Scottish Parliament, 12 June 2003

540 contributions from 86 members. The official report.

Introduction

Europe

George Reid (None, Ochil)

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

Nicola Sturgeon (Scottish National Party, Glasgow)

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.

George Lyon (Liberal Democrat, Argyll and Bute)

Will the member give way?

Nicola Sturgeon (Scottish National Party, Glasgow)

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—

Alex Johnstone (Conservative, North East Scotland)

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?

Nicola Sturgeon (Scottish National Party, Glasgow)

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.

George Lyon (Liberal Democrat, Argyll and Bute)

Will the member give way on that point?

Nicola Sturgeon (Scottish National Party, Glasgow)

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.

Keith Raffan (Liberal Democrat, Mid Scotland and Fife)

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.

Nicola Sturgeon (Scottish National Party, Glasgow)

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.

George Lyon (Liberal Democrat, Argyll and Bute)

Will the member give way on that point?

Nicola Sturgeon (Scottish National Party, Glasgow)

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.

George Lyon (Liberal Democrat, Argyll and Bute)

Will the member give way on that point?

Nicola Sturgeon (Scottish National Party, Glasgow)

God loves a trier.

George Lyon (Liberal Democrat, Argyll and Bute)

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?

Nicola Sturgeon (Scottish National Party, Glasgow)

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

George Lyon (Liberal Democrat, Argyll and Bute)

What is early entry?

Nicola Sturgeon (Scottish National Party, Glasgow)

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.

Margo MacDonald (Independent, Lothians)

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?

Nicola Sturgeon (Scottish National Party, Glasgow)

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.

Tavish Scott (Liberal Democrat, Shetland Islands)

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.

Nicola Sturgeon (Scottish National Party, Glasgow)

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.

Irene Oldfather (Labour, Cunninghame South)

Will Nicola Sturgeon give way?

Nicola Sturgeon (Scottish National Party, Glasgow)

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.

Irene Oldfather (Labour, Cunninghame South)

Will Nicola Sturgeon give way?

Nicola Sturgeon (Scottish National Party, Glasgow)

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—

Brian Monteith (Conservative, Mid Scotland and Fife)

Will Nicola Sturgeon give way?

Nicola Sturgeon (Scottish National Party, Glasgow)

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.

Tavish Scott (Liberal Democrat, Shetland Islands)

Will Nicola Sturgeon give way?

Nicola Sturgeon (Scottish National Party, Glasgow)

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.

Irene Oldfather (Labour, Cunninghame South)

Will Nicola Sturgeon give way?

Nicola Sturgeon (Scottish National Party, Glasgow)

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.

Irene Oldfather (Labour, Cunninghame South)

Will Nicola Sturgeon give way?

Nicola Sturgeon (Scottish National Party, Glasgow)

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.

Tavish Scott (Liberal Democrat, Shetland Islands)

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.

Margaret Ewing (Scottish National Party, Moray)

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.

Tavish Scott (Liberal Democrat, Shetland Islands)

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.

Richard Lochhead (Scottish National Party, North East Scotland)

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?

Tavish Scott (Liberal Democrat, Shetland Islands)

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.

Nicola Sturgeon (Scottish National Party, Glasgow)

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?

Tavish Scott (Liberal Democrat, Shetland Islands)

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.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

rose—

Tavish Scott (Liberal Democrat, Shetland Islands)

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.

Stewart Stevenson (Scottish National Party, Banff and Buchan)

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?

Tavish Scott (Liberal Democrat, Shetland Islands)

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.]

Murdo Fraser (Conservative, Mid Scotland and Fife)

Will the member give way?

Tavish Scott (Liberal Democrat, Shetland Islands)

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."

Phil Gallie (Conservative, South of Scotland)

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.

Tavish Scott (Liberal Democrat, Shetland Islands)

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

Phil Gallie (Conservative, South of Scotland)

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.

Irene Oldfather (Labour, Cunninghame South)

Will the member give way?

Phil Gallie (Conservative, South of Scotland)

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—

Irene Oldfather (Labour, Cunninghame South)

rose—

Phil Gallie (Conservative, South of Scotland)

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.

Irene Oldfather (Labour, Cunninghame South)

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.

Phil Gallie (Conservative, South of Scotland)

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.

Margaret Ewing (Scottish National Party, Moray)

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.

Phil Gallie (Conservative, South of Scotland)

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?

Fiona Hyslop (Scottish National Party, Lothians)

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?

Phil Gallie (Conservative, South of Scotland)

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.

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

Will the member give way?

Phil Gallie (Conservative, South of Scotland)

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."

Frances Curran (SSP, West of Scotland)

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.

Keith Raffan (Liberal Democrat, Mid Scotland and Fife)

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.

Murdo Fraser (Conservative, Mid Scotland and Fife)

The commissioners were all reappointed, however.

Frances Curran (SSP, West of Scotland)

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.

Phil Gallie (Conservative, South of Scotland)

Will the member take an intervention?

Frances Curran (SSP, West of Scotland)

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.

Trish Godman (Labour, West Renfrewshire)

You have one minute.

Frances Curran (SSP, West of Scotland)

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.

Trish Godman (Labour, West Renfrewshire)

Ms Curran, you really will have to sum up.

Frances Curran (SSP, West of Scotland)

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."

Irene Oldfather (Labour, Cunninghame South)

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.

Phil Gallie (Conservative, South of Scotland)

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?

Irene Oldfather (Labour, Cunninghame South)

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.

John Swinburne (SSCUP, Central Scotland)

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.

Trish Godman (Labour, West Renfrewshire)

Was there a question in that, Mr Swinburne?

Irene Oldfather (Labour, Cunninghame South)

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.

Nicola Sturgeon (Scottish National Party, Glasgow)

rose—

Irene Oldfather (Labour, Cunninghame South)

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

Nicola Sturgeon (Scottish National Party, Glasgow)

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?

Irene Oldfather (Labour, Cunninghame South)

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.

Brian Monteith (Conservative, Mid Scotland and Fife)

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?

Irene Oldfather (Labour, Cunninghame South)

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.

Phil Gallie (Conservative, South of Scotland)

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.

Trish Godman (Labour, West Renfrewshire)

That is not a point of order.

Irene Oldfather (Labour, Cunninghame South)

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—

Carolyn Leckie (SSP, Central Scotland)

rose—

Irene Oldfather (Labour, Cunninghame South)

I am not taking any interventions.

Carolyn Leckie (SSP, Central Scotland)

On a point of order, Presiding Officer.

Trish Godman (Labour, West Renfrewshire)

The member wishes to make a point of order.

Carolyn Leckie (SSP, Central Scotland)

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.

Trish Godman (Labour, West Renfrewshire)

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.

Irene Oldfather (Labour, Cunninghame South)

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—

Trish Godman (Labour, West Renfrewshire)

You will have to finish now, Irene.

Irene Oldfather (Labour, Cunninghame South)

I am just concluding.

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

Carolyn Leckie (SSP, Central Scotland)

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.

Trish Godman (Labour, West Renfrewshire)

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.

Mark Ballard (Green, Lothians)

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.

Keith Raffan (Liberal Democrat, Mid Scotland and Fife)

Will Mark Ballard give way?

Mark Ballard (Green, Lothians)

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.

Keith Raffan (Liberal Democrat, Mid Scotland and Fife)

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.

Murdo Fraser (Conservative, Mid Scotland and Fife)

Will Keith Raffan give way?

Keith Raffan (Liberal Democrat, Mid Scotland and Fife)

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.

Mary Scanlon (Conservative, Highlands and Islands)

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?

Keith Raffan (Liberal Democrat, Mid Scotland and Fife)

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?

Margo MacDonald (Independent, Lothians)

Will the member give way?

Keith Raffan (Liberal Democrat, Mid Scotland and Fife)

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

Trish Godman (Labour, West Renfrewshire)

Order.

Keith Raffan (Liberal Democrat, Mid Scotland and Fife)

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.

Murdo Fraser (Conservative, Mid Scotland and Fife)

Will the member give way?

Keith Raffan (Liberal Democrat, Mid Scotland and Fife)

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.

Margo MacDonald (Independent, Lothians)

Will the member give way?

Keith Raffan (Liberal Democrat, Mid Scotland and Fife)

In a second.

Trish Godman (Labour, West Renfrewshire)

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

Keith Raffan (Liberal Democrat, Mid Scotland and Fife)

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.

Michael Matheson (Scottish National Party, Central Scotland)

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.

Margo MacDonald (Independent, Lothians)

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.

Michael Matheson (Scottish National Party, Central Scotland)

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.

Maureen Macmillan (Labour, Highlands and Islands)

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—

Margaret Ewing (Scottish National Party, Moray)

rose—

Maureen Macmillan (Labour, Highlands and Islands)

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

Margaret Ewing (Scottish National Party, Moray)

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.

Maureen Macmillan (Labour, Highlands and Islands)

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

Margaret Ewing (Scottish National Party, Moray)

It was probably edited out.

Maureen Macmillan (Labour, Highlands and Islands)

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.

Richard Lochhead (Scottish National Party, North East Scotland)

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.

Maureen Macmillan (Labour, Highlands and Islands)

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.

Phil Gallie (Conservative, South of Scotland)

Will the member give way?

Maureen Macmillan (Labour, Highlands and Islands)

How much time do I have left, Presiding Officer?

Trish Godman (Labour, West Renfrewshire)

You have just under two minutes left.

Maureen Macmillan (Labour, Highlands and Islands)

I will take a short intervention from Mr Gallie.

Phil Gallie (Conservative, South of Scotland)

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.

Maureen Macmillan (Labour, Highlands and Islands)

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.

Ted Brocklebank (Conservative, Mid Scotland and Fife)

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.

Tavish Scott (Liberal Democrat, Shetland Islands)

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.

Ted Brocklebank (Conservative, Mid Scotland and Fife)

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.

George Lyon (Liberal Democrat, Argyll and Bute)

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.

Ted Brocklebank (Conservative, Mid Scotland and Fife)

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?

Mike Rumbles (Liberal Democrat, West Aberdeenshire and Kincardine)

The member should tell us what he wants to do.

Ted Brocklebank (Conservative, Mid Scotland and Fife)

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.

Trish Godman (Labour, West Renfrewshire)

You must conclude now.

Ted Brocklebank (Conservative, Mid Scotland and Fife)

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.

Trish Godman (Labour, West Renfrewshire)

You must finish now.

Ted Brocklebank (Conservative, Mid Scotland and Fife)

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

Bruce McFee (Scottish National Party, West of Scotland)

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.

Margo MacDonald (Independent, Lothians)

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.

Keith Raffan (Liberal Democrat, Mid Scotland and Fife)

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.

Margo MacDonald (Independent, Lothians)

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.

Trish Godman (Labour, West Renfrewshire)

You must sum up now.

Margo MacDonald (Independent, Lothians)

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.

Trish Godman (Labour, West Renfrewshire)

Ms MacDonald, you must wind up.

Margo MacDonald (Independent, Lothians)

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.

Trish Godman (Labour, West Renfrewshire)

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.

Alex Johnstone (Conservative, North East Scotland)

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.

Margaret Ewing (Scottish National Party, Moray)

Will the member give way?

Alex Johnstone (Conservative, North East Scotland)

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.

Keith Raffan (Liberal Democrat, Mid Scotland and Fife)

Will the member give way?

Alex Johnstone (Conservative, North East Scotland)

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.

Nicola Sturgeon (Scottish National Party, Glasgow)

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.

Alex Johnstone (Conservative, North East Scotland)

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.

Margo MacDonald (Independent, Lothians)

Will the member give way?

Murray Tosh (Conservative, West of Scotland)

The member has just entered his last minute.

Alex Johnstone (Conservative, North East Scotland)

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

Margo MacDonald (Independent, Lothians)

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

Alex Johnstone (Conservative, North East Scotland)

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.

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

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.

Mary Scanlon (Conservative, Highlands and Islands)

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?

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

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."

Mary Scanlon (Conservative, Highlands and Islands)

How could it be worse off?

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

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.

Alex Johnstone (Conservative, North East Scotland)

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?

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

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?

Murdo Fraser (Conservative, Mid Scotland and Fife)

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?

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

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.

Murdo Fraser (Conservative, Mid Scotland and Fife)

rose—

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

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

Murray Tosh (Conservative, West of Scotland)

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.

Jeremy Purvis (Liberal Democrat, Tweeddale, Ettrick and Lauderdale)

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.

Carolyn Leckie (SSP, Central Scotland)

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.

Keith Raffan (Liberal Democrat, Mid Scotland and Fife)

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?

Carolyn Leckie (SSP, Central Scotland)

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

Roseanna Cunningham (Scottish National Party, Perth)

On a point of order, Presiding Officer.

Margo MacDonald (Independent, Lothians)

On a point of order.

Murray Tosh (Conservative, West of Scotland)

There is a point of order.

Carolyn Leckie (SSP, Central Scotland)

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

Murray Tosh (Conservative, West of Scotland)

There is a point of order.

Carolyn Leckie (SSP, Central Scotland)

I am sorry.

Murray Tosh (Conservative, West of Scotland)

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

Margo MacDonald (Independent, Lothians)

So have I.

Roseanna Cunningham (Scottish National Party, Perth)

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.

Murray Tosh (Conservative, West of Scotland)

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.

Margo MacDonald (Independent, Lothians)

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.

Murray Tosh (Conservative, West of Scotland)

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.

Tavish Scott (Liberal Democrat, Shetland Islands)

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

Murray Tosh (Conservative, West of Scotland)

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

Carolyn Leckie (SSP, Central Scotland)

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.

Mary Scanlon (Conservative, Highlands and Islands)

Will the member give way?

Carolyn Leckie (SSP, Central Scotland)

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

Mary Scanlon (Conservative, Highlands and Islands)

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.