. No area should want to be in objective 1, of course, as that signifies that it is among the poorest areas of Europe and has real economic problems. However, it is important that the allocation of objective 1 status across the European Union is fair.

With gross domestic product in the Highlands and Islands at 76 per cent of the EU average, which is just above the 75 per cent cut-off for objective 1 status, and sparsity of population also just above the cut-off—9 per square kilometre compared with a cut-off of 8—it was important that the area's problems were recognised. We were and continue to be grateful for the contribution that structural funds make to the Highlands and Islands. I hope that we can use the new package to ensure that the area need not even be considered for objective 1 funding in the next round of the programme.

To ensure that all the major local players in the area have contributed to the plan, the plan team has brought together ideas and consulted widely within the area. It has concluded that the main priorities for the area are to increase business competitiveness, to create the conditions for regional competitiveness and to promote the development of the people in the area by fighting unemployment, promoting lifelong learning and social inclusion and supporting the primary sectors of agriculture and fisheries. Those priorities find resonance in the priorities for the European Union, and are reflected at a UK, Scottish and local level. They mirror closely and will complement the Executive's priorities as outlined in the programme for government.

The priorities for action are not surprising. As European structural funding meets at most only half the cost of any project, there must be support at a local level to ensure that any project can proceed. As Commissioner Barnier said to me, the European Commission does not want to make all areas the same; it recognises distinct regional identities. As a result, it is not only the wording of the strategies that is important, but how they are put in place. We must, therefore, use the funds efficiently and effectively.

In an area such as the Highlands and Islands, which is diverse and, arguably, has several micro-economies, it is not possible to say that one or two projects will make all the difference to the area. The strategy developed by the plan team is therefore one that enables rather than prescribes.

In the rapidly changing world in which we live, even areas once considered remote, such as the Highlands and Islands, are now affected by increasing global competitiveness. Therefore, the strategy that we put in place must allow the area to take advantage of developments in the next seven years.

I also want to concentrate on what is termed internal cohesion—reducing the differences between local areas within the Highlands and Islands. Measures that deal with social inclusion, address gender imbalances in the labour market and improve community and social infrastructure will be as important as improvements to the communications infrastructure in the area as a whole. We must raise incomes and improve year-round opportunities in all parts of the Highlands and Islands.

The special programme for the Highlands and Islands recognises the area's particular difficulties. However, across Scotland, our aim during the next seven years will be to ensure that the available moneys are used in the most durable and cost-efficient way to deliver real results and to help bring the most deprived areas into the main stream.

The European structural funds support and complement important policy objectives in many areas that are the responsibility of this Parliament. I want to stress in particular the role that the funds will play, in line with European and UK priorities, in complementing our policy objectives in enterprise and work-related training. The objective 2 and Highlands and Islands programmes will have important business development components. Objective 3, too, will promote the development of important work-related skills in employment. Similarly, there will be an emphasis on helping those who are unemployed to go back to work. Social inclusion will be a big priority for the new programmes. The focus on helping areas of need under the new objective 2 programmes will bring an increasing emphasis on developing economic opportunities and social structures in our most deprived communities.

I strongly welcome the new emphases in the new programmes. There is a new and reinvigorated emphasis on promoting equal opportunities and on mainstreaming them across the public sector. Priority is also given to the promotion of sustainable development and environmental protection, including the promotion of renewable energies and energy efficiency. When I was in Brussels some weeks ago, I was pleased to welcome the preparation of sustainable development strategies by the East of Scotland and the Highlands and Islands European partnerships. The strategies will help to put the new environmental standards set by the Amsterdam treaty at the heart of the way in which we implement structural funds.

Structural funds also support new technologies and the development of the information society. They support sustainable jobs in tourism and in cultural and natural heritage. They also provide viable support for co-operation between Scotland and other regions of the Community, through the URBAN and LEADER Community initiatives, for example, and the important programmes linking the northern periphery. All those measures are important priorities for the Scottish Executive and we look forward to effective use of European resources to support them.

Photo of Dennis Canavan Dennis Canavan Independent

On 8 October, the minister issued a statement that referred to the objective 2 proposals that are being submitted by the UK Government to the European Commission. How firm are those proposals? Are they still amendable? Are we just debating decisions that have already been made, or is this a genuine consultation exercise between the Executive and the Parliament?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

As Mr Canavan knows, the Executive has consulted the European Committee a great deal. The proposals that have been submitted, with our support, to the European Commission are not subject to appeal, although they are subject to negotiation with the Commission. As I made clear at the European Committee last week, if the Commission is unhappy with any of the areas that we have submitted, it will be possible to consider possibilities in other parts of Scotland.

I intend to return to objective 2 and the proposed map but, before I do that, I wish to turn to the new objective 3. The European social fund provides a continuing and important mechanism to support the training needs of those in or out of work who require extra help. Under the new round, a special objective 3 programme for Scotland has been designed to support our objectives of developing a work force for tomorrow. Much good work has been done with the education sector and voluntary organisations and I look to those concerned to ensure that the new programme delivers results where they are most needed.

I am pleased to be able to announce that we have reached agreement with colleagues in Whitehall and Cardiff on the financial allocations for objective 3. The allocation for the Scottish operational programme amounts to some €480 million for the seven years from 2000 to 2006. That represents 10.5 per cent of the allocation to Great Britain as a whole and includes an element to reflect the proposed concentration of objective 3 in objective 2 areas. As our population share for objective 3 purposes is less than 8 per cent, that is an excellent outcome and I wish to congratulate publicly those who negotiated it on our behalf.

The objective 3 plan team will immediately consider the implications of the overall financial allocation to the programme for, first, the distribution of resources to individual priorities and measures and, secondly, the performance targets that are associated with those measures. Towards the end of next week, the plan team will issue a consultation paper seeking the views of the wider partnership on these matters; I expect the plan team to submit the revised plan to the Scottish Executive towards the end of November. Following final consultation with the European Committee of this Parliament, we expect to submit the plan formally to the Commission before Christmas.

The overall objective of structural funds is to promote economic and social cohesion. Consequently, the European regional development fund plays a key role in supporting measures in areas of need. The concentration of assistance decided at the Berlin summit means that, for the new programming round, resources will be concentrated on substantial areas of most need. As I explained to the European Committee, the Executive, in close consultation with the Scotland Office, played a full role in preparing the UK proposals to the European Commission for objective 2 coverage in Scotland. The proposals target significant areas of need for economic and socio-economic conversion, in line with the requirements of the regulation. They represent a balance between the needs of the different parts of Scotland and between urban and rural Scotland.

Photo of John Swinney John Swinney Scottish National Party

I refer to the issue that Mr Canavan touched on. Will there be an opportunity for the minister to reflect on any of the objective 2 allocations that have been made? I raise this matter because representations have been made to me by the University of Abertay in Dundee, which makes an enormous contribution to the wider Tayside economy. However, because of its location and the demarcation of the maps, the university is excluded from many of the access routes to the objective 2 programmes. Has the minister heard the university's representations and does he have any response that would assist a university that will have its ability to continue to contribute to the Tayside economy restricted by the demarcation of the maps?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

My officials have already held discussions with representatives of Dundee City Council on that matter. I expect the plan team not only to take on board those representations but to ensure that the area where the university is located is taken fully into account in the plans for transition funding. As I said, if the Commission questions any of the areas that have been included in the UK proposals—or any of the criteria on which those proposals are based—we will reconsider the map proposals. However, the current proposals were based on objective criteria and are now before the European Commission.

The proposals allow for coverage of some 40 per cent of the Scottish population. That proportion is greater than those of any comparable EU member state—for example, Sweden's coverage is 14 per cent, Finland's is 31 per cent and, for that matter, England's coverage is 24 per cent. Moreover, areas that previously qualified will be eligible for substantial transition funding of some £75 million, which means that more than 85 per cent of Scotland will be eligible for regionally based European programmes into the next millennium.

Photo of Bruce Crawford Bruce Crawford Scottish National Party

I wish to return to the point made by Dennis Canavan and John Swinney. The minister seemed to close the door to cases that MSPs may raise from now on relating to the map. What he said today is different from the information that he gave to the European Committee on 19 October, when he stated:

"It does no harm for members of Parliament to make representations on behalf of particular areas because if, for example, the Commission said that in general the map was agreeable but certain parts of it were unacceptable, that might open doors for other areas".—[Official Report, European Committee, 19 October 1999; c 206.]

At that time, the minister was encouraging members to involve themselves in a process, but I hear a different message today.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

I would be grateful if those who take the record of debates in this chamber would ensure that Mr Crawford receives a copy of my answers to the two interventions that I have taken. If he reads them carefully, he will see that, in both, I have made it absolutely clear that the statement that I gave to the European Committee still stands—if the Commission questions the areas that have already been submitted, representations made in the meantime will be taken on board by me and by the UK Government.

It is important that I clarify that none of the areas in Scotland that previously received European funding will receive no funding in the years to come. All those areas that are not—or that will not be—on the new map are eligible for transition funding. Our job, as an Administration, as an Executive and as a Parliament, is to ensure that the transition funding is used to maximum effect. It is vital that we concentrate on that, not only today but in the weeks ahead. I make it clear to the plan teams that that should also be the case for them.

Unfortunately the stipulation for a cluster of substantial areas means that not all needy wards in Scotland can be included. We will now be involved in the UK negotiations with the Commission and trust that the proposals will be found to be generally acceptable. There is no formal appeal process for areas that do not achieve objective 2 status, although—and I repeat this for the fourth time—I will take careful note of any representations that areas wish to make.

Nevertheless, those areas that do not receive full coverage will be eligible for substantial transition funding. In future, that funding should be targeted on the highest priorities—those that will make the biggest impact when the plan teams for each area make their recommendations. I shall be looking for that; I am writing to the teams to highlight that objective as well as our other priorities. I make it clear to the Parliament that draft plans will not be accepted unless they meet those aims.

The need to ensure that European resources are used as effectively and efficiently as possible is just as important as support for our policy objectives. The partnerships have worked well to deliver structural funds and to ensure that the policy is developed in an integrated manner to complement our national and local objectives. New pressures on funding and the establishment of the Scottish Parliament and the Scottish Executive create an extra spur to take this policy integration one step further.

There are parts of Scotland that are not on the proposed map but would receive transition funding—for example, Keith, Dudhope in Dundee, Craigmillar, the Raploch in Stirling, Girvan in Ayrshire or Barrhead in East Renfrewshire. Various methods of funding support—through the Scottish Executive, local authorities and other public agencies—should be targeted to ensure that those areas do not lose out in the longer term as a result of the new map. Rather, they should be supported by the added value of transition funding and be able to benefit from that.

I am particularly keen that the basic principles of good value and financial propriety on which we insist in our domestic programmes are applied equally vigorously in European programmes. I know that the new European Commission attaches particular importance to the financial propriety of its new programmes and I confirm that the Scottish Executive will give it all the support that it requires to that end. I am keen for extra effort to be made in the new programme round to streamline the administrative arrangements for implementing the programmes. I have already announced that I would like to see smaller, more strategic monitoring committees for each programme. Those committees should focus on monitoring the quality and impact of the programmes and leave the detail to project selection subordinate bodies. For the first time in Scotland, I will include on those committees elected members representing local authorities and more representatives of the economic and social partners.

Photo of Dr Winnie Ewing Dr Winnie Ewing Scottish National Party

Will the Minister give an assurance that each of the Highlands and Islands regions will be represented on the monitoring committee? I am receiving worried letters from chief executives on the matter.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

I am keen for smaller bodies that are responsible for the quality of the programmes and strategy to be represented but I also want broad-based representative bodies to be involved in the implementation, in the Highlands and Islands and elsewhere. That broad-based representation would be most appropriate in the implementation bodies. It will be important to ensure that the smaller monitoring committees or boards have a wider representative role; for that purpose, it would be wrong to say that every local authority in Scotland would be represented. I am certain that the Convention of Scottish Local Authorities and the individual authorities will welcome the presence of elected representatives on the new bodies.

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

Minister, you are now into injury time. I am happy to allow it because of the number of interventions that you have taken, but it is now time to wind up.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

I was keen to take the interventions because of the subject.

I will shortly be seeking nominations for the five new committees, which are to be in place by the new year. There will also be a review of the operation of the programme management executives and the way in which they relate to the Scottish Executive, to ensure that the good lessons from the way in which those bodies have operated in the past can be applied to make the administration of the new programmes as efficient as possible. Details of the review team will be announced next week.

Scotland has had a good deal from European Union structural funds and has been a model for their implementation. In the new circumstances, we, as an Executive and as a Parliament, have a role in getting a fair deal for Scotland and in implementing it in line with our other priorities. We must ensure that national strategy is linked with local decisions and that in taking action we make maximum use of the added value of the structural funds. We want to fulfil our priorities and create new life opportunities across Scotland. We want to plan for a future where such funds may not exist. We want to stop falsely moaning about the past.

European funds are one of our responsibilities, as is Scotland's profile in Europe, which we started to develop very successfully earlier this month, during Scotland week. Much more needs to be done. Through our use of the structural funds, and in other ways, we can exploit our unique position as a devolved legislature within the UK and the European Union. We can also make a contribution to European Union development and to the development of other regions and nations. I hope that we will take up that opportunity.

I move,

That the Parliament welcomes the intention of the Executive, in preparing for the new round of European Structural Funds Programmes in consultation with local and national partners throughout Scotland, to ensure that the new plans for Scotland complement the policy priorities in the Programme for Government.

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

Because of the ministerial statement at 12 pm the debate is shorter than scheduled so there is no prospect of being able to call everybody on the list. I will therefore move to the bottom of the list those who were not present at the start of the debate.

Photo of Bruce Crawford Bruce Crawford Scottish National Party 9:54 am, 28th October 1999

Last year, when the European Commission announced proposals for widespread reform of the EU structural funds, it was generally accepted that the structural fund regime needed to be improved in effectiveness and better target the poorest regions. In June, the Agenda 2000 financial package and the structural fund regulations for the period 2000 to 2006 were approved. Agenda 2000 is a series of reforms responding to challenges the European Union faces: the future enlargement of the union to include countries with a total of around 105 million inhabitants where the average income is barely a third of the average in the 15 current member states; and the increased competition as a result of globalisation of the economy that makes it necessary to help disadvantaged regions and the most vulnerable groups in the labour market to benefit from new development opportunities. It will also bring the budgetary rigour required to ensure successful implementation of economic and monetary union. In this context, the objectives and resources of the structural funds for the most disadvantaged regions and social groups had to be redefined. That background creates a necessary context for the outcomes for Scotland.

The UK and Scotland settlement contains a number of paradoxes that should be subject to the rigour of debate, with the result made more transparent. It is time to strip away some of the veneer of new Labour spin and look at cold facts. The first paradox is that while we are told that the UK has secured a good deal, the funds for Scotland and the geographical coverage are reducing. On the so-called special deal secured at Berlin for the Highlands and Islands, the Minister for Finance boldly told the European Committee:

"The success of the UK delegation in Berlin, led by the Prime Minister, in achieving these resources for the Highlands and Islands cannot be underestimated."—[Official Report, European Committee, 19 October 1999; c 185.]

I say to the minister that overstating the ability of his Government to secure a special deal does nothing to add to properly informed debate. The reality is that the Highlands and Islands lost objective 1 status, whereas Merseyside retained it. To rub salt into the wound, while the Highlands and Islands lost out, Cornwall, West Wales and the Welsh valleys as well as South Yorkshire gained objective 1 status.

Photo of Hugh Henry Hugh Henry Labour

Does Mr Crawford recognise that one of the reasons that the Highlands and Islands lost out was its growing prosperity and that under the rules it would not have qualified for anything, so the UK Government negotiated an allocation despite the Highlands and Islands not meeting the criteria?

Photo of Bruce Crawford Bruce Crawford Scottish National Party

That is exactly the point, Mr Henry. I ask him about Finland and Sweden given their particular situation—[[MEMBERS: "Answer the question."] I will come to exactly what I mean by that in a minute. The reality is that between 1994 and 1999 the Highlands and Islands was allocated €311 million and over the next seven years that will drop to €300 million. That €300 million will have an immediate call on it of €45 million from the European agricultural guidance and guarantee fund.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

This is a point that needs to be pressed. Will Mr Crawford confirm that the Highlands and Islands is the only area in the European Union that did not meet the criteria but received a special package related to objective 1 status?

Photo of Bruce Crawford Bruce Crawford Scottish National Party

I will turn to the special package. I well recall the fanfare when it was announced. It had always been the European Commission's intention to support areas losing objective 1 status by a period of transition funding, as the minister knows. If the deal was special, why was the House of Commons library able to confirm in a letter to Alex Salmond on 23 March that the regions that were losing their current status would be eligible for transitional assistance? There was no special win. After that letter, I did a bit more digging and I am now clear that the level of spin and deceit being practised over the so-called special deal is staggering.

For evidence we need to look no further than the European Commission's own analysis of the reform of structural funds in 1999, which gives the European Commission's view of the Berlin council and an accurate picture of the Berlin decisions without the spin attached. Under the heading "Transitional support" it says:

"The regulation establishes a transitional assistance mechanism for regions eligible under Objective 1 in 1999 but which will no longer be eligible in 2000."

The next paragraph is about special programmes:

"In accordance with the decisions taken by the European Council in Berlin two special programmes will be financed within the framework of Objective 1" and names

"the PEACE programme, which supports the peace process in Northern Ireland" and a special assistance programme for Sweden. No mention is made of any special programme for the Highlands and Islands. Those are the European Commission's own words—a fact. Winnie Ewing will return to that issue.

In general, we are supportive of the move towards a ward-based approach for the targeting of objective 2 funding, but we are deeply disappointed that there has been a reduction of around 20 per cent in that funding, compared with the previous programme. There is widespread worry that the boundaries may have been drawn too tightly and, as a result, some obvious candidates for inclusion may have been missed out. I hope that the minister notes that, with our reasonable amendment, we are being constructive in seeking to help the areas across Scotland that rightly feel hard done by.

Additionality is a concept that has always bothered the Labour party. Who could forget the difficulties that poor old Bob Gillespie got himself into during the Govan by-election, when the concept of additionality was raised with him? There is a paradox in the Government's position that requires to be exposed through deeper understanding and greater transparency.

Let us examine a couple of the European Commission's definitions of additionality and contrast them with the Executive's stated position. First, the Commission's description of the main operating principles of structural policies:

"Action taken by the Union must be in addition to and never replace resources already deployed by national and local authorities for regional development and job creation".

Secondly, and perhaps more authoritatively, a statement on 21 June from the council regulations laid down the general provisions for structural funds:

"In order to achieve a genuine economic impact, the appropriations of the Funds may not replace public or other equivalent structural expenditure by the Member State."

Those statements are clear and unambiguous in comparison to the Executive's stated position. For examples of that, we need look no further than the First Minister. On 7 October in this chamber I asked him to confirm that

"structural funds are non-additional to Scotland's overall bottom-line position."

He replied:

"That is broadly correct. Budget provision is made for European structural funds within the Scottish assigned budget each year."—[Official Report, 7 October 1999; Vol 2, c 1174.]

In The Herald the following day, the First Minister's spokesman further explained the Government's position:

"If money from Europe goes up then the money we get from the Treasury would go down because we can't go above what we are entitled to under the Barnett formula."

Those are clear explanations. The Minister for Finance confirmed the Executive's position at the European Committee meeting on 19 October:

"As less money is spent from European structural funds, surpluses will be freed up to be used for other purposes."—[Official Report, European Committee, 19 October 1999; c 197.]

The fact that true additionality—or even added value—is not being achieved was further exposed by the Minister for Finance's private secretary in a note dated 17 September, which contains an illuminating statement:

"If payments of the Structural Fund grant increases or decreases from one year to the next, the resources available for other purposes change correspondingly".

In simple terms, if the amount of money that Scotland gets from Europe goes up, the same amount is clawed back from the Treasury block grant. The Government's position is laid Blair—that is quite a good word to have used. [Laughter.] The Government's position is laid bare, and the conclusion is unavoidable. The case is proved that the Government is not treating structural spending as additional to normal public expenditure commitments.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

Mr Crawford did not want to answer my first question, so I will ask a different one. Will he confirm that as a result of the new package of structural funds across the European Union, and the changing economic circumstances of all the nations in the EU, the amount of money that Scotland receives will go down over the coming seven years, and that that means there will be more money in the Scottish budget, not less? He is painting a distortion of the true picture.

Photo of Bruce Crawford Bruce Crawford Scottish National Party

If there was ever a distortion, that is it. The First Minister said clearly that if the money that the Executive gets from Europe goes up, the money from the Treasury goes down. The effect has been to deny Scotland approximately £730 million since 1993—the equivalent of £150 for every man, woman and child. Since 1993, Scotland has been cheated out of £730 million of public expenditure that should have found its way into the Scottish economy.

Like the minister, I am glad that the Commission is taking a more serious interest in the issue of additionality, has introduced more robust regulation and has put in place more stringent monitoring and auditing trails. That will mean that the malpractices that were introduced by the Tories cannot be continued under new Labour, and will be exposed at European level if they do. At last, Scotland can hope to get its full block grant. We cannot leave this matter to Europe: we need to sort out this mess here, and we will be asking the Finance Committee and the European Committee to carry out a joint inquiry into this scandal, to ensure that the Government properly is held to account for its actions.

This matter shows that Scotland is merely a regional appendage. It proves that Scotland would fare much better as a full, independent member state of the European Union. It is time for the Executive to stop its misleading spinning. It is not fair on the people of the Highlands and Islands. It leads to a lack of transparency, mistrust and bad government. As for additionality, it is one of the scandals of the past quarter of a century. The Executive must stop using methods of Tory malpractice, but if it insists, this Parliament should be prepared to drag it kicking and screaming through the committee process. Scotland needs this scandal to be sorted out now, once and for all.

I move amendment S1M-230.2, to leave out from "welcomes" to end and insert,

"expresses its concern over the unsatisfactory consultation process with regard to the European Structural Funds Programme for the Highlands and Islands, and asks the Scottish Executive to review the wards eligible under the Objective 2 Programme using the latest information and giving attention to the need to address and remove a number of anomalies."

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

I am grateful to Mr Crawford for moving his amendment in less than the time allotted to him. I encourage David Davidson to be equally brief.

Photo of David Davidson David Davidson Conservative 10:06 am, 28th October 1999

I always pay attention to what you have to say, Sir David. You will not be surprised that I do not totally agree with the minister's motion, which suggests that we endorse without question the policy priorities of the Executive. However, I acknowledge the hard work that has been done by the many local and national agencies in preparing for the submissions to the Commission. I am aware of the tremendous efforts of Scotland's local authorities in conducting the mapping exercise. In particular, I am grateful to Aberdeen City Council and Aberdeenshire Council for the help that they have given me in trying to understand the mapping exercise. It not only assisted me in understanding the process, but it helped me to appreciate how much effort was put in by so many different organisations in Scotland—not all of which were part of the Executive—which helped to put the package for Scotland into the UK proposals.

I appreciate that there will be disappointment in the many areas that will no longer receive the previous levels of support, but that is a reflection of the fact that some regions have improved in comparative terms. Surely that is a positive thing. I note the minister's comment that nobody wants to have to have objective 1 status. We must move forward with some positive views as to how the Executive and this Parliament can play a role in the process.

The SNP has agreed to the fairness of the principle that funds are focused on the areas of greatest need. There will always be winners and losers. The current process must be used to advance our thinking on how to refine further the targeting of the funds by recognising that so-called affluent wards contain strategic activities that have been excluded this time. I ask the Executive to institute a review early in the new year of how that and other anomalies can be tackled in future. If the minister is prepared to take on board that point while the current round is on-going, the Conservative party will be supportive and will participate in a positive manner. I will leave one of my colleagues to address other points on the issue.

It cannot be stressed enough that structural fund expenditure is expected to complement national policies and actions: it is not there to replace resources that should be allocated by the Government. On that issue I have some sympathy with Mr Crawford, but there is a difference between complementing and his version of additionality. He seems to forget that additionality applies to the UK, and that what we do internally in the UK has, in the past, been a successful way of ensuring that Scotland received a fair share of the contributions from Europe. I trust that we shall never see the day when honest Jack tries to pass off some of those resources as new money, or Executive spending. In the spirit of new politics, in this Parliament we expect the Executive to clearly label such moneys correctly as and when they are utilised.

Where access to the funds depends on matched funding, the Executive and its agencies must play their part in ensuring that the potential benefits are maximised. Many of the funds are dependent on other moneys being linked to them. It is a key responsibility of the Executive to ensure that no opportunity is missed. As far as the Conservatives are concerned, if that involves private as well as public money, that is fine—as long as it is conducted correctly. I do not think that Andrew and his colleagues have much sympathy with that. I will stop at this point, if Andrew has something to add.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

I am grateful for the consummate politeness of Mr Davidson. He hits the nail on the head when he talks about additionality being at UK level. The point is that Scotland's allocation is much in excess of our population share but, as the quotes that we have used show, we get only our population share. Therefore, we lose out considerably because additionality applies only at a state level and we are not a state.

Photo of David Davidson David Davidson Conservative

I will perhaps return to answer that question later in my speech because I have some comments to make about that issue.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

I know that SNP members have difficulty understanding some of the finances of the Executive in this Parliament. Perhaps Mr Davidson could confirm to the Parliament, so that it does not have to come from my mouth, how the Barnett formula operates and how Scotland receives increases or decreases in our allocations.

Photo of David Davidson David Davidson Conservative

I am always happy to help the Minister for Finance to do his job correctly. If he will have patience, I will come on to that. I will not just pick up bits and pieces, but try to get a clear thrust across, as the Presiding Officer is anxious that none of us wastes the Parliament's time.

I ask the minister for a categorical assurance that the committees of the Parliament will be fully and regularly briefed on the roll-out of those programmes, so that they can scrutinise the part played by all the partners in those programmes. We must pay more attention here than is paid in Westminster to the way that Parliament is involved and the way that information flows through to us, so that we can constructively co-operate on behalf of the people of Scotland rather than wait to pick up comments made outwith Parliament, which is often what happens down south. The minister suggested earlier that he would keep us briefed. I will continue to remind him of that promise.

This point is especially important as enlargement of the European Union will inevitably lead to a continuing reduction in funding for the UK from those funds, assuming that we continue to make the progress that we made during the Conservative years in government, which we hope will be continued. We must accept the message that Scotland has been given notice and a breathing space to prepare for the day when regional funds will no longer be an external panacea for inactivity or failure on the part of any future Scottish Administration or its agencies.

Over its first term, this Parliament must take responsibility for preparing for the day when the UK will be better placed than many of its European neighbours and will no longer qualify for current levels of support. We must focus better on building the infrastructure for the future and must use this window of opportunity to use the next few years, especially as we have transition funding, to ensure that we put down a rock on which we can build stability and sustainability for the Scottish economy of the future.

We have contributed a lot of money to Europe over the past few years. We are net contributors of about £3 billion, and that is part of a package that we have been party to for a long time. The previous Conservative Administration was fully signed up to enlargement, as is the current Blair Administration. We may have differences over the amount of involvement that Europe has in our internal affairs but we accept that Scotland has had a reasonable settlement in the past—and I use the word reasonable—with regard to those funds. We can argue over delivery and detail, but the UK has received more than £10 billion over the last five years. Under five out of the previous six objectives, the UK, and especially Scotland, has done well in the amount of support it has received. Sensitive and focused use of the funds, coupled with our positive management of the UK economy, has left Great Britain in a stronger position than many of our European neighbours. I pay credit to the Minister for Finance for recognising the golden legacy that we passed on to him.

Photo of David Davidson David Davidson Conservative

Be brief, Mr Rumbles, as time is pressing.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

On the previous two occasions on which I have intervened, Mr Davidson has suffered from terrible amnesia about the effect of the previous Conservative Government on farming. He now seems to be taking all the credit on this issue. Does Mr Davidson always want to refer to the past record of the Conservative Government?

Photo of David Davidson David Davidson Conservative

I am grateful that Mr Rumbles is concerned about my health, sleeping patterns and forgetfulness. If he wants to take that argument further, I suggest that he lodges a motion so that we can debate it properly, rather than have Liberal Democrat members, who do not seem to offer anything positive in this Parliament, indulging in constant back-stabbing.

Photo of Keith Raffan Keith Raffan Liberal Democrat

We are not stabbing you in the back, but in the front. Your front is so exposed.

Photo of David Davidson David Davidson Conservative

I heard that, Mr Raffan.

That is not to say that the Commission might not do much better and become more productive and cost-effective. If we could achieve that through our MEPs, we would have even more funds for disbursal in this country.

It is the Executive's duty to be a strong advocate for Scotland in any UK discussions prior to bids being made to Europe. This Parliament has a strategic role in focusing on, and arguing for, the needs of Scottish regions. I am delighted that, under the new objective 2, the rural areas and fisheries-dependent areas of Scotland have been recognised as needing support at a difficult time. The rural economy is under great pressure, not least from the fuel taxation policies of the Labour Government and its apparent lack of enthusiasm for tackling rural economy issues. The rural economy requires a more constructive and sensitive approach than we have experienced thus far.

The new support measures for those areas, many of which are currently without such support, will be even more meaningful when the implications of the implementation of the European waste water directive put our fish processors, the food industry and our agricultural markets under even greater pressure. Scotland is also on the brink, and we have the evidence in Parliament, of an accelerating industrial decline, especially in the traditional manufacturing sectors that employ older technology. We must apply more focused development funding in those sectors. If there is an opportunity for refocusing within the current process, through the teams that the minister has mentioned, that should be one of the prime areas for their operation.

The Borders, Clackmannanshire and Glasgow have been recognised. I will not list the communities, but again emphasise that unless there is matched funding, those areas will not receive the full potential of the offered support. I remind the Parliament that the Conservatives managed to obtain a 20 per cent share of the UK structural fund allocation for Scotland between 1979 and 1998, hardly based on a population split, as SNP colleagues might suggest. Judged in terms of the European population, that is a creditable benefit to Scotland and a clear challenge for the Executive to take up, as the 1999 outturn figures indicate a drop to 15.2 per cent. Objective 1 funding will use up a major part of the total funding for the objectives. My party appreciates and welcomes the transitional extension of this support.

In Inverness last week, at the Enterprise and Lifelong Learning Committee, we heard from some of the agencies up there that the £300 million European relief for the Highlands and Islands spread over the next few years will give local agencies the opportunity to develop new funding streams. That is a positive and welcome approach from those agencies. Other areas in a similar position should consider how best they can refocus to cope with a new, more streamlined future. We should consider the reduction as recognition that, over the past 20 years, Scotland has improved in comparison with the EU, thus affording an opportunity to reconsider our strategy for the future.

Unlike the SNP, we believe that Scotland should not be run as an old-style collective, dependent on public funding and subsidy. It is not good enough for the separatists to moan and groan about bad deals and blame Westminster for everything. It would be refreshing to hear just what the SNP would do if it dragged Scotland out of the UK, which has muscle in Europe, into a new existence as a peripheral, offshore new entrant to the EU at the back of a lengthening queue of applicants. Independence in Europe, which was bandied about during the elections, is a joke. In the SNP's terms, we are either independent or we are in Europe.

Photo of David Davidson David Davidson Conservative

If we were to follow the SNP's line, we would miss out on the opportunity to co-operate with the rest of the UK, which has the ability to negotiate reasonably—I use the word reasonably, because it is a negotiation—in Europe.

Photo of David Davidson David Davidson Conservative

The UK has the collective clout to argue a strong case in Europe—[MEMBERS: "Give way."] I am sorry, I did not see Bruce asking to intervene.

Photo of Bruce Crawford Bruce Crawford Scottish National Party

It is very difficult to get riled up about this man, as he is so polite. [Laughter.] However, he will not disarm me that easily.

I am interested in some of the statements that we have just heard about our position on Europe, and that of the Conservatives. I want to find out from the member where he is coming from on this issue. At the moment, there seem to be four different camps in the Conservative party with regard to Europe. We have Heseltine and Clarke, who want to be part of the euro and do not want to renegotiate—

Photo of Bruce Crawford Bruce Crawford Scottish National Party

Will the member tell us to which arm of the Conservative party he belongs?

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

Interventions must be brief, and Mr Davidson is now coming into injury time.

Photo of David Davidson David Davidson Conservative

It strikes me as typical of the left-leaning collection of members from the SNP to want to label everything. The Conservative party in Scotland wants Scotland to be a strong member of an even stronger United Kingdom that is capable of doing its best in the world, which includes Europe. We are part of Europe, we have contributed to Europe and we will continue to do so. Unlike the SNP, we may not welcome too much intervention in our internal affairs, because we think that decentralisation tends to make for better decision making. We would rather that the UK took upon itself some of the measures that come across to us from Europe. Perhaps Bruce Crawford will join me in saying that some of our civil servants tend to gold-plate regulations, and that ministers go along with it. Our party does not favour that. The member needs to think on a stage further. It is irrelevant to apply labels to us from down south. We are in a different situation.

Photo of Bruce Crawford Bruce Crawford Scottish National Party

So the Scottish Conservatives are no longer part of the UK?

Photo of David Davidson David Davidson Conservative

I will take the member's word for that.

Photo of David Davidson David Davidson Conservative

The new objective 3 has some admirable aims, but the primary focus of these funds must be to regenerate employment across Scotland. Infrastructure spending is required from the funds, and not just in the central belt. Areas such as Aberdeen, with a perceived affluence that is based on oil, are missing out in this package. That is symptomatic of the fact that we need to get on with the ward-mapping exercise. The SNP has made that point, and I believe that the minister has taken it on board. We have something in common.

We must take a long, hard look at the threats to our economy and its stability, along with the opportunities that are on offer. This may not be a perfect solution, but I think that we have done reasonably well over the years. As this programme moves forward, we must look to the next six or seven years. We must take action now to ensure that the use of these funds produces the outcomes that not only the people of Scotland expect, but Europe expects.

Photo of Keith Raffan Keith Raffan Liberal Democrat

On a point of order. Is there a time limit on front-bench speeches today?

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

Yes. I have already told Mr Davidson to wind up. However, he has taken interventions.

Photo of David Davidson David Davidson Conservative

That is very kind of you, Sir David. I will wind up—I thought that I had started doing so before Mr Raffan interrupted.

Photo of Keith Raffan Keith Raffan Liberal Democrat

If he made some sense, it would be worth it.

Photo of David Davidson David Davidson Conservative

I look forward with great pleasure to seeing what positive contribution and how much of their own thinking, rather than mere rubber-stamping of their colleagues' position, the Liberal Democrats will bring to today's debate. Presiding Officer, there are other members who wish to speak, so I will happily sit down.

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

I repeat that there is no prospect of calling all members who wish to speak, so the occupants of the chair this morning will be keeping speakers strictly to a four-minute time limit.

Photo of Tavish Scott Tavish Scott Liberal Democrat 10:24 am, 28th October 1999

I thought that Mr Davidson illustrated rather well the difficulties that the Conservatives have on Europe, although his speech was rather long.

In his opening remarks, Mr Crawford introduced an important context—that of the wider and enlarging Europe. We need to take that into account, particularly with regard to what may happen a number of years down the line. However, this is a devolutionary settlement, not an independence settlement. We need to be positive about what we can achieve with European funds in that context, rather than in a context that does not and will not exist.

Mr Crawford did not speak much to his amendment and, in particular, to the point about unsatisfactory consultation. I have done some research and tried to consult organisations, particularly in the Highlands and Islands, which have concerns of which I want to be aware. The consultation has been very full: it has involved partners and the plan team, which includes local enterprise companies and local authorities. In general, I do not recognise the problem that is described in this amendment.

Clearly, different sectors want more. That will always be the case. However, Bruce Crawford was present at the meeting of the European Committee last week at which the minister asked the committee to identify areas where it wanted there to be more investment; in other words, to make a pitch for increased funding where the committee considered that important. David Mundell raised agricultural diversification, Winnie Ewing raised fisheries and Allan Wilson made the case for more transport infrastructure. In other words, members had an opportunity to put their case.

Photo of Bruce Crawford Bruce Crawford Scottish National Party

Tavish will be aware that questions were put to the minister by the European Committee about discrepancies in the consultation process in the Highlands and Islands. Concern was also raised about the consultation that had taken place with the committee itself with regard to the Highlands and Islands document, and about the fact that the committee was receiving documents so late.

Photo of Tavish Scott Tavish Scott Liberal Democrat

If Bruce Crawford had made that point in his speech, it might be a fair comment, but he did not say anything about that. I thought that members were supposed to speak to their amendments.

I take the point about the European Committee, but what is important is how the plan team put its proposals together, how it introduced its ideas and how it came up with what it considered to be the best use of the moneys that were available.

Having been given some information about the benefits of the devolution settlement in the context of European funding, it seems to me that we need to be aware of the wider context. I understand that, earlier this autumn, Stephen Boyle of the Royal Bank of Scotland gave evidence to the Finance Committee. He said that

"Identifiable spending per capita in Scotland was 19% higher than the UK average" and that

"Per capita spending in Scotland" was

"higher in all programmes than in UK".

He also said that what he called the "Scottish 'premium'" was

"greatest in agriculture, housing, environmental services & 'economic development'".

Those statements were illustrated in a table. Current spending on structural funds amounts to some £150 million per year—1 per cent of the assigned budget. In that context, surely structural funds complement national and local social and economic development programmes.

The other issue that I would ask Mr Crawford to consider is the additionality point. If the additionality point is so much at odds with what these plans are doing and with the submission that the Executive is making, the Commission will say that and find difficulties with the plans. However, that has not been the experience in the past. We will see the proof of the pudding in what happens when the plans are put forward.

I was never happy about arguing that the Highlands and Islands was a desperately poor area. To rabbit on about that demeans the work that many local authorities and local enterprise companies did when seeking the son of objective 1 funding—the transitional support. Sparsity of population was the key to that. We should pay credit to the work that those people did rather than pour scorn on their efforts.

I believe that more money from the Highlands and Islands programme could be allocated to fisheries. Because the programme is shorter, we need more time. The moneys will be cut unless we can increase the allocation.

I want to finish by reiterating Mr Davidson's point about the role of the European Committee. Like the other committees of the Parliament, the European Committee has a role in monitoring and putting in place mechanisms to ensure that these programmes achieve their objectives.

Photo of Allan Wilson Allan Wilson Labour 10:29 am, 28th October 1999

I rise to support the motion and to deal with some of the points that the amendment raises and to which Bruce Crawford did not refer. I commend the settlement, which sets out the total structural funds that are likely to apply to Scotland.

A little over a year ago, the West of Scotland European Consortium and North Ayrshire Council were predicting a substantial reduction in European funding that would seriously curtail their activities. Fortunately, that situation has not arisen, due to the favourable settlement that was arrived at after negotiation between the various parties.

It is right that the motion looks to the future. It is also right that it expresses an intent, in preparing for the new round of structural funds programmes in consultation with local and national partners throughout Scotland, to ensure that the new plans for Scotland complement the policy priorities in the programme for government.

That new round must target areas of need and prioritise targets in those areas. In my constituency, the islands of Arran—with which I know the minister will be familiar—and Cumbrae qualify for objective 1 funding.

I take the opportunity that today's debate affords to comment on the consultation process in the Highlands and Islands. I welcome the political involvement in the programme's implementation and recommend that local authorities be fully represented. The political involvement redresses the democratic deficit and enables local authorities to provide substantial match funding for the programmes.

I support the continuation of the partnership executive as the implementing mechanism for the programme. The principle of partnership is fundamental to the success of the programme, as is a strong role for local area groups in the development of projects.

The programme executive in the Highlands should become a company limited by guarantee, as has happened in other programme areas. I also recommend the decentralisation of programme implementation from national and regional centres. That will help to achieve internal cohesion in the Highlands and Islands and will allow more equal access to information and resources. I further recommend a greater simplification and transparency of the programme application process, with a two-tier application process—in principle and detailed—and clear information to applicants on reasons for project refusal.

How do we manage the transition period between the 1997 to 1999 programmes and the 2000 to 2006 programmes? Failure to do so properly will cause problems of cash flow for organisations involved in the implementation of the programmes.

There are slightly different problems in different objective areas, but the prolongation until 30 June 2000 that was agreed with the Scottish Executive, though welcome, might not go far enough. If we do not work out a plan and tell people about it, organisations that recruit on a continuous basis will face huge problems and might have to reduce capacity. Training programmes cannot be treated like water from a tap—something to be turned on and off.

A solution would be to treat 2000 as a one-off year zero and guarantee to underwrite the risk for existing capacity, making longer-term decisions for the 2000 to 2006 period. There is a precedent in section 10. The costs would be small, since much will be funded and only six or eight months' extra funding would be needed, because of the prolongation. That would keep options about the future of the programme open for much longer.

Photo of Dr Winnie Ewing Dr Winnie Ewing Scottish National Party 10:33 am, 28th October 1999

Presiding Officer, fellow members of this distinguished Parliament, I was disappointed not to be invited to the opening of Scotland House in Brussels, although, when he met me in the street, Mr McConnell apologised for having overlooked me. It is strange that I was overlooked, as I am the only member of the Scottish Parliament to have been a member of the European Parliament and I was one for 24 years.

I admired the speech that Donald Dewar made at the opening. He said that Scotland must fight its corner as a country with a stake in Europe's future. Scotland House is a positive mechanism with which to draw the attention of the European Union to the nature of this ancient part of Europe. However, the SNP sees Scotland House more as a pocket battleship than as a flagship. It is a part of a good procedure. Calum Macdonald and Henry McLeish went to Europe and got all sorts of information from many regions. I co-operated fully with that process.

Some would argue that Scotland benefits from having the UK to act as our big brother in negotiations in Europe, but I do not agree. We are one of the only states that turns down European money. We did not apply for poverty money or post-chunnel money. The European Commission explained that to me in the Parliament. We are in the most incredible situation of hailing as a great victory the loss of objective 1 status for the Highlands and Islands when it is quite clearly a terrible defeat.

Photo of Dr Winnie Ewing Dr Winnie Ewing Scottish National Party

Not until I have finished my argument.

The Highlands and Islands had objective 1 status because of its uniqueness. We have 90 inhabited islands, a figure with which only Greece can compete. Our gross domestic product was 76 per cent of the European Union average—1 per cent off the figure that is required to qualify for objective 1 status.

In the Highland Convention's debates, every regional council and local enterprise company in the area argued brilliantly the case for retaining objective 1 status. There is no satisfaction among those bodies that it was not retained. We were unique in that we were only 1 per cent off. No other applicant was in that situation. The representatives of the Scottish Office who attended the Highland Convention thought that we might retain the status if the European Commission used its powers of flexibility.

We were reasonably optimistic, as such a move would not open the floodgates—the GDPs of Sweden and Finland were more than 80 per cent of the European average. They did not use the peripherality argument but relied on the special deal that they had struck as new member states. We tried to argue our case along with Sweden and Finland and I think that it would have been to their advantage to have the peripherality criteria established: as we pointed out, when they lose objective 1 status, they will get only transitional money. When our transitional money runs out, that is the end of all assistance.

I do not apologise for arguing that we should be entitled to assistance. We had a debate in this Parliament about the Mallaig road. Many members could talk about terrible roads of which they are aware, as well as other massive infrastructure problems.

When Mr McLeish spoke to the European Parliament's Committee on Legal Affairs and the Internal Market, which came to Edinburgh, he said that, during negotiations in which the Scottish interest dominated—such as those to do with fisheries—the Scottish minister would have the lead negotiating position. I am interested to hear how John Home Robertson's meeting with the Fisheries Council went. I was appalled to hear that although Scotland's legal system is distinct from that of England, we were not invited to the Tampere justice meeting. It does not look as though big brother is very good at negotiating on our behalf.

The Tories tell us that they did well in negotiations with Europe, but Mrs Thatcher's Government did not even ask for the Highlands and Islands to be included in objective 1—that is a matter of public record—even though the European Commission was in favour of the area's being included. She did not want to match the funds that would become available. The Tories did not do well.

Photo of Sylvia Jackson Sylvia Jackson Labour 10:39 am, 28th October 1999

I will speak about Stirling, but will try to draw general points, which I have made in the European Committee, from the specific case.

Following the publication of the Scottish Executive's recommendations for objective 2 coverage, the local newspaper in Stirling spoke of the bad news. It said that Stirling Council was still reeling from the blow of losing much of its assistance and reiterated that the deprived areas of Raploch, Corton and Culsenhove have all missed out.

The three most disadvantaged wards in Stirling—Gowanhill, Ballangeich and Borestone—have unemployment figures of 14.7 per cent, 12.1 per cent and 11.2 per cent, respectively, yet they are all excluded from objective 2 funding.

It is even more disturbing that wards in a neighbouring council area, with unemployment figures of only 2.2 per cent and 2.6 per cent, have qualified for objective 2 funding. Stirling's neediest area, Castleview, which includes the Ballengeich and Gowanhill wards, is recognised as being among the worst 5 per cent of deprived areas in Scotland. It includes parts that fall within the worst 1 per cent, yet it has been excluded.

At the meeting of the European Committee on 19 October, the Minister for Finance, Mr Jack McConnell, explained that a ward group approach had been used in drawing up the objective 2 map. That approach has obviously worked against the most needy wards in Stirling. The same is true of Edinburgh, Dundee and parts of the Falkirk Council area. Of the 101 wards in the worst 10 per cent in Scotland in terms of unemployment, 16 have been excluded from objective 2 funding. Six of those 16 are within the worst 5 per cent in Scotland in terms of unemployment. Together, the 16 wards cover 62,000 people.

That is not all. There are communities in Stirling that qualify for assisted area status because they have been recognised as areas of extreme urban deprivation, but they are excluded from objective 2 funding. Where is the joined-up thinking there? Furthermore, those disadvantaged wards in Stirling are attempting to recover from years of unemployment and decline and have relied on current and past programmes using objective 2 funding, which has allowed the development of social inclusion projects essential to the regeneration programme. Local initiatives have worked well, using an integrated strategy throughout Stirling but focusing on areas of greatest need. Limited access to those funds via transitional funding will have a serious impact on the success of urban regeneration projects.

My message is simple: it is imperative that the Scottish Executive looks at devising a strategy to support—at the very least—the 16 disadvantaged wards to enable them to continue with the regeneration projects that are already on stream. I look for assurance from the Executive and—in particular—the Minister for Finance.

Photo of George Reid George Reid Scottish National Party

I ask members to keep their eye on the clock to ensure that their speeches last four minutes.

Photo of Dennis Canavan Dennis Canavan Independent 10:42 am, 28th October 1999

I shall begin on a positive note and welcome the inclusion of eight wards in my constituency in the Government's proposals for objective 2 status. I am particularly pleased about the inclusion of Bonnybridge, as I protested strongly to the First Minister and the Secretary of State for Scotland about its exclusion from the assisted areas map. The fact that Bonnybridge is now included in the objective 2 map reinforces the case for its inclusion in the assisted areas map.

However, I would like to present a broader view of the situation in the Falkirk Council area, compared with Scotland as a whole. According to the Government, 40 per cent of the Scottish population will be covered by eligibility for objective 2 assistance. In the Falkirk Council area, less than 25 per cent of the population will be covered, despite the fact that unemployment—particularly youth unemployment—is higher than the Scottish average. There must be 800 or 900 wards in Scotland, yet the Dawson ward in my constituency, which has the 19th highest unemployment rate in the country, is excluded from the objective 2 list.

Unemployment is not the only indicator of social exclusion. If we take the proportion of people on income support, standardised mortality rates, crime rates and the number of people lacking educational or vocational qualifications as other indicators, there are several other wards in the Falkirk Council area that have a high rate of social exclusion. I mention the Victoria, Ladysmill and Dunipace areas in my constituency; Cathy Peattie could cite the former mining area of Bo'ness in hers.

I do not understand why those areas have been excluded. There seems to be no logical explanation. In his statement earlier this month, the Minister for Finance, Mr Jack McConnell, said:

"I am confident that the" objective 2 proposals

"focus on areas of real need in Scotland."

I do not share the minister's confidence, because some areas of very real need have been excluded. I believe that the Government has reached decisions using information that is not up to date. Over the past year, the Falkirk area has suffered the loss of well over 1,000 jobs, with closures or threatened closures at Wrangler, Baird Clothing and Russell Athletic, and redundancies at BP-Amoco.

Falkirk was the birthplace of the Scottish industrial revolution, but over the years there has been a massive decline in traditional industries, and a resultant loss of jobs, especially in manufacturing industry. The area and its people still have great potential, but it will never be completely fulfilled if areas of deprivation are excluded from objective 2 status. I appeal to the minister to think again—even at this late date—and try to ensure a fairer deal for people in the Falkirk area.

Photo of Cathy Peattie Cathy Peattie Labour 10:46 am, 28th October 1999

I agree with Sylvia Jackson and Dennis Canavan, and will almost repeat everything Dennis said. Falkirk has been on the objective 2 map, and much valuable work has taken place. The new map seems to exclude a range of services and things that are going on in Falkirk. The fact that coalfield areas are not included is worrying, considering that—as Dennis said—only last week we heard that more than 200 jobs are being lost at Russell Athletic. That is worrying for an area of Bo'ness where unemployment is more than 10 per cent.

In some areas of Falkirk, unemployment is 15.5 per cent. Many of Falkirk's social inclusion areas have not been included, in spite of very good practice in partnership working. Projects involving the local enterprise company, the voluntary sector and councils are delivering in social inclusion areas. They include the routes to employment project, which helps people who are long-term unemployed to get back to work. That can involve finding someone transport to a place of work. It can also involve finding them something to wear for an interview. For somebody who has been unemployed for more than a year, that can be quite difficult. The map fails to recognise some practical things that are happening at local level. I am concerned that a valuable partnership in Falkirk is being threatened.

As Dennis said, for a while there has been concern about the problem of unemployment in Falkirk East. BP-Amoco is downsizing by 400 jobs, but that could lead to another 2,000 job losses in the Grangemouth area. Russell Athletic is shedding more than 200 jobs, while last week we heard that Baird Clothing in Grangemouth is under threat, which would mean the loss of another 500 jobs.

The Minister for Finance's statement is little comfort to Falkirk East. Will he agree to meet Falkirk Council and other representatives of the area to discuss the issue as a matter of urgency?

Photo of David Mundell David Mundell Conservative 10:49 am, 28th October 1999

I welcome the opportunity to speak in today's debate. As a member of the European Committee, I have already had the opportunity to scrutinise the proposals. It has been useful for us that Mr McConnell has twice attended committee meetings for detailed questioning.

Much has been said about how closely the Executive has worked with Westminster, the Secretary of State for Scotland and other ministers, but I put on record that I was disappointed that the Secretary of State for Scotland, Dr Reid, did not respond positively to an invitation to meet the European Committee. There is no doubt that European funding issues take us into some of the greyest constitutional areas. It is important that the secretary of state works closely not only with the Executive but with the Parliament and its committees.

As other members have said, the matter is extremely complex—so complex that at last week's European Committee meeting, Bruce Crawford got Andrew Wilson in to ask a question on his behalf—Andrew then shuffled off. That seemed very unusual. Similarly, at a previous meeting, we had to question the Minister for Finance about his nuts, although fortunately it was NUTS 5, which he has decided upon as the determining methodology.

There are imperfections: we have heard much about the inconsistencies produced by ward boundaries, particularly in South Ayrshire, Dundee and Falkirk—about which Cathy Peattie made representations to the committee—and Stirling. I accept the minister's approach, which targets transitional aid at the wards in those areas, rather than tinkering with the process.

I am pleased that Mr Sheridan's rather divisive amendment has been withdrawn. It is most unhelpful to get into a discussion about whether one area has a greater claim than others—particularly in reference to the Borders, or Dumfries and Galloway. There has been a perception that, because those areas have great natural beauty and pockets of apparent prosperity, they do not have difficult economic circumstances, but Dumfries and Galloway has some of the worst unemployment statistics and levels of take-home pay in Scotland. Entrepreneurial activity has not reached its height in the area. I welcome funding for Dumfries and Galloway. It is necessary, not simply because the area is large—when coloured in, it takes up a greater part of the map.

The Minister for Finance has invited written questions on issues arising from today's debate. I will write to him about objective 3 funding. I have received some representations saying that it is difficult for smaller organisations in rural areas to make claims for relatively small sums under objective 3 funding. I hope that the minister will consider the matter.

Photo of Michael Matheson Michael Matheson Scottish National Party 10:53 am, 28th October 1999

I am very pleased to be part of a cross-party alliance, with Dennis Canavan and Cathy Peattie, that is addressing the issue of Falkirk. I hope that that will emphasise for the Minister for Finance the concern in the Falkirk area about the present proposals for objective 2 funding.

Objective 2 funding has served the area well in recent years. Cathy touched on several of the projects that have benefited from the funding, such as the routes to employment initiative, Falkirk Enterprise, the business parks and business development. It is important that we recognise that objective 2 funding has been an important building block in the regeneration of a community that was very dependent on traditional industries.

However, there should be no doubt that the Falkirk area has suffered major setbacks in the past year. As Dennis Canavan mentioned, over the past year there have been several closures and many redundancies in major industries in the local community. I want to take a moment to draw together some of the points made by Dennis and Cathy. The loss of 500 jobs at Wrangler has been followed by the loss of 160 jobs in support businesses in the local community. That was followed by the loss of 400 jobs at BP-Amoco in Grangemouth. It is estimated that a further 2,000 jobs will be lost in support services in the local community as a result of that downsizing. So far this year, almost 3,000 jobs have been lost—both directly and indirectly—in the area.

I recognise that objective 2 status has been awarded to the area where the Wrangler factory was based. However, the wards covered by the BP-Amoco refinery in Grangemouth have not been awarded objective 2 funding. I am conscious that the minister may say that such matters were considered when the objective 2 map was being drawn up. I would like to point out to the minister that things have moved on since then—matters have got worse.

Cathy Peattie and Dennis Canavan also mentioned the plans for closures at Baird Clothing and Russell Athletic, both of which are clothing manufacturers. About 560 jobs could be lost directly and it is estimated that another 180 indirect jobs may be lost. Almost 750 jobs may be lost in the area—in addition to the 3,000 that have already been lost this year. The areas where those losses will be felt the most, particularly Bo'ness and Grangemouth, do not have objective 2 status.

One of the Department of Trade and Industry's key principles in the award of objective 2 status is that an area has high unemployment. Unfortunately, that does not appear to have been applied in this case. I have particular concerns that several wards, including Dawson, Inchyra, Dunipace and Victoria, have the highest levels of unemployment in the district but do not have objective 2 status.

I must tell the Minister for Finance that now is not the time to abandon communities that are suffering severe job losses. It is time to help local communities rebuild and to ensure that they can address their current problems. I urge him to meet officials from Falkirk Council to consider the matter, bearing in mind the developments in the past year.

Photo of Hugh Henry Hugh Henry Labour 10:58 am, 28th October 1999

I am sorry that Dr Ewing did not feel able to take my intervention earlier; I would have asked her to confirm that when the original proposals for the Highlands and Islands were drawn up, it was recognised that the Highlands and Islands were not included in objective 1. The only reason the Highlands and Islands have been included in the financial assistance is the work carried out by the United Kingdom Government. Scotland's local authorities undertook part of the lobbying to influence the UK Government. Earlier, the positive role that the Convention of Scottish Local Authorities played was mentioned. It was because of the work carried out by COSLA that the United Kingdom Government came to recognise the case for the special deal that was done.

In general, the minister was right to say that this is a good deal for Scotland. He has described the coverage that the Scottish population has in comparison with the rest of Europe or the United Kingdom.

Photo of Hugh Henry Hugh Henry Labour

No, I am sorry. I will extend to Mr Neil the same courtesy that Dr Ewing extended to me—I will take his intervention after I have made my points.

The minister mentioned the significant gains that Scotland has made. One of the things we need to emphasise is that although we have benefited, which is a good outcome, reductions in European funding are based on success. The reductions are based on the fact that, relative to the rest of the UK economy, the Scottish economy is growing.

In the past, European funding was based on our relative backwardness compared with many other parts of Europe. We are gaining because the UK Government has argued a good deal for Scotland. We are also starting to gain from some of the benefits of European investment.

A number of noticeable improvements have been made in the current round. A new seven-year programme is replacing two three-year programmes, which will help many of the agencies involved. However, we must emphasise to all the partners involved that they need to prepare exit strategies for European funding: they cannot keep thinking that more of the same will come.

The vexed question of the maps has been raised. The advice from the European Commission was that maps should be grouped together. Again, we gained from the lobbying that was done in Scotland's local authorities that there should be maps based on wards. That has been built in, but certain clear anomalies have resulted.

Given that the European Commission has three months to agree the list, I hope that the Scottish Executive's actions will reflect what it said to the European Committee—that representations can be made to the Executive that will then be taken back to the Commission for it to consider. I hope that that will be done in a way that reflects the debate.

There were some serious concerns about the way in which negotiations and consultation were carried out, especially with regard to objective 1. We must address some of those concerns. The minister has already given some indication on that.

The thrust that we now have means that, for the first time, we have a serious opportunity to ensure that different funding streams from European Union sources and Scottish and UK sources are brought together. Where there are gaps caused by a reduction in European funding, I am convinced that the Scottish Executive will, in the years to come, step in with imaginative programmes, using the money that we gain as part of the Barnett formula.

Photo of George Reid George Reid Scottish National Party

Before I call Nora Radcliffe, I should remind members that the Presiding Officers, in determining today's order of speakers, will have regard to those members who were in the chamber for the opening statements by the minister and the Opposition.

Photo of Nora Radcliffe Nora Radcliffe Liberal Democrat 11:02 am, 28th October 1999

A good settlement has been won for Scotland, but all regions must be treated equally and objectively to achieve a fair distribution of the funding. It must be recognised that fragile rural economies that currently benefit from funding will require continued support. The proposed map for objective 2 assistance was greeted with dismay and disbelief in Keith and Strathisla and in west Gordon. Although those areas may benefit from transitional funding, the case for continued objective 2 funding is strong.

If we consider the criterion of sparse population, and take percentages of population outwith settlements of 10,000 people, the figure for the Highlands and Islands is 70.6 per cent and that for Moray is 77.2 per cent. Aberdeenshire has an even sparser population—84.7 per cent of its population is outwith settlements of 10,000.

The Borders is included because of low incomes. Gross domestic product per head in the Borders is £9,041; in Moray, £8,779; and in Aberdeenshire, £7,926. The economic output of Aberdeenshire and Moray on 1996 figures was below the Scottish average.

The north-east is often regarded as affluent because of oil. The oil bonanza, such as it was, was welcome, but it was centred largely on Aberdeen. The overall figures for the north-east mask pockets of real deprivation. Dependence on the oil and gas sector is likely to cause problems, as oil employment in the north-east is expected to fall by as much as 10,000 in the next 10 years, with an obvious and severe impact. That is already happening.

Photo of Margaret Ewing Margaret Ewing Scottish National Party

Obviously, Nora Radcliffe and I share a combined interest in Keith and Strathisla. It is no longer in my constituency, but lies within the Moray Council area. Considering the criteria, does she agree that, with its traditional industries of textiles and agriculture, the Keith and Strathisla area suffers a clear disadvantage? We have also lost the adjacency argument, because of the loss of objective 1 in the Highlands and Islands.

Photo of Nora Radcliffe Nora Radcliffe Liberal Democrat

I fully agree with what Margaret Ewing said. Keith is in an anomalous position—the poor town is on the periphery of my constituency and on the periphery of its local authority area. It often feels like the poor relation, and it does not deserve to.

The recent crisis in the agriculture sector, BSE and the strong pound have led to sharply falling prices and farm incomes, and a situation for many that could fairly be described as desperate. We should be increasing aid at such a time, not withdrawing it. There is a strong case for continuing European aid to existing objective 5b areas. Both Turriff and Huntly are integral parts of the rural hinterlands, and both need help to diversify and create economic opportunities that are currently lacking. Keith and Strathisla are equally deserving. As Margaret Ewing said, there have been cutbacks in the textile industry that have hit it hard. It is ridiculous that Keith and Strathisla are not included when the rest of Moray is.

There is a strong sense of injustice in Keith and Strathisla and rural Aberdeenshire. We hope that the minister will accept the strength of the arguments to adjust the map for assistance.

Photo of Ben Wallace Ben Wallace Conservative 11:06 am, 28th October 1999

Whether some people like to admit it or not, Scotland has become a more prosperous and better-off place in the past 20 years. I would add that 18 of those were under the previous Tory Government. That had to be said, because most people forget it.

It would be wrong to expect that Scotland should receive more European funding as the European Community expands eastwards into Poland. The European Committee was part of the Executive's consultation. The minister was keen to help out and attended on two occasions to answer our questions. He also gave me a number of lengthy written replies to some of my concerns about the region that I represent.

However, I point out that, in this European debate, the Department of Trade and Industry at Westminster will be presenting Britain's case in Europe. It would therefore have been nice if John Reid had either come before the committee to listen to our concerns or made a submission to explain his position. The Cabinet committee that worked on the DTI proposals does not, I am afraid, have Jack McConnell as a member, but it does involve John Reid. That is important, and in future, John Reid—while he is looking for something to do in Westminster—should take it into consideration.

To the Scottish National party I would like to say that we shall be negotiating in Europe as part of Britain and as part of the United Kingdom—as part of a larger, more powerful country that can make a better case. We will not be some federal region that is stuck on the end of Europe.

Photo of Ben Wallace Ben Wallace Conservative

I shall give way to the SNP, because I do not know what party Keith is in.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

Does Mr Wallace think that Mr Hague's particular style of diplomacy in stating to the French that their beef should be banned from the UK would be helpful in arguing the Scottish case in Europe?

Photo of Ben Wallace Ben Wallace Conservative

That comes from a party whose policy until 1983 was to remove itself completely from Europe, and which would therefore be in no position to negotiate anything. [MEMBERS: "Not true."] Mr Hague is quite within his rights to state his position on beef.

Photo of Ben Wallace Ben Wallace Conservative

No—I have just given way.

I have a number of concerns about the plans for objective 2 funding, and, indeed, for objective 3 funding. The changes to some of the travel-to-work criteria mean, I am afraid, that some strategic sites might be left out because of a lack of recognition of industrial networks. In Dundee, for example, the technology park and some of Ninewells have been left out. They could have benefited from more start-up and more enterprise funding.

The minister's insistence to the committee that he would prefer the objective 2 map to mirror the assisted areas map that was submitted earlier in the year meant that some areas—for example, in the north-east—were missed out. I would have liked more of a skew from the assisted areas to the objective maps, to cover some of those shortfalls.

The plan's Highlands and Islands provision does not give enough weight to both agriculture and the economy that depends on that sector, and more funding should have been provided.

On the subject of fairness, I am not sure whether we will ever know the exact details of the setting of each ward's criteria. I recognise that, although some of the circumstances in Falkirk, the Borders and the north-east are exactly the same as those of some wards that have received objective 2 funding, those areas have been left out. I urge the minister to release the details of those criteria once he has completed his negotiations, so that we can see whether the system was fair and just.

Finally, I ask the minister to be imaginative when he hands out the money from Europe and not to stick to traditional methods. Members of the European Committee have raised concerns about the use of venture capital and how we can stimulate future long-term business when European funding runs out. I welcome today's debate and acknowledge that there was consultation, although perhaps not enough in some areas. I am also concerned about fairness. However, I hope that the European funding will allow us to build more sustainable industry, better business and a better Scotland.

Photo of Mike Watson Mike Watson Labour 11:11 am, 28th October 1999

It is inevitable that much of the back-bench debate on this issue has revolved around parochial matters. After all, we have been sent here to look after our constituencies, however those may be defined.

I make no apology for continuing the trend of the debate. I have considerable concerns that reflect a number of representations that I—and I imagine other Glasgow MSPs—have received from Glasgow City Council, the Glasgow Alliance, the Strathclyde European Partnership, Heatwise and, from my own area, the Castlemilk Partnership, about the effects of operating objective 2 status.

I do not think that there is any general objection to basing funding on wards instead of on local authorities, and we broadly accept the logic behind that plan as outlined by the minister. However, we need to question how some of the wards have been selected. Cathy Peattie, Sylvia Jackson and other members eloquently outlined the problems in their areas, and I have to do the same for Castlemilk. The ways in which those ward boundaries have been chosen cause real difficulties in that area of the Cathcart constituency. Although there are three wards in the Castlemilk district, the Castlemilk ward itself is to be excluded—the organisations that operate in the ward find that inexplicable.

I do not know whether it will be possible to have a rethink on that issue. The detail emerged only relatively recently. I understood from the minister that the European Commission could amend the UK submission, and I hope very much that any amendments can be made before the EC announces its final decisions.

Castlemilk stands to suffer if the centre of the district is excluded from objective 2 status. Although Glasgow City Council wanted such status for 75 per cent of the city, only 61 per cent will be covered. That is serious. I know by talking to MSPs from other parts of the country that Glasgow tends not to get much sympathy. It is thought that, as Glasgow has had considerable assistance in the past, it needs less assistance now. All the now widely accepted poverty indicators are most obvious in Glasgow, which is not to say that other parts of Scotland do not have them. Although Castlemilk has improved greatly over the past 10 years as one of the partnership areas in the new life for urban Scotland programme, the area still has serious problems, which is evident from many of the poverty indicators.

For the first time, the new European structural fund boundaries will create boundaries within Castlemilk, with the potential to set communities and residents there at odds with one another. I have to tell the minister that the proposed boundaries seem to run contrary to the tenets of the social inclusion policy. Although Castlemilk cannot be one of the social inclusion partnerships because of what has happened over the past 10 years, the Glasgow Alliance regards the area's needs to be sufficiently important as to merit funding and to allow it effectively to continue as a social inclusion partnership area.

Local people and organisations will not understand the divide being drawn within the council ward boundaries. We might have a potentially divisive situation whereby people are refused access to opportunities because they have the wrong address in an area such as Castlemilk, and that might destroy some of the community consensus built up over the past 10 years.

Photo of Mike Watson Mike Watson Labour

I am sorry, Bruce. Under the constraints, I do not have time to give way. Time for interventions is not taken into account and added on.

Over the years, some organisations—I do not have time to name them—have developed valuable projects, particularly through the Castlemilk Economic Development Agency in conjunction with Langside College's Glenwood campus. I am concerned at the effect that the new boundaries will have on such organisations.

I am also concerned that details of any transitional funding that presumably will be available to areas such as the Castlemilk ward have not been specified. Well-respected organisations such as Heatwise, which does much work through structural funds assistance, are also concerned.

Finally, I would like further information about how the decisions on ward boundaries were made and about whether those decisions are final. Is there room for more consultation with local authorities such as Falkirk? If so, I want Glasgow to be included in such consultation. I hope that we will find a way of not simply allowing the EC to be the only organisation that can change the proposals, because they seem to have severe flaws, which MSPs of every party have recognised.

Photo of George Reid George Reid Scottish National Party

It would be helpful if members kept their eye on the countdown clock. I call Brian Adam.

Photo of Brian Adam Brian Adam Scottish National Party 11:16 am, 28th October 1999

It should come as no surprise that I also rise to make some special pleading. In particular, I want to talk about several different aspects of the issue. The first is the general problem of the removal of objective 2 status, or what was objective 5b status, for a number of rural areas in north Tayside, parts of rural Perthshire such as Blairgowrie and the parts of west Aberdeenshire—and Huntly in particular—that Nora Radcliffe mentioned. I support her claims for Keith and Strathisla, which is an issue that I shall develop further.

I also want to highlight the Government's stated intention to use the funds to support existing programmes such as social inclusion partnerships at a time when Aberdeen City Council's claim for its partnership has been excluded. Furthermore, I echo comments made by John Swinney and Ben Wallace about Dundee, which is trying hard and is winning new business because of its technology park, its medipark and its universities. However, the way in which the boundaries were drawn in Dundee has excluded certain wards in key areas of the city. My colleague Shona Robison has written to the Executive with her concerns about the situation and I support her in that.

Members will forgive me if I relate some of my personal history. I was born in Newmill in the Strathisla ward, and many members of my family still live in that area. My mother worked in Kynoch's woollen mills, and uncles, aunts and cousins worked in both Kynoch's and Laidlaw's woollen mills in Keith. The Conservatives will be sympathetic to that as one of the members of the Kynoch family eventually ended up as a parliamentarian.

Photo of Brian Adam Brian Adam Scottish National Party

Of course, the other family funded the Conservative party. However, both families' support for Keith and Strathisla is somewhat absent now. Keith has a particularly strong case for funding because its textile, agriculture and whisky industries have been hit hard. That should allow further consideration of both wards in any review.

One of the problems with European funding is that it is set for a fairly long time and there is no flexibility to deal with changes that are beyond the European Union's control. The EU might need to consider a structure that allows minor adjustments to be made. I do not think that any special pleading by MSPs today will have a major impact on the programme produced by the minister on behalf of the Executive. I hope that adjustments can be made for those areas, and particularly for Dundee and for Keith and Strathisla.

Photo of George Reid George Reid Scottish National Party

I call Cathy Jamieson, after whom I will call Sandra White and Irene Oldfather, who have regularly missed out on being called in recent debates.

Photo of Cathy Jamieson Cathy Jamieson Labour 11:20 am, 28th October 1999

I recognise the difficulties that the Executive faces in trying to draw a map that will suit everyone, and I also recognise that not everyone will be happy with the final outcome. I welcome the fact that Jack McConnell came to the European Committee and was prepared to engage in a dialogue. I will not, however, apologise to Jack for saying things that he has heard me say several times, and about which I have written to him on several occasions.

I am glad that Tommy Sheridan's amendment has been withdrawn. I do not know whether that is because Tommy is not here to move the amendment or because he has recognised that it was not helpful. It might, however, have been interesting to hear the socialist argument for putting forward the more prosperous areas in south Ayrshire for objective 2 status when the former coalfield areas in Fife were not put forward.

In this issue, it is not helpful to pit one disadvantaged community against another. It is about ensuring—as the Executive has stated—that the funds are targeted at the areas that need them.

It would be remiss of me not to mention my constituency. The Cumnock and Doon Valley part of Carrick, Cumnock and Doon Valley has done relatively well out of the objective 2 map, but it was a great disappointment to me that the Girvan area in particular, and also Maybole and South Carrick, were not included in the map. It is all the more disappointing because on 8 October, when I attended the opening of the new Carrick buildings of Ayr College in Girvan, Henry McLeish acknowledged the difficult situation for Girvan. He acknowledged that there is high unemployment and, indeed, that unemployment rates there are among the highest in the UK—not just in Scotland. He also acknowledged the value of the social inclusion partnership there; it is disappointing that the announcement of the objective 2 map coincided with that opening.

All credit is due to the local press—The Carrick Gazette & Maybole News—which tried to give balanced coverage of the positive news. That building project was partially funded by European funding in partnership with South Ayrshire Council. We should look to what is positive and I want Jack, in his summing up, to address the points that I am making.

Regarding the representations that we have made on behalf of South Ayrshire Council, the inclusion of some wards—the former coalfield areas of Annbank, Mossblown, Coylton and Kincaidston—which were not originally to be included has been achieved, and I have worked closely with the council to achieve that.

I want recognition that the Girvan area meets all the criteria for objective 2 status in terms of rural deprivation and industrial decline and in relation to former fishing areas such as Dunure, Maidens and Girvan harbour.

Photo of Cathy Jamieson Cathy Jamieson Labour

I will not give way, as I do not have time.

I want an assurance that the Girvan area and other areas like it that have missed out on objective 2 funding because of a technicality relating to drawing of maps and adjacent wards will be top of the list of priorities. The people in those areas deserve that. This is about taking things forward positively and I want the projects that I can encourage into that area to address high unemployment and to ensure that people have the equality of opportunity that the Executive wants to work towards.

If the minister can give me that assurance, I will leave here happier than when I arrived this morning.

Photo of Sandra White Sandra White Scottish National Party 11:24 am, 28th October 1999

I am surprised at the number of Labour members who appear to be supporting the SNP amendment and I would like to ask them whether that is in fact their intention. Mr McConnell has already said that he is pleased to announce the programme, but most Labour members who have spoken have asked him to think again about the map. They should, perhaps, think about supporting our amendment, or Mr McConnell could think about taking the SNP amendment on board.

I would like to concentrate on the Glasgow area. Mike Watson—or Lord Watson—is not in the chamber at the moment, but I agree with most of what he said. Glasgow City Council carried out a case study that mentioned that 10 of the poorest areas of the city are excluded from the proposed objective 2 areas. Those areas include Pennilee, Castlemilk—which Lord Watson mentioned—Govanhill, Dennistoun North and Dennistoun South, Glasgow West, North Maryhill, Shettleston and Carmyle.

Those areas of deprivation have been removed from the objective 2 map but are in the worst 10 per cent of areas in Scotland. The Department of Trade and Industry has said that, based on their need, they should be included. Why have they not been included?

I would like to mention joined-up thinking and continuity. Dennistoun, Cardonald and Mount Vernon are areas of opportunity for business parks, for example, and they have been excluded. Why? Broomhill, Summerston, Mount Vernon, Pennilee, Cardonald, Castlemilk and Newlands are included as assisted areas, but will not receive structural funds. There is no joined-up thinking in relation to structural funding in Mr McConnell's programme.

We are all supposedly fighting for our areas—as we were elected to do. I am fighting for the Glasgow area, but I would like to point out that the SNP feels that the Scottish people have been hard done by because of the way in which the map has been drawn up and presented. I put it to Mr McConnell and the Executive that they and successive Westminster Governments have pulled the wool over the eyes of the Scottish people, who have been told that they are getting extra money when they are not.

We are the only oil-producing nation in Europe and we must go cap in hand to Europe and Westminster to ask for money that is rightfully ours. That is the case that the SNP makes—a case that must be put to the Scottish people. Members can all put forward their individual cases as they were elected to do, but we are also elected to highlight the anomalies that the Executive and Westminster have not addressed for successive years.

We are not here with a begging bowl—we are a country in our own right and we should get the money that we deserve.

Photo of Irene Oldfather Irene Oldfather Labour 11:27 am, 28th October 1999

I am pleased to be able to speak in the debate, and I am grateful to the Deputy Presiding Officer for fitting me in.

Before I begin my comments, I would like to pick up on a point that was made by Brian Adam regarding flexibility and inflexibility, fixed time scales of programmes, and the difficulties that that creates in funding. Will the minister say something about that? That point was made vociferously by the West of Scotland European Consortium, where we argued in favour of a fund that would deal with asymmetric regional shocks. Will the minister also say something about that?

It is important to reflect on the fact that the key objective of European structural funds is to advance social and economic cohesion, thus reducing regional disparities throughout the European Union. While I am delighted that my area qualifies for and continues to benefit from objective 2 funding, that is a measure of the chronic and deep-seated structural problems from which the area suffers. Despite significant European and other funding over the previous programme period, unemployment remains higher than the national average and there is a dependence on declining industries.

I am aware that developing a knowledge base and modernising our economy is part of the solution to social exclusion, and the agencies in my area are committed to those objectives and to working in partnership to achieve them. The extension of structural funds is a vital boost to help my area continue its much-needed economic regeneration.

One of the major difficulties in the Ayrshire economy is the small number of small and medium-sized enterprises. I do not believe that that is because the people of north Ayrshire are less enterprising or less innovative than people in other parts of Scotland. It is an understandable reaction to the severe structural problems faced by the area.

Substantial business support programmes must accompany development finance, so that potential can be fulfilled. Perhaps I can mention projects such as the recently announced management upskilling programme in Ayrshire, which gives management training to the owners of small and medium-sized enterprises. The project is assisted by European structural funds—it should be built on and developed.

Small and medium-sized enterprises could benefit further from business support programmes that are aimed at strengthening supplier and customer links with inward investors. I hope that this round of structural funding will prioritise such programmes in concert with Government schemes such as the business growth unit.

The structural problems facing north Ayrshire and many other parts of Scotland do not affect businesses alone. They affect the aspirations of the people, which is why it is vital that the structural funds bolster measures such as the social inclusion partnerships and deliver social and economic regeneration throughout our country.

The social economy has as much to contribute to communities as business has. The three towns initiative in my area is another example of a scheme that works well and is supported by structural funds. It has provided training for local people, concentrating on things such as child care, furniture recycling and research skills. Such projects offer people the opportunity to give something back to the local community, fostering in the individual a sense of citizenship and stakeholding, and in the community a sense of social inclusion and unity.

To tackle the problems in our most deprived communities, the philosophy of partnership and joined-up government must be carried through. It is clear that some areas of Scotland, such as my constituency, are still suffering substantial structural difficulties and, with them, unemployment and social exclusion. European structural funding can make a difference and can offer renewed hope to those areas in partnership with joined-up thinking and a local approach. I call on members to support the motion.

Photo of George Reid George Reid Scottish National Party

There is time for one final speech. I call Mike Rumbles. Please limit your speech to three minutes.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat 11:32 am, 28th October 1999

Nora Radcliffe, MSP for Gordon, the neighbouring constituency to mine, argued the case powerfully that aid to rural Aberdeenshire should be continued. Brian Adam, a regional member for North-East Scotland, also made a powerful argument. People may have noticed that, during the debate, one or two MSPs have argued the case for their own areas—they are absolutely right to do that.

I am not going to talk about special pleading, because this is not special pleading. I want to draw attention to the fact that people in West Aberdeenshire and Kincardine and in other parts of rural Aberdeenshire feel that they have been missed out. I believe that a fundamental error has been made in relation to the structural fund aid map. Even at this late stage, it is not impossible for the minister to change the draft map.

The Upper Deeside and Upper Donside areas in my constituency, which are currently eligible for objective 5b funding, have been excluded from the map for objective 2 funding. I know that transitional funding is available, but the point about that is that it is transitional. I am concerned that my constituency and the neighbouring constituency of Gordon are universally perceived as affluent because of their proximity to oil-rich Aberdeen, which has resulted in the exclusion of the area from the aid map. That perception is completely misleading because, in many parts of the area, the principal driver of the local economy is not oil but farming. The farming crisis has increased rural unemployment, which in turn leads to population drift and undermines rural communities. Those are the sort of conditions that structural funds are supposed to tackle.

United Kingdom ministers have defended the exclusion of areas such as rural Aberdeenshire by saying that those areas are not among the poorest in Europe. That may be true in a European context. In a Scottish context, however, there are areas of Upper Donside and Upper Deeside that not only meet the EU criteria for objective 2 funding—and we heard lots of relevant statistics from Nora Radcliffe—but are more sparsely populated, are more dependent on agriculture and have a lower income per head than some areas of the Highlands and the Borders that have been included in the draft funding map.

In that context, the case for continuing financial support is unmistakable. The obvious temptation to draw neat lines on the map must be resisted. We need to take account of local factors.

I hope that the minister will address that point. This is not an administrative exercise. We need to take account of real problems in rural areas, as has been said forcefully by several members today. I urge the minister to take account of our concerns. It is not too late to change the proposals.

Photo of Bill Aitken Bill Aitken Conservative 11:35 am, 28th October 1999

This debate is highly technical, but it is important, as we are dealing with a large amount of money.

It is important to maximise the impact that the funding will have, so it is understandable that one cannot please all of the people all of the time. I listened with considerable sympathy to the views that have been expressed by representatives of the areas that have lost out, but it is vital to consider the big picture. Having said that, I understand and empathise with those who feel that the present criteria and the formula for the funding calculations are not appropriate. When reducing the test bed down to a local government ward, we cannot possibly get a strategic overview. After all, when is one ward entirely economically dependent on another?

I have to confess that it was with some cynicism that I watched Jack McConnell, that honours graduate of the Mandelsonian institute of spin, putting forward the Executive's proposals on the basis that it was Executive or UK Government money that was being injected into the economy. He was very clever and did not actually say that, but the implication was firmly there. This has been an exercise in salesmanship that I do not think has quite come off. It certainly did not come off for the SNP, which has lodged a rather carping and negative amendment.

Let us face the realities. There is a big picture but it is a diminishing one.

Photo of Bruce Crawford Bruce Crawford Scottish National Party

I hear what Mr Aitken says about carping, but does he agree that so far almost all members—including Conservative members—have backed the sentiment and spirit of the SNP amendment?

Photo of Bill Aitken Bill Aitken Conservative

Of course there are some aspects of the amendment that are worthy of consideration, particularly when one considers the parlous state of the agriculture industry in the Highlands and Islands. Only about €21 million is being put into the 2000-06 package, and much more money is required. It is important to recognise those points, but the amendment is carping, negative and divisive none the less.

It is ironic that members of the SNP, who consider themselves the champions of the European dimension of Scottish politics, constantly and consistently propose policies that would reduce Scotland to the economic equivalent of Cuba or Albania.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

I am glad that Mr Aitken is so confident about his own country's economic well-being, but will he specify which words in our amendment cause him difficulty?

Photo of Bill Aitken Bill Aitken Conservative

There is no need to specify anything. The phraseology of the entire amendment and its negative attitude are indicative of the thought processes of the SNP.

What should we be trying to achieve? Let us be honest about this. The European concept is one that is likely to grow in the years ahead. Members of the Conservative party want to be part of Europe, but certainly not run by it, and we recognise that, in time, the European dimension will increase. More and more countries are joining the European Community and that in itself will have an adverse effect on Scotland.

Members of the SNP like to consider Scotland as equivalent to Ireland in the early 1980s. The Irish unmercifully exploited European funding—from their point of view, they did so successfully.

Photo of Bill Aitken Bill Aitken Conservative

Very successfully indeed. The Irish were successful because, at that stage, their economy was very poor. With the emergence of the eastern European countries, other countries will come forward that are much poorer than Ireland, and significantly poorer than Scotland. Those countries, after all, did not have the benefit of being governed by a Conservative party which showed imagination and success in its economic policies and which greatly increased the benefits to the people of Scotland.

Photo of Alex Neil Alex Neil Scottish National Party

We have heard Jack McConnell boasting that 40 per cent of the Scottish population are so poor that they will be covered by the measures—Scotland has one of the highest coverages in Europe. Is it not a total indictment of successive UK Governments' management—or mismanagement—of the Scottish economy that 40 per cent of our people are so poor that they have to be covered by the measures?

Photo of Bill Aitken Bill Aitken Conservative

It is not a matter for satisfaction that that is so, although, once again, that totally disregards the starting base. What was the situation 20 years ago? Much better. What will the situation be in 10 years' time, when these eastern bloc economies come into the European Union? Scotland will undoubtedly be the loser. That is why what we are discussing today is, in effect, an exit strategy, which will have to be managed carefully.

Jack McConnell must realise that the consultation process on the formulation of European structural funding has been wide and well considered. He must also recognise, however, that the funding on which we are deliberating today will not always be there. He will need to report back to the various committees of this Parliament over the next year on how the funding is being operated, because we will eventually have to go without it.

Conservative members have listened to the arguments carefully. This is a purely technical matter. We recognise that one cannot please all of the people all of the time, but we must address the fact that the goose that has laid the golden eggs for so many years is not likely to be doing so for much longer.

Photo of Andrew Wilson Andrew Wilson Scottish National Party 11:42 am, 28th October 1999

I would like to cover three main issues from the debate: the consultation process; the loss of objective 1 status and the so-called special agreement; and additionality.

I am bemused by Mr Aitken's inability to find what he does not like in our amendment, other than the fact that it is from the SNP—and he does not like the SNP.

There seems to be agreement on our criticism of the consultation process. In the interests of consensus, I should say that there has been remarkable agreement across the chamber on this key issue. On consultation, Mr Hugh Henry, convener of the European Committee, repeated what he said in that committee. He said that the consultation

"document has significant weaknesses as regards consultation. The section on consultation has nothing in it".—[Official Report, European Committee, 19 October 1999; c 200.]

There was no effort by the Government or Executive seriously to consult the European Committee on the matters in hand.

Mr Scott, speaking for the Liberal Democrats, said that we needed an opportunity to make our case and, as the opportunity was there, there was no need for the amendment. All the opportunity is after the fact, however—it is after the submission has gone to the Commission. The Minister for Finance's only case seems to be that we will wait for the Commission to decide whether things are inadequate, and then make our case.

If the consultation process had been adequate, we would not have to wait for the Commission before we had the chance to offer criticism. We would have had things all sorted out up front.

Allan Wilson, for the Labour party, suggested changes to the consultation process. That is confirmation that he agrees with us that the consultation process was inadequate. If the Commission, the body on which we must now rely, does not object, does that mean that we are snookered and that everything that has been said today is lost? The Minister for Finance seems to be slipperily washing his hands of the whole process and handing responsibility to the European Commission. That is not good enough.

Mr Canavan rightly called for new information to be taken into account. Our amendment gives us that opportunity. Mrs Peattie made the same point and agreed with the arguments of Michael Matheson. Mr Henry agreed with both elements of our amendment; he agreed with what it says about European objective 1 status and about the anomalies in the consultation process. If members agree with what we are saying, there is no case for their not voting for the amendment. If they do not vote for it, their words will fall emptily.

Our point on objective 1 status—I see that Mr Henry is no longer in the chamber—is that there was a complete lack of lateral thinking from the Executive when making the case for retaining objective 1 status: 1 per cent below the cut-off point is very close.

Scotland is in a unique position to make the case that the gross domestic product measure, for example, is wrong for us. Scotland is unique in the European Union in having a GDP that is much higher than the gross national product. Put simply, the GDP measure is not a good measure of our state of national welfare or standard of living. It is unusual, because of high inward investment and because of the oil sector.

Shetland skews the figures. It sits at about 112 per cent of the average GDP, although that is not enjoyed by the people of Shetland. Much of it is expatriated in profits and salaries. The Executive fails to make that case. Perhaps Jack does not understand it.

The special deal is an absolute nonsense. It is an example of the triumph of Labour spin over reality. There was no special deal. Labour would like us to believe that there was so that it can claim the credit, but that is what it always does. It would say anything to anyone at any time to save face or to win an argument. There is no substance behind its argument.

The case was put perfectly by my colleague, Mr Crawford. I have the European Commission document here. There are two special deals—two special programmes. One is for the PEACE programme; one is for Sweden. I point out to Ben Wallace that Sweden does not have to rely on the big clout of the UK to secure that special programme; it is an example of a small country doing rather well. As I said, there are the two special programmes, but where in the Commission document is the Highlands and Islands? It is not there. It is an untruth to suggest that there is a special deal. It has always been the case that transitional support would apply to the Highlands and Islands if it lost objective 1 funding.

The pre-briefing for this debate concentrated on additionality, and we have heard no criticism of our arguments from the Executive, other than some childish taunts from the Minister for Finance, which do not do his office any credit. When, on 7 October, the First Minister was asked whether structural funds were non-additional to Scotland, he said: "That is broadly correct." Mr Davidson made the point that the funds are additional at a UK level, not at a Scottish level. Mr Dewar's spokesman was quoted in The Herald on the following day, 8 October. He said:

"If money from Europe goes up then the money we get from the Treasury would go down because we can't go above what we are entitled to under the Barnett formula."

In 1998—not ancient history—our allocated share of the UK structural funds pot was 23 per cent. What we actually got through the Barnett formula share—as Mr Dewar says, we cannot get more than that—was about a third of that. That is a fact—Mr McConnell can get to his feet if he disagrees. The resulting loss, under the Labour Government, was £350 million. None of what the Minister for Finance has said—none of his taunts or childish assertions on the radio this morning—makes any difference to that fact.

Let us consider the forward process. The minister's entire assertion would appear to be that, because we are losing out now, we will gain in the future by losing less. When he sums up, will he say whether Scotland's share of the 1999-2005 structural funds is less than our population share of the UK? If it is not, we will lose out; if it is, the minister has a big problem to answer for.

Drawing, I think in good time, to a close, I believe that Winnie Ewing, who probably has more experience of Europe than anyone else in this chamber, put it well: we have lost out. I say to our friends on the Conservative benches that we have done so by being an appendage of a very reluctant partner throughout the 1980s.

Mr Davidson made the point that, under the Tories, we had 20 per cent of UK structural funds. The point is that we never got 10 per cent of that because, as Mr Dewar said, we only ever got our Barnett formula share. We are asking not for anything special from Europe, just normality. We are asking for the status not of Cuba, as Mr Aitken suggested—he would do well to show more respect for his own country—but of Denmark, Ireland, Sweden and any other normal country in Europe. If we had that, we could argue our case with consensus without waiting for the Commission to make up its mind and then change its position. We could think laterally about making the case for objective 1 status on the ground of what is good for Scotland, rather than just accept the proposals for a variety of reasons that are unclear. The funds would be additional if we were at a member state level—we would reap the benefits of being an independent state in Europe.

Everyone in this chamber appears to agree with the amendment, with the possible exception of those on the Labour front benches. The Tories agree with it, although they do not like it because it is from us. Their back benchers will probably agree with it, but will be whipped into opposing it.

Photo of Andrew Wilson Andrew Wilson Scottish National Party

Believe me, Ben, I would have done.

Likewise, the Liberal Democrats would appear to agree with the amendment—I know that from an offhand remark that one of them made a moment ago. They would love to support it, but cannot. Members cannot make their words in the chamber stick if they are not going to follow through when it comes to the vote. I call on them to do their constituents a service by voting for a reasonably worded amendment.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour 11:50 am, 28th October 1999

I thank members for their contributions to the debate—I make the exceptions of the opening and closing speeches from the front-bench members of the nationalist party—and for the constructive way in which they put the case for their local areas and contributed to the way in which we can spend this money over the next seven years. That is a serious responsibility of the new Executive and the Scottish Parliament, and it is a serious part of the devolved arrangements. We have a duty to take that responsibility seriously as we discuss and discharge it.

We also have a responsibility to keep the European structural funds in perspective. Although they amount to a lot of money—£150 million or so a year, which may go up or down over the next few years—that is only 1 per cent of our overall budget. Significantly more money is being spent on economic and social development in Scotland through many agencies and from Executive funds. It is important that the work that we do with the European structural funds complements that activity rather than replaces it, and that, over the next seven years, it prepares us for a time when much of this money, if not all of it, might no longer be available.

In the time that I have, I want to address some of the points that have been made by individual members of all parties. In my opening statement, I referred specifically to several areas, including Keith. Several areas have been missed from the map because of the range of the criteria that we had to meet, because of competing pressures and priorities throughout Scotland and because of economic developments in different parts of Scotland over the past three or four years. By any objective criteria, those areas would, taken on their own, have been deserving of these European funds. That is why the transition money is so important. We have heard nothing from Andrew Wilson or Bruce Crawford about the negotiation of the transition fund by the UK Government at the Berlin summit.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

Sorry, Dr Ewing.

The UK Government provided strong and important support for all those Scottish areas that can no longer stay on the map. That is why I am so determined to ensure that not only Keith, but a number of other areas receive top priority in the spending of that transition funding in the years to come.

I also want to make it clear that some areas of rural Scotland benefit significantly from the new map. The Borders provides a particularly good example, with current economic problems that deserve objective 2 status. Other parts of rural Scotland are already benefiting from the £500 million a year from the common agricultural policy that is spent in Scotland. Those areas will benefit from the rural development regulation in addition to the moneys that are targeted towards both the new objective 2 map and the transition funding. It is important to keep that in perspective. I assure members that I will insist that the transition areas that need such funding most will receive the transition funding. For the benefit of Cathy Jamieson, who made her point so clearly, I state that those areas will include Girvan, in south Ayrshire.

Cathy Jamieson made it clear that, since the objective 2 funding map was first hinted at, and almost published, back in July, it has been improved. One example of such an improvement involves Falkirk. Given the recent job losses in Falkirk and the problems that are faced by Falkirk district, I was particularly keen to ensure that areas of Falkirk were included on the map. I assure members that they were among those areas that it was most difficult, behind the scenes, to negotiate on to the map. In response to Cathy Peattie's request, I would be delighted to meet representatives from Falkirk Council and other local organisations to discuss that and to discover what can be done to improve the position of those areas that were not included on the map that has been submitted.

We were also keen to include as much of Glasgow as possible. I take on board the points that were made by Sandra White and Mike Watson. However, 61 per cent of the Glasgow area is on the map. That is a significantly higher percentage than for most other parts of Scotland. If the whole of Glasgow had been on the map, we would have had difficulty in including most of the other areas whose inclusion on the map has been welcomed, never mind all those areas that have not made it on to the map. However, the points were well made and I take them on board. We will do everything that we can to ensure continued support.

Sylvia Jackson made the best point about an individual area. She spoke about Stirling. The wards that she highlighted—which are among not only the top 10 per cent, but the top 5 per cent of the most deprived areas in Scotland—are the wards on which the transition funding should be focused. I repeat the commitment that I made in my earlier speech: I will reject plans that do not target the transition money on those areas.

Several good general contributions have been made; I do not have time to mention them all. I agree with Allan Wilson that it is important to decentralise decision making in the programmes. It is important that we support small, rural projects, as David Mundell said—and we do. Many of the 450 projects that are already supported through the European structural funds would come into that category. We are keen on flexibility. However, the best response to the on-going shock economic problems, to which Irene Oldfather referred, is the quick reaction of the national Government and the Scottish Executive to allocate an even higher level of funding than is available through Europe to those areas in a co-ordinated and spontaneous way. That is not always possible through European funding, but it is possible for us and we should continue to make that a priority.

I welcome many of the comments that were made about rural areas in the Highlands and Islands. However, to describe the success of winning that money for the Highlands and Islands as a defeat, as Dr Ewing did, is a disgrace not only to her and to her position, but to this Parliament.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

No.

The Highlands and Islands did not qualify for objective 1 status. At the last minute, that package was secured by the UK Government. As I have said before in this chamber, it would be nice if every now and again we heard the nationalists congratulate the UK Government on the work that it has done, instead of this continual carping, moaning and criticism from the sidelines.

The money will be well spent. I notice that there was no contribution from the SNP this morning about how the money might be spent in those areas when it is allocated, about the priorities for spending the money or about the allocation within individual programmes. We are here to ensure that we discharge our responsibilities. We are here to ensure that this money is spent in a way that improves gross domestic product and incomes in Scotland, year-round employment in the Highlands and Islands and the economic and social cohesion of the different communities in Scotland; we are here to ensure that, when the European structural funds finally run out, we will have an opportunity to move on and play a full part in the European Union.

To describe the financial position in which we find ourselves as in any way damaging to the work of the Executive, this Parliament or the communities of Scotland, is so financially ludicrous that it is staggering that the argument is still being made. We have been arguing against that since July. The truth is that the European structural funds have always been in the Scottish budget. They are used in Scotland, as throughout the rest of the UK, as additional money. The amount that will be spent from the European structural funds that are in the assigned budget will decrease, which means that there will be extra money, not less, for Scotland over the next seven years.

Those who do not acknowledge that are either not telling the truth or are failing to understand the situation. Nothing makes me angrier than constant carping about the UK and England, when, in this matter, the devolution settlement is of huge benefit to Scotland. We will run our own programmes. We can determine our own priorities. We can use the European funding with our own funding, in different areas, to ensure that communities in Scotland benefit. We will receive a financial benefit that was perhaps not predicted by the Treasury at the time, owing to the fact that the European structural funds will decrease and will release money elsewhere in the budget that is assigned to Scotland.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

That is good news for Scotland as Mr Wilson should accept. Until he accepts it, he will not be taken seriously on this subject in this Parliament.

I hope that we can look forward to plans—not only in the Highlands and Islands, but in objective 3 areas and the new objective 2 areas—that involve the economic and social partners locally, that make a difference in local communities, that are positive and forward looking, and that create the kind of constructive and positive Scotland that can play its role in bringing about an economic future for the European Union that is full of opportunity as well as challenges for us.

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

That concludes this morning's debate. The decisions on the amendment and on the motion will, as usual, be taken at 5 o'clock.