European Structural Funds

– in the Scottish Parliament at 2:30 pm on 24th January 2002.

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Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament 2:30 pm, 24th January 2002

The next item of business is a debate on motion S1M-2630, in the name of Peter Peacock, on European structural funds, and one amendment to the motion.

Photo of Peter Peacock Peter Peacock Labour 3:33 pm, 24th January 2002

I am an unashamed European enthusiast: I believe that the development of the European Union and its continued expansion are two of the most remarkable achievements of any century in our history and that of our European partners. The EU has contributed enormously to the peace and security of Europe over the past 50 years and more.

That, to me, is the underlying goal of the EU. It is about peace and security. That is one of the reasons why many countries, which have not enjoyed such peace or security for much of their history, want to join the EU. The peace and security throughout Europe are built on a common marketplace in which vibrant, shared economic activity is trying to create the prosperity that acts against conflicts such as those that we saw in the past.

The EU is not just an economic phenomenon. It has a sophisticated view of social justice and it is the only trading block in the world that operates an explicit policy to bring about what it calls cohesion, which is a regional policy of which structural funds are a major part. That policy is about ensuring that a country, wherever it is in Europe, has the opportunity to share in the wealth and prosperity of the EU and to become able, if it is not already able, to compete on equal terms with other parts of the EU.

That is why so much European money has poured into parts of Scotland over many years through structural funding. I have seen the major difference that that has made to my part of the world—the Highlands and Islands—in the past 25 years. It has made a significant difference.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

I have a question for the minister before he goes on to make a point about the structural funds. Given that the minister talked about cohesion and his enthusiasm for Europe, when does he think that the United Kingdom will have reached the level of cohesion with the rest of Europe that will allow it to join the euro?

Photo of Peter Peacock Peter Peacock Labour

Alasdair Morgan is straying into territory that it would not be right for me to get involved in. Perhaps he can detect my personal view on the matter from my comments about my enthusiasm for Europe.

When we last debated European structural funds, in April of last year, Parliament welcomed the progress that had been made in ensuring that the funds would have a lasting effect on Scotland and supported the steps that we were taking to put together a broad strategy to prepare for European enlargement. That debate took place in the early days of the new programme period. The structural fund programmes for the Highlands and Islands and the objective 3 programmes were only a few months old and the three objective 2 programmes for east, west and south Scotland had been approved by the Commission only a few weeks before.

The programmes are now fully under way and are bringing benefit to people all over Scotland. European structural funds are being used to underpin domestic, regional and local priorities throughout Scotland. In Autumn 2001, the Executive issued a policy statement in which we set out the key message for the use of the structural funds in a way that brings synergy between those funds and the funds that are at the Executive's disposal for domestic priorities.

European structural funds support jobs, education, transport, crime reduction and health, which are key priority areas for the Executive. So far, in this programme period, the south of Scotland has received £19 million, the east of Scotland has received £45 million, the west of Scotland has received £23 million, the Highlands and Islands has received £85 million and the objective 3 area has received £104 million. Although such global figures give an indication of the impact of structural funds, it is far more meaningful to examine the impact on local projects. That is where the funds deliver tangible benefits and make a difference to people's lives in communities throughout the country.

First and foremost, structural funds are about creating opportunities for employment and employability by, for example, giving people the confidence to enter the labour market for the first time—or to re-enter it—by providing back-up child care facilities, careers guidance and coaching in vital social skills.

In the west of Scotland, the objective 2 programme will create many thousands of jobs over its duration. However, creating and sustaining quality jobs needs a higher level of skill than ever before. Training and learning are therefore major priorities of European structural funds. A good example of that is the Wellbank training centre in Peterhead, which aims to increase training provision, particularly for young people, and provides courses in pressure systems and subsea technology to local engineering companies. Jobs and education head the list of priorities within the structural funds.

Structural funds are also about the quality of life in individual communities. Community development projects often contribute to our priorities in crime and health issues. For example, the Princes Trust young offenders youth opportunities scheme will enable more than 500 ex-offenders between the ages of 16 and 24 to work together to improve the quality of life for themselves and their communities, developing their skills and their capacities to enter into employment.

The Scottish Association for Mental Health project in Irvine offers an integrated guidance, counselling and pre-vocational training course and aftercare for 165 people with disabilities, specifically those with mental illness. Those people are often disadvantaged in accessing employment as a result of low self-esteem, lack of transferable core skills and up-to-date vocational skills, or because they are discriminated against in the workplace.

In the Highlands and Islands, transitional funding is especially suited to supporting transport projects, which address issues of peripherality. A good example of that is the north isles ferry infrastructure, which enhances lifeline links to the northern isles and provides new economic opportunities for those areas.

The five main programmes and the community initiatives that together make up the structural funds drive forward our priorities as well as those of the European Commission.

Photo of Tavish Scott Tavish Scott Liberal Democrat

Peter Peacock is describing the range of soft-infrastructure projects and hard-infrastructure projects. Does not that illustrate the difficulty that Government faces in delivering its priorities? The First Minister announced five priorities for Executive spending in the debate a couple of weeks ago. Mr Peacock is now outlining the balance between soft and hard infrastructure projects. How do we get that balance right?

Photo of Peter Peacock Peter Peacock Labour

That is a continual challenge. Over the period of the use of structural funds, which now goes back for a number of years, the emphasis has changed. The early programmes, particularly in the Highlands and Islands, had a clear emphasis on major infrastructure projects. It is felt that those problems have been overcome to a significant extent, but by no means all of them have been overcome and we are still addressing some of them. It is recognised that it is not just hard infrastructure that creates jobs and wealth over time. Softer issues, such as training and helping people back into the labour market in a variety of ways, must also be addressed. Over time, the European Union's priorities have shifted towards those softer measures—if I may put it that way.

Photo of Dr Winnie Ewing Dr Winnie Ewing Scottish National Party

The minister mentioned lifeline ferry services. I have always wondered—and have asked ministers before—why we do not seek to benefit from cross-border funding. We could have done so if we had added a link to the Republic of Ireland to the ferry service between Campbeltown and Northern Ireland. That would have opened up such funding.

Photo of Peter Peacock Peter Peacock Labour

I am not clear about the specifics of that, nor about how that project would be affected. I took part in an event only two or three weeks ago relating to the next version of the INTERREG programme, which is about a variety of means of cross-border co-operation. We are making progress on that general theme.

European structural fund projects build on and foster partnerships, an approach that has been endorsed by the European Commission and for which Scotland is particularly well noted. Partnership is a key to using structural funds.

On the theme of partnership, I am delighted to announce that the LEADER + community initiative programme has now been approved by the Commission, and that we will move into the first stages of its implementation immediately. Local partnership is the key to LEADER +, which follows the LEADER II programme and encourages sustainable development in rural Scotland.

Now that the Commission has approved the programme, we are able to designate the local action groups. I am pleased to say that 13 local action groups will share about £17 million of grant, which will, in turn, support programmes worth over £40 million. They will happen in communities throughout Scotland: in Orkney and Shetland, the north Highlands, the Western Isles, Skye and Lochalsh, the Scottish Borders, Argyll and the islands, Dumfries and Galloway, the Cairngorms, East Lothian, Midlothian, upland Tayside, east Fife, South Lanarkshire, Loch Lomond and Stirling—the national park area—and Moray. They will all benefit from those funds.

Photo of Ben Wallace Ben Wallace Conservative

Why has that announcement—which is similar to the announcement that was made by the European Commission on 10 January—been made only now in 2002, a third of the way into the LEADER + programme and two years after it should have started in Scotland? England and Wales proceeded with the programme 18 months sooner, much ahead of us.

Photo of Peter Peacock Peter Peacock Labour

I am sorry that Ben Wallace is unable to welcome the announcement with open arms. The plain fact is that, sometimes, getting approval— [Interruption.] Ben Wallace asked the question; I would have thought that he would want to hear the answer. The fact is that dealing with the European institutions can sometimes be a lengthy process. All of us who have dealt with them know that. It has taken us a certain length of time, but the good news is that the money is now coming in and may be spent on projects throughout Scotland.

Continuation strategies need to be in place to ensure that the significant funds that are involved in this programme period have lasting benefits, and that reduced receipts in the future target the right priorities. In November, the Scottish European structural funds forum endorsed the Executive's approach to ensuring that Scotland's voice is prominent in the debate on future funds. I spoke at the cohesion forum in Brussels in May, and intend that Scotland should participate fully and effectively in Commission seminars on the priorities that were identified in the second cohesion report in May this year. Michel Barnier, the European Commissioner for Regional Policy, has welcomed our contribution to the debate on structural funding so far; we in turn will welcome him to Scotland in May this year so that he may see some of our projects for himself.

Be in no doubt: the approach that is likely to deliver what Scotland needs post-2006 is not one of special pleading. We must focus on what is required to produce a competitive Scotland and on where the most intractable problems remain. That could be in our island or mountainous communities—the communities that are most peripheral to the centres of population—or in our deprived urban communities. The Commission recognises that in its programme.

The enlargement of the European Union potentially adds 100 million consumers to the existing market. That offers Scotland scope to win lucrative contracts and to extend her influence. We are working with a number of partners throughout the EU, as well as with the accession countries, on ways in which we can help.

Through regional policy, the EU has brought undeniable and visible good for Scotland. It has helped us create jobs; it has given us impetus to innovate; and it has supplied and supported entrepreneurs, and nurtured them so that they may stay here.

Before I move the motion, I want to say a word about the SNP's amendment, which I regret we will have to reject. However, I very much welcome the positive tone in which it was cast and look forward to the positive contribution that the SNP will make to the debate. I may well have accepted the amendment had it been in the form of an addendum to the motion, rather than the form in which it was lodged.

I move,

That the Parliament recognises the success of the Executive's strategic approach and decentralised administration in managing European Structural Funds and underpinning its commitment to key policy priorities, in particular education, jobs and transport, and endorses the continuation of this approach to ensure a sustainable impact from this funding.

Photo of Tricia Marwick Tricia Marwick Scottish National Party 3:44 pm, 24th January 2002

I thank the minister for his warm words. Perhaps he could have accepted the SNP amendment as an addendum to the Executive motion. I wish that we were not constantly forced to lodge amendments to the Executive's self-congratulatory motions. That is an issue that the minister may want to consider in future.

As the minister indicated, Scotland has been a long-time beneficiary of EU regional policy. Some £6 billion has been made available to Scotland through structural funds. Credit for that must go to our very own Madame Ecosse, Winnie Ewing, who won objective 1 status for the Highlands and Islands. It is unfortunate, to say the least, that successive Tory and Labour Governments have not provided the necessary match funding to allow our country to access European money. Significant improvements to our nation's infrastructure that could have been put in place remain unmade. The Executive was also responsible for losing objective 1 status for the Highlands and Islands. While other areas in the United Kingdom were devising cunning plans and redrawing boundaries to ensure that places such as west Wales, Cornwall and Merseyside could access structural funds, the Scottish Executive and the Scottish Office were twiddling their thumbs.

It would be easy for me to dwell on those matters, but the SNP amendment is positive in tone. I intend to move the debate forward to examine what is required now. However, lessons must be learned if the mistakes of the past are not to be repeated.

The end of the current programme, in 2006, is not far away, and already the rest of Europe is beginning to discuss the future for structural funds. One thing is not in dispute—that the money available to Scotland through structural funds is likely to diminish in the future. The European Union faces swift expansion, with a dozen or so additional member states seeking entry to it. The income levels of those states are well below the EU average and their need for structural funding is at least as great, if not greater, than Scotland's.

They include Cyprus, the Czech Republic, Estonia, Latvia and Lithuania.

Photo of Tavish Scott Tavish Scott Liberal Democrat

I accept what Tricia Marwick says about the pressure that new entrant countries in the east will place on structural funds. Presumably at that stage the SNP will not criticise whatever Administration is in power in 2006 for not obtaining exactly the same amount of money that Scotland is receiving at present.

Photo of Tricia Marwick Tricia Marwick Scottish National Party

As my colleague says, we would hardly criticise ourselves. If Tavish Scott waits to hear the rest of my speech, he will find out exactly where I am going.

Photo of Tricia Marwick Tricia Marwick Scottish National Party

That is unworthy of the member.

Several applicant countries may join the EU before the next round of structural funding begins in 2006. An article by John Bachtler quantifies some of the possible effects of that: a reduction in overall wealth per capita of as much as 15 per cent; an increase in the gap between richer and poorer member states; and the appearance of an even wider gap between the regions.

Structural funds were designed to iron out disparities, to ameliorate the structural problems that are faced by certain regions and, principally, to level the playing field for trade. One of the main issues exercising our European neighbours is the reform of structural funding. How does Scotland stand and how do we face the challenges to which I have referred?

First, we must ensure that our economy is leading the current EU 15. We must ensure that the £1 billion or so that is left of EU funding for Scotland is used wisely and to provide long-term benefits. We must have something to show for that money. That means having infrastructure investment in transport and communication links to make areas such as the Highlands and Islands more accessible.

Secondly, we need to participate in the debate. When the previous funding map was redrawn, Scotland was on the sidelines; the cost of being a spectator was the loss of objective 1 status for the Highlands and Islands. The debate for the next round has already started—

Photo of Tricia Marwick Tricia Marwick Scottish National Party

I ask the member to let me finish.

The debate for the next round has already started and will involve an even more fundamental Europe-wide rethink. We cannot allow Scotland to be excluded from that debate.

A number of proposals are on the table, including proposals for opt-outs from structural funds for richer countries, proposals for a redrawing of the map, proposals for supporting poorer nations rather than poorer regions and proposals for different regional support policies for the current EU 15 and for new member states.

Where does Scotland fit into all that? First, rather than being inward looking, we must take an outward-looking, European viewpoint. New European regional policy will be based on the lessons of the past. As one of the main beneficiaries of EU funding, Scotland can make a valuable contribution to the debate. Securing regional assistance for our own areas will present some difficulties. However, securing such funding will be possible only if we are involved in discussing the mechanisms by which that funding will be distributed. If we want to argue that funding should be allocated on social criteria, the case will have to be made for using a different statistical approach. If we want to make Scotland's case on geographic criteria, we must start to make common cause, and find common ground, with neighbours such as Sweden and Finland.

We must do three things. First, we must acknowledge that changes to European politics mean that we will face a significant drop in EU funding. Secondly, we must take an honest, rather than a self-congratulatory, look at the way in which we spend what remains of the current round of funding. That means that we must concentrate on sustainability as we ready our economy to be in the leading EU 15. Thirdly, and perhaps most important, we must engage Scotland in the European debate. We must be participants, not spectators.

I quote John Bachtler:

"The message that EU funding is making a significant commitment to cohesion is often lost amidst the debate of whether supposed national interests have been advanced or not."

The Parliament must look outward. Scotland, as a European nation, should be satisfied that we are arguing not just for Scotland but for our neighbours, old and new, and for the benefit of Europe as a whole.

I move amendment S1M-2630.1, to leave out from "the success of" to end and insert:

"that £6 billion has been made available to Scotland since 1975 through European Union (EU) structural funding; further recognises that, because of EU enlargement, the level of support offered to Scotland in future years is likely to diminish, and urges the Scottish Executive to ensure that the full benefits of EU structural funds still available are used for sustainable, strategic and infrastructure improvements and to involve itself fully in the ongoing debate about the future of EU enlargement and the consequences for EU structural funding."

Photo of David Davidson David Davidson Conservative 3:51 pm, 24th January 2002

I began to wonder why we had come to the chamber this afternoon, because the minister had reached the end of his speech before he announced anything new—that is usually what the Executive call debates for. Even though the announcement was late, we welcome LEADER +. Obviously, we cannot agree with the wording of the motion, as that would suggest that we accept the Executive's policy priorities and its management of the funds. However, I agree with the minister that we must get sustainable benefit out of anything that comes through the structural funds system.

I remind the Parliament that the Conservatives managed to obtain a 20 per cent share of UK structural fund allocations between 1979 and 1998. We are quite proud of that record, and we would like the Executive to play the same role by ensuring that Scotland is well represented.

Photo of Dr Winnie Ewing Dr Winnie Ewing Scottish National Party

Is the member aware that when Mrs Thatcher was in power, she cast her vote against the Highlands and Islands receiving objective 1 status?

Photo of David Davidson David Davidson Conservative

I thank Dr Ewing for her intervention—we have got her point.

Unlike the SNP, we do not think that there is a conspiracy theory, with Scotland being done out of things. There is no such conspiracy. We believe that we must promote better use of partnership funding with the private sector, but the SNP has some difficulty with that approach. It is not good enough for the separatists to continue to talk about doing better than Westminster when we have more strength in Europe by being part of the union. We must have a guarantee from the Executive that it will promote early on, and at every possible stage, the need for Scotland's case to be put in Westminster, so that there is a united front on negotiations with Europe. I welcome the fact that the minister said that he will be part of the delegation and I wish him every success.

Tremendous business opportunities for Scotland are coming out of enlargement, which the Conservative party supported. I hope that the minister will reflect on how we can best assist Scottish businesses to benefit from those opportunities. On the range of funds that Scotland receives at present, although we know where some of them go, we do not have in-year clarity about when they are called down. Far too often, the Executive takes the credit for expenditure without defining exactly how much came from European funds and how much came from the public purse. We must have that information. I am afraid that the minister did not address the issue of transparency in the use of funds.

On spending priorities, we must remember that we are net contributors to Europe. Tricia Marwick was right to say that enlargement means that our opportunities for calling down funds will become fewer. We must have a robust set of arguments in order to ensure that Scotland gets a fair share. However, we must ensure that the money is spent on long-term infrastructure and economic opportunities, not only on the social side. We must invest wisely, with good partnership operations with the private sector, get people into employment, create the infrastructure that we need to take forward the economy, particularly in the regions that suffer badly because of rurality or distance from market, and do the training not only at the centre, but out on the ground. The minister talked about such an exercise in Peterhead. Such opportunities are welcome, but we want to see more of them throughout Scotland.

It is important to understand that if we get the funds that will create additional funding, on a match funding basis from the private sector, and get the jobs going, then, internally, the taxation benefits that will allow us the social programmes will follow in time.

I want to hear from the minister in his wind-up how the Executive intends to deal with match funding. There is a lack of obvious movement towards operating match funding, and that is very much in the hands of the Executive. I want the minister to have a go at explaining away how the Executive has not managed to do the match funding. Every member in the chamber can list projects that have failed because the Executive did not get the match funding together, whether that was Government funding or third-party funding. It is essential that we maximise whatever opportunities we get from the structural funds programme.

If we are to enable individuals to attain the skill sets—which the minister talked about—that lead to employment, we must be sure that all the Executive ministries hold hands to ensure that there is a proper structure to deliver that.

I presume that the minister will accept the Conservative thinking that is based on our successful delivery in the past of structural funding for Scotland.

Photo of Tavish Scott Tavish Scott Liberal Democrat 3:57 pm, 24th January 2002

I welcome the minister's opening speech, particularly his careful and diplomatic remarks on the subject of the euro, which Alasdair Morgan raised with him. I recognise a good European when I see one. I would say the same about many members on the SNP benches. I am not so sure about those on my extreme right here. The Conservatives always give themselves away by using phrases like "We must remember that we are net contributors to Europe" as David Davidson did. It is, of course, absolutely the case that we are net contributors to Europe.

Those of us who believe in Europe and in its expansion and in so much more of what needs to happen to raise standards, as well as the aspirations and living standards of people who live throughout the European Union, will recognise that we are one of the richer nations in the EU. If we are to play a proper, constructive and meaningful role for the future, contributing to Europe is an essential part of that process. I have no difficulty with that.

I welcome also the minister's announcement on LEADER +. An important aspect of the Parliament is that the European Committee—I greatly enjoyed my time on that committee—and the nature of the plenary sessions have given us the opportunity to discuss structural funds. Some of us who were previously in local government will remember not being able to get to the heart of how structural funds were distributed throughout Scotland and how the more shadowy mechanisms were used. That opportunity is now here with the Parliament, and members of all parties across the chamber can take that opportunity.

I swiftly move to a couple of areas that I want to mention in terms of how funds should be applied, given that they are available. The transitional relief for the Highlands and Islands, which other members have mentioned, is of considerable importance to me as a constituency member for that area. Last week we debated in Parliament renewable energy and last night I and other members from the Highlands and Islands heard presentations from the Crown Estates Commission and Highlands and Islands Airports Ltd. It struck me that the issue of structural funds was a connecting theme throughout those events.

If Government is serious about, for example, using renewables for a long-term energy policy, that can come about by the use of structural funds. For example, the interconnector that is being talked about for the western seaboard and the interconnector that could produce and take power from the northern isles down through Dounreay and the northern Highlands, through the main grid, could be usefully funded through structural funds. That is one of the hard infrastructure projects that bear attention, as Mr Peacock mentioned in his opening speech. Investment in airports is equally important in terms of infrastructure.

A project that would pool soft and hard infrastructure investment would be to address the digital divide—investment in the hard infrastructure of broadband and satellite telecommunications and in all the ways in which people can take advantage of the advances in telecommunications and digital technology, no matter whether they live in urban or rural Scotland. We must allow people to use the skills, which can be funded through other sources, to drive forward a knowledge economy. If a knowledge economy and Executive initiatives such as a smart, successful Scotland are to mean something, they should be funded in a supportive way.

Photo of Brian Adam Brian Adam Scottish National Party

It is appropriate to use structural funds to advance the causes of peripheral areas and those of deprivation. However, does the member not agree that a better approach to tackling broadband issues would be to place a universal service provider obligation on those who are implementing it, so that everyone can have access irrespective of location or circumstances?

Photo of Tavish Scott Tavish Scott Liberal Democrat

The driving initiative that the Executive is taking through the pathfinder projects will create access. In the areas that are being considered in the first instance, the public sector is the driver. That will lead to the private sector picking up the kind of initiative that Mr Adam talks about. That is already happening in central Scotland.

We must recognise the importance of the Executive's role in using the hundreds of millions of pounds that are available to Scotland. Tricia Marwick made the point that it is important that we do not think of it as the tap being turned off in 2006, but that we ensure that we take a position about Brussels—arguing through different agencies, the Government at Westminster, and using our MEPs as well—to allow us to take the best advantage of what happens thereafter. We should not necessarily conclude that the relationship will end at that point. We must make the case for continued investment in Scotland.

Photo of Trish Godman Trish Godman Labour 4:02 pm, 24th January 2002

Before I start, I must make an apology because I will disappear from the debate for a minute or two to say goodbye to two of my sons, Michael and Mark, who are in the visitors gallery. They are returning to Australia in a couple of hours' time and I do not want to wave from the floor of the chamber in case I am greetin.

I welcome the debate on EU structural funds. I know that such assistance has been of immense value to some of the communities that I represent in West Renfrewshire. Indeed, a written answer from the Minister for Finance and Local Government reminded me of the fact that, in the past four years, 180 projects based in my constituency have received awards through European structural funds—through the European regional development fund, the social fund and the urban community initiative.

In the near future, I hope that Port Glasgow, along with West Dunbartonshire, will receive URBAN II funding. URBAN II places emphasis on developing local initiatives, based on a bottom-up approach. I anticipate genuine partnership between local community groups in Port Glasgow, local councillors and the Scottish Executive. I hope that the minister noted that I referred to the local community groups first and the minister and his officials last. That is the way it should be. Those welcome developments should be as far away as possible from the bureaucrats in Brussels and, dare I say it, Edinburgh. That is subsidiarity in practice.

Could the minister tell us whether if it would be possible to apply for European structural funds for the semi-permanent home in Port Glasgow for the Stanley Spencer war paintings of Port Glasgow? I understand that European structural funds have been used for cultural activities in the past. As the Rev Andrew MacLean of St Andrew's church in Port Glasgow reminded me last week, the paintings usually languish in the basement vault of the Imperial War Museum. I believe that a suitable place could be found to house those historic paintings. Considerable funds would be needed. I hope that the minister will answer the question and that he will hear my plea sympathetically.

As others have said, how long can Scotland expect to receive structural funding once EU enlargement takes place? Many communities in Poland, the Czech Republic and other applicant countries are in dire need of structural funds. Nobody can deny that. On a scale of affluence through to poverty, it could be argued that they are in much greater need than many of our communities.

It may be, in the light of French, German and Irish reluctance to support enlargement, and the abject failure of member states to radically reform the common agricultural policy and EU institutions, that enlargement is some way off, but I agree with remarks made by Tavish Scott and others that that should be no excuse for us not to be in there working full blast to get what we can. However, we have to be aware—and as a socialist I am very aware—that if other countries are in dire need, that has to be addressed by members of the EU.

I am sure that the minister will agree that things move at a snail's pace in Brussels. I certainly think that they do. Communities can become disillusioned by the cumbersome and time-consuming procedures. I ask the minister to assure me that he will argue for more efficiency and speed when next he has discussions with his EU counterparts.

Photo of Colin Campbell Colin Campbell Scottish National Party 4:06 pm, 24th January 2002

I share Trish Godman's desire to see a solution to the URBAN II question. I have a note in my hand, dated "Brussels, 22 January 2002" which states that

"Michel Barnier, Commissioner responsible for regional policy, has announced the approval by the European Commission of a programme for urban regeneration in Clyde Urban Waterfront in Scotland."

The programme is to run from 2000 to 2006, which gives us a mild problem. That is today's good news from the Opposition. I rather thought that we would get it from the Administration.

In April last year I took part in a debate on European structural funding, specifically on the European regional development fund. The object of my attention in that debate was the URBAN II funding project for what was splendidly entitled the Clyde urban waterfront regeneration programme. With the exception of local MSPs, members will be forgiven if the location of the project does not immediately spring to mind. It has now had its name reduced to Clyde waterfront, which gives the impression of a continuous strip of land in need of a massive injection of cash. In fact, it is composed of two completely separate areas, one of which is Port Glasgow and the other, a few miles away across the Erskine bridge, is Clydebank south. I expect that if the area was presented to the European Commission on a small-scale map with a big blob of highlighter on it, it could seem like one place.

I bring this issue to the chamber because it was brought to my attention that the reason for these geographically separate towns being brought together was not that they had major problems—which of course they do—but that the Labour party on both sides of the river was not prepared to give up a chance of URBAN II. One can understand that. In other words, the Clyde urban regeneration programme appears to have been cobbled together as a political compromise between two arms of the Labour party.

Peter Peacock will remember that early last year I asked questions about the maximum number of people who can be included in an URBAN II project area—a maximum number has been applied. That is not to disparage the intent or the work of the people involved, nor to criticise the planned effects of the URBAN II programme. I raise the issue because there was a delay in meeting the deadline for submissions, which slipped from April 2001 to November 2001. I wonder to what extent that slippage was due to the difficulty in marrying the differing priorities of the areas, because the councils on either side of the Clyde identified different priorities.

When I spoke on this issue last year, it was known that the authorities in England had not decided how they were going to distribute the projects in England. To what extent was the Scottish proposal delayed to meet a slower-moving bureaucracy in the south? The very fact that I raise that question indicates that Scotland could have moved more quickly to seek an outcome had it been free of Westminster. I am not being difficult, but we do have to sharpen up our act for the future. As Ben Wallace pointed out earlier, the URBAN II programme runs from 2000 to 2006, so in my very large constituency, which embraces the constituency of Trish Godman—who I see is absent—there are only four years in which to spend the money. If there are any lessons that we can learn from that about speeding up other matters in the future, we should learn them.

Photo of David Mundell David Mundell Conservative 4:10 pm, 24th January 2002

Although the minister referred to remarkable achievements at the start of his speech, he did not mention a few of his own.

First, he appeared 11 times—in 11 photographs—in a South of Scotland European Partnership leaflet that was only four pages long. Those leaflets must have been a success, because when I tried to obtain a copy of one today, I was told that they had all been given out. Alasdair Morgan will appreciate the minister's second achievement, which was to be pictured on a bike in the Mabie Forest with the leader of Dumfries and Galloway Council, Mr John Forteath, a man who is rarely seen on a bike.

I want to refer to another remarkable achievement. I congratulate Irene Oldfather on becoming convener of the European Committee. Along with Tavish Scott and Ben Wallace, I had the pleasure of serving on the European Committee at its start. In those early days, the committee did a lot of important groundwork on the scrutiny of European funding that had not taken place before. As a result of that, we ensured that there was a south of Scotland area. It was thought initially that the funding might be allocated in fewer areas.

I want to pay tribute to Donald McKinnon and his team at the South of Scotland European Partnership. The fact that they are on an away day in Hawick today has made it rather difficult to obtain the facts that I wanted for my principal point.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

That has never stopped the member in the past.

Photo of David Mundell David Mundell Conservative

Indeed. In the Galloway Gazette —although Mr Morgan's picture did not appear 11 times—a member of the public mistook him for Ian Lang, which must considerably reduce the member's credibility in his ranks.

It is perhaps not the best idea to try to illustrate my point with a diagram. Dumfries and Galloway will receive about £3 million or £4 million a year in structural funding for the next six or seven years. The amount of money that comes in via the common agricultural policy is £60 million plus. As Trish Godman indicated, that figure is likely to change significantly with the enlargement of the EU. Although some areas might be able to cope with the reduction of structural funding, it is clear that if we do not begin to plan for a reduction in the level of CAP funding that comes into an area such as the south of Scotland, we will face serious structural difficulties if that funding ends abruptly.

Although we welcome the structural funds that are the subject of the debate, we must step back and consider the wider picture of European funding and the impact that changes in the EU will have on that. Those changes will be very significant.

Photo of Ian Jenkins Ian Jenkins Liberal Democrat 4:14 pm, 24th January 2002

I will cover territory that is similar to the ground that David Mundell covered. I am happy to support the Executive's motion on European structural funds, because the Scottish Borders and the south of Scotland have benefited substantially from European structural funds. European officials are discussing related matters in the south of Scotland today, probably in Hawick.

Between 1994 and 1999, the objective 5b programme and other Community initiatives were of assistance. More recently, the south of Scotland objective 2 programme and the lowland Scotland objective 3 programme have made possible many projects that will continue until 2006. Structural funds have been used to support large numbers of economic development and vocational training projects that are undertaken by public agencies, such as councils, enterprise companies, further and higher education institutions and a range of voluntary bodies. Without those moneys, support for economic development activity would have been significantly reduced.

The south of Scotland programme area is the only wholly rural strand objective 2 programme in the UK, and was the first objective 2 programme to approve projects. The South of Scotland European Partnership has completed three successful application rounds and 71 projects have been offered grants that total approximately £19 million. They include projects such as the Hawick and the Eyemouth regeneration programmes, the Advance building in Selkirk, the project for the Borders showground in Kelso and the Peebles arts centre. Those projects are wide-ranging and many more could be mentioned.

Under the objective 3 programme, we have received almost £1.25 million. I hoped for and was delighted to hear an announcement on the LEADER + programme, which should help the south of Scotland significantly.

The Liberal Democrats support the motion. In a fragile area with difficulties in agriculture, tourism, electronics and textiles, structural funds have been a lifeline. However, I press on the minister the need, which others have mentioned, to take a hard look at the future for the south of Scotland and the Borders.

First, we must ensure that opportunities between now and 2006 are maximised. We have problems when match funding is necessary. It would be desperately disappointing and damaging if available funds could not be accessed from Europe because of limits on available match funding here. I urge the minister to take that on board.

Secondly, it seems to have been passively accepted and assumed, for good reasons about expansion and so on, that structural funds programmes as we know them will finish in 2006, to be seen no more in Scotland. I hope not. Like others, I stress to the minister that if an area such as the south of Scotland loses support and has no replacement at the same time as the changes in the CAP will mean that funding for agriculture is massively affected, the danger exists that the south of Scotland will be left in a parlous economic state. We must avoid that double whammy at all costs and do everything that we can to ensure that plans are laid.

It is vital that a form of regional assistance is maintained. We must have the means to improve our economic infrastructure. It is a shame that the criteria have changed, because we could have done with road improvements and the re-establishment of the rail link—the hard infrastructure that was mentioned. It is vital that such provision is made in some way or other.

We need continuing support for a fragile rural economy that has experienced and will continue to experience the economic restructuring that such European funds target. The restructuring will continue and the support must continue. I support the motion strongly, but I urge the minister seriously to recognise and respond to those concerns and to negotiate with Westminster and the European Union to ensure that provision is made for the south of Scotland.

Photo of George Reid George Reid Scottish National Party

Irene Oldfather will be followed by Brian Adam. Both have an abundance of time.

Photo of Irene Oldfather Irene Oldfather Labour 4:18 pm, 24th January 2002

Thank you, Presiding Officer. I was about to say that I would address my comments only to the motion, but I am pleased to hear that there is plenty of time.

We have had an interesting debate. Since the Scottish Parliament's establishment, I have no doubt that there has been greater monitoring of the distribution and implementation of structural funds in Scotland than ever before. David Mundell was right to speak about the European Committee's role. Since its inception, the committee has been vigilant in scrutinising structural funds. We have produced no fewer than five reports on the subject, all of which have been agreed unanimously and so have attained cross-party support.

We have a commitment to review the process annually. Post-devolution, the system has the accountability that it lacked. Those of us who were in local government will remember that lack of accountability. I often used to speak about the democratic deficit in the allocation and implementation of structural funds. That has gone.

I am happy to recommend the European Committee's sixth report of 2000 to anyone who has not read it—I know that Ben Wallace has read it. It is complimentary. We took much evidence to produce that report. We have heard about the difficulties of finding match funding. As we have time, I will take a moment to quote from paragraph 133 of the report, which states:

"The Committee has found little evidence of a significant problem with the provision of match-funding in Scotland. While there are some examples of difficulties experienced by certain organisations, these do not appear to be common or widespread."

Nevertheless, the committee gave a commitment to monitor the situation and we will certainly continue to do that.

Scotland expects to gain around £1 billion in the next programming period. Taken with match funding, the amount for projects will be about £2.4 billion. To state the obvious, Scotland has done well from European structural funds and will continue to do so.

As the minister explained, the objectives of the funds are to assist in reducing inequalities and to achieve cohesion across the European Union. Many members spoke about projects in their areas. Those of us who have been involved in European matters for some time can look back and see real differences and improvements in areas of deprivation. Over the years, we have learned how better to focus and target funds to make the money work for us and to get the greatest return. In my area, we have benefited substantially from moneys to assist people with mental health problems and for capital projects such as the Magnum leisure centre, James Watt College and the Big Idea.

Much has been achieved, but it would be remiss of me not to mention the perennial problem of delayed and late payments, which seem to dog the system. I know that the minister is aware of the problem. Over the past couple of days, I did a quick ring-around and a number of organisations highlighted substantial delays in receiving payments. I am happy to write to the minister separately about that. He knows from contributions that have been made by the European Committee to the Scottish European structural funds forum that the issue has not been resolved, despite attempts to improve online management and information systems. John Home Robertson raised the matter at the forum. I would welcome an assurance from the minister that he will look into the matter, so that people in the voluntary sector can have confidence in future programmes.

I will turn to future strategies for structural funds. Does the minister feel that there is merit in something that I have lobbied on for some time—the idea of an instrument to deal with unexpected asymmetric shocks to a regional economy? Instead of the Council of Ministers staying up for three days and three nights—something that Dr Ewing will remember—to agree aid packages in exceptional circumstances, the instrument would be in place on the basis of pre-agreed and objective criteria. I have to say that economic and monetary union makes an instrument of that sort all the more important for regional economies. I welcome the minister's views on such a measure.

I also want to say a few words about the opportunities that enlargement brings. The European Commission estimates that between 30 per cent and 40 per cent of all EU funding that is spent in poorer member states eventually finds its way back to the richer member states in the form of purchases or expertise. Improving the quality of life in the candidate countries can bring benefits to us all. We should examine the formation of partnerships at parliamentary and Executive level. I welcome the minister's comments on that.

I am aware that the executive has already made links with the Czech Republic. We must examine how we can capitalise on that and share our expertise of drawing down structural funds. We have been commended by the European Commission as being flagship performers in that respect. If we can share that experience and expertise with our colleagues in the candidate countries, that could produce real dividends in the future for Scotland post-2006.

There is one front on which we should be a little wary. Structural funds must not be used to displace jobs—directly or indirectly—from one area of the Community to another. The Committee of the Regions expressed an opinion on that. The opinion is good—I do not say that because I wrote it myself—and I would welcome the minister's commitment to it. It concludes:

"The aim of regional policy should be to ensure that direct subsidies do not simply lead to a shift in existing jobs from one area of Europe to another."

Therefore, we must look for ways in which, even in the transitional periods for the accession states, social and environmental standards are adhered to across the European Union.

I fear that I may be running out of time.

Photo of George Reid George Reid Scottish National Party

You may take another three minutes yet.

Photo of Irene Oldfather Irene Oldfather Labour

That is fine. Perhaps, then, I may take a moment to mention areas outwith the big European funding projects—some of the smaller community projects and initiatives that have delivered first-class results.

I have been immensely impressed by the links that we in Scotland have been able to develop in relation to educational aspects of European funding. Some of those links have been developed with very little expenditure and through specialist education programmes that have brought great benefits to our young people. In my area, there is a teacher and pupil exchange programme with Catalonia and the Balearics. As a consequence, only this week, we started to teach Catalan in North Ayrshire. Our children have visited Tarragona and Lleida and are set to visit Gerona this week.

The opportunities for children, including those from deprived areas, to develop language and learning skills demonstrate that programmes such as Socrates and Comenius have given us tremendous returns on our expenditure of quite small amounts of money. Such programmes are an investment in the skills that our young people will need to compete in the challenging knowledge economy.

I shall begin to conclude my remarks now, Presiding Officer, if that is okay. What I want to say is that Europe should not simply be measured in terms of structural funds, important though today's debate is. We have much to learn, much to offer and much to understand.

I support the motion.

Photo of George Reid George Reid Scottish National Party

Thank you. We are all indebted to you. I call Brian Adam, to be followed by Rhoda Grant. Both speakers will have approximately five minutes.

Photo of Brian Adam Brian Adam Scottish National Party 4:27 pm, 24th January 2002

I am certainly indebted to Irene Oldfather. I had no intention of speaking for 10 minutes.

I echo the remarks made by other members about the dangers of arriving in 2006 unprepared for the significant changes that will take place. I hope that the minister will not take my contribution as a series of carping complaints—that is not what I intend to contribute—but there appear to be one or two difficulties with the administration of the existing programmes. Irene Oldfather referred to the fact that there appear to be problems getting the money. I have had complaints from the area that I represent that some financial claims are not being met timeously. I hope that the minister will look into that and rectify the situation.

It has been suggested that we also need improvements to the rather complex interactive software that is currently used to process claims. It is difficult for organisations other than councils to deal with such things directly. It has been suggested to me that it is difficult for community groups and voluntary organisations to make direct applications for funds. That is a problem particularly in social and capacity-building areas, where we are looking for voluntary organisations to take a significant lead. We should not always try to deliver everything directly through Government agencies or even through local government. We should do all that we can to encourage and support the voluntary organisations. Where mechanisms have been set up that create a barrier to that, we should try to rectify the situation.

As we have a little time to spare, I ask the minister to apply his mind to how we might best deal with some of the drug problems that exist in areas covered by European structural funds. We could encourage those who have already gone through the process of overcoming their afflictions but who are not yet able to participate fully in society to have access to those funds and to get training as support workers. We should also look to help those who have chaotic lifestyles to assert themselves and adopt a more disciplined lifestyle, which will allow them to return to work. There may well be an opportunity to have access to funds for such purposes. Perhaps the minister can give guidance to local organisations on how that might happen and give support from the centre.

Photo of David Davidson David Davidson Conservative

Does Mr Adam agree that one of the difficulties with structural funds is the mapping exercise that was carried out, so that postcode wealth covers up gaps in different communities? I am thinking of the inner cities in particular. There is a difficulty in the city of Aberdeen. The council has done its best to have the mapping altered, but it is rigid. If there happen to be two or three good streets and two or three with real problems, that is often swamped because it does not fit in with the rules. Does Mr Adam agree that the minister should consider that?

Photo of Brian Adam Brian Adam Scottish National Party

I agree. When the boundaries were drawn, Europe had a slightly more relaxed approach, where the mapping would allow it. Mapping was not based on whole council areas. For a variety of reasons, the Executive has drawn the map in the way that it has. I agree that there are pockets here and there in which broader access to funds might have been helpful.

I hope that the minister will give us guidance on how we might increase the number of applications from a variety of areas so that the usual suspects are not relied upon to dream up schemes to use up the money, which would not be helpful. I was concerned to hear that Tavish Scott is looking for access to broadband only in certain areas. We must not use the funds to tackle issues in such a way. Universal service provision is needed. Totally unregulated markets, in which people with a significant share do not accept that they have a responsibility to provide a universal service, cannot be allowed. I hope that the minister will discuss that with colleagues who have broader responsibility in that area.

Photo of Rhoda Grant Rhoda Grant Labour 4:32 pm, 24th January 2002

I know that I have extra time, Presiding Officer, but I do not think that I can copy Irene Oldfather's feat and make a three-minute speech stretch to 10 minutes. I will do the best that I can.

Photo of Rhoda Grant Rhoda Grant Labour

I am glad to have the chance to discuss structural funding, which is extremely important to Scotland and especially to the Highlands and Islands.

The Highlands and Islands have enjoyed structural funds through objective 1 funding and through the special programme funding, negotiated by Tony Blair, which brings more funding to the Highlands and Islands than would have been attracted had the area been chopped into parts to attract objective 1 status. Those parts are sparsely populated and funding is allocated per head, so it is important that we attracted the special funding, so that it can have the impact that it has had and is having in the Highlands and Islands.

In the Highlands and Islands, and throughout Scotland, it is important to allow communities to have an input into how money is spent. The LEADER II project helped to enable communities to consider issues that create barriers to economic development and allowed them to look with fresh eyes at the opportunities that exist. The project went a long way towards enabling communities to gain confidence, which the Executive has made a priority. We need only consider the Land Reform (Scotland) Bill to see that that is happening.

The minister mentioned that the LEADER II project has now been replaced by LEADER +. That project builds on the work carried out by the LEADER II project and comprises three strands: support for integrated and innovative development strategies for rural areas, which is based on partnership and giving priority to initiatives proposed by local people; support for inter-regional and transnational co-operation; and networking among all EU rural areas, whether or not they receive LEADER + funding, and those who are involved in rural development.

Through work on previous projects, the Highlands and Islands have shown that they are ideally placed to make the best use of funds; the area has worked hard to identify issues and to put together solutions. Such information has been used by partners in the Highlands and Islands and elsewhere in the EU. Indeed, I was privileged to take part in two of the many dissemination conferences that were held in the Highlands.

Those who took part in LEADER II are well placed to seek support from LEADER + for the projects that they have identified. As a result, I very much welcome the minister's announcement. The money will have an impact on many areas and I am pleased that a lot of it will go to areas on the periphery of my constituency. Such projects will give communities a real opportunity to build on the work that they have carried out and will put the creation of solutions into their hands.

The priority given to the views of communities has been carried into other aspects of structural funds. The Highlands and Islands Partnership has spent time consulting local authorities and community bodies on how best to use the money, and the effect of that is evident throughout the area. For example, on infrastructure, causeways, piers and harbours have been built. There have been social changes, thanks to the provision of support to women who are returning to work after having children and to disabled people. The last time we debated structural funds, I mentioned the jobs for all project, which goes a long way towards enabling disabled people to enter the employment market and has significantly changed their lives.

Contrary to concerns that have been raised, structural funding has not been spent in the centres of population but has been put to good use. Most of the money has been allocated to peripheral areas, with the benefit of the additional per capita payments obtained through the special funding.

It has been said that enlargement makes it unlikely that we will attract structural funding in the future, but we should not aspire to attract it. To secure such funding, we need a lower gross domestic product than the rest of Europe. We must use the money to ensure that we never again need to claim it. The money must be spent on projects that will continue to benefit the area once the funding has run out.

I urge the Executive to ensure that that theme runs through all structural funding commitments in future.

Photo of Donald Gorrie Donald Gorrie Liberal Democrat 4:37 pm, 24th January 2002

I want to press various issues on the Executive in a friendly manner. First, the Executive must work harder to publicise the benefits of being a member of the EU. I know that that is a very hard job and that the press is not always receptive. However, there is still far too much totally erroneous anti-EU publicity. For example, the EU's alleged insistence on straight bananas enables journalists write stories that ask why, if we have bent politicians, we cannot have bent bananas. We must counter such stories with factual good-news stories about the EU.

Everyone who has benefited from grants would welcome anything that the Executive can do to persuade the EU to simplify its bureaucratic procedures. The paperwork that is involved puts many people off, causes a great deal of difficulty and means multiple reporting from institutions such as colleges that receive grants from many different sources.

It would also be interesting to find out the number of people who have really benefited from objective 3 training funds. Although we have figures for the number of people who have benefited nominally, courses always have a lot of drop-outs. As a result, it would be useful to conduct some research into the exact number of people who have really benefited.

As far as additionality or match funding is concerned, the relevant committee examined the question of match funding and the Barnett formula and concluded that Scotland did not suffer seriously in that respect. However, we should pursue the issue with the Westminster Government to ensure that we get our fair share. Scotland's share of areas that require European funding is larger than the share that it receives per capita through the block grant allocation.

There is also match funding between councils and the European Union. We have missed out in the past because either the Executive or the previous Government—especially the Conservative Government, which was unenthusiastic about Europe for a long time—did not provide the resources to help councils to produce match funding and we lost out on the funding. Although the sum that is involved at the moment—about £160 million—is relatively small compared to the overall Scottish budget, it is vital to areas that have significant problems.

Finally, at United Kingdom level, the Labour Government seems to have problems with regionalism in England. That has a knock-on effect on us. The Government needs to sort out the north versus south issue. Although the issue is basically English, it affects us.

I welcome the debate. I am happy to support the motion and I hope that the Executive will pick up on the points that I have raised.

Photo of Ben Wallace Ben Wallace Conservative 4:41 pm, 24th January 2002

I have concerns about the timing of the debate. Several members—of all parties—to whom I have spoken said that it was perhaps too early to comment on some of the outcomes of the structural funds and that it would have been better to have the debate later in the year or even next year. Today we have heard not filibustering so much as filler-upping in some speeches.

I would not, however, detract from the content of Irene Oldfather's speech, which was good and knowledgeable. One of the problems of structural funds is that they are not simple even for those who scrutinise them. Each of the three plans for Scotland ran to a 600-page document. Nevertheless, the European Committee conducted that scrutiny. We were looking forward to seeing how the plans would be implemented.

Of course, the outcomes must be matched to ensure that a plan has been successful. I recently visited the business centre in Huntly, where there are some very good examples of the ways in which EU objective 2 funds can kick-start a project and help attract capital without being used as core funding to run it. Once such projects are up and running, they use other income so that they can carry on. The business centre in Huntly also incorporates a learning centre that will be in operation for many years to come.

As a good European—[MEMBERS: "Ooh."] Yes—the Conservative party was engaging with Europe while the SNP and the Labour party were trying to pull out. We will not take any lessons from other parties on how to be good Europeans.

A report will be published on the benefits of EU enlargement—I cannot disclose any information from the European Committee—which it would be useful for all members to read. Enlargement of the EU will have an impact on all our constituencies and I urge members to read the report when it is published. Much work has gone into it and it is a very positive document. That is all that I can say without feeling the wrath of the Presiding Officer.

There are problems. To say that there is a delay in LEADER + is not to be negative. People who have waited for LEADER funding and who use LEADER II funding have waited for more than two years for the next round, which should have begun in 2000. It is not a bad thing to ask why it could not have come a bit quicker. If the minister's reason is that Europe is slow in such matters, why did the Government in England and Wales introduce it before the Executive? It is perfectly reasonable for Opposition members to pass on the concerns of groups that have made plans and which have expected to be engaged in a funding process, but which were left in the lurch for two years. I therefore make no apologies for doing so.

Further difficulties with the application procedures were highlighted in the European Committee's interim report and acknowledged in the Executive's response to that report. I have not seen much evidence that those difficulties are being cleared up. As for the outcomes, as I said earlier, we could have waited a little longer to ensure that we could compare the outcomes with success.

The Executive has a responsibility to make it clear what will be possible post-2006. It should not say that there will be nothing or that the process will carry on as before. The Executive should ensure that we are made aware when issues emerge from Europe that give us clues. For example, the minister never alluded to the fact that about five months ago the European commissioner on structural funds said that he believed that Scotland would receive about 50 per cent of what it gets at the moment.

The onus is on the Executive to communicate that to people and so ensure that they can make plans for the post-2006 situation. The European Committee allows us to examine Europe closely. Irene Oldfather was right when she said that the closer scrutiny that the committee allows is one of the major benefits of the Scottish Parliament. However, we do not get to examine one of the key issues relating to structural funds, which is the pointing system. Perhaps that is because there is a fear that we might use that access to help our constituents. However, it is important that we are allowed to examine some randomly chosen examples to enable us to understand how decisions are made. It is all very well knowing what the procedures are, but it would be helpful to be able to examine the process—perhaps after the decision has been made—so that we can decide whether it has been fair, just and based on the idea of equity. That is what structural funds are all about.

We will not oppose the motion although, as ever, it contains an element of self-congratulation and its timing is not satisfactory. We look forward to seeing what the outcome of the current process will be and whether the structural funds become the success that we hope for.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party 4:46 pm, 24th January 2002

We have had a good, short debate but, like David Davidson and others, I am not quite sure why we had it today. I do not think that the LEADER + programme announcement, particularly given its lack of detail, justified it. As other members have said, the delay in the LEADER + programme is unfortunate.

The minister rightly pointed out the benefits to many areas of Scotland of the application of structural funds. He talked about a tendency of structural funds applications to move toward soft projects rather than toward hard infrastructure projects. However, we could do with more infrastructure projects. On that, I note that Greece and Italy have built substantial motorway projects as part of their contribution to the EU's trans-Europe networks. It is a great disappointment to me and to my constituents—and, I am sure, to David Mundell, who represents the area as well—that successive Governments have not been able to come up with the match funding that is necessary to deliver improvements to the A75, which runs from Stranraer to the motorway network at Gretna and is part of the trans-Europe network. I say that regardless of what Irene Oldfather said, although I congratulate Irene Oldfather on her excellent filibuster.

I thank the minister for his words on the SNP amendment, but I wish to say, as others have, that it is difficult for Opposition parties to table addendum motions when the original motion is not party-politically neutral. The Executive should be able to phrase an original motion that we could add to, rather than one that forces us simply to substitute words.

We do not know what the shape of the structural funds will be after 2006 but, as other members have said, there will be substantial differences. We cannot object to a large part of the structural funds going to new entrants, particularly countries that were formerly part of the Union of Soviet Socialist Republics. We welcomed those nations when they became free and we owe it to them to help them to recover from the devastation of their infrastructure during those dark years.

If I heard him correctly, we got David Davidson to apologise for one of Mrs Thatcher's votes which, I suppose, is progress. However, I was disappointed by his insistence that Scotland could make progress only by increasing its lobbying of Westminster. That suggestion betrays poverty of ambition.

Photo of Ben Wallace Ben Wallace Conservative

I remind Alasdair Morgan that, no matter how much we administer the structural funds, they are distributed through the Department of Trade and Industry and the other Westminster departments, with which the Secretary of State for Scotland liaises. That is the role for the SNP members at Westminster.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

The point that I was making—perhaps only subliminally—was that it is possible to change that arrangement, should the people of Scotland wish it.

Tavish Scott made a valuable point about renewable energy and the building up of infrastructure in that sector, particularly in telecommunications and broadband communications on which, despite the Executive's strategies, we are still falling behind.

Trish Godman and David Mundell also raised the problem of the reform of the CAP. It is interesting to note that, in the south of Scotland, funds from the CAP dwarf structural funding. We must wonder whether that balance is correct but, as other members have said, we cannot afford CAP funding and structural funding to be decimated in tandem. We need to be aware of what is happening on that point.

David Mundell mentioned the minister's cycling proficiency. We can see now why the minister has held on to his job. I presume that he took away all the copies of the leaflet himself. I was suitably chastised by David Mundell, who reported that one of my constituents had mistaken me for Ian Lang. Clearly, I am not being radical enough. On the other hand, Ian Lang held his seat for 18 years, so perhaps that is not all bad news.

I emphasise, as others have done, that we must begin to think about whatever changes are likely to come along in 2006. Far too often in the past, there have been gaps in moving from one state of funding to the next. Those gaps are not helpful to anyone; they certainly do not help community projects and other organisations that are trying to move their communities forward.

Photo of Peter Peacock Peter Peacock Labour 4:51 pm, 24th January 2002

I agree with Alasdair Morgan that the debate has been short but good. Members have made some worthwhile contributions. We will try genuinely to pick up the constructive criticisms that members have made of the processes in which we have been involved.

I was shocked by David Mundell's revelation that there were 11 photographs of me in his leaflet. As members know, the Executive sets targets and I am sure that the target was 14. The Executive is committed to continuous improvement and we will expect better performance next time. That would imply my going in one direction and David Mundell's going in the opposite direction. We will consider that matter.

I am sorry to have to correct the SNP yet again on objective 1 funding in the Highlands. I do so only in passing, because Rhoda Grant put the record straight. The fact that the Highlands and Islands did not get objective 1 funding is a matter for celebration because it demonstrated that, for the first time in many years, the gross domestic product of the Highlands and Islands—its prosperity relative to other areas—has increased dramatically. Notwithstanding that, the Prime Minister—using the strength of the United Kingdom in the EU—was able to negotiate that splendid deal of some £210 million over six years for the Highlands and Islands to continue the good work.

Photo of Dr Winnie Ewing Dr Winnie Ewing Scottish National Party

My memory is clear that the transitional moneys were laid down in advance. It was not a case of the Prime Minister doing a marvellous job of securing them; the moneys were laid down in advance for objective 1 areas that lost that status.

Photo of Peter Peacock Peter Peacock Labour

I have nothing to add to what I said. The record is clear that the Prime Minister was able to secure that resource for the Highlands and Islands through the strength of the UK at the negotiating table. That is a position that we want to continue.

I will move on, as members made many other more constructive points. Trish Godman, who has had to leave the chamber, raised a number of points, particularly about the URBAN II programme. I confirm that that has now been approved by the European Commission. We want to implement that very quickly. We will make announcements about that soon. She rightly pointed out the rules of subsidiarity—passing down decision making on the use of those funds to the lowest possible level. Our proposals will reflect that. On her point about cultural activity and the war paintings that she mentioned, we will happily consider in detail the eligibility of her suggestion but, on the face of it, it might be difficult to secure structural funding for that.

David Mundell and Ian Jenkins also made valid points about the CAP and funds from the agricultural programme, which affect the south of Scotland in particular, relative to funds from the structural funding programmes. CAP funds and other support measures from the EU are significant to the wider economy of Scotland. The Executive is aware of the difficulty that would be caused were the structure of those funds to change dramatically in any short period of time. Whether the accession of countries such as Poland into the EU will accelerate or hold back CAP reform is a matter for debate. It remains to be seen. We are, nonetheless, well aware of the problems.

A number of members, particularly Irene Oldfather, but also Brian Adam and Donald Gorrie, raised points about delays in payments. I assure them that we are investigating those delays thoroughly. We are concerned about them and we want the situation to improve.

Brian Adam also asked questions about the way in which organisations can make applications for funds using computer technology. Again, we realise that there are difficulties with that and we are making appointments to Executive posts to try to pursue and solve that problem. He also made a point about drugs problems and about broadening the range of ways in which we can apply European funds to help particular disadvantaged groups. If Brian Adam will give us his suggestions, we are happy to consider whether European funds can stretch to that directly or whether it can be done through training programmes of the sort that I mentioned, which help those who may have had drug problems back into society.

A number of members mentioned match funding— [Interruption.]

Photo of George Reid George Reid Scottish National Party

Order. There is far too much private conversation and chuntering going on, which is discourteous to the minister.

Photo of Peter Peacock Peter Peacock Labour

Match funding has never been a serious problem in Scotland. We have always been able to use the European funds that are available. Although finding the cash is a challenge for local authorities or enterprise companies, they have nonetheless found the cash and given priority to that kind of expenditure in ways that have brought benefits to their communities.

David Davidson mentioned economic development and the potential for further use of European funds. There are many good examples of that in the private sector. Perhaps the most recent and striking example is the development of the Vestas Wind Systems factory in Kintyre, which produces wind turbines. Significant sums of money are going into that from the European Union, the enterprise companies and private investment. We want more of that.

David Davidson also mentioned the transparency of the decision-making process, as did Tavish Scott. Under European rules, we are required to ensure that we advertise well the resources that are available from European funds. We seek to do that. If there are difficulties, we are more than happy to review the procedures. Irene Oldfather said that because of the existence of the Parliament and its committees, European funds—among many other aspects of Scottish life—are subject to more rigorous scrutiny than they were before the Parliament. I welcome that scrutiny; there is much to be said for drawing out such matters in public.

I have given answers to the smaller points that were made, but members made two central points recurrently. One was on enlargement and its implications; the other was on what we will do about the next round of European funds. For the reasons that I set out in my opening speech, we support the process of enlargement; it will lead to the development of Europe, of the marketplace and of peace and security in Europe. Inevitably, enlargement will mean that the European Union will engage with countries whose gross domestic product measures are significantly below those of Scotland.

Photo of Gil Paterson Gil Paterson Scottish National Party

Does the minister find it rather ironic that Scotland is seen as one of the richest countries in Europe, yet we have many children who live below the poverty line and are born to fail?

Photo of Peter Peacock Peter Peacock Labour

The member makes a good point. He knows that we are committed to tackling the issues that he mentioned, through domestic and European programmes.

As the new accession states enter the European Union, funds will inevitably and properly flow to meet the needs of those countries. Equally, the accession of new states into the EU opens up enormous opportunities for Scotland. There will be about 100 million new consumers in the marketplace, which means enormous opportunities for growth, given the development of those countries' economies relative to ours. As Irene Oldfather rightly pointed out, for every pound that we spend on European investments of that sort, a significant amount comes back to this country by way of the goods, services and expertise that we provide to the accession states. We are working closely with the Czech Republic to help it to develop opportunities for joining the European Union. We are also working with the Finnish Government on helping Estonia with its process of joining.

Irene Oldfather made another equally important point about enlargement. We must ensure that we have a level playing field throughout the European Union. That is why we are paying attention to state-aid policy to ensure that competition, environmental standards and social policy are treated equally throughout the European Union.

Members mentioned Scotland's involvement in the negotiations for the next round of funds. As I said, we take an active part in those negotiations. Last year, I took part in the cohesion forum. Angus MacKay attended the Namur council in the middle of last year on behalf of the Executive and as part of the UK delegation. We will be an active part of the discussions on the next round of funds. I have been fairly open about the strategy that we are developing and negotiating. I am happy to share the strategy with members in other debates on the subject. Members should be clear; special pleading will not win resources for Scotland. We must attach ourselves to the arguments about how we remain competitive in the new marketplace and we must develop those arguments with our UK colleagues.

I have indicated not just my support for and enthusiasm in our involvement in the European Union, but that of the Executive. Scotland has a very important part to play in Europe's continuing development. It is not simply a question of our receiving funds; it is also about sharing our understanding and expertise with the new, accession states and with the developing union that we see before us. I commend the motion.

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

I did not want to interrupt the minister, but there has again been too much noise during the wind-up speech prior to decision time. That is not fair to whoever must respond to the debate. I ask members to confine their conversations to the coffee lounge.