Europe

– in the Scottish Parliament at 9:30 am on 12th June 2003.

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Photo of George Reid George Reid None 9:30 am, 12th June 2003

Good morning. The first item of business this morning is a debate on motion S2M-124, in the name of Nicola Sturgeon, on Europe.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

There could be no more appropriate moment for the Parliament to debate Europe; to reflect on current developments that will have lasting implications for the governance of our country and a profound impact on our lives; to consider the extent of Scotland's influence on them; and to look forward to how Scotland's interests can best be represented in the new Europe that is taking shape before our very eyes.

Right now Scotland is little more than a bystander at the big discussions that will shape and define the terms of our relationship with Europe for generations to come. If anyone doubts that, they need only reflect on the events of this week. In Scotland, as in the rest of the United Kingdom, opinion is deeply divided on the single currency, but what is beyond argument is that the chancellor's decision to kick euro membership into the political long grass was taken in London for London. It had nothing to do with Scotland and it ignored completely the needs and interests of the Scottish economy. We have distinctive economic conditions in Scotland. Our housing market is different, being less volatile than that of London and the south-east of England, we are a more export-oriented economy than the UK as a whole and we have a major financial services sector.

Also, as we have heard many times in the chamber, we have a chronic and long-term problem of low growth. It could therefore reasonably be argued that we—even more than the rest of the UK—need the benefits of euro membership for the increased output and employment that Gordon Brown extolled on Monday, before he went on to reject early entry because of the overheated housing market in the south-east.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

In a bit.

Our distinctive economic conditions demanded a separate Scottish assessment of the five tests, but that was never going to happen because, as we know, Scotland's interests were never a factor. The decision was based solely on the economic needs of London and the south-east, and on the pathetic powerplay between Tony Blair and Gordon Brown.

The decision on the euro exposed Scotland's powerlessness and lack of influence on these central matters, but it exposed something else as well: the utter uselessness of the Secretary of State for Scotland. Exactly one month ago today, Helen Liddell made a speech in which she asked people to "reflect" on what being excluded—

Photo of Alex Johnstone Alex Johnstone Conservative

Would the member accept that the post of Secretary of State for Scotland remains essential within the structure of British government and that it is Helen Liddell herself who is useless?

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

I think that both are useless and I am sure that the Prime Minister will have something to say about that later.

Helen Liddell says that failure to join the euro would leave Scotland "out on a limb" and that Edinburgh would be left "offshore", so it would have been reasonable to expect that, on Monday, when her darkest fears became a reality, Scotland's so-called voice in London would have been heard loudly objecting to a decision that, in her own words, leaves Scotland out on a limb. Not a bit of it; instead, the bold Helen announced herself "pleased" with the chancellor's decision.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

I will take more interventions when I get into my stride.

That is proof, if proof were needed, that Helen Liddell's outburst a month ago was nothing to do with standing up for Scotland's interests and everything to do with impressing the Prime Minister and keeping her seat at the Cabinet table. Let us hope that the reports are true and that the Prime Minister uses his imminent Cabinet reshuffle to abolish the post of Secretary of State for Scotland because, with friends like Helen, Scotland does not need enemies.

Photo of Keith Raffan Keith Raffan Liberal Democrat

Will Ms Sturgeon comment on Mr Alex Neil's statement that

"A Scottish economy run from Frankfurt will be no more successful than one run from London. Joining the euro would place severe limitations on the degree to which we could be independent in Europe"?

She should not launch attacks on politicians of other parties when there are so many splits in her own.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

Mr Raffan knows only too well that Mr Neil is more than capable of speaking up for himself and I am sure that he will do so during the debate. I will explain in the course of the debate exactly why Scotland should and must be independent in Europe. If Mr Raffan listens, he might learn something.

I believe that Scotland's rightful place is at the heart of Europe, represented at the top tables, and playing her full part in the decisions and debates that shape the European Union and have such an enormous impact on our everyday lives here at home.

The Scottish National Party is passionately pro-European. We believe in an enlarged, confederal Europe, a voluntary coming-together of states in a union that collectively exercises certain sovereign rights pooled by its members. In today's world—ever smaller, ever more interdependent—there are many issues that are best dealt with collectively, across state boundaries. There are areas where the states that make up the Europe Union are stronger together and weaker apart.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

The member should be patient. If he keeps asking, he might get somewhere.

On matters such as environmental standards; the flow of goods, services, capital and, of course, people; employment law; and common defence and security, it makes sense to pool sovereignty and act collectively. However, we oppose a European superstate. The nations and peoples that make up the European Union now, and even more so post-enlargement, are historically, culturally, politically, constitutionally and linguistically diverse. That is why each member state must retain its own distinctive identity and its own sovereignty in respect of constitutional, fiscal and other matters of vital national importance. That is our vision of Europe.

As a party, our response and attitude to each development on the European stage, to each decision about whether, on any given matter, sovereignty should be pooled or retained, or in some cases about how pooled sovereignty is exercised, will be governed by a simple test: is it in Scotland's national interest or not? It is the application of that simple test that results in our support for the euro. Early entry to the single currency, subject to the approval of the Scottish people in a referendum, is, I believe, in Scotland's interests.

Photo of George Lyon George Lyon Liberal Democrat

We have noticed—the member is trying.

Mr Salmond, that leader over the sea, said that

"Failing to join the euro ... will continue to wreak damage" to the Scottish economy. Does Nicola Sturgeon argue that an independent Scotland should go into the euro immediately, if the SNP can win a referendum in Scotland, or in one year, two years or three years?

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

I think that I made it clear that we support early entry to the euro.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

We do not know whether the Scottish economy is ready now because there was no separate assessment in Scotland of the five tests. What we do know is that remaining outside the euro has a price for Scotland. Scotland's interest rates are double those in the euro zone. What that means for home owners in Scotland, for example, is mortgage payments of more than £1,000 extra every year. We are paying the price right now of decisions taken elsewhere. That is the reality. It is our concern for the Scottish national interest that allows us to support entry to the euro. It also means that we support the development of the European constitution but steadfastly oppose the conferral in the EU of exclusive competence over fishing.

Photo of Margo MacDonald Margo MacDonald Independent

On the matter of the constitution, I absolutely agree with what the member has just said about steadfastly opposing a federal constitution, but what will she do if Germany, France and Italy say yes to federalism?

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

As Margo MacDonald is, I believe, a nationalist, she would agree that Scotland should be independent in Europe so that we can influence those decisions in a way that we simply cannot do at present.

I want to outline why we support a constitution but also—in direct response to Margo MacDonald—why we believe that it reinforces the need for Scotland to be an independent member state. Before I do that, let me make one thing clear. Before the UK Government moves to ratify the constitution treaty, it must have the courage to seek support in a referendum. Peter Hain may say that it is a tidying-up exercise, but the constitution marks a significant step in the evolution of the EU and it must have democratic legitimacy. We should not allow the case for a referendum to be appropriated by the Eurosceptics and used as a Trojan horse against the whole concept of European participation.

It is interesting that the Tories are new-found converts to the idea of referenda on European matters, given that they refused to have a referendum on the Maastricht treaty, which introduced the single European market and increased qualified majority voting. However, Labour—and indeed its Liberal Democrat representatives—can learn the lessons of Tory mistakes. I hope that the minister will take the opportunity today to support calls for a referendum and press the UK Government on that point.

Photo of Tavish Scott Tavish Scott Liberal Democrat

Would Nicola Sturgeon care to state at this stage what the referendum would be about? At this moment, the convention has not concluded its discussions, there is no agreement on its final proposals and we do not know whether the final proposal will include a single president of the European Council. It is ludicrous to suggest that we should have a referendum today until we know what the final outcome is.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

Tavish Scott should listen. I did not suggest that we should have a referendum today and, if he does not mind my saying so, that is a singularly stupid point to make. There should be a referendum prior to ratification of the constitution treaty. Does he support that or not? Perhaps he will answer that direct question in summing up.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

I will not give way just now, as I have to make some progress. I may take further interventions later.

I believe that the constitution is a good step forward. Transforming the various treaties that make up and have developed the European Union into a formal written constitution gives us the ability to enshrine certain fundamental principles. Democracy, subsidiarity, the principles of human rights, cultural and linguistic pluralism and the protection of minorities are all entrenched in the draft constitution. Most important of all for those of us who believe in a confederation of states, in defining the scope and extent of the EU's competence, the constitution sets limits on its reach. The powers of national Parliaments are entrenched, and that is fundamentally important.

Of course, there are parts of the constitution that we cannot and will not support. National control of national resources is essential. That is why we totally reject that part of the constitution that gives the European Union exclusive competence over fishing. The effect of that proposal would be to exclude marine conservation and fisheries from the principle of subsidiarity. It would also preclude any possible legislative role for Scotland in relation to the conservation of fish stocks in Scottish waters. It is, quite simply, unacceptable.

Centralised EU management of fishing over the past 20 years has been disastrous. It is time to return control more closely to fishing communities.

It is also the case that exclusive competence in that area does not fit with the other exclusive competences.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

I will not give way just now; I have to make progress.

The other competences—monetary policy, commercial policy and the customs union—all impact on all member states. Fisheries policy impacts only on the few member states with significant coastlines and fishing industries, so it is clear why that part of the constitution should be opposed.

The question is who will speak up for Scotland on that issue of vital national importance. Neil MacCormick, Scotland's only elected representative on the European convention, has fought valiantly on behalf of Scotland's fishing communities. When the final amendments to the draft treaty were lodged, it was Neil MacCormick who attempted to delete fishing from the list of exclusive competences. Peter Hain did not even bother to try, so there was no back-up for Scotland's fishermen from the UK Government, in spite of the fact that this Parliament was told by the First Minister on 29 May:

"Not only has the UK Government made representations, but it has written to the EU to make it clear that it is also opposed to the proposal."—[Official Report, 29 May 2003; c 251.]

That is fighting talk—

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

I have to make progress; I have been quite generous with interventions.

That is fighting talk, but it is a pity that Peter Hain did not get the letters from Jack McConnell or the UK Government. Of course, we now know that there was no letter from the UK Government, because it has no intention of opposing the proposal. It takes the view that no change to fisheries competence is being proposed and that there is therefore no need for it to oppose the proposal.

How the UK Government can describe a decision to enshrine exclusive competence over fishing in a constitution, when fishing is not even mentioned in the existing treaties, as "no change" is beyond me. However, that is how it has described it, and we are now told by Jack McConnell, that that is

"the shared position of the Executive and the UK Government".

It really could not be clearer. When faced with a choice between standing up for Scotland's national interests and doing as London tells him, Jack toes the line. He expects to be taken seriously when he lodges an amendment to today's motion promising to

"ensure that Scottish interests are fully taken into account during the forthcoming Inter-Governmental Conference".

The truth, as we now know, is that, when the draft constitution goes to the IGC, where the crucial decisions are taken, there will be no one standing up for the interests of the Scottish fishing industry.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

I will not give way just now; I have to make progress.

That is the price that we pay for being part of the UK, which brings us to the central question of what we want Scotland's place in and relationship with Europe to be. I said earlier that the powers of national Parliaments are enshrined in the draft constitution, but the hard fact is that the Scottish Parliament, in the context of the EU, is not a national Parliament. The constitution represents a firmly statist view of the European Union. Member states, post-constitution, as is the case now, will be the component parts of the EU and the collective decision makers on policy. We have only to glance at the draft constitution to know how true that is. If a country is not a member state, it has no clout.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

I am running out of time and I have already been quite generous with interventions.

All that a regional Parliament can do is try to snatch bits of influence here and there, and then only with the consent of the parent member state.

The Executive amendment is right to point to references in the draft constitution to the role of regions and the mechanisms for consulting them. Those are important provisions and, in the interests of the regions of Europe, we support them. However, Scotland is not a region. We are a nation with a Parliament of our own and we should not have to rely on the UK to represent our interests when decisions are taken, especially on issues such as fishing, which are of vital national importance to us but of marginal significance to the rest of the UK. That is how we end up with fishing deals that are devastating for our industry.

Scotland independent in Europe would have a more powerful voice than we have now, with 13 MEPs, seven votes in the Council of Ministers—votes for us, not against us, as the UK votes were in last year's fishing talks—and the right to nominate a commissioner.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

I will not give way; I believe that I am now in the final minute of my speech.

I know that there are members who believe, contrary to all the evidence, that our interests in Europe would be best represented as part of the UK. That is a valid point of view, although it is one with which I clearly disagree. I simply ask those people to look ahead, and not even very far into the future. Post-enlargement, the EU will be—even more than it is now—a union of small nations. Seventy per cent of all member states will have populations of less than 10 million, and seven out of 10 of the countries poised to join have populations similar to or smaller than that of Scotland. If Slovakia, Lithuania, Latvia, Slovenia, Estonia, Cyprus and Malta can have seats at the top table, why cannot Scotland? Why should Scotland be content with second-class status?

Those are the questions that we should ask ourselves and we should do so honestly. We all have different opinions, but we should engage openly in debate. None of us should hide behind the age-old Labour-SNP enmity that so often stunts rather than fosters discussion about Scotland's future.

What is the place in the world that we want our Parliament and our country to have? All of us have an obligation to address and answer that question.

I move,

That the Parliament supports the European Union as a confederation that collectively exercises certain sovereign rights pooled by states but in which each state retains its own sovereignty in respect of constitutional, fiscal and other matters of national importance; believes that decisions about pooled and retained sovereignty should always be taken in Scotland's national interest; therefore welcomes the development of a European constitution but opposes the conferral of exclusive European Union competence over the conservation of marine biological resources under the common fisheries policy; considers that the terms of the final draft constitution should be subject to the approval of the Scottish people in a referendum prior to ratification; regrets that the decision by Her Majesty's Government to delay entry to the single currency does not take account of Scotland's economic interests, and believes that Scotland's interests would best be represented in the European Union as an independent member state.

Photo of Tavish Scott Tavish Scott Liberal Democrat 9:47 am, 12th June 2003

I welcome this debate on Europe, particularly on the morning that Ana Palacio, the Spanish foreign minister, has made an interesting contribution in The Scotsman to the increasingly important debate on the future of Europe.

This morning's debate comes at an important stage in the debate on the future of Europe. The 105 members of the convention are about to produce a new constitution for the European Union after 16 months of work. The outcome should either help EU enlargement to work, and that is the Executive's wish, or dictate whether the creaking institutions of the European Union come grinding to a halt. The convention has the potential to have a great impact on the future of Europe and the future of countries in Europe including Scotland.

When they gathered at Laeken back in December 2001, EU leaders were clear that a number of issues faced the developing Europe of the 21st century. Perhaps the most important issue was a growing perception among citizens that Europe was becoming more and more distant. It was clear that Europe had to be reformed, to be more open and transparent in the way it conducts its business, to involve the people affected by its policies and laws and, most important, to be a Europe that people actually understand.

The convention has produced some good, sensible proposals. It is true that they are not necessarily the stuff of tabloid headlines, but they should make a real difference to how the EU conducts its business and the extent to which it involves all those with an interest. The Scottish Executive has involved itself fully in the work of the convention. Last summer, the First Minister acted as rapporteur for a Committee of the Regions opinion on more democracy, more transparency and more efficiency in the EU. That opinion was adopted unanimously and formed a crucial plank of the committee's formal submission to the convention. Our work with other influential regional Governments led to the adoption in November in Florence of a declaration by 43 governments.

In addition to our active involvement and leadership at the regional level, we have been able to fight for our interests with the full weight of a major member state behind us. We led the drafting of a joint submission on the role of the regions in Europe that was submitted to the convention in February on behalf of the Scottish Executive, the National Assembly for Wales Government and the UK Government. That submission contained a package of proposals to reflect the important role that the legislative regions have in implementing EU legislation.

Our submission called for greater flexibility to be given to the implementing authorities so that they can reflect local circumstances and for greater use to be made of framework legislation, which sets the broad objectives to be achieved but leaves the detail up to those who deal with the implementation.

Photo of Margaret Ewing Margaret Ewing Scottish National Party

I do not want the minister to over-egg the idea that somehow the Scottish Executive is playing or has played a full role in the convention. Scottish Executive members are not part of the convention. If they attend at all, they do so as observers, which does not give us the status that is required of the Scottish Parliament, and no one is attending the Council of Ministers meeting in Greece.

Photo of Tavish Scott Tavish Scott Liberal Democrat

The Scottish National Party is eternally obsessed with who sits in what chair, rather than what gets done. The important point is what we achieve for Scotland. The SNP constantly forgets that and is never interested in what we achieve—it is interested in who is on the plane.

I will tell members what has been achieved at the convention by the Scottish Executive working with the member state—the Scottish National Party could not care less about this, but people in Scotland do because it affects the legislation that governs this country. Our submission called for the Commission to consult us on new policies at an early stage in the planning process—presumably, the Scottish National Party opposes that, as Nicola Sturgeon is grinning away furiously. Our submission also called for a new mechanism to ensure subsidiarity—another thing that the SNP will, presumably, oppose. We do not want the EU to start making Europe-wide policy when we could do the job as well at member-state or regional level. That is something that the partnership parties are committed to but which the Scottish National Party clearly opposes. If Richard Lochhead will define his party's position, I will be grateful for his intervention.

Photo of Richard Lochhead Richard Lochhead Scottish National Party

Does the minister believe that the Scottish Government and Parliament should have access to the European Court of Justice to ensure that Europe adheres to that important principle?

Photo of Tavish Scott Tavish Scott Liberal Democrat

The importance of the European Court of Justice is considerable and I will address it later.

In areas of fundamental importance to the good government of Scotland, the Executive has worked hard and with considerable effect—although the SNP does not believe in doing that. Parliament will wish to be aware that the convention text takes good account of the role of regional Administrations, which is a first in European treaty terms. We consider that to be important, and its significance should not be underestimated and is not underestimated by partnership parties.

The convention proposes a new protocol on subsidiarity. It includes the monitoring mechanism that we demanded. National and regional Parliaments will have the chance to cry foul if they believe that particular proposals breach the principle. Those are important victories as a result of the work that we have done and they should be regarded as such. Under the convention's proposals, the Commission will be obliged to consult widely before making legislative proposals, and it will be compelled to take into account the regional and local dimension of the action envisaged.

That is a good result. We know that there is still work to be done with our partners to ensure that those proposals make it through the inter-governmental conference that will kick off later this year to negotiate the final constitutional treaty, but we have excellent foundations for that discussion now.

I will tackle some of the misinformation spouted by Nicola Sturgeon. The SNP claims that the convention proposes additional competence for the EU in the fisheries field. That is untrue. Nothing in the draft proposals under consideration in the convention at the moment would bring about any change to the current position on competence. If a proposal emerged for any extension to EU competence, the Executive and the UK would oppose it vigorously. Are we giving up any responsibility for fishing? The answer is an unambiguous no.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

The minister and I will agree to differ on whether enshrining something in the constitution makes a difference when it is not even mentioned in the existing treaties. We will put that to one side.

Tavish Scott argues that the status quo pertains. Does that mean that he is prepared to argue today that the status quo is in the interest of Scotland's fishing industries and that he does not want to take this opportunity to change it and get a better deal for those communities and industries that have suffered so much, particularly in recent months?

Photo of Tavish Scott Tavish Scott Liberal Democrat

I would have more respect for that position had SNP members not made U-turns on fisheries throughout the recent election. They said—we all remember this—that the transitional relief package was wrong, and then they said that it was right. They said that decommissioning was wrong, and then they said that it was right. I have here Mr Lochhead's press release, which I will read to him, if he likes. The SNP's position on fishing is a complete sell-out of everything that it ever says in the chamber.

It is one of the rich ironies of Scottish nationalism—into the European Union but out of the common fisheries policy. The SNP never explains, particularly in fishing constituencies how that would happen. It never explains how it would negotiate entry into the EU in an independent Scotland and at the same time withdraw from the CFP. Its position is not credible.

The Executive has taken forward and will take forward genuine management changes to the CFP. Those changes will build on the progress made in December in securing relative stability and the retention of the 6 and 12-mile fishing limits and the Shetland box. Those were important victories for the Scottish fishing industry. All those policies were secured at that time, despite the scepticism of many.

Photo of Tavish Scott Tavish Scott Liberal Democrat

There are persuasive arguments for fishermen being involved in local decision making, a point that I know Stewart Stevenson agrees with. Both partnership parties not only agree with those arguments but are implementing policies on that through regional management initiatives. That is the future—working with the fishing industry to build a sustainable future.

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

The minister said that Scotland, when independent, would need to negotiate entry into the European Union and yet, simultaneously, he appeared to suggest that we would have to negotiate out of the common fisheries policy at that point. If the minister adhered to the view that Scotland has to negotiate into the European Union, would it not be the case that we would be outside the common fisheries policy at that point and that no sensible, independent Scotland would join the CFP as it is presently constituted?

Photo of Tavish Scott Tavish Scott Liberal Democrat

So how would Mr Stevenson negotiate with Denmark, Norway and the other member states that have competence in the North sea? The SNP never provides answers to those questions because it does not have any.

Fishing, and the SNP's duplicity on that issue, is one aspect of its motion, but there are further nationalist inconsistencies on Europe that must be exposed. Is it independence in Europe or independence out of Europe? Is it yes or no to the convention? Yes or no to the euro? Nicola Sturgeon proposes a Scottish test. Is that the John Swinney test or the Alex Neil test? Is it the Roseanna Cunningham test or the Kenny MacAskill test?

John Swinney regards the convention proposals as "generally a positive step". I quote Andrew Wilson in his paper for national assembly discussion on "Economic policy and positioning":

"Scotland's best interests would be served through membership of the European single currency area as soon as is practically possible".

Then we turn to Mr Neil. I have re-read the text of an interesting lecture that he gave in September and it makes fascinating reading. As usual from Mr Neil, it is entertaining, but not, I suspect, for Mr Swinney:

"My purpose is to initiate a debate in Scotland and particularly within the SNP on whether a yes or no vote is in Scotland's interest.

I will argue that the SNP, when the time comes, should campaign for a no vote in the UK Euro referendum.

I will argue that the SNP in the run up to the referendum should revisit our support in principle for membership of the Euro."

It is rich for the SNP to attack the Scottish Executive for the constructive work that we are doing to strengthen Scotland's role in the European convention and in the wider debate about Europe, at the same time as the SNP is having a sordid internal debate. On that basis, Parliament should reject the SNP motion today.

The convention proposals set out clearly for the first time where the EU has exclusive competence; where it shares competence with member states and their regions; and where it can act only in support of member-state action. That is a good step forward for two reasons. First, it enables people to see at a glance the division of competence between the EU and member states. Secondly, it allows a clear definition of competence, which should protect us against creeping encroachment by the European Union into areas that were previously our responsibility. The Executive welcomes the opportunity to make the positive case for Europe and will play a full role in the debate on Europe.

Inevitably, that will include the euro. It is for Westminster to determine the future on that matter, but the Executive believes that entry into the single currency is in principle desirable. The principal role of the Scottish Executive is to work with business, organisations and people throughout the country to prepare for the time when the UK joins the single currency. The First Minister and the Deputy First Minister will be members of the Scottish committee on euro preparations. As the representatives of the people of Scotland, we should seek to promote the benefits that our nation can gain from Europe and the euro. Every member of the Parliament who understands those benefits should join us in that campaign.

I turn to the other amendments. The very phrase "the Tories and Europe" brings back so many happy memories: Teresa Gorman, Bill Cash, even Lord Lamont of Lerwick and Phil Gallie—a history of catastrophic economic mismanagement.

I will quote two Conservatives who spoke following Monday's statement by the chancellor in the House of Commons. Mr David Curry asked:

"Given that there will be a natural gravitational pull toward countries that have espoused the policies that are considered to be central to the European Union, is it not important that the Chancellor bears those facts in mind and gets on with his further assessment at the earliest sensible opportunity?"—[Official Report, House of Commons, 9 June 2003; Vol 406, c 434.]

Photo of Tavish Scott Tavish Scott Liberal Democrat

Let me read out the second quote. Murdo Fraser will enjoy this one, as it comes from Kenneth Clarke, whom I know he particularly admires. Mr Clarke said:

"I look forward to Budget day next year, when he"— the chancellor

"and I might at last begin to campaign together in support of the views that we hold in common".—[Official Report, House of Commons, 9 June 2003; Vol 406, c 424.]

I am sure that Conservative members of the Scottish Parliament share those views.

Mr Gallie's amendment is presumably a response to the cries from certain hysterical sections of the press and to a deep-seated desire to question, under cover of a referendum, the UK's continued membership of the European Union.

I invite Parliament to reject the Tory and SSP amendments, as well as the SNP motion. The debate about Europe's future is about a vision, within an ever more interdependent world. It is about whether this country is frightened, isolationist and living in the past or—as the partnership parties believe—optimistic, internationalist and willing to embrace change.

I move amendment S2M-124.4, to leave out from "supports" to end and insert:

"welcomes the many benefits that the European Union (EU) has delivered for Europe and for Scotland; continues to believe that the EU should seek to become more effective, efficient, democratic, transparent, accountable and easier to understand; notes the work of the Convention on the Future of Europe towards these objectives; further welcomes the submission to the convention of the proposals on Europe and the regions drawn up by the Scottish Executive in conjunction with Her Majesty's Government and the Welsh Assembly Government; further notes with approval the references in the draft Constitutional Treaty under consideration in the convention to the role of the regions, and to mechanisms for consulting them; welcomes the intention of Her Majesty's Government to involve the devolved administrations in the operation of the subsidiarity mechanism proposed by the convention, and calls on the Scottish Executive to continue to work with other sub-member state administrations and Her Majesty's Government to ensure that Scottish interests are fully taken into account during the forthcoming Inter-Governmental Conference."

Photo of Phil Gallie Phil Gallie Conservative 10:02 am, 12th June 2003

I make no apology for concentrating on two issues: the euro and the convention on the future of Europe. I do so ignoring the SNP motion, principally because it is based on a hypothetical situation that will not arise in the foreseeable future. In the recent Scottish parliamentary elections, support for the SNP fell back considerably. I believe that that trend will continue. The objective of an independent Scotland has clearly been rejected by people in Scotland. For that reason, the terms of the SNP motion are totally irrelevant.

This week, expectancy reached a high with the chancellor's production of a stone of paperwork on the euro. For those who are no longer up to speed on stones, a stone is about 6.5kg. In the chancellor's deliberations, carried out over six years, we find no change in the arguments for taking the United Kingdom into the euro. Back in 1997, of the five criteria set by the chancellor, only one was met; the same is true today. I suggest that we are dealing not with an economic argument for adoption of the euro, but—as Nicola Sturgeon suggested—a political decision that needs to be made. Nicola Sturgeon's approach was somewhat confused. She envisaged Scotland having fiscal autonomy, but at the same time she wanted to pass control of our currency to a European body.

Tavish Scott mentioned David Curry and Ken Clarke. There are divisions in our party, as there are in many democratic parties—although perhaps not among the Liberals, who take a tight line on this issue. I know that there are divisions in the Labour party, just as there are among the nationalists. The minister might have mentioned Ted Heath, who took us into the Common Market. Ted deceived many of us in the Tory party, because he took us into a common market and we did not envisage the federal approach to Europe that he apparently did.

Photo of Tavish Scott Tavish Scott Liberal Democrat

Did Mr Gallie agree with Mrs Thatcher when she signed the UK up to the Single European Act?

Photo of Phil Gallie Phil Gallie Conservative

I agreed that it was desirable to have common conditions, in so far as that was possible, for trading in Europe. I was concerned principally that the same level of subsidies should be provided to companies and businesses across Europe.

Photo of Phil Gallie Phil Gallie Conservative

Irene Oldfather should hold on—I am trying to answer the question.

I accept that Mrs Thatcher's vision was somewhat overcome by the detail of implementation of the Single European Act. One must also consider the people who were behind her at the time—people such as Douglas Hurd, Lord Howe and Ken Clarke, all of whom were pushing in that direction.

That brings me on to another point—

Photo of Phil Gallie Phil Gallie Conservative

I will give way in a moment.

When we talk about the euro, we look back to the exchange rate mechanism. The people who support the euro are the people who took us into the ERM. People who are now members of the Scottish Parliament from all the other parties encouraged us to adopt that line. However, the ERM ended up as an absolute disaster for Scotland and the UK. Surely our politicians of today should have learned the lessons of the ERM.

Photo of Irene Oldfather Irene Oldfather Labour

Does Mr Gallie accept that the very first reference in a treaty of the European Union to economic and monetary union appeared in the Single European Act, which was designed by a member of Mrs Thatcher's Cabinet and widely supported by the Conservatives in 1987? That is the genesis of economic and monetary union. I do not recall that at any time the Conservatives wanted to put the Single European Act to a referendum.

Photo of Phil Gallie Phil Gallie Conservative

The member is absolutely correct. We went further than the Single European Act and agreed to the Maastricht treaty without a referendum. In the Maastricht treaty, Britain obtained opt-outs on the very issues that Irene Oldfather suggests: the social chapter and the common European currency. For that reason, there was value in our accepting the Maastricht treaty. To some extent, it was a pull-back from the Single European Act.

I remind members of the effect that the ERM had on the economy of Scotland and the UK. I remind members that, from the point at which we pulled out of the ERM, our economy grew. It grew to the extent that in June 1997, when Tony Blair attended the meeting of the Council of Ministers in Amsterdam, he was able to boast that the UK had the strongest economy in Europe. To a large extent, that was the consequence of our looking after our own financial affairs, ensuring that our currency matched our national needs and having the flexibility to govern as we felt was reasonable.

Photo of Margaret Ewing Margaret Ewing Scottish National Party

Before we go too far down memory lane, I remind the member that John Smith, Gordon Brown and others in the Labour party gave huge support to the decision to join the ERM. We should remember that. The decision to join the ERM was supported not just by one political party—it had cross-party support.

Photo of Phil Gallie Phil Gallie Conservative

I thought that I had made that clear. Many people who are now members of the Scottish Parliament suggested that it was right for us to enter the ERM. I am concerned that those who are now shouting that we should adopt the euro are the same people who shouted for us to join the ERM. They have not learned their lesson. Today, I am trying to get them to remember where their past support for the ERM took us.

When the euro zone was established, we were told that it would be a disaster for the United Kingdom and would affect employment. Today, Labour boasts that we have the highest level of employment in Europe. What has been the problem with staying out of the euro zone? We were told that failure to adopt the euro would have a devastating effect on our financial services industries, but just last week we learned that Edinburgh is now the second most important financial services centre in Europe, second only to London. I have to ask: what has been the disadvantage in our staying out of the euro zone?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

As a representative of Edinburgh in the Scottish Parliament, I inform Mr Gallie that the city has been a centre for financial services for some time. Does he recognise that a financial services company in Edinburgh that employs many of my constituents is very much in favour of early entry to the euro zone?

Photo of Phil Gallie Phil Gallie Conservative

I am not aware that people are very much in favour. I recognise that opinion is split in business, much as it is across the country. In the business world, far more people feel that taking Britain into the euro would be damaging than believe that it would bring benefits.

On that point, I have some sympathy with the SSP amendment. Rightly, the socialists emphasise that the people who will gain most from our adopting the euro will be the large global companies. I agree entirely with the SSP on that point, which is one that we should all take into account.

We have heard much about the convention on the future of Europe and have been told that it is a tidying-up exercise. However, when I consider the effects that it could have on our judicial system for a start, it frightens the socks off me. The idea of having some sort of European procurator who would look after the affairs of our Scottish judicial system seems to me to be totally wrong. We are passing out powers rather than taking them in—powers that many people in the chamber fought for many years to bring back to a Scottish Parliament.

Photo of Phil Gallie Phil Gallie Conservative

I am sorry, but I am in my final minute.

We should also question the contents of the new Charter of Fundamental Rights of the European Union. What effect will the charter have on health, education and transport? Europe already dominates the scene with regard to environmental issues. All aspects of the charter could well take powers away from the Scottish Parliament. The charter threatens the powers that have been devolved to this Parliament in relation to areas on which it is right that local people should make decisions.

The last thing that I want to see in this country is other people speaking for us on foreign affairs and defence issues. [Laughter.] SNP members may laugh, but I point out to them that we elect 72 Scottish members to go to Westminster and that the Westminster Government speaks for Scotland.

I move amendment S2M-124.2, to leave out from "confederation" to end and insert:

"partnership of nation states working together for the common interest; expresses concern at the clearly federalist objectives of the current proposals of the Convention on the Future of Europe; pledges to analyse the detail of these proposals as they affect devolved responsibilities and report back our objections to Her Majesty's Government along with our view that, given the conclusions drawn up by HM Treasury over the last six years on the United Kingdom entering the European single currency, there is no basis for the United Kingdom surrendering the pound for the euro and that further uncertainty on monetary union will be bad for Scottish interests, and urges Her Majesty's Government to hold an early referendum on both the Convention proposals and European monetary union."

Photo of Frances Curran Frances Curran SSP 10:13 am, 12th June 2003

I think that I have found a new comrade today. However, even in our short time in the Scottish Parliament, no one could accuse the SSP of basing our views on Europe on the need to keep the Queen's head on the £5 note—although Colin Fox might have a sentimental attachment to the idea of having Rabbie Burns on the Scottish pound.

Despite the fact that the SSP also opposes the euro, I do not think that Phil Gallie and I will find ourselves on the same platform in the eventual referendum campaign. The SSP is part of the European social forum, a meeting of which I attended in Florence last year. The forum stands for a Europe of citizens' and democratic rights and opposes deregulation, privatisation and cuts in public spending. The SSP believes in international solidarity and co-operation with the peoples of Europe but does not believe that signing up to European monetary union and the single market will in any way help to deliver that kind of co-operation and solidarity.

The Lisbon summit—the big business summit, as it was dubbed by much of the press—set out the agenda that people are now trying to implement throughout the European Union. That agenda—and on this point I agree with Phil Gallie—means a shift towards centralisation of political and economic power away from the structures in Scotland and Britain.

The European Union has no democracy. The European Parliament is the only elected component of the structure. The Council of Ministers and the 20 commissioners make the decisions and the elected Parliament plays only an advisory or supervisory role. The new draft constitution attempts to change that in some ways, but that is the situation that has existed for several years. The commissioners are accountable to no one—not to the European Parliament and not to any national Parliament. Neil Kinnock, who could not win an election in Britain, has no problem being in charge of transport policy across Europe.

Photo of Keith Raffan Keith Raffan Liberal Democrat

Is Ms Curran aware that the European Parliament sacked a previous Commission? The European Parliament has the power to remove the Commission, so she is misinformed on that issue.

Photo of Murdo Fraser Murdo Fraser Conservative

The commissioners were all reappointed, however.

Photo of Frances Curran Frances Curran SSP

I thank Murdo Fraser, who rightly points out that the commissioners were all reappointed, even though they were accused of fraud, corruption, expense claims irregularities—the lot. It is right that the European Parliament should have the power to remove the Commission and we should argue for that right. If the SSP gets candidates elected in the next European elections, we will link up with people across Europe who feel the same as we do and support those ideas.

Photo of Frances Curran Frances Curran SSP

No, I want to press on.

The European Parliament must be one of the most expensive advisory bodies in the world. The SNP, Conservatives and Liberal Democrats want to sign us up to an undemocratic structure that will take decision making out of our hands.

All the member states have signed up to the convergence criteria and the growth and stability pact, which limits Government borrowing to 3 per cent of gross domestic product. Let us be clear: that is intended to slash public services, force the privatisation of public services and state-owned companies and give tax cuts to the rich. Those are the ideas that were brought into Britain more than 20 years ago. Ironically, the policies that Britain has followed—including those of Blair and Brown—which have slashed public spending and privatised public services, have already ensured that many of those measures have been implemented and that there is no problem with Britain meeting the convergence criteria. However, many other countries in Europe might not be in that position.

Photo of Frances Curran Frances Curran SSP

Last year, Germany was warned that it was in danger of breaching the criteria and that it needed to make cuts in public spending. That highlights the fact that we are talking about a democratic issue. Who should decide how much Germany spends on health—an unelected committee and the European Central Bank or the elected Government and the population of Germany?

The whole project is about profit, exploitation, trade and global capitalism. Phil Gallie was right to say that the main beneficiaries will be the multinational companies. They want as few restraints on them as possible, especially when they enter the new markets in the countries that are to join the EU. There will be an attempt to lower wages across the EU. We are not involved in a race to the top but a race to the bottom as cheap labour becomes integrated into the euro zone.

Since the introduction of the euro, there has been industrial revolt across Europe. In Rome, 2 million people went on strike and demonstrated against privatisation and attacks on their pensions. During the EU summit in Seville, 10 million workers took strike action in opposition to the EU and there were demonstrations of 1 million people in Barcelona, Seville and Madrid. There have also been strikes in France and other countries. The EU is not a popular as members might think. We are involved in those events and demonstrations and in the development of an alternative type of Europe. I will be going to the European social forum in Paris in November.

Photo of Trish Godman Trish Godman Labour

Ms Curran, you really will have to sum up.

Photo of Frances Curran Frances Curran SSP

I believe that the Scottish Executive—and I appeal to the Labour members, some of whom might remember their radical past—should consider hosting the ESF. Perhaps I will have support from VisitScotland for that idea.

I move amendment S2M-124.3, to leave out from "supports" to end and insert:

"believes in a socially just, democratic and accountable Europe for citizens and not big business; further believes that the structure of the current European Union undermines democracy within Scotland and that any further attempt to centralise political power in Brussels, or financial decisions at the European Central Bank in Stuttgart, would not be in the interest of ordinary Scots; is concerned that the economic agenda of European monetary union has the intention of furthering the aims of capitalist globalisation and the interests of trans global corporations, resulting in lower wages, cuts in public services and a wholesale onslaught against workers' pensions; demands the right of the Scottish people to make their views known through a referendum; opposes entry to the euro, and calls on the Scottish Executive to offer to host the 2004 annual anti-globalisation event, the European Social Forum, involving up to 100,000 people, that has already taken place in Florence and will meet in Paris in November 2003."

Photo of Irene Oldfather Irene Oldfather Labour 10:20 am, 12th June 2003

It is important to consider how far Scotland has travelled. Four years ago, there was no Scottish Parliament. Devolution has given Scotland the opportunity to play an active part in Europe in a range of ways. Through the work of the Scottish Parliament and its committees, through our networks with other regions throughout Europe, through our representation on the European Committee of the Regions and through the establishment of an office in Brussels, which was a major milestone in the previous session of Parliament, the message is loud and clear—Europe's newest and youngest Parliament is keen to be a key player in the debate on the new Europe.

For all members, it is important that, in the light of a changing and reforming agenda in Europe, our citizens believe that Europe is relevant to their everyday lives. The Executive's amendment refers to making improvements in accountability and transparency to better connect Europe's citizens and to give them the confidence in the EU that they desperately need. As I listened to Phil Gallie's speech, I wondered whether he and I were reading from the same convention document, because I see in the draft document much progress towards the improvements that are needed.

Photo of Phil Gallie Phil Gallie Conservative

Irene Oldfather said that she had seen progress with respect to Scotland's voice in Europe. Can she name one major change since devolution that introduced something that did not exist under the previous arrangements?

Photo of Irene Oldfather Irene Oldfather Labour

I have just spoken about one of the key milestones, which was the establishment of a Brussels office to provide the early intelligence that is needed for the Scottish Parliament to scrutinise European legislation. That will enable better decision making for Scotland's people.

I will deal with some points from the convention's draft document. I welcome the fact that information about European council meetings is likely to be transmitted directly to national Parliaments in the minutes of legislative deliberations. The Scottish Parliament has asked for that to happen for three years, so that is, indeed, progress.

Photo of John Swinburne John Swinburne SSCUP

I have listened patiently to all the arguments from all the major parties, but the only member who mentioned the most serious implication of Europe was Phil Gallie. He used the F-phrase: fiscal autonomy. Without fiscal autonomy, we are kidding ourselves if we think that we have any authority here, in Europe or anywhere else. We are being led by Westminster and unless fiscal autonomy is transferred from Westminster to Holyrood, we cannot do things for senior citizens, for example, because everything is controlled down south.

Photo of Trish Godman Trish Godman Labour

Was there a question in that, Mr Swinburne?

Photo of Irene Oldfather Irene Oldfather Labour

Mr Swinburne's point is interesting, but I am not sure—and I do not think that the Conservatives are sure—that that is exactly what Phil Gallie said.

I welcome the commitment by Peter Hain in his submission to the convention to the role of the devolved Parliaments in helping the EU to become more democratic and transparent. Indeed, the UK submission to the convention takes on board about 96 per cent or probably even 98 per cent of the proposals made by the Scottish Parliament's European Committee, which were debated in the chamber on several occasions. The submission states:

"In the EU context, the UK Government strongly supports proposals made to the Commission by the Scottish Executive ... that it should consult implementing authorities at the pre-legislative stage. This should include direct consultation with regional and local authorities on relevant policies".

If that is not a step forward, I do not know what is.

Other proposals that the UK supports include a more focused role for the Committee of the Regions, greater use of framework legislation and impact assessments on regulatory authorities. That might be beginning to sound a wee bit like European mumbo-jumbo, but the proposals would improve the lives of the Scottish people by delivering better legislation in a legislative process that would be relevant and subject to scrutiny.

Photo of Irene Oldfather Irene Oldfather Labour

I will take an intervention from Nicola Sturgeon, although she did not take one from me.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

I am sure that I will be able to make that up to Irene Oldfather in future. Can we cut to the chase? It is all very well to talk about being consulted on European legislation and being involved in the operations of the subsidiarity mechanism—those are important steps forward. However, when it comes to where the decisions are taken, Scotland's voice will not be heard. Article 1.22 of the draft constitution says:

"The Council of Ministers shall consist of a representative of each member state at ministerial level ... only this representative may commit the member state in question and cast its vote."

Therefore, if our interests do not coincide with UK interests, we lose out, as happened with fishing. Can Irene Oldfather tell me why, in a European Union that is increasingly made up of small states, Scotland should not simply be represented at the top table in her own right?

Photo of Irene Oldfather Irene Oldfather Labour

I am happy to cut to the chase because Scotland has the best of both worlds. In fact, Scotland is represented within the UK delegation of 78 members in the European Parliament. That compares favourably with other smaller nations with populations akin to Scotland's—for example, Luxembourg has only six members. Furthermore, in the Council of Ministers, after enlargement, the UK—[ Interruption. ] Nicola Sturgeon does not seem to like the answer, but she asked the question. In the Council of Ministers, after enlargement, the UK will have 29 votes, whereas Luxembourg, Estonia and Latvia will each have only four votes. If that is not pulling one's weight, I do not know what is.

Photo of Brian Monteith Brian Monteith Conservative

Does Irene Oldfather agree that the breakdown of the voting figures for individual nations shows that the votes have been weighted in favour of France and Germany, which have bilateral treaties to meet before any international meetings so that they can ensure that no grouping of small countries—even if they have coinciding interests—can overrule them?

Photo of Irene Oldfather Irene Oldfather Labour

As a member of the UK delegation working within the Committee of the Regions, I have no doubt that the big players such as Britain, France, Germany and Italy carry a great deal of weight. That is where the key decisions are taken.

Presiding Officer, I acknowledge that I am running a little bit short of time, but I want to spend a moment on the motion.

Photo of Phil Gallie Phil Gallie Conservative

On a point of order, Presiding Officer. This is not personal in any way, but I note that the Scottish Socialist Party had six minutes to put its case, whereas Irene Oldfather has now taken seven minutes and 40 seconds. I am interested in what she has to say, but I feel that there must be an element of fairness. I would like you to explain why that has happened.

Photo of Trish Godman Trish Godman Labour

That is not a point of order.

Photo of Irene Oldfather Irene Oldfather Labour

Thank you, Presiding Officer.

I want to spend a moment on the motion. In debates such as this one, I normally begin by saying that I welcome the debate, but I think that the timing of this debate and the content of the motion are entirely wrong. I am disappointed that, when we have worked for two years in the Scottish Parliament, a week before the European convention—

Photo of Irene Oldfather Irene Oldfather Labour

I am not taking any interventions.

Photo of Carolyn Leckie Carolyn Leckie SSP

On a point of order, Presiding Officer.

Photo of Trish Godman Trish Godman Labour

The member wishes to make a point of order.

Photo of Carolyn Leckie Carolyn Leckie SSP

I have to be a wee bit strong about this point, Presiding Officer. Phil Gallie was right and I thank him for his point of order. You prompted Frances Curran several times and you were strict in bringing her speech to an end. I expect a wee bit of consistency, thank you.

Photo of Trish Godman Trish Godman Labour

Irene Oldfather has eight minutes. When she sat down and Phil Gallie got to his feet, she had spoken for seven minutes and I indicated to her that she had one minute left.

Photo of Irene Oldfather Irene Oldfather Labour

Thank you, Presiding Officer. I think that I have taken more interventions than any other member has in the debate.

As I was saying, I am disappointed that the hard work that was done over two years in the Parliament to put together a submission on which there could be consensus—members of all political parties worked on the European Committee to achieve that—is being let down by the motion. The motion sends out entirely the wrong message to our European partners, some of whom—in Flanders and Catalonia—have worked with us to put together a submission based on the agreements that we had in the Parliament, because we realised that, working together, our submission to the Commission would carry weight. The debate today—

Photo of Trish Godman Trish Godman Labour

You will have to finish now, Irene.

Photo of Irene Oldfather Irene Oldfather Labour

I am just concluding.

Today's debate is regrettable in its timing. It should have waited until after the conclusion of the convention.

Photo of Carolyn Leckie Carolyn Leckie SSP

On a point of order, Presiding Officer. I did not want to interrupt Irene Oldfather's concluding remarks, but I must ask you why she had eight minutes and Frances Curran, who was moving an amendment, had only six.

Photo of Trish Godman Trish Godman Labour

That was because of the proportional timing that they had been allotted. Irene Oldfather had eight minutes and Frances Curran had six. If you look at the Official Report , you will see that Frances Curran went over her six minutes by quite some time. Irene Oldfather also went over her time—she took interventions—but when she had spoken for seven minutes and had taken Phil Gallie's intervention, I signalled to her that she had one minute left.

Photo of Mark Ballard Mark Ballard Green 10:31 am, 12th June 2003

Unlike Irene Oldfather, I welcome the motion, because it opens up an important discussion about the current and future structure of Europe. The new European convention clearly takes us further towards a federal Europe—that is, Europe as a single state, which devolves power to appropriate levels. The Scottish National Party has argued its case for a Europe of nations—a confederation of nations that pool a certain amount of their sovereignty. However, there is a third way: a Europe that is not a single state or a collection of states, but is built from a lower level—from regions and communities. We need a Europe that is built on a scale that suits people, not on a scale that suits only big business and big government. At the first meeting of the Parliament this session, the Greens, along with members of other parties, asserted that the people are sovereign in Scotland. By the same token, sovereignty throughout Europe must begin with the people.

Photo of Mark Ballard Mark Ballard Green

No. I am sorry.

I welcome, therefore, Peter Hain's paper on Europe and the regions, which Irene Oldfather mentioned. The paper proposes more ways to give recognition in the legislative field to local and regional government. However, we must go beyond legislative structures. We need a localisation agenda to give proper recognition to local economic, social and ecological interests, but at the moment, the European Union is moving ever further away from this green ideal of a network of strong, self-reliant economies. The EU is pushing the process of economic globalisation ever more ruthlessly through its role in the World Trade Organisation. Economic and monetary union is exacerbating economic centralisation and accelerating the removal of democratic control over the economic system. Enlargement, as it is currently designed, is little more than the export of the free-trade model eastwards with potentially devastating impacts on the economies of central and eastern Europe.

Therefore, Her Majesty's Government's decision to delay entry into the single currency was in Scotland's interest. That is not because of the Chancellor's five economic tests, but because entry into the euro would have tied Scotland into the big-business-oriented economic agenda of the growth and stability pact. The drive is on to create one huge European economic superpower that is able to compete ever more fiercely in international markets with Japan and the US. However, in between the cracks of that drive, some green shoots are pushing up and showing an alternative route forward. Many people know instinctively that bigger is not always better and that greater security and sustainability are more likely to come in the context of strong local and regional economies and democracies.

People are therefore questioning the future role and direction of the European Union. There is a growing sense that the European institutions are disconnected from the people whom they are supposed to represent. That is more than a simple communication problem that can be remedied by a little more transparency and consultation, as President Prodi would have us believe. It is a problem of substance as well as of process.

The European Union's overriding priority of ever-increasing international trade and competitiveness is seriously undermining its often genuine aspirations to achieve greater sustainability. Its unwavering support for economic globalisation means that it is unable to become the world leader in promoting sustainable development that it has the potential to be. Until we address and change that, the EU will continue to be part of the problem, not part of the solution.

A Europe of local economies holds the potential for a reconnection with the European Union that puts sustainable development firmly at the core of its agenda—a European Union within which there is sufficient flexibility and space for local economies to flourish and for relationships to grow between the different peoples of the union. That is an ambitious agenda, but the growing disillusionment with the European Union shows that it has to be seized.

The price of not doing so will be high. If the European Union continues to put its corporate-led, deregulated, neo-liberal agenda above social justice and sustainable development, the result will be the further marginalisation and exclusion of growing numbers of its citizens. People will engage only with a European Union that is relevant to their everyday lives and that they feel is democratic and accountable. More than two millennia ago, Aristotle recognised a fundamental truth:

"To the size of states there is a limit as there is to plants, to animals, and to implements: for none can retain their power or facility when they are too large."

That is a truth that we would do well to remember in all our discussions about Scotland's place in Europe and the future structure of a European Union.

Photo of Keith Raffan Keith Raffan Liberal Democrat 10:36 am, 12th June 2003

I must say that I had hoped for more from Mr Ballard's speech. A federation is not the same as a unitary state. He should look up the "Oxford English Dictionary". There is too much confusion in the European debate over the terms "federation" and "unitary state". I find Mark Ballard's economic arguments totally indistinguishable from Miss Curran's. The Greens—the Liberal Democrats will make this point very strongly in the run-up to the European elections—are highly socialist in their outlook. Perhaps they should merge with the Scottish Socialist Party.

This week has been momentous—in both hopeful and disappointing ways—for anybody who is committed to the widening and deepening of the European Union. No party in the Parliament has been more consistently in favour of that principle or more continually pro-European than the Liberal Democrats.

First, last weekend, we had the Polish referendum, which had a much higher yes vote than was expected—75.5 per cent—on a much higher turnout than was expected, namely 59 per cent. Scottish socialists may be against the European Union, but former Polish communists are not. Perhaps that is due to a distinction, which I will have to study, between Trotskyites and Marxists. We now look forward to an equally resounding yes vote in the Czech Republic this weekend.

Secondly, of course, on Monday, we had the chancellor's characteristically Scottish not proven verdict on the euro—not now, not yet, maybe next year. That reminds me of the song "Send in the Clowns". For once, I agree with the shadow chancellor, Michael Howard, who said:

"The national economic interest took a back seat. As the Government dithers, uncertainty is maximised."

The Scottish economic interest certainly took a back seat. I agree totally with Nicola Sturgeon. As I said last week, in the one-size-does-not-fit-all debate I know which interest rate would be better for the current state of the Scottish economy.

Photo of Keith Raffan Keith Raffan Liberal Democrat

No.

It would not be the 3.75 per cent that the Bank of England in London set to deal with the overheated economy in the south-east of England, particularly the booming housing market. It would be much more the 2 per cent that the European Central Bank in Frankfurt set. That would give the Scottish economy a badly needed boost.

Photo of Mary Scanlon Mary Scanlon Conservative

The interest rate in the European Union is 2 per cent, which Keith Raffan is very much in favour of. Why is unemployment in Europe at 8.8 per cent, which compares with ours at 5 per cent, and economic growth at 0.8 per cent compared with our 2.2 per cent growth?

Photo of Keith Raffan Keith Raffan Liberal Democrat

I am a bit worried about Mary Scanlon's economic illiteracy. The whole point is— [Laughter.] After the exchange rate mechanism debacle, the Tories should be laughing into the mirror. It was the Tories who totally undermined the British economy in the early 1990s, and they are the last people from whom I would take economic lessons. The whole point about a 2 per cent interest rate is to stimulate the economy, which we want to happen in Scotland. My gosh, do the Tories not want that?

Photo of Keith Raffan Keith Raffan Liberal Democrat

No, I am not giving way. [ Interruption. ]

Photo of Keith Raffan Keith Raffan Liberal Democrat

I say to Murdo Fraser and others that what counts for the British people is the money—whatever it is called—in their pockets, not pound signs on their lapels.

Photo of Keith Raffan Keith Raffan Liberal Democrat

No.

We all know the achievements of the European Union. Sixty per cent of our trade is with the European Union and 3 million jobs depend on the European Union. Former Secretaries of State for Trade and Industry of all parties have intervened to say that by not going into the euro yet, we have lost £12 billion in trade. The Scottish Mirror was right to say this week that the longer we stay out, the more we will lose out.

Tomorrow is the deadline for the draft constitution of the enlarged European Community. As Tavish Scott said, rightly, that is only the end of the beginning. The draft constitution will then begin the tortuous process of going through the IGC, which will culminate in decisions being taken next year. We do not know how the constitution will finally turn out. The Liberal Democrats' position is clear: we do not want the draft constitution to be diluted beyond recognition. The leader of the European Liberal Democrats, Graham Watson MEP, has made that absolutely clear, as has our representative on the convention, Andrew Duff MEP. Above all, the convention is about removing the democratic deficit.

Photo of Trish Godman Trish Godman Labour

You are in the last minute of your speech, Mr Raffan.

Photo of Keith Raffan Keith Raffan Liberal Democrat

I welcome the proposed extension of the European Parliament's powers of democratic control over budgets and over European legislation. I welcome the creation of a European foreign minister, which ends the uncomfortable division of responsibility between Commissioner Patten and Mr Solana. I welcome the strengthening of the regional role in the EU.

I cannot do better than to quote the Financial Times, which said:

"Another page is turned in the tortured history of Britain's involvement with the European Union ... littered with indecision, cries of betrayal and laments for missed opportunities".

Over the next 12 to 15 months, my party believes that the moment will come to decide on both the euro and the constitution, which Valéry Giscard d'Estaing says he wants to last for 50 years, and to decide on the future direction of Europe. Otherwise, more opportunities will be missed and European Union policy will be shaped, yet again, in the interests of other nations and not in those of our own.

Photo of Michael Matheson Michael Matheson Scottish National Party 10:42 am, 12th June 2003

As the European Union goes through major changes, Scotland will, as ever, be left on the sidelines. We have a new European constitution. It carries many good points, one of which is a legally binding fundamental charter of rights. I know that Phil Gallie is not very keen on that, but it will cover labour law and social policies and it is likely to be rather progressive. The Tories do not often like giving rights to people.

There are areas of concern in the new constitution, however, in particular fishing. As Nicola Sturgeon said, the draft constitution omits any question of the right of representation beyond the level of nation state, thus ensuring that Scotland is consigned to be treated as a region, rather than as a nation. Next year, there will be 10 new members of the European Union, seven of which will have a population smaller than that of Scotland. Representatives of Latvia, Cyprus, Malta and Estonia, for example, will be sitting round the top table, deciding on matters that will have a direct influence on the daily lives of the people of Scotland, yet we will not be there, working with them to ensure that we represent the Scottish interest.

Our unionist colleagues often point out to us—Phil Gallie said it today—that that is what our Westminster colleagues are for: they represent us at the EU. Irene Oldfather said that we have "the best of both worlds" because UK ministers represent us on the Council of Ministers. The fishermen do not reckon that we have the best of both worlds. When ministers represent our interests at the EU, they often do so behind closed doors. At this reforming time for the EU, it is essential that there be greater transparency, accountability and democracy at the heart of the decision-making process.

I welcome the fact that Jack McConnell has a pal in the convention, who put a word in for him and said that we want more transparency and accountability in the new constitution. However, the real power base lies in the Council of Ministers, and that is where we should be arguing for those changes. We should not just be a bit player on the convention. Would it not be nice to see some more open proceedings of the Council of Ministers, so that when UK ministers are there, apparently representing our interests, we could hear what they were saying and see what they were doing for us? If they are so confident about how they are representing us, they should be pushing for more open proceedings for the Council of Ministers, so that they can show off what they are doing on our behalf.

Photo of Margo MacDonald Margo MacDonald Independent

Does the member agree that it is the underlying differences in the concept of democracy that give rise to that secrecy at Council of Ministers level? To take one example, an Italian Prime Minister who owns the media outlets and the television channels is not used to having to explain things in public. We seem to accept that and to think that that is the way that it should be.

Photo of Michael Matheson Michael Matheson Scottish National Party

It is important that the EU be more transparent. If the public of Europe—not just politicians such as ourselves—are to have faith in the process, it must be made more transparent and the EU must be more accountable to the people.

Justice and home affairs in the European Union are, increasingly, issues of co-operation between member states. The Scottish Executive could play a key part in the development of European Union policy in that area. During the Danish presidency, 184 meetings on justice and home affairs were held. How often did the Scottish Executive send a representative to those meetings to discuss such matters as co-operation on criminal issues and police co-operation? We were there seven times out of 184. Our Executive could have been there to ensure that the Scottish justice system was promoted and that its integrity was protected, but it fails to rise to the game and to ensure that we take part in that process.

With the enlargement of the EU and the draft constitution, the only way in which Scotland's interests in the EU will be properly protected is if Scotland is a normal, independent nation such as Cyprus, Malta, Estonia or Latvia, and if we are sitting at the top table.

Photo of Maureen Macmillan Maureen Macmillan Labour 10:48 am, 12th June 2003

I rise to speak in support of the amendment in the name of Tavish Scott. I was interested in what Nicola Sturgeon said about the SNP being passionately in favour of the EU. One of the more interesting encounters in the recent election campaign occurred in North East Scotland, where the Tories and SNP were fighting each other tooth and claw for the anti-European vote and were begging the fishing community not to stand a candidate of their own.

"Only the Tories can save you", said Jamie McGrigor, conveniently forgetting that it was the Tories who signed up to the common fisheries policy in the first place. Of course, that is why they lost North East Scotland seats to the SNP. Considering that the Tories and the SNP are competing with each other in that area over who has the strongest anti-European credentials, it was telling that John Swinney was schmoozing with the Cod Crusaders. Grampian Television news recorded that John Swinney said that he would do everything he could for them, but when one of them asked, "Will you take us out of Europe, John?" there was a long, long silence. "Nice weather we're having for the time of year," said John in the end. Why did he not reply, "No, I am passionately in favour of the EU"? Perhaps Mr Swinney—although he is not present at the moment—could answer that today. He could tell the fishing communities whether the SNP wants to leave Europe, as it tries to maintain in the north-east of Scotland.

I believe that the SNP leadership's attitude to Europe—

Photo of Maureen Macmillan Maureen Macmillan Labour

I said "the SNP leadership", and I do not include Margaret Ewing in that.

Photo of Margaret Ewing Margaret Ewing Scottish National Party

The member should not exempt me. What she has portrayed is ludicrous. Our argument with the European Union has been about the common fisheries policy, which is exactly what the Cod Crusaders and the Moray Makes Waves campaign have been about. We are arguing for this Parliament's right to lead the negotiations on the common fisheries policy and to repatriate management.

Photo of Maureen Macmillan Maureen Macmillan Labour

Why did John Swinney not answer the question that was put to him about total withdrawal from Europe?

Photo of Maureen Macmillan Maureen Macmillan Labour

I doubt it. I believe that the SNP leadership's attitude to Europe is moving inexorably to the right. Whatever happened to the SNP love affair with Europe? Was it broken on the rock of reality? In 1999, the SNP MSPs all rushed off to Brussels to say, "Here we are. Look at us; we are the SNP. Aren't we lovely?" Nobody was interested.

When I was a member of the European Committee in the first year of the Parliament, Bruce Crawford spent an enormous amount of time failing to prove that Scotland was not getting its fair share of money from Europe. That is the sort of silly focus that the SNP has on Europe.

Photo of Richard Lochhead Richard Lochhead Scottish National Party

The member has been speaking for more than three minutes and has spent the whole time attacking the SNP. Will she illuminate us as to what she would change about Europe? Perhaps if she had spoken more about those issues during the election campaign, she would have found that her party would not have done so badly—given that the SNP won the elections in North East Scotland and the Highlands and Islands.

Photo of Maureen Macmillan Maureen Macmillan Labour

It is funny that Richard Lochhead should intervene, because the other thing that the SNP does is to oppose every directive that comes along. Richard Lochhead opposed the waste water directive. In an article in The Press and Journal , he said that he opposed the measures that had to be taken on board to sort out the waste water problem. A page later, he was complaining about the state of Scottish beaches. That demonstrates the opportunism of the SNP. It would not accept the Caledonian MacBrayne tender and it will oppose the directive on food supplements, not out of principle but because it always tries to schmooze certain sections of the community. The SNP has no principles on Europe.

Photo of Maureen Macmillan Maureen Macmillan Labour

How much time do I have left, Presiding Officer?

Photo of Trish Godman Trish Godman Labour

You have just under two minutes left.

Photo of Maureen Macmillan Maureen Macmillan Labour

I will take a short intervention from Mr Gallie.

Photo of Phil Gallie Phil Gallie Conservative

Rather than attacking the SNP, perhaps the member was offering sage advice on moving to the right. Perhaps she will take on board the fact that it worked for the Labour party.

Photo of Maureen Macmillan Maureen Macmillan Labour

I thank the member, but I will not accept that.

The SNP rhetoric is one thing in the north-east and another thing elsewhere in the country. The SNP wants a referendum on the new convention, as do the Tories. SNP members all have different points of view on the euro. Alex Salmond wants it now; Nicola Sturgeon is not sure when she wants it; John Swinney wants it only when everyone else wants it; and Alex Neil does not want it at all. The SNP members are passionate about disagreeing with one another over Europe.

The reality for the SNP is that it finds itself ignored by Europe and that it is becoming increasingly anti-Europe as it vies with the Tories for right-wing votes. It is not passionate about Europe. All that it wants to do is take the money and run.

Photo of Ted Brocklebank Ted Brocklebank Conservative 10:54 am, 12th June 2003

Last week, the European Commission banned Shetland Islands Council and Orkney Islands Council from buying fishing quota that they intended to lease to beleaguered local fisherman. The Commission ruled that the aid provided by the northern isles councils was illegal, because it conferred an unfair advantage on the islands' fleets—an unfair advantage to fish their own coastal waters.

The funds that were to be used were not local authority funds and were not provided by the taxpayer. They came largely from the oil industry as compensation for disruption to the islanders' way of life. It is exactly that politics of the madhouse, which is driving Scots fishermen from the seas that they have fished traditionally, that makes it essential that we wrest back from the European Union control of our national waters.

Photo of Tavish Scott Tavish Scott Liberal Democrat

Mr Brocklebank should get his facts right before he makes the sort of assertion that he has just made. What he said about the European Union judgment is absolutely untrue. It allows the councils to consider mechanisms to achieve the same outcome in being able to purchase fish quotas; it does not ban them from doing so in the way that Mr Brocklebank described.

Photo of Ted Brocklebank Ted Brocklebank Conservative

Tavish Scott is wrong; the councils are not allowed to purchase the quotas and they are appealing against the decision.

I often hear Ross Finnie claim that the problem with the Scottish fishing industry is that there are too many boats fishing too few fish. Let us examine that. In 1975, just after we joined the then European Economic Community, there were 1,800 boats of around 18m fishing in Scottish waters. On the basis of current decommissioning plans, by 2004 there will be around 700 boats. That is a drop of more than 60 per cent, the direct economic impact of which has been estimated at around £900 million a year out of the Scottish economy. Does Ross Finnie really believe that any economic benefit that Scotland gets from the European Union comes remotely close to £900 million a year? In one breath, Ross Finnie tells us that there is no alternative to further decommissioning. In the next, he declares that he will not preside over the destruction of the Scottish fishing industry. The fact is that in Scotland we have devolved powers only out to the 12-mile limit. We do not have control of the grounds, nor is it within the gift of the Scottish minister to do a blind thing about it.

For 25 years as a working journalist and television producer, I have reported on the way in which the common fisheries policy has consistently worked against the best interests of our local fishing industries. Meanwhile, UK politicians of all hues have jumped through hoops trying—if I can mix the metaphor—to square the circle of the common fisheries policy.

Despite all the evidence that the Community was hell-bent on the destruction of the Scottish fleet, our politicians have seized on every tiny concession and parroted the European line that there really is no alternative.

EU policy stipulates that common resources must be shared by member states. Guess which is the only common resource to be identified—fisheries. It is worse that member states are allowed to share in the catching beanfeast, regardless of whether they are landlocked. In other words, the fact that Scotland has a long, fish-rich coastline and Austria has none is totally irrelevant. The CFP is, and always has been, a carve-up of fish-catching capacity, with the lucrative spin-off in ancillary jobs.

Photo of George Lyon George Lyon Liberal Democrat

Ted Brocklebank should remember that it was his Tory Government that took us into the common fisheries policy, so when the Tories negotiated it, surely they got it fatally wrong.

Photo of Ted Brocklebank Ted Brocklebank Conservative

That is the age-old cry that is still used three decades later. Ted Heath got us into the CFP. Nobody here is denying that it was a catastrophic decision, but unlike the Liberal Democrats—and unlike the Bourbons—we learn from our mistakes.

With EU enlargement, the problem will simply get worse. None of the new entrants adds significantly to the fishery pool, so for Scotland, enlargement simply means more boats competing for fewer fish.

Having made our bed, must we continue to lie in it?

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

The member should tell us what he wants to do.

Photo of Ted Brocklebank Ted Brocklebank Conservative

I will come to that.

Ross Finnie and his colleagues in the Executive have no doubts. While the Scottish fleet has the heart cut from it and our coastal communities continue to haemorrhage jobs and people, Mr Finnie in his promoted role—from home guard captain to surgeon general—has the job of administering the painkillers. Despite the fact that not a penny of the vaunted compensation package has been paid out and many skippers do not know where next week's wages are coming from, Mr Finnie continues to promise aspirin tomorrow.

The fact is that Mr Finnie cannot negotiate with people who see no advantage in negotiating with him. Any crumb or sprat thrown to Scottish fishermen would affect directly the interests of other countries, so unanimity can never be achieved—it is as simple as that.

Until now, the Scottish National Party has worked within the common fisheries policy, but I am delighted to see that there appears to be a degree of unanimity coming from it. The Scottish Fishermen's Federation has talked this week about its long-term goal always being to regain control of Scottish waters. The Fishermen's Association Ltd says that its long-term goal is to regain control of Scottish waters.

We are told that we cannot regain control of Scottish waters, but the hard fact is that the European Union has no sovereignty over the waters of nation states. Only the United Kingdom has sovereignty over its waters—at least, until that sovereignty is tidied up somewhere down the Brussels road.

Photo of Ted Brocklebank Ted Brocklebank Conservative

Our policy is not complete withdrawal from the European Union; we want simply to pull out of the CFP, which, over three decades, has proved to be incapable of reform. The CFP is a pernicious, unfair and hugely dangerous threat to the richest fishing grounds in Europe. We have a responsibility, not only as Scots but as Europeans, to sustain that remarkable gift of nature for future generations.

Photo of Ted Brocklebank Ted Brocklebank Conservative

The EU has shown that it cannot do that, so we must do it.

Photo of Mr Bruce McFee Mr Bruce McFee Scottish National Party 11:00 am, 12th June 2003

It gives me great pleasure in my first speech in the Parliament to support the motion in the name of Nicola Sturgeon.

Last week, the Parliament debated matters concerning young people. Many members who are present commented on the positive contribution that young people make to our society, welcomed their enthusiasm and remarked on the confidence that many of our young people display. Only two days before that debate, as we awaited the arrival of the Queen, we witnessed an example of that confidence when we were entertained by a choir that was composed entirely of youngsters.

It is such a pity that, in a few short years, many of the unionist politicians in the Parliament—by which I mean Labour, Tory and Liberal members; or the British nationalists, if that title is preferable—will have done their best to destroy the confidence that those youngsters displayed, which they so admired.

When those youngsters start to take an interest in current affairs, and even politics, they will discover that they do not live in a confident, self-reliant country. The same unionist politicians that applauded their confidence will tell them that they live, almost uniquely in this world, in a country that does not have the ability to govern itself. Those youngsters will be told that Scotland does not deserve a place in the United Nations and is not entitled to direct representation in the Europe Union.

As the EU enlarges, we are being left behind. Scotland has no voice in the decisions that are being taken on membership of the euro. As the future of Europe is being determined, we are on the outside looking in; others take our decisions for us. The harsh reality is that, in all those matters and in many more, Scotland is a powerless nation that is suffocated in the union with England.

Some members would have us believe that Scotland's best interests are served by its being part of a larger British voting bloc in the EU, but one needs to look no further than the fishing issue to recognise what nonsense that argument is.

On 29 May, at First Minister's questions, John Swinney asked the First Minister a question on the imminent meeting of the European convention. Mr Swinney said:

"Tomorrow, when the convention meets, it will consider a proposal to make fishing policy a matter for the EU's exclusive control. Does the First Minister's Government support that proposal?"

That was a perfectly clear question.

The First Minister replied:

"Mr Swinney asked a specific question about the specific proposal for exclusive competence on the common fisheries policy. Not only have we made representations on that matter, but we have written to the UK Government and asked it to oppose the proposal. Not only has the UK Government made representations, but it has written to the EU to make it clear that it is also opposed to the proposal. Not only is this Administration opposed to it, but the UK Government is opposed to it. We will ensure that that view is put across."—[Official Report, 29 May 2003; c 251.]

That was a perfectly clear answer—there were no ifs, no buts and no maybes. The Scottish Executive was opposed to the proposal and so was the UK Government. It seemed that, at last, there were some unionists who were prepared to stand up for Scotland's interests. However, that impression did not last long.

In a letter to John Swinney, dated 10 June, Jack McConnell shifted his ground dramatically. I quote from that letter:

"During First Minister's Questions on 28 May 2003 and in answer to your question on the European Convention and competence on the common fisheries policy, I said that we had written to the UK Government and asked it to oppose the possibility of extending competence."

The First Minister well knows that that was not the question. As with so many other aspects of Executive policy, the talk is tough but the delivery is poor. Squirming like a worm on an angler's hook that tries to wriggle free, the First Minister chooses to attempt to rewrite the record.

Last night, a lady in the village in which I live—a lady who knows a thing or two about politics—said that, on that issue, the First Minister was either a fool or a liar. I will not make that allegation in the chamber, as such a term would be considered to be unparliamentary language, but members will be reassured to learn that I was able to convince her that the First Minister was no fool.

Scotland can no longer afford to be held within the straitjacket of the so-called devolution settlement. As more powers become centred in Brussels, the relevance of the Westminster Government diminishes. It is vital that we are full participants in mapping out the future of Europe. We need direct representation in the making of decisions that affect all our livelihoods. It is time for Scotland to have that direct voice in the European Union. I urge members to support the motion.

Photo of Margo MacDonald Margo MacDonald Independent 11:07 am, 12th June 2003

First, I congratulate the SNP on using its debating time to discuss a motion on developments in the EU. I disagree with Irene Oldfather—we should not wait for others to make up their minds before we express an opinion. We are supposed to be representing the Scots and giving voice to their thoughts and opinions. Now is as good a time as any to do so, before the die is cast and some of Ted Brocklebank's dire warnings are proved to be true.

We call this morning's session a debate and we will vote on our consideration of the arguments that have been put forward by members of all parties. There is the rub. It will not matter a docken leaf what decision we reach, because we do not have the power to enforce any decision that we might make on the advisability of joining the euro or of endorsing the draft constitution. We cannot even ensure the implementation of the outcome of the considered deliberations of the Parliament's committees on the effect of genetically modified foods.

We have heard faint echoes of the argument that we should leave such things to London. I would have hoped that that idea is gone. In saying that we should open our minds, Nicola Sturgeon began well. She said that, instead of the SNP and Labour bashing each other as usual, we should consider the matter at hand. That is what I would like to do.

I want to examine some of the options. We talk glibly about the benefits and disadvantages for the Scottish and UK economies of joining the euro, as if those two economies were the same. Again, I must congratulate Nicola Sturgeon, who pointed out that the Scottish and UK economies are not the same and that the economic situations north and south of the border are very different. The Parliament has nothing to lose by admitting the reality and examining where that admission takes us.

The SNP suggests that we should have a referendum on the euro right away. I freely concede that a 2 per cent interest rate would advantage the Scottish economy at the moment, as Keith Raffan said, but would it advantage the English economy? Why do I mention the English economy? I do so not just because I am an independent, but because the English economy is Scotland's biggest market. Do we want to beggar our neighbour and jeopardise our market by imposing on England an interest rate that is as unsuitable for its needs as the current rate that is set in London is for our needs?

If we want to consider the interests of the economies north and south of the border, we must examine the economic developments in Europe that will flow from the existence of a single interest rate. Europe's single interest rate suits us just now, but it might not suit us in future. I do not claim to know economics, but if we know anything about the subject it is that—as a number of honest European politicians have noted—there is a closeness between having a common interest rate and having a common fiscal policy, which is what the rate feeds into.

Would we be happy with a common fiscal policy that operates from Poland through to Scotland? Have we thought about the implications of that? I seem to recall that members of this Parliament have suggested that there should be different fiscal policies north and south of the border.

Photo of Keith Raffan Keith Raffan Liberal Democrat

On interest rates, Margo MacDonald makes the mistake of lumping the whole English economy together. An interest rate of 2 per cent would probably be in the interest of large parts of the English economy, especially in the north-east and north-west.

Photo of Margo MacDonald Margo MacDonald Independent

The point is a fine one, but I did not make a mistake. The people who live in the north-east of England think of themselves as English and identify with most other folk who live in England, just as the people who live in Shetland—as Tavish Scott would admit—probably think that they have more in common with the people of Lanarkshire than with folk who work in Poland.

Let me return to my theme, which is the honesty of European politicians who are prepared to talk about what should happen in the future. What does the Labour party think about the issue? We know what Tony Blair thinks, although like the rest of the population, I do not believe a word that he says. However, I am prepared to believe Gordon Brown. Gordon Brown has said that joining the single currency is not a good idea right now and that we should see how things develop before we commit ourselves. To go from one system of economic management to another and from one economic cycle to another would be a huge leap. Gordon Brown has said that we should give ourselves a bit of time. I happen to agree with that very sensible suggestion.

What does the Scottish Executive think of the single currency? We know that the Lib Dems think that we should go in tomorrow. Being federalists, the Lib Dems have no objection, as far as I can work out, to the federalisation and harmonisation of tax policy, but what does the other half of the Executive think? It would be nice if some of them were here to tell us. Perhaps that is why there are no Labour ministers in the chamber.

And what does the SNP think about tax harmonisation across Europe? SNP members want us to go into Europe. They love Europe, and are passionate about it, but do they realise that Europe is a pork barrel? The reason that Ted Brocklebank's party, when it was in Government, agreed to the common fisheries policy is that it traded off fishing against other perceived advantages to the British economy. What advantage would be gained for the Scottish economy? Would we trade fish for tax? What would we oppose? The SNP will need to take a cold look at the implications of the federal development of Europe.

We need to be honest about this issue. Within the last fortnight, the European Central Bank's spokesman has said that we could forget the national health service because we would not have the taxation system to support anything more than an accident and emergency service.

Photo of Margo MacDonald Margo MacDonald Independent

I, for one, am not willing to cede that sort of sovereignty to any unelected crowd, in Brussels or elsewhere. I do not believe that there is an homogeneity of understanding across Europe about what democracy is. For goodness' sake, have a look at France just now. The President would be in the jail if he did not have immunity. It is true. And the man who has drawn up the European constitution was heavily into diamonds—he was into diamonds in a big way.

Photo of Trish Godman Trish Godman Labour

Ms MacDonald, you must wind up.

Photo of Margo MacDonald Margo MacDonald Independent

We should not forget what other European countries' history of democracy is, especially when we are willing to give up so much of what our people fought and died for for over 200 years.

Photo of Trish Godman Trish Godman Labour

I intend to include as many back benchers as possible. I will leave the time for speeches at six minutes, but I remind members to keep an eye on the clock. When I call one minute, members should stick to one minute. They should be careful about accepting interventions in their last minute.

Photo of Alex Johnstone Alex Johnstone Conservative 11:14 am, 12th June 2003

I will try to be concise.

I congratulate the SNP on introducing today's debate. Europe is an important issue, especially at this time, although not necessarily for the reasons that Nicola Sturgeon stated in her opening remarks. One thing that comes over clearly from the motion is that SNP policy is fluid and flexible. There seems to be some movement in SNP policy after the experience of the election, not least in the decision to adopt the policy of withdrawing from the common fisheries policy, which prior to the election was an exclusively Conservative policy. We should all learn from that.

Photo of Alex Johnstone Alex Johnstone Conservative

I want to move on from the subject of fishing, although I will return to it briefly.

A couple of points that have come up in the debate so far need to be answered. People have asked why the Conservative party has decided that a referendum is required on the proposals for a European constitution. History shows that political parties tend to favour referenda that they can win and oppose those that they cannot. One reason why the Conservative party wants a referendum is that we believe that the will of the British and Scottish people is behind us in opposing the proposed constitution. We support the notion of a referendum. What I want to know is why the SNP, if it believes in the proposed constitution, wants a referendum.

Photo of Alex Johnstone Alex Johnstone Conservative

Excuse me, Keith.

From what the SNP has said about the referendum, it appears that it wants to pick and mix. The SNP wants some sort of multiple choice approach to the constitution, but a referendum would not necessarily deliver that to the best advantage.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

We want a referendum on the euro and on the constitution because we believe that there must be democratic legitimacy. We also wanted a referendum on the Maastricht treaty, but the Tories rejected that. Our position is entirely consistent; the inconsistency lies with the Tories.

Photo of Alex Johnstone Alex Johnstone Conservative

For the long-term future record, I remind Nicola Sturgeon that the Conservative party has a record of fighting referendum campaigns and then abiding by the result. Will she do likewise after the referenda that she takes such great pleasure in proposing?

I must change my subject and continue quickly to the main question that I had hoped to discuss today, which is why there is such scepticism about Europe not only among Conservative party supporters but among people of every political persuasion. Indeed, we have seen some remarkable alliances develop during the course of today's debate. As I mentioned, the SNP has now adopted a policy that is more about quitting the common fisheries policy. It is just a pity that the SNP did not realise much earlier that getting out of the CFP was the only way.

As we speak, a particularly important point is being reached in negotiations on the mid-term review of the common agricultural policy, at which we are represented by both Scottish and Westminster ministers. A number of the proposals that have been made could greatly benefit both the Scottish farming industry and the broader rural economy in Scotland. In particular, the proposal for decoupling would give us the opportunity once and for all to return to farming as a business that is carried out on the basis of profit and loss. For economic and environmental reasons, we should no longer be required to support artificial and unnecessary production. By decoupling, we could give our farmers what could be described as freedom to farm.

However, the discussions that have taken place in the European Parliament and the policies that have been expressed by countries such as France show that some countries obviously oppose any change that would disadvantage their own feather-bedded farmers. Such policies would take away the advantages that the new proposals might deliver for farmers here in Scotland.

That is where our party realises the importance of being represented by strong blocs within the structures of Europe. An independent Scotland might well be able to recognise the important advantages of accepting the European Commission's proposals for the mid-term review of the CAP, but an independent Scotland would have no power to defend those proposals against the blatant vested interests of a French Government that continues to buy the support of its farmers in every election that comes along.

Photo of Murray Tosh Murray Tosh Conservative

The member has just entered his last minute.

Photo of Alex Johnstone Alex Johnstone Conservative

I think that I have two seconds to spare, so I give way.

Photo of Margo MacDonald Margo MacDonald Independent

Does Alex Johnstone think that the British Government has been any better able to defend Scottish farmers?

Photo of Alex Johnstone Alex Johnstone Conservative

What I am saying is that, in the continuing negotiations, we need the strongest possible representation to avoid being walked all over once again by the French. If the UK Government is prepared to enter into negotiations, it does so from a position that is significantly stronger than that which a small member state could adopt. It is essential that we negotiate from a position of strength. To accept, as the SNP does, that it would be more valuable for us to be represented as an individual small country is to accept that we will never again have the opportunity to defend ourselves against the power bloc in central Europe.

It is important that we have raised the mid-term review of the common agricultural policy. In the weeks to come, I hope that the SNP is not left with egg on its face as it was over the common fisheries policy, when it had to change its policy once again because it had not noticed what was happening.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat 11:20 am, 12th June 2003

Regrettably, after two statements, six years and 18 economic reports, we still have no clear direction from the Chancellor of the Exchequer on membership of the euro. On Monday, we heard of the undoubted benefits that we would enjoy from membership of the euro. However, we still have to wait—maybe for the budget, maybe until next year, or maybe for four years.

Last week, a local businessman in my constituency told me that the volatility in the exchange rate could mean the difference this year between him making a profit and him making a loss. How can he plan future investment under the current indecision? If the Treasury's watchwords are growth, stability and employment—the fifth test—how can a delay in entry allow him to plan ahead?

There has been much talk of the economic performance of euro zone countries—indeed, Mary Scanlon spoke about Germany in particular. Many of the problems of the German economy have arisen because of German economic policies and not because of its currency.

Photo of Mary Scanlon Mary Scanlon Conservative

I refer once again to this week's The Economist , which concludes that, in Germany, the interest rate is too high and that budgetary rules mean that Government spending will have to be cut at a time when the country is sliding deeper into recession. For next year, the forecast for the biggest driving economy in the whole of Europe—with 80 million people—is for growth of 0.2 per cent. Does that not give Jeremy Purvis cause for concern?

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

The German market economy is inflexible, which prevents it from being competitive. Therefore, it is wrong to point to the German economy as an example of the failure of the euro. I ask Conservative members to consider the respective policies of each country in the round. I will not agree with Mary Scanlon, but I will agree with the German ambassador to the United Kingdom, who said on Monday evening:

"Germany would be much worse off if Germany didn't have the euro."

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

Mary Scanlon will have to take that up with the ambassador. I am sure that he would be delighted to hear about the economic policies of the Scottish Conservatives.

Photo of Alex Johnstone Alex Johnstone Conservative

I was interested to hear Mr Purvis say that a businessman in his constituency was concerned about the volatility of exchange rates. In Mr Purvis's constituency, and all across the Borders, there is a dependence on knitwear, on other manufacturing and on trade with the United States. Would not joining the European single currency increase the exposure to volatility of many of those industries?

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

Being a strong partner in a euro bloc is exactly what the Borders needs to compete with the United States and Japan. I thank Alex Johnstone for raising the point. Using the economic tools that are available to us for growth is exactly what our Minister for Enterprise and Lifelong Learning is doing, what the UK chancellor should be doing, and what the European Central Bank must do for the euro zone.

For years, the SNP—whose motion we are debating—favoured its own currency and favoured nationalising the Bank of Scotland to establish its own rates of interest for the Scottish pound. The SNP complains that interest rates are controlled from the south-east of England and are set to meet the needs of the south-east of England. However, the SNP's solution is to return macroeconomic policies not to Scotland but, instead, to Frankfurt. The SNP argues that crucial economic powers should be harnessed to a body of pooled sovereignty. That represents a massive shift in SNP policy since the 1970s. There would never be a free and independent Scotland again.

It is wholly inconsistent for the Conservatives, and for some SNP members this morning, to favour the internal market but not to favour having the necessary tools within that market to make it work effectively—namely, the single currency. Without a single currency, it is impossible to have a fully functioning single market in which Scotland can plan investment patterns in comparison with European partners. It is hardly likely that our financial services industry, which represents 10 per cent of our gross domestic product, will appreciate knowing that the Treasury has outlined all the benefits of entry but has then reined back and said, "Not yet." How can we take advantage of the single market without the euro to allow us to compete on an equitable basis for inward investment and for investment opportunities in the euro zone?

Photo of Murdo Fraser Murdo Fraser Conservative

I understand that it was the policy of the Liberal Democrats that we should join the euro in 1999, when it was established. Given the respective performances of the UK economy and the euro zone economies since that time, have the Liberal Democrats revised their opinion?

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

The biggest disservice to the UK economy was the derogation in the Maastricht treaty that John Major and the Conservatives negotiated. We have wasted 10 years during which we could have been preparing. In 1999, we would have had six years to prepare our economy, but we have been delayed and we are suffering for it.

Murdo Fraser has a keen interest in economics and I am sure that he will have noticed the decline in the UK share of inward investment since the establishment of the euro.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

I will be happy to give way if Murdo Fraser wishes to contradict me.

Photo of Murray Tosh Murray Tosh Conservative

The member has been very generous in allowing interventions, but he is in his last minute. I will compensate him for the time that he has allowed to others.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

The Treasury analysis, which I am sure Murdo Fraser has read, and the United Nations international investment report, which I am also sure he has read, have shown the decline in the UK share of EU inward investment since the economic and monetary union was established. Before EMU it was, on average, 25 per cent; since then, it has been 15 per cent. I agreed entirely with Kenneth Clarke when he said on Monday that Britain's problem was that we always thought about catching the train, but then ran along the platform before jumping into the guard's van at the end. My constituents, who have been deprived of a railway for many long years, will feel aggrieved by that analogy, but it is time now for us to take the driving seat.

Photo of Carolyn Leckie Carolyn Leckie SSP 11:26 am, 12th June 2003

It must be difficult for some people in the public galleries to follow this debate—especially the children. The challenge for us all is to translate the debate into language that people can understand and feel is important. EU issues have a detrimental effect on people's lives. I will concentrate on the interests of workers in Scotland.

Where there have been progressive reforms, the British Government has resisted them tooth and nail. What is the Government's record, and what can we deduce about its intentions? What does Gordon Brown mean when he talks about a Europe that is more inclined to support our values? When he talks about flexibility, freedom and liberalisation, he means in the interests of big business, not of ordinary people. He means the tearing down of reforms that have been won for workers. Blair is teaming up with Berlusconi and Aznar to translate enlargement of the European Union into workers' rights at the lowest common denominator.

The record shows that the British Government has continually achieved a watering down of all progressive reforms on workers' rights when legislation is implemented in Britain. The European works council directive was watered down. The Government had to be taken to court over parental leave. For fixed-term workers, the Government excluded pay and pensions from the clause on equal treatment. Measures on information for, and the consultation of, workers in national companies were all watered down. On collective redundancies, the directive was watered down. On the protection of young people, there was delay, delay, delay. For the Transfer of Undertakings (Protection of Employment) Regulations acquired rights amendments, the deadline passed in July 2001. There is no protection of pensions despite that being a legal requirement.

Photo of Keith Raffan Keith Raffan Liberal Democrat

Will Ms Leckie explain how it will help workers if we withdraw from Europe and make unemployed a large number of the 3 million people who depend on trade with Europe?

Photo of Carolyn Leckie Carolyn Leckie SSP

Keith Raffan is completely and utterly misrepresenting what I am saying.

Photo of Carolyn Leckie Carolyn Leckie SSP

Keith Raffan knows that the Scottish Socialist Party does not think that one simple measure, whether it be withdrawing from—

Photo of Murray Tosh Murray Tosh Conservative

I apologise, Ms Leckie, but I have to stop you. Ms Cunningham has been trying to catch my eye with a point of order.

Photo of Roseanna Cunningham Roseanna Cunningham Scottish National Party

Is it proper for us to be debating when there is an empty Executive front bench? It is quite extraordinary—the front bench is entirely vacant. That does not seem to me to express any kind of courtesy to the chamber.

Photo of Murray Tosh Murray Tosh Conservative

In standing orders there is no explicit provision on that point. However, it is accepted practice that a minister should be on the front bench. I am sure that the Minister for Parliamentary Business will be cognisant of the member's point.

Photo of Margo MacDonald Margo MacDonald Independent

On the same point of order, Presiding Officer. I hesitate to embellish what you said, but standards are laid down for the conduct of ministers in the chamber and the minister's conduct today would not meet them.

Photo of Murray Tosh Murray Tosh Conservative

As the member knows well, it is not for the Presiding Officers to interpret or comment on the ministerial code of conduct. If Margo MacDonald wishes to raise the matter, she knows how to do so.

I see that the minister has returned to the chamber and that he wishes to make a point of order.

Photo of Tavish Scott Tavish Scott Liberal Democrat

I apologise profusely. I went to the loo. [ Laughter. ]

Photo of Murray Tosh Murray Tosh Conservative

I suggest that we allow Carolyn Leckie to continue her speech.

Photo of Carolyn Leckie Carolyn Leckie SSP

I ask the Deputy Presiding Officer for some time to be added on.

I am sure that we could have forgone commenting on the minister's trip to the loo if he had been supported in the chamber by Andy Kerr, who supported the minister's amendment, yet I do not have a clue what his position on Europe is.

I think that I had addressed the issue of TUPE just before I was interrupted. There is no protection for pensions—the British Government removed it in 1997, with Ian McCartney in the chair at the Council of Ministers.

I can speak directly about the working time directive because of my experience in the NHS. All sorts of clauses in the directive have been watered down, including counting public holidays in with workers' annual leave entitlement. Britain has to comply with the directive by August 2003. The Scottish Parliament and the British Government will be asked to say whether the directive is being applied in Scotland and the UK—they will be asked whether Britain is compliant. The answer to that question is no, Britain certainly is not compliant.

The NHS is failing to monitor, regulate or even record working times. There is no such thing as compensatory rest in the NHS, which also makes excessive use of bank working, a practice that is not monitored at all. Nurses and other NHS workers are working in excess of 50, 60, and in some cases, 70 hours a week. I reiterate that Britain has to comply with the working time directive by August 2003, yet there are no structures, procedures or systems in place in the NHS to do that.

Photo of Carolyn Leckie Carolyn Leckie SSP

I will take Mary Scanlon's intervention, but I am running out of time.

Photo of Mary Scanlon Mary Scanlon Conservative

I want to elaborate on the point that Carolyn Leckie has just made. I received a written answer this week that confirmed that, in some NHS trusts in Scotland, only 10 per cent of junior doctors are compliant with the working time directive, which must be complied with in two months' time.

Photo of Murray Tosh Murray Tosh Conservative

Because of interruptions, I will give Carolyn Leckie another minute.

Photo of Carolyn Leckie Carolyn Leckie SSP

Thank you.

Mary Scanlon will also know that the British Government negotiated an extension for junior doctors, and that, even then, the directive will be implemented for junior doctors before it is implemented for the rest of the NHS work force. Junior doctors are further ahead in respect of implementation of the working time directive than the rest of the NHS work force, for whom nothing has been done.

The question is complex. Instead of squabbling about the minutiae, members of all parties should say whether they would support a Europe that places democracy in the hands of the people as the SSP does. Would they support a Europe that increases workers' rights and protection; drives up wages; drives down working hours; and ensures full and protected final salary and state pensions? Would they support a Europe that regulates and sanctions companies such as the Boots Company plc and Ethicon Ltd, which exploit workers in poorer countries by taking flight for greater profits? I know the Tory and Labour record on and attitude to such issues, but what sort of Europe does the SNP visualise?

I hope that members will take the opportunity to participate in a real debate that allows us to get underneath the issues and not just to deal in soundbites. I also hope that members will support Frances Curran's amendment, and that they will encourage the European Social Forum to come to this country. In the past, 100,000 people have attended its meetings. The ESF would be better for tourism than Charlie's visit the other day, when I saw only about 50 people in the street.

Photo of Margaret Ewing Margaret Ewing Scottish National Party 11:34 am, 12th June 2003

I spent some time last night and early this morning considering what I might say in the debate, but having sat through about 99 per cent of it, I have to say that it has been a strange debate.

The fact is that the SNP has propounded a visionary approach to the European dimension that has been dumbed down by our unionist colleagues; I refer in particular to Irene Oldfather's speech, in which she spoke about the "other regions" of Europe. It seems to me to be absolutely wrong hat she should say that; that kind of attitude portrays Scotland as a tartan waitress at the top table, or as a country that prompts from the pit in a theatre when decisions are being taken. I campaigned for decades for a Scottish Parliament, but I do not want a Scottish Parliament that is reduced to observer status on major issues that affect the daily lives of our citizens in Scotland.

John Swinburne had the courage to mention fiscal autonomy and Bruce McFee highlighted the important issue of Scotland's being deprived by our lack of the right to an international voice. In his amendment, the minister talks about "the regions", but I had believed that the Liberals were federalists and that they would therefore look with greater vision to what is happening in Europe.

It does not matter how we approach Europe: some Eurosceptics like some bits of it and other Eurosceptics like other bits of it, and there are Europhiles who like the whole thing and Europhobes who hate it all, but we must address the issue of Europe. It is a fact of modern political and democratic life that we are inside the European Union. That is where the SNP intends that we will stay.

I had the privilege of serving for 10 years on the House of Commons European Scrutiny Committee and I look forward to serving on the Scottish Parliament's European and External Relations Committee in this session of the Parliament. I saw the bundles of paper that went before the European Scrutiny Committee, which are decried by some as proof of how obsessive and over-bureaucratic Europe is. I say to those critics that they will find, if they look at what comes out of the Scotland Office in Whitehall, a bureaucracy that is over-obsessed with detail.

It is important that we see the concept of Europe behind all of the arguments about policies. The European Union was founded in the first place in the hope that my generation could grow up to see never again war in Europe such as was seen in the two great wars.

Developments have taken place in Europe since that time and the Scottish Parliament must play its role in them. It is not enough for Jack McConnell to say that nobody is going to the Council of Ministers meeting in Thelassaloníki this month or that we are to be observers at the Commission or the council. We must, as members of the Scottish Parliament, exert our democratic right to represent our people. I have clear reservations about the common fisheries policy and about the changes that are to be made to the common agricultural policy, but I welcome the enlargement of the community and think that it is important that that happens.

I had the unusual privilege of heading a Foreign and Commonwealth Office delegation to the Baltic states when they were under Soviet occupation. We do not have to clamber into the Scottish Parliament building over heaps of sandbags, but that is exactly what I had to do in all of the Baltic states in order to talk to representatives there. We are lucky with our democracy, but why do countries such as Hungary, Slovenia or the Baltic states look towards the European Union? They see Europe not as a gravy train—as someone tried to claim—but as a star of hope and democracy. People in those countries have lived through decades of oppression and we should value the fact that they want to join us. We should be involved directly in the discussions that are being held with them and in reaching the conclusions that recognise our needs and their needs.

Photo of Helen Eadie Helen Eadie Labour 11:39 am, 12th June 2003

I rise to support Tavish Scott's amendment. Alex Fergusson's comments were absolutely right; indeed, I thought that he was being polite when he described the SNP's position on this issue as being very "fluid and flexible". Those of us who have longer memories might remember that the nationalists took an "in, out, in, out" approach to Europe; they might have even shaken it all about sometimes.

It is a shame that Margo MacDonald has left the chamber for the moment. Some members might not know that her husband, Jim Sillars, lived in my house in London for a time when he was a Labour MP. We had many interesting discussions about Europe: Jim was usually on the anti-European side of the argument, while I was very much on the pro-European side. It certainly made for some very lively suppers. However, I am afraid that Margo seems to have picked up too much of his Euroscepticism.

One of the UK's great tragedies is that we did not adopt a positive approach to Europe soon enough. No matter whether we are talking about the CAP, the CFP, the policy on the euro or whatever, the trouble is that the UK has always been at the coo's tail when we have tried to get into negotiations. We have never been in on the ground floor, establishing the ground rules. Everyone in the UK must learn that salutary lesson: we must get in there and do the deal that will benefit our people.

Photo of Alex Johnstone Alex Johnstone Conservative

First, I want to remind Helen Eadie that my name is Alex Johnstone, not Alex Fergusson.

The lesson that I tried to draw from the current negotiations in Europe is that, although what is on offer delivers for us, the French do not like the proposals and will knock them on the head. That is why we must always negotiate from a position of strength.

Photo of Helen Eadie Helen Eadie Labour

We both agree on that point. We must constantly be in there, battling for our people's rights. It does not matter whether we fight for the rights of coal miners, iron and steel workers or fishermen who lose their jobs; all our workers have lost jobs over the past decades and it is our job to get the very best deal for them. I hope that we all unite on that point.

As for the points that Carolyn Leckie and other SSP members raised, I think that the Parliament has very much agreed the principle of having its own presence in Brussels. Such a presence provides us with early intelligence to ensure that we can challenge the quality of some of the decisions that are made there. After all, we do not want to keep going to court to challenge and fight decisions that have already been made.

That said, policies and measures such as the working time directive, parental and paternal leave, maternity rights and environmental improvements have benefited the people of this country. How those measures are implemented in our hospitals is a matter for our internal Government. However, the bigger policy issue that we must agree to is that progressive arguments must be made in Europe for our workers in order to ensure that they receive advances that we believe in. The Amalgamated Electrical and Engineering Union, Amicus, the GMB, the Trades Union Congress and many other UK unions have argued powerfully for such an approach; they know that 3,500 jobs are lost every day because we do not have the euro. That is another salutary lesson that we must take on board.

Photo of Phil Gallie Phil Gallie Conservative

If that is the case, why have the Institute of Directors and chambers of commerce throughout Great Britain come out against the euro? Is it because they believe that it will cost, rather than create, jobs?

Photo of Helen Eadie Helen Eadie Labour

Last night, I was in the company of farmers and representatives of the National Farmers Union of Scotland who told me that the industry throughout Scotland is being decimated because we are not part of the euro. That is not just my message; it is what farmers who are trying to sell their products are arguing. For example, in the Borders, the manufacturers of paper gowns—

Photo of Brian Monteith Brian Monteith Conservative

I thank the member for being so generous. Earlier she posed a question that I would like to answer now. The problem with berries, in particular, is the result of imports from eastern European countries that are not yet members of the euro zone. Does the member not therefore accept that the significant factors in that situation are more likely to be the lower cost, and sometimes quality, of the berries from those countries, rather than the euro?

Photo of Helen Eadie Helen Eadie Labour

No, I do not. Mr Monteith obviously needs to speak to some farmers on the matter; they are very unhappy with the Conservative party's approach.

The Scottish Parliament has been positive in its approach to Europe. It is interesting that the SNP is taking a different tack from Professor Neil MacCormick, who has been party to the work of the Scottish Executive, the Scottish Parliament and civil servants at the Scotland Office in batting very strongly for team Scotland. The claim that we do not have a very strong voice in Europe completely ignores the fact that we have such strong representatives over there.

The convention on the future of Europe and the debates that we are currently having are all about paving the way for enlargement. We have to bring together and simplify the various treaties to make them easily understandable for the people that we represent, who need to know the answers to those questions. As a result, I strongly support the minister's amendment.

Photo of Brian Monteith Brian Monteith Conservative 11:46 am, 12th June 2003

In Scotland, we used to have a Scottish currency. However, when we joined the most successful political and economic union that the world has ever known, we gave up many of our political and economic rights. I am glad that we did so, because it was the right thing to do. The benefits have far outweighed the costs. For example, we were able to retain our Scottish culture as well as share in our British culture. We also retained a number of distinct institutions, procedures, laws and traditions, as we would have wished to.

When Scotland joined the union, it experienced some economic shocks. However, they were overcome because we enjoyed three distinct advantages. First, our economies converged. Although we already traded with Scandinavia, the Baltic and—in particular—France, our volume of trade with England was large. Not only did that trade grow, but our access to the new worldwide markets and new continents also grew. We were economically in step.

Secondly, we had a common tongue. Some nationalists might not like to hear this, but the Scottish form of English has existed in Scotland as long as Gaelic has. Greater economic and political interaction—

Photo of Brian Monteith Brian Monteith Conservative

Certainly. I thought that that point might provoke someone.

Photo of Rob Gibson Rob Gibson Scottish National Party

Mr Monteith's point is absolutely untrue. The Gaels have a word for English—"Beurla"—which means jargon. In other words, compared with Gaelic, English is a very recent language in Scotland.

Photo of Brian Monteith Brian Monteith Conservative

I simply defer to Professor Charles Jones of the University of Edinburgh—I recommend that the member read his book on the English language, which contains evidence that Gaelic and forms of English existed in Scotland at the same time. The point is that the countries in the union had a common language, although there were some differences.

Thirdly, we also enjoyed labour mobility. Given those factors—converging economies, a common language and labour mobility—the economic, political and monetary union in 1707 was a success. It is interesting to note that we would not enjoy those three advantages if we in the UK—or in Scotland—joined the euro zone.

Photo of Brian Monteith Brian Monteith Conservative

I want to finish my point. As the Chancellor of the Exchequer has explained, there is no economic convergence. Furthermore, we would not have the labour mobility that we would like to have. In that context, I draw members' attention to the labour mobility that exists in the US.

Photo of Brian Monteith Brian Monteith Conservative

I will come back to the member.

Finally, we would not enjoy a common language throughout a united states of Europe.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

Is the member's description of the Conservative position somewhat fraudulent? He seems to be indicating that the Conservatives would join the euro if the economic conditions were right and if doing so would be to our economic advantage. That is not the their position. Will he confirm that their position is that they would never join the euro, no matter what the economic conditions were?

Photo of Brian Monteith Brian Monteith Conservative

I think that Mr Rumbles is somewhat ahead of himself: I was talking about the SNP's policy and motion. However, he will not be surprised to learn that I will be delighted to explain exactly where I stand.

It is interesting that, as I have said, Britain and Scotland's relationship with the euro zone would not enjoy economic convergence, common language or labour mobility.

Photo of Brian Monteith Brian Monteith Conservative

I must make progress. I might take an intervention later in my speech.

The relationship would not enjoy those things because the euro zone is structurally rigid. Therefore, I do not believe that it is in our economic, political, social or cultural interests for this country—Scotland or the United Kingdom—to join the euro. I say all of that because the SNP's policy on the euro is at odds with, and contradictory to, its policy on independence and—that unionist concept—fiscal autonomy. For SNP members to suggest that Parliament should have greater financial powers when the evidence on monetary union suggests that we would lose them is either to fool themselves or to deceive the public. I will let the public decide which it is.

It is possible for a British Parliament to share taxation powers with its Scottish sister Parliament, but it would not be possible to share those powers if the British Parliament were set to lose such powers, which it would lose with the euro.

Photo of Jim Mather Jim Mather Scottish National Party

Convergence has not taken place in the UK. Over the past 30 years, Scotland has grown at an average rate of 1.6 per cent and the rest of the UK has grown at 2.1 per cent. Scotland has had no power or flexibility: it has no tax powers, no borrowing powers, no control of interest rates and no control of exchange rates.

Photo of Brian Monteith Brian Monteith Conservative

I am cognisant of all those factors, but the union has existed for hundreds of years and there has been convergence over that time. There might be convergence next week or even next year, as the chancellor tells us, but the following year there might not be. The convergence test that the chancellor has set is fallacious.

The trend in Europe is to push towards more central control of taxes. Portugal wanted to cut its taxes; its Government was elected on the basis that it would cut taxes, but it was told by the European Central Bank that it could not do so. It is not only the euro that threatens the Parliament and its control over taxes, but the European constitution, which the SNP is so keen to support.

It is clear that the SNP is riven with contradiction. Its policies on fiscal autonomy and independence are contradictory, and its policy on more powers for Scotland and support for the euro and the draft constitution are contradictory. I believe that we should send them all home, "Tae think again."

Photo of Richard Lochhead Richard Lochhead Scottish National Party 11:52 am, 12th June 2003

It is funny that Brian Monteith should say that the SNP is riven with contradiction, given that the Conservatives seem to be against centralisation in Brussels and elsewhere, but have—against Scotland's interests—defended centralisation within the UK for decades.

I read last week that thousands of world war two veterans in the United States pass away every week. That reminded me that we should never lose sight of the reason why so many people wanted a united Europe—it was to bring peace, so that never again will we have a massive European war like the two that we experienced last century.

Photo of Irene Oldfather Irene Oldfather Labour

It is a major omission that that is not mentioned in the motion.

Photo of Richard Lochhead Richard Lochhead Scottish National Party

The SNP has made the point in every international debate and every debate on Europe.

Photo of Alex Johnstone Alex Johnstone Conservative

Is not it the case that the reason why the SNP avoids that subject wherever possible is that peace in Europe, which it claims should be credited to the European Union, is in fact down to our membership and active involvement in the North Atlantic Treaty Organisation?

Photo of Richard Lochhead Richard Lochhead Scottish National Party

The SNP's anti-nuclear stance shows that of all the mainstream parties in the chamber, we are the most peaceful. It is ludicrous to suggest otherwise.

In today's interdependent and globalised world, it is important that nations decide how they can use their sovereignty; when to pool it, share it or retain it. In these important days when many international and European debates are taking place, the question that Scotland must address now is: What decisions do we want to take in Scotland and what decisions do we want to be taken in London, Brussels, Washington, New York or wherever? That is the massive challenge that faces the people of Scotland.

Photo of Brian Monteith Brian Monteith Conservative

Will the member note that there was a civil war within the United States while it had a common currency called the dollar?

Photo of Richard Lochhead Richard Lochhead Scottish National Party

I am speechless from trying to work out the relevance of that point to the debate and to my speech in particular.

Scotland must decide where to secede power and where to get power back. The cleverest nations in the 21st century will be the ones that make the right decisions. The SNP thinks that many decision-making powers must be taken back from London because they would best be made in Scotland. Powers over fuel duty, whisky duty, taxation and all the other powers that are still with London should come back to Scotland. We should also decide where to pool sovereignty with other international institutions. We think that some powers should come back from Brussels to Scotland, such as power over our own fishing grounds—we must have power over that.

We must manage our sovereignty here in Scotland. We want to gain sovereignty in other international decisions, such as in relation to nuclear weaponry and to what happens at the World Trade Organisation and other forums; we are currently shut out of all such decision-making forums. We must work out what is in Scotland's best interests. The SNP wants to repatriate from Europe sovereignty over issues such as fisheries, genetically modified crops and so on, and it wants to repatriate from London sovereignty over other issues. We want to take decisions here about where we should pool sovereignty with other people.

I will address what is currently happening in Europe. In 1958 there was the treaty of Rome, in 1987 there was the single European treaty, in the 1990s there was the Maastricht treaty, in 2000 there was the Nice treaty and next year we will have another important treaty, which will decide the fate of many of the decisions that will affect Scotland. The pace of integration in Europe is quickening and there is less and less time between treaties. If we want to have decision-making powers in Scotland, and to have an influence over our society and our economy, it is imperative that we get involved now. The only way to get involved is to get involved directly.

We want to determine what sort of Europe we live in. Most members and most people in Scotland want to live in a Europe of the people, not a Europe where big business can drive through policies on issues such as GM crops, and in which the people of Scotland can have no say in what happens in their own environment. That is why it is so important that we have a direct say over such matters.

The membership of the EU will increase soon to 25 states—more eastern European states will get on board. The EU cannot be widened at the same time and pace as it is deepened. If that is done, one of two things will happen: either the EU will collapse, which I do not think any member in the chamber wants, or it will turn into a super-state in which democracy is an abstract concept for Scotland. I do not believe that members or people in Scotland want that to happen.

There are three solutions. First, we need subsidiarity so that decisions are made at the proper level. We should make decisions about our fishing grounds here in Scotland. Those decisions should not be made by land-locked countries such as Austria or Luxembourg, or by countries such as Croatia, Bulgaria and Romania, which will soon join the EU and will have more say over the Shetland fishing grounds than will the people of Scotland or the people of Shetland. Secondly, we must—on GM crops and other issues—repatriate sovereignty from the relevant authorities. If the relevant authority is an international forum, we must repatriate authority from that and we should do so if the relevant authority is the EU. Thirdly, we need equal status with other nation states. Our north-west European neighbours such as Sweden, Denmark and Ireland have seats at the top table—Scotland should seek that status.

Photo of George Lyon George Lyon Liberal Democrat 11:58 am, 12th June 2003

I welcome the chance that the SNP has provided for us to debate Europe—its motion is drawn extremely broadly.

There is a good argument that the common fisheries policy, the European constitution and the single currency are all important subjects that are worthy of a debate in their own right, but I will concentrate on the single currency. Earlier in the week, following the UK's move to kick the decision on the euro into the long grass, Alex Salmond, in a press release at Westminster, criticised the chancellor's decision to delay the decision to go into the euro. He stated:

"Failing to join the euro ... will continue to wreak damage to ... Scotland".

Nicola Sturgeon confirmed earlier that the SNP policy is early entry to the European single currency. Several members have already pointed out the contradictions in the SNP policy. The SNP has argued consistently day after day and week after week in the Parliament and throughout the election campaign that Scotland's economy can be rescued from decline only by Scotland's leaving the UK single currency area.

The SNP argues that monetary policy in the UK is skewed to favour the interests of the housing market in the south-east, which results in low growth, poor performance and the fact that we consistently lag behind the rest of the UK. The SNP claims that the economic hot spot of the south-east draws resources and young people away from Scotland. We have heard many times from SNP members such as Andrew Wilson, John Swinney and Jim Mather—we heard it relentlessly during the election campaign—that the answer to Scotland's economic problems is for us to have independence, a Parliament with proper powers and a full economic toolbox.

We must respect that legitimate argument. However, within months of Scotland gaining independence and grabbing the toolbox from Eddie George at the Bank of England, the SNP would hand the toolbox back to Willem Duisenberg at the European Central Bank. As my good friend and highly respected SNP MSP Alex Neil argued in his lecture for The Sunday Times:

"How can we in the SNP argue for full fiscal freedom from London if we are then prepared to hand back fiscal powers to Brussels and Frankfurt?"

That is a fatal contradiction. A Scottish economy that was run from Frankfurt would be no more successful than one run from London.

Photo of Richard Lochhead Richard Lochhead Scottish National Party

Does the member suggest that London is better at looking after the Scottish economy than Brussels would be? If so, is the member anti-euro?

Photo of George Lyon George Lyon Liberal Democrat

I am pointing out the argument of one of the SNP's leading members, who said that there is a fatal contradiction in the SNP's economic policy because it seeks an independent Scotland and early adoption of the euro. The SNP must face up to the fact that its policy on the euro is fundamentally flawed, contradictory and not credible in the eyes of the Scottish people.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

Mr Lyon is somewhat confused. Our argument is perfectly simple: it is that Scotland has no economic, fiscal or monetary powers whatever within the United Kingdom and that we should have the same range of economic powers that every other member state of the European Union has. That argument is straightforward. What is Mr Lyon's position on the euro? He cannot have it both ways—he argues for the euro, but criticises the SNP because we want to take Scotland into it.

Photo of George Lyon George Lyon Liberal Democrat

We are debating the SNP's motion and it is the SNP's policy that is contradictory. The SNP argues that Scotland would benefit from regaining control over interest rates—one of the major monetary tools—from the Bank of England, but it would a few months later hand that control to the European Central Bank, which would have to take into account the interests of about 24 different currencies. How can the SNP argue that when it believes fundamentally that Scotland is disadvantaged within the single monetary area of the UK? The SNP must deal with the contradiction that lies at the heart of its economic policy.

Michael Matheson's speech highlighted the danger to Scotland of the SNP's policy of independence. He set his sights high when he said that an independent Scotland should take its place at the top table of Europe with Latvia, Cyprus and the other small nations.

Photo of George Lyon George Lyon Liberal Democrat

I would be delighted to, but I am in my last minute and I must make progress.

As Irene Oldfather pointed out, that would leave Scotland in the second division of Europe, with only four votes to cast against the big countries' 29 votes. I support Tavish Scott's amendment.

Photo of Murray Tosh Murray Tosh Conservative

I offer my regrets to Gordon Jackson, but we must now begin the closing speeches. I call Christine May to close for the Labour party.

Photo of Christine May Christine May Labour 12:04 pm, 12th June 2003

I support Tavish Scott's amendment. The debate is our first opportunity to discuss the view that our membership of the EU within the United Kingdom is fundamentally important to the economic, social and cultural life of Scotland. That idea is one of my long-held views and I had high hopes for today's debate, although I agree with Irene Oldfather that it would be better to have the debate after Giscard d'Estaing's draft document is finalised.

There has been a cacophony of discordant voices from the SNP on the various aspects of EU policy, about which the SNP members have individual disagreements—I suspect that those disagreements are purely for party-political or electoral advantage. Should we be in or out of the euro now or later? Should we have a referendum now or later? What should the subject be? Nobody knows.

Many Tories, including Phil Gallie, have been busily lighting votive candles to ward off the bogeyman of the charter of fundamental rights—be afraid; be very afraid.

Photo of Christine May Christine May Labour

I will take an intervention in a moment.

The Conservatives do not take responsibility for anything that that previous Conservatives did. They claim that a big boy did it, or in their case—as they say where I come from—a little oul wan did it and got stabbed in the back by her own party.

Photo of Murdo Fraser Murdo Fraser Conservative

I am delighted that the member has given way. Will she say which leader of a major political party in the UK is the only one who has campaigned on a platform of withdrawing the UK from Europe?

Photo of Christine May Christine May Labour

I thought that it was Iain Duncan Smith.

What have we done? We have played our part in the United Kingdom and raised arguments that cater for Scotland's interests. Members throughout the chamber, including Margo MacDonald, Alex Johnstone—who made sensible comments about the common agricultural policy—Margaret Ewing, Carolyn Leckie and Mark Ballard have advanced some of those arguments.

Photo of Carolyn Leckie Carolyn Leckie SSP

Christine May referred to the EU charter of fundamental rights and is obviously proud of it. Does she agree with the British Government, which, together with its right-wing friends such as Berlusconi and Aznar, cobbled together a scheme to ensure that the charter was not incorporated into treaties and therefore not legally enforceable? Does she agree that the charter should be incorporated into treaties and made legally enforceable?

Photo of Christine May Christine May Labour

I was coming to that point. It is my view that, at the time, the UK Government was right not to argue for the inclusion of the charter of fundamental rights. However, as a committed European, I remain committed to an expression of the rights of individual citizens within the EU and I will continue to argue with my party and the UK Government that we should have something that sets out those rights.

Members raised and sought to debate some key matters, such as the stable economy that Gordon Brown and the Labour Government have delivered for this country for the first time in anybody's recollection. We need jobs and profits, but we must also take account of workers' rights in an enlarged Europe. We must take account of the impact of enlargement on the rights of individuals and the economy of this country.

Our membership of the European Union is not a lucky bag or a pick-and-mix; we cannot have various bits that we like and not have bits that we do not like. The European Union is about us getting together in a partnership of nations and regions with like interests and like economies and arriving at a balanced conclusion. That is why Gordon Brown and Tony Blair are correct that, for the moment, the circumstances are not right for membership of the euro. However, given that some of the tests have been met and that Gordon Brown and Tony Blair are confident that the other tests can be met, we should now start to move apace in making the case for joining the euro. When the referendum comes, I will campaign for membership because I will believe that the time is right.

The aim of reaching a balanced conclusion is why we participated in the Giscard d'Estaing convention and why we managed to achieve amendments to the original draft document that took account of Scotland's interests and of the differing aspects of our economy, culture and social life. That is why we will continue to participate in the on-going reviews of the various structural funds of the European Union.

Tavish Scott's amendment, which sets our membership of the European Union in a clearly Scottish and international context, bringing forward the benefits of peace and stability, is the right way to go. I am pleased to support that amendment.

Photo of Murdo Fraser Murdo Fraser Conservative 12:10 pm, 12th June 2003

This has been an enlightening debate in which we have heard the parties set out their positions on the European constitution. It seems that Labour now believes unreservedly in the euro but, like some latter-day St Augustine, thinks that it does not want it quite yet. The famous five tests dreamed up on the back of an envelope in the back of taxi to give some credibility to the Government's position are quite irrelevant compared to the sixth test: can Labour win a referendum? The answer to that question is, of course, no. Labour therefore has to dream up all sorts of excuses as to why the other five tests have not been met. I am sure that that process will continue for many years to come.

I am pleased that the Lib Dems are as enthusiastic about the euro as ever. They are the people who said that we should have joined the euro when it was established in 1999, despite all the evidence that that would have been a disaster for the UK economy.

Wim Duisenberg, the president of the European Central Bank, said just yesterday that he had to revise his forecast for euro zone growth from the 2 per cent that he had predicted for the coming year down to between 0.4 per cent and 1 per cent. He said:

"Inflation is dropping significantly, further fuelling economists' worries about the risks that prices might start falling, damaging investment and risking even lower growth."

It is clear that joining the euro in 1999 would have been a disaster for us.

Photo of Murdo Fraser Murdo Fraser Conservative

Mr Raffan did not give way to me, but I will show him a little more courtesy than he showed me.

Photo of Keith Raffan Keith Raffan Liberal Democrat

I am grateful to Mr Fraser. I point out that I gave way to Mary Scanlon.

In view of the strong criticism by the leaders of Mr Fraser's party of the lack of economic growth in Scotland, which interest rate does Mr Fraser think would be better for Scotland: 2 per cent or 3.75 per cent?

Photo of Murdo Fraser Murdo Fraser Conservative

That is a fair point from Mr Raffan—I will address it in my remarks.

I want to deal with a point that Jeremy Purvis raised about inward investment. Ernst & Young published a report on 4 June on inward investment in the UK that showed that the UK share of inward investment projects in the EU rose from 26.5 per cent in 2001 to 28.4 per cent in 2002. The report said:

"The UK will continue to punch well above its weight in inward investment terms in Europe. To continue to do so its efforts must not be sidetracked by the euro debate."

That is the fact of the matter, from the consultants Ernst & Young. We are not being damaged by staying outside the euro zone.

The motion today is from the SNP and, interestingly, I detect a note of healthy Euroscepticism from members on the SNP benches. Of course, the SNP's policy was once independence in Europe. If the press are to be believed, there are some within the SNP who are starting to question whether independence is in fact what they want at all. Perhaps they are thinking twice, not just about independence but about whether they want to be in Europe after all.

As my colleague Brian Monteith said—indeed George Lyon, in a remarkably Eurosceptic speech, also made the point when he quoted Alex Neil—if fiscal autonomy is the policy of the SNP, how does the SNP square that with its policy on joining the euro? Joining the euro means giving up control of interest rates and economic decisions and, in due course, taxation policy. What fiscal autonomy will be left to Scotland if we join the euro zone? The fact is that the euro would be a disaster for our economy.

Photo of Irene Oldfather Irene Oldfather Labour

We gave up our total autonomy in trade negotiations long ago. In many respects we long ago ceded sovereignty to get into the single market. If we move to one monetary authority, we pool our sovereignty again in order to have a common position. Does Mr Fraser agree with Ken Clarke's statement that when we create a single market we pool sovereignty?

Photo of Murdo Fraser Murdo Fraser Conservative

I am sure that Irene Oldfather will not be surprised to learn that I occasionally disagree with my esteemed colleague Mr Clarke on that issue as on others.

The euro would not be to our benefit. We trade substantially with Europe but, by comparison with the rest of the UK, we have large oil and electronics sectors. Those industries are priced in dollars and euro fluctuation against the dollar would only damage them.

On interest rates, I would like to respond to Keith Raffan's comments. Looking at the property market in Edinburgh, Inverness or other hot spots in Scotland, who can argue that it is prudent to call for 2 per cent interest rates? In the euro zone, as Ireland has found out to its cost, interest rates that are set too low mean high inflation and long-term damage.

Photo of Murdo Fraser Murdo Fraser Conservative

I am sorry, but I have already taken a number of interventions and I am very short of time.

We must retain the same currency as the rest of the UK. As Margo MacDonald said, the rest of the UK is our main market. If we were to be independent, we would still have to have the same currency as England to retain our single market.

Photo of Murdo Fraser Murdo Fraser Conservative

I am sorry, but I am in the final minute of my speech.

SNP members are out of step with public opinion in Scotland, and not for the first time. They would surrender our currency, our control of interest rates and our national ability to influence economic affairs, which would have serious consequences for jobs, living standards and other aspects of economic welfare.

By contrast, on this issue as on so many others, it is the Conservatives who speak for the people. We believe that the Scottish Parliament must be responsible for ensuring that Scottish views on the convention are clearly represented to the Westminster Government, thereby ensuring that Scotland's specific concerns are covered in any final outcomes. Only we see that membership of the single currency and the inability to set interest rates in our own interests would hit jobs and incomes. To safeguard people's living standards, we must keep control of our economic policy and set the interest rates that are right for us. Throwing away that flexibility would undermine economic stability, putting jobs at risk.

Only we oppose a European constitution, because that would be a further step down the road to a unitary super state. Whatever the outcome of the European convention, the Scottish Conservatives believe that the people of Scotland have the right to decide. The Government must hold a referendum on the proposed European constitution. It must trust the people. I am delighted to support the amendment in the name of my colleague Phil Gallie.

Photo of Carolyn Leckie Carolyn Leckie SSP

On a point of order, Presiding Officer. As Frances Curran moved an amendment, do you consider that it would be better in the interests of fairness that she should be given the opportunity to sum up on that amendment? With three amendments before the Parliament, it seems bizarre that she is the only member unable to respond. If you are not of a mind to allow her to sum up, would it be competent to put the question to the chamber and ask members to allow her to sum up?

Photo of Murray Tosh Murray Tosh Conservative

I am afraid that that is not competent. I will not be calling Frances Curran to close. I understood that the allocation of closing slots had been determined by some form of agreement about how such matters would be conducted. It was on that basis that you were called to speak as the SSP's second speaker in the debate. You have raised an issue that we will obviously need to consider for future reference. I take your point and I will try to respond to you in the fullness of time. Now, however, I call Tavish Scott to close for the Executive.

Photo of Tavish Scott Tavish Scott Liberal Democrat 12:18 pm, 12th June 2003

If I may, I shall start with two of Parliament's committed ladies on the subject of Europe: Helen Eadie and Margaret Ewing. I shall do so because I believe that they both made a similar and extremely important point: that the current social, political and economic realities mean that we have to engage with and use Europe as effectively as we can. Both Mrs Ewing and Mrs Eadie said that, as did a number of other members, unlike the Eurosceptics from whom we also heard during this morning's proceedings. That fundamentally important point often gets overlooked in the context of debates on Europe. It illustrates a reflective approach to those issues that is particularly important at this time, given the future of Europe convention.

A number of members picked up on the importance of the future of the European convention, either agreeing or disagreeing with it. I observe, however, that few looked at it in detail. Irene Oldfather did so, illustrating to Parliament the benefits that positive engagement in the convention can bring to the Scottish Executive and, more important, to the people of Scotland in delivering legislation and powers that are within our competence.

The convention deserves our support. It is an innovative and open way of addressing the increasingly big issues in Europe that need to be sorted out. I agree with Carolyn Leckie on her point about needing to make Europe more understandable—it was a fair point that was made by many members.

We need to ensure that Europe regulates only when it must. That would be a profoundly important advance in European policy. We must also ensure that the European Union carries out its business more efficiently and, as Michael Matheson put it, more transparently and accountably. I hope to ensure that Parliament reflects all principal points of approach to those matters.

The convention will and must tackle the democratic deficit, as Keith Raffan rightly put it. That is why the Executive has been active in pushing for a means of enforcing the subsidiarity principle, with which most members would agree. It has also been pushing for recognition of the role of the regions in Europe, more efficient policy-making and greater involvement with those on whom European policy impacts.

Photo of Richard Lochhead Richard Lochhead Scottish National Party

I return to the theme of enforcing subsidiarity and ensuring that Europe adheres to that principle. Once again, I ask the minister to clarify whether he believes that this Parliament and his Government should have access to the European Court of Justice to achieve adherence to that principle.

Photo of Tavish Scott Tavish Scott Liberal Democrat

I was going to come on to that issue, and Mr Lochhead has given me the opportunity to do so now. The Executive believes strongly that breaches of the principle of subsidiarity are political rather than judicial matters and would be most effectively dealt with at an early stage in the legislative process. The Executive set out in the paper that it submitted to the convention a number of practical and workable proposals to ensure that early, pre-legislative consultation negates the need to risk over-burdening what I am sure Mr Lochhead would accept is an already busy court.

The convention is moving in the right direction—one in which Parliament should have confidence. However, the convention has not concluded its work and it is on that point that I disagree fundamentally with the Conservatives. There remain important issues to resolve. As Christine May said, there also remain a number of bogeymen that, hitherto, one could read about only in the pages of the Daily Mail. Mr Gallie mentioned them, which is at best disappointing but it is not of any great surprise.

The proposals will be discussed at the IGC later this year and into next year, and the big issues remain up for grabs. The Executive will work extremely hard with our partners on those issues to ensure that the convention delivers firmly on the agenda that we have set for it.

Photo of Phil Gallie Phil Gallie Conservative

Perhaps the minister has had the good fortune to examine the charter to which I referred. Will he give me an assurance that there is nothing in the charter that will affect the decisions we take in Parliament on health, education, the environment and transport?

Photo of Tavish Scott Tavish Scott Liberal Democrat

Mr Gallie needs to accept my point that the process is fluid at the moment. We have worked hard through our representatives, who are involved in different aspects of the convention's work and who represent different parties in Scotland. We have done that over the past 16 to 18 months and will continue to do so throughout the IGC process. At no time will we take our eyes off the ball on the issues that Mr Gallie or other members raised.

Photo of Keith Raffan Keith Raffan Liberal Democrat

I am glad that Mr Scott has emphasised the point that the constitution is a draft constitution. Many of us hope that there will be major constitutional change, but, through this year and into next year, the process has to go through the IGC, and we do not know what the outcome will be. That is why Menzies Campbell MP is right—there should be a referendum if we are facing major constitutional change, but no referendum if the process is simply a tidying-up operation, which we hope it will not be.

Photo of Tavish Scott Tavish Scott Liberal Democrat

Mr Raffan makes a fair point. I add to that by illustrating the work that the Scottish Executive is doing on linkages with other areas of Europe. It is important that the Executive has developed formal co-operation agreements with European partners. During 2002, agreements were signed with Catalonia and Tuscany, and more will follow shortly. Those are important commitments, and not only for some of our partners. The core point is that we must work with other parts of Europe to find common cause on issues of considerable economic, social and cultural interest and to ensure that we achieve shared objectives.

Photo of Tavish Scott Tavish Scott Liberal Democrat

I want first to deal with enlargement.

A number of members raised enlargement in relation to economic activity in Scotland. Alex Johnstone made some important points about agriculture. He will be aware that the National Farmers Union and other representative bodies have been closely involved in discussions with partner organisations in some of the accession countries, especially Poland, about the benefits that both sides can gain from enlargement. There is much to be said for such engagement. As Keith Raffan rightly said, last weekend 77 per cent of Poles voted in favour of accession to the European Union—on a 59 per cent turnout. That drives a coach and horses through the complaints of some. Poland has followed Malta, Slovenia, Hungary, Lithuania and Slovakia in supporting accession to the EU.

The issue of the euro has been raised to the considerable excitement of many members. The Scottish Executive will work closely with Scottish business organisations and people throughout Scotland to prepare for the time when decisions about the euro are taken.

I want to deal with two points that were made about fisheries. The first relates to the ridiculous speech that Mr Brocklebank made. Yesterday Jörgen Holmquist, the director general of the fisheries directorate-general, confirmed in Brussels to Highlands and Islands Enterprise that the competition directorate-general ruling on the Shetland and Orkney quota purchase scheme did not ban the practice in its entirety, only the discriminatory elements of the system. The member should get his facts rights before he makes such speeches.

Nicola Sturgeon claimed that fisheries are not mentioned in the current treaties of the EU, but she should read the treaties. Article 32 of the treaty establishing the European Community requires a common fisheries policy, and annex 1 of that treaty lists fish among the products that are covered by article 32. A little homework would not do the member any harm.

Important issues face Scotland at this time. It is important that Parliament and the European and External Relations Committee engage with the issues that we have debated. However, it is the partnership parties in the Executive that will take those issues forward. From what we have observed today, only the partnership parties have a positive engagement with the future of Europe.

Photo of Roseanna Cunningham Roseanna Cunningham Scottish National Party 12:27 pm, 12th June 2003

We can characterise the Tory position in this debate as follows: we are in, we do not like it, we want out, but we do not want to say that. That is the extent of the Tories' contribution.

Photo of Murdo Fraser Murdo Fraser Conservative

I am sure that Roseanna Cunningham would characterise Mr Gallie and perhaps even me as politicians who can speak our minds. Does she think that if we believed that Britain should pull out of the EU we would be afraid to say so?

Photo of Roseanna Cunningham Roseanna Cunningham Scottish National Party

That is just what I said. Murdo Fraser is obviously waiting for Iain Duncan Smith to tell him that it is okay to say that Britain should pull out of the EU. That is the difficulty that Conservative members face.

Lib Dems and Labour members conveniently ignore all the divisions within and between their parties and end up unutterably confused in a debate such as this, as evidenced by the speech that we heard from George Lyon.

Few subjects that are debated in this chamber better highlight the stark difference in vision and ambition that exists between members of other parties and members of the Scottish National Party. Some woeful speeches were made this morning.

Photo of Mary Scanlon Mary Scanlon Conservative

Public sector spending in Scotland is 20 per cent higher than it is in England. The SNP number-cruncher is sitting in the front row of the SNP benches, so can Roseanna Cunningham confirm that, if Scotland were independent, its spending and consequent borrowing would be compatible with the monetary rules of the European Union?

Photo of Roseanna Cunningham Roseanna Cunningham Scottish National Party

There would be some debate about the figures on which the member is basing her argument. I would be happy to engage in a separate debate about those figures, but that cannot be done in this context because the member is putting forward a position that is arguable.

A number of the speeches that members made can only be fairly characterised as covering up the fact that they do not want to be clear about their position or do not know clearly what their position is. Maureen Macmillan's was one such speech. I suspect that the entire speech was intended to cover up the fact that she does not know what side of the Labour debate she is on.

I am sorry that Margo MacDonald has left the chamber, because although she spent six minutes and 43 seconds on her speech I am still none the wiser as to her position on Europe. I must say the same about Jeremy Purvis's speech.

The SNP, in contrast, would have Scotland's voice heard at the centre of Europe. Our position is clear. The Executive parties and the Conservatives are happy to have Scotland's voice muffled and distorted by diverting our representation through Westminster—the same Government that has consistently failed to defend Scotland's interests. Perhaps the big difference between our position and that of the other parties is that we want to participate in the development of the European Union rather than being stuck—mentally as well as geographically—at the periphery, half wishing that we were Americans, which is the problem underlying current Labour party policy on Europe.

We look forward to our country being at the heart of European progress. We welcome the enlargement of the EU and the development of its constitution but we want to be directly involved in the process. In fact, the SNP's Neil MacCormick, as a substitute member of the European convention, is the only democratically elected representative of Scotland involved with that body, which demonstrates our commitment to its future.

Despite the fact that the First Minister is chair of the group for European regions with legislative power—REGLEG—and despite the fact that 80 per cent of devolved Scottish functions are covered in some way by EU competence, the Executive has done little to promote Scottish interests, involvement or influence and has failed to get a place in the European convention. From what Tavish Scott said, we can see that he believes that the Scottish Parliament's role is simply to implement decisions made elsewhere by other people. Effectively, that accords second-class status to Scotland. We could not more fundamentally disagree with that view.

The European convention and the development of a European constitution will give the EU a legal personality that will allow it for the first time to sign treaties and sit on international bodies. The usual suspects have, of course, started throwing their rattles out of their prams about that, portraying it as the loss of our identity—usually our British identity, whatever that is—and an erosion of the sovereignty of the member states. In fact, nothing could be further from the truth. The draft EU constitution enshrines the principle of conferral and entrenches the principle of subsidiarity. That means that the EU can exercise only those powers conferred on it by the member states and that it will act only if a policy cannot be implemented at national, regional or local level. Far from being eroded, the powers of national Parliaments will be entrenched. The only pity is that this Parliament is not on that list.

Photo of Brian Monteith Brian Monteith Conservative

Is the member aware that the draft constitution gives the European Commission powers to veto national powers relating to energy and culture? What does the SNP say about that with regard to the protection of Scottish energy and Scottish culture?

Photo of Roseanna Cunningham Roseanna Cunningham Scottish National Party

It should come as a surprise to no one that there are things that the SNP, like every other political party, disagrees with over Europe. We all have our debates about which is the best way forward and the areas in which we should regain or hold on to competence. There is no difference between the SNP and any other party in that all our members have views about specific issues. However, we are saying that Scotland should have the ability to debate those issues at the centre and should not sit on the sidelines, which is what everyone else in this chamber thinks is appropriate.

Increased powers for the European Parliament across more than 30 policy areas will increase the amount of democratic input in the EU's decision-making processes. However, as with any major development of this nature, if we are not involved in making the rules, we are in danger of losing out. With Scotland not having a direct say in the European constitution, there is a danger that some serious issues of importance to Scotland will be omitted, overlooked or traded away. That is the point that Brian Monteith is making.

Photo of Roseanna Cunningham Roseanna Cunningham Scottish National Party

Irene Oldfather has been up and down all morning like a jack-in-the-box. Someone really should put a lid on her.

The extremely important issue of exclusive competence on the common fisheries policy, which, as other members have said, the First Minister told John Swinney that he had asked the UK Government to oppose, would exacerbate the current ridiculous situation that results in land-locked member states of the EU having more say than this chamber has over the future of Scotland's fishing industry. Elliot Morley, the UK fisheries minister, says that he knows nothing about the Scottish Executive's objections or concerns. There is something fishy here and I can assure the chamber that we have not heard the last of this one.

I am surprised, given the constituency that he represents, that Tavish Scott's view of the fishing industry is that everything is just fine and dandy and that fishing communities have scored great victories. Frankly, that is Alice in wonderland territory and I am surprised to hear that from him.

The SNP has consistently argued that major constitutional changes should be put to the people in a referendum for approval. In Scotland, the people are sovereign—not the Crown or the Parliament. Therefore, it is the Scottish people's sovereign rights that are being pooled with those of other member states. That cannot and should not be done without the Scottish people's explicit and specific endorsement.

On the euro, Britain and Scotland are, again, being left at the starting post because of our reluctance to join with others. The SNP has put the case that the five tests should be considered individually for each of the nations and regions within the UK. That is because Scotland has distinctive economic conditions that require an equally distinctive assessment of the five tests. When we talk comparatively about the economy and growth rates throughout Europe in European debates, it is significant that the Tories choose to ignore the virtually zero growth rate of the Scottish economy.

An independent Scotland would benefit from being in the euro zone. There would be lower interest rates, a stable exchange rate, control of tax—which we do not have at the moment—and control of borrowing. Scotland is being hamstrung by the application of five highly political and vague tests that are meaningless in the context of the Scottish economy and where it needs to go.

A lot is happening out there in the big wide world and Scotland needs to grow up, get out there and be part of it. We are not a region; we are a nation and we need the full economic powers of independence to be able to compete properly in Europe and have the competitive edge that our economy needs to survive and thrive. We are not too wee or poor and, despite some of the evidence to the contrary that is offered up frequently from members in other parts of the chamber, we are not too stupid. Small countries in Europe are successful. An independent Scotland would be following a model that is becoming the norm within the EU. However, all the small countries that are coming in would no doubt be characterised by Tavish Scott as inward looking and living in the past. That would be news to Latvia, Lithuania, Slovenia, Estonia, Slovakia and all the rest. The economies of small EU countries, which are our closest economic competitors, have grown at five times the rate of growth in Scotland. That is the model that the SNP wants Scotland to follow.

All the small countries to which I referred have a guaranteed seat at the top table, permanent representation in the Council of Ministers and the right to nominate a commissioner. They also have, per head, considerably more members in the European Parliament than Scotland has. Colleagues of many of the members opposite are extremely exercised by the Boundary Commission for Scotland review that is slashing the number of Westminster parliamentary seats in Scotland to ensure a so-called fairer reflection of our per capita entitlement within the UK. However, I would happily get rid of the lot and take instead our fair entitlement to representation within Europe. The time has come to cut the connection with Westminster—which is a ball and chain, not an umbilical cord—and speak for ourselves in Europe. It is time for independence.

Photo of Murray Tosh Murray Tosh Conservative

There being no business motion to discuss, I suspend this meeting of the Parliament until 2.30 pm.

Meeting suspended until 14:30.

On resuming—