DEVOLUTION AND EUROPEAN POLICY-MAKING: THE CHALLENGE FOR SCOTLAND

The issues for this timely seminar involve looking at how the devolved institutions in Scotland, Wales and Northern Ireland relate to the European Union. Inevitably that raises questions about the role of the United Kingdom as a Member State, and about the relationship between the UK Government and the devolved administrations.

In this short talk, what I would like to do is to seek to identify the purposes and aims of the devolution settlement, how those aims and purposes relate to relations with the EU, both for the UK and Scotland, and how - so far - it has worked in practice.

We have long believed that our institutions must reflect our values, not circumscribe them. So our agenda for change is about revitalising and modernising the constitution to ensure that it reflects and serves the society which supports it. It is a democratic response to the evolving aspirations of the British people.

Our way of tackling this agenda has been to offer specific solutions to specific problems, rather than to impose a single blueprint for change. Our guiding principle has been, as we said in our manifesto, "what matters is what works". So we have responded flexibly, pragmatically and appropriately to particular problems on the ground. Building on what we already have. Conscious of the way the separate constitutional reforms interact with each other. While avoiding making false connections where none exist.

Our approach to decentralisation and devolution is different for each part of the United Kingdom. The different settlements we have reached reflect the different circumstances and histories of Scotland, Wales, England and Northern Ireland, and the different realities on the ground. Our approach does not involve a federal division of powers, on a uniform basis, but differential delegation to different parts of the Union.

In Scotland we have an executive and legislature which can pursue a distinctive legislative and administrative agenda in a wide range of fields. By contrast, the National Assembly for Wales is a single corporate body which has no powers to enact primary secondary legislation. It serves an executive function, offering a more transparent and democratic framework for the government of Wales. In Northern Ireland, we have seen what everyone hopes will be a temporary set-back. But the model we adopted recognised that the nature of the communities and the special relationship with the Irish Republic dictated a different settlement again. The Belfast Agreement made provision for a range of new institutions not just to govern Northern Ireland itself, but also to promote and enhance co-operation within the island of Ireland. It also made provision for the establishment of a British-Irish Council, bringing together not just the two sovereign Governments but also the devolved institutions in Northern Ireland, Scotland and Wales, as well as the Channel Islands and the Isle of Man, to discuss and co-operate on matters of mutual interest. All of these institutions are now in place.

In developing our devolution proposals, it was essential to identify the appropriate electoral system in each case. In any democracy, if the electoral system is not right, everything else is open to question. So we now have a number of different electoral systems in different parts of the United Kingdom. Each one reflecting the different democratic context. But in each case, we have adopted an electoral system which makes unlikely the domination of the legislature by one political party. So much for central control from London, as some of our critics would have you believe. The essential fact about devolution is that not only do you create a new institution with its own electoral system, but you also create a new electorate. So the electorate which now selects the people who legislate in respect of devolved matters and provide the executive is Scottish, not that of the UK. That electorate votes differently from a UK electorate. With a new institutional focus, the different political focus becomes apparent.

The differential geometry of the devolution arrangements recognises that the countries require different degrees of devolution to produce the best governance. They proceed on the basis that the preservation of the UK is in the interest of the people of the UK – all of the people of the UK. And on the basis that the new constitutional arrangements must make the people of each of the constituent parts of the UK feel comfortable about their relationship with the rest of the UK. The benefits of belonging to the UK. The benefits of constitutional arrangements which allow for the maximum devolution of power appropriate to the needs of the constituent part of the UK. The benefits which are best realised by close co-operation between the UK Government and the devolved administrations.

We are convinced that the variable geometry which we are putting into practice can provide for democratic accountability and ensure that different levels of Government can work together to improve the live of the people in all parts of our United Kingdom. That commitment was clearly demonstrated when we published last October the Memorandum of Understanding and a series of supplementary agreements (or Concordats) between the UK Government and the devolved administrations in Scotland, Wales and Northern Ireland setting out the principles which will underlie relations between them. We aim to consult and co-operate with each other across the full range of Government business.

These key principles are:-

• communication and consultation. So that each administration alerts the others in sufficient time to developments, and gives consideration to the views of the other administrations;

• co-operation. Committing the administrations to work together and to undertake activities on each others’ behalf;

• exchange of information. So that the administrations provide each other with as full and open access to relevant information as possible;

• and confidentiality. So that information supplied by each administration is subject to safeguards in order to avoid prejudicing interests.

The EU is a very good place to test these principles.

As a matter of law, the UK remains responsible for the UK’s relations with the European Union. But so many areas of EU business impact on devolved matters, and responsibility for much of the implementation falls to the devolved administrations. If any part of the country fails to implement Community law, or implements it too late, it is the UK which finds itself in the dock at the European Court of Justice. The funding settlement makes clear that the devolved administrations will be liable for damages in respect of an actionable breach of Community law; but that does not mean that the UK Government can be relaxed if such breaches occur – whoever is at fault.

So right at the beginning a sensible balance was struck in the devolution White Papers. There may be differences of approach or emphasis between the four administrations. But we will negotiate internally, and in partnership, to achieve a single negotiating line which meets the needs of all parts of the UK.

This means that the UK Government is committed to involving the devolved administrations as directly and fully as possible in discussions about the formulation of the UK’s policy position on all EU issues which touch on devolved matters. Subject, of course, to mutual respect for the confidentiality of those discussions and adherence to the resultant line, without which it would be impossible to maintain such close working relationships.

At the same time, it should ensure that the UK can negotiate effectively with our partners in Brussels in pursuit of a single policy line, but with the flexibility that fast-moving negotiations require. It should also ensure that EU obligations are implemented with consistency of effect and, where necessary, of timing. This is how we set about making devolution work.

The Concordat on EU co-ordination of EU policy issues also provides for:

• the UK Government to provide the devolved administrations with full and comprehensive information, as early as possible, on all EU business likely to be of interest;

• complete confidentiality in formulating a UK negotiating position in the EU and in developing tactical responses;

• copying papers widely to the devolved administrations so as to facilitate resolution of matters requiring cross-Whitehall and cross-administration consultation against the background of an externally-imposed timetable. Areas of contention are to be identified as early as possible and every effort made to resolve them. The devolved administrations have access to relevant papers, including reporting telegrams from the UK’s Permanent Representation in Brussels (known as "UKRep").

The status and functions of UKRep in Brussels continue unchanged. UKRep represents the views of the UK to the EU Institutions and to other Member States. Now the devolved administrations are establishing offices in Brussels to assist their direct relationships. But such offices work closely with, and in a complementary manner to, UKRep which remains responsible for representing the views of the UK to the EU institutions.

Scotland has a representative office in Brussels – opened last October at the launch of a highly successful Scotland week. Within Scotland House, George Calder’s team from the Scottish Executive are also part of the UKRep family. With free access to all UKRep’s staff and meetings.

I agree with the Scottish Council Foundations’ finding that Scotland can better exercise influence on EU policies through existing UK institutions and channels than by attempting separate diplomatic lobbying. There are real advantages in an arrangement in which the Scottish Executive’s Office is part of the UKRep family:

• readier access to UKRep offices and systems;
• easier contact with desk officers;
• attendance at working group meetings in the Council as part of the UK delegation;
• a formal role in accompanying Ministers when calling on the Commission; and
• privileged access to the Council, Commission and Parliament;

These arrangements are valuable not just for Scotland, but also for the UK as a whole. Scottish Ministers and officials in Brussels are able to forge their own links with representatives from other regions of the EU. Networking between the offices of Europe’s regions in Brussels enables experience to be shared, common problems to be solved, and benefits to flow. The links which Scottish Ministers are now busy establishing with their regional counterparts across Europe are not just useful in themselves - they also serve to strengthen the UK’s positive engagement and involvement in European affairs. They are another string to the UK’s bow, another level of engagement.

Clearly the devolved administrations cannot sign up to collective Cabinet responsibility when they are no longer part of the UK Government. That is true even, as now, when the Welsh administration and the main coalition party in Scotland are of the same party as the UK Government. It follows that ministers in devolved administrations cannot continue to sit on Cabinet Committees which are part of the UK Government’s formal decision-making machinery.

So the MoU established a Joint Ministerial Committee. Its membership comprises the devolved administrations and the UK Government. It has been set up to "consider non-devolved matters which impinge on devolved responsibilities, and devolved matters which impinge on non-devolved responsibilities" as well as to resolve differences between the administrations. It was never envisaged that this body would meet often. It is not surprising therefore that it has not yet met in its Plenary form, chaired by the Prime Minister, although the agreement provides for it to meet at least once a year to review the MoU and arrangements for liaison.

The JMC can also meet in a number of other "functional" formats. Gordon Brown has chaired meetings of the JMC on Poverty and the Knowledge economy, the latter feeding in helpfully to preparations for next month’s Lisbon European Council.

The MoU also envisages that a JMC Europe, under the chairmanship of the Foreign Secretary, will operate as a mechanism for consultation on UK positions to be taken on EU issues which affect devolved matters. In practice, the need for rapid decisions to keep abreast with developments in Brussels will result in the bulk of business being conducted through correspondence.

It is important to underline that the JMC architecture is consultative rather than deliberative. It reaches agreements rather than takes decisions, and so is not binding on any of its participants (although the expectation is that participating administrations will support positions that the JMC has agreed). This distinguishes it from the normal machinery of Cabinet Government in which Cabinet Committees are deliberative and take decisions which are collectively binding on all participants. The presumption is that proceedings of JMCs are confidential so as to permit free and candid discussion, although the holding of JMC meetings may be made known publicly and there may be occasions on which the Committee will wish to issue a public statement.

The role of the Territorial Secretaries of State is also important. Their wide membership of Cabinet Committees means they are able to describe distinctive factors existing in Scotland, Wales and Northern Ireland which might have an impact on the overall shape of UK policy.

So the linkages between the devolved administrations and the UK Government are extensive. Directly through the JMC system. And indirectly through the Secretaries of State for Scotland, Wales and Northern Ireland in Cabinet Committees.

As I have already mentioned, the devolved administrations may also have a role to play in relevant Council meetings and in other EU negotiations. Decisions on Ministerial attendance at Council meetings are taken on a case-by-case basis by the lead UK Minister. The role of Ministers from the devolved administration is to support and advance the single UK negotiating line which they will have played a part in developing. And when they do speak at Council, they do so with all the weight of the UK behind them.

Outside the UK Government’s collective decision making process, the devolved administrations can be represented on other inter-Ministerial groups. So in the EU sphere, Ministers from Edinburgh and Cardiff have several times participated in meetings of MINECOR, the Ministerial Committee which meets to promote and co-ordinate the Step Change policy on stronger, more constructive engagement with our European partners.

Officials from the devolved administrations are invited to a wide variety of Ad Hoc meetings held in the Cabinet Office at which Whitehall Departments meet to discuss EU business. I am pleased that the Scottish Executive have participated fully in recent such discussions on preparations for the Inter-Governmental Conference and on issues likely to dominate during the current Portuguese Presidency.

In addition, Scottish, Welsh and Northern Irish officials regularly participate in the frequent co-ordination meetings chaired by the Cabinet Office at which Whitehall Departments and the UK Permanent Representative in Brussels agree how best to pursue UK policy objectives in Europe and, indeed, what those objectives should be.

There are dozens of such meetings every week – covering such subjects as the UK line on proposals for a European Food Authority, to implementation of the Bathing Waters Directive.

The Scottish view is well voiced and welcomed. Growing use of video-conferencing makes participation by officials here in Edinburgh that much easier. The view from Edinburgh and London has not always been identical on these issues. But the Ad Hoc machinery has so far managed to find a mutually acceptable way forward.

So that is the theory. How is the practice working out? Let me give you some concrete examples which illustrate the theory.

Take the example of Agriculture. Agriculture, fisheries and food safety are wholly devolved matters. At the same time, policy in these areas is largely determined by EU law and relations with the EU are reserved. This obviously produces a tension between legal frameworks – the devolution of decision-making, and the responsibility of HMG for relations with the EU.

At the Fisheries Council last December, close prior preparation and co-operation between London, Belfast, Edinburgh and Dublin enabled the UK team to present the Commission with an outline recovery plan for cod stock in the Irish Sea. The team, including John Home Robertson from Scotland, was highly effective in persuading the Commission to support new regional management plans. This is good for fisheries conservation and good for industry.

John Home Robertson has participated three times at the Fisheries Council, and has occasionally spoken on the UK’s behalf. Sarah Boyak has participated at the Environment Council, and Ross Finnie has also participated at the Agriculture Council. This has always on the UK’s behalf. When Scottish issues need to be put, then Scottish Ministers should speak with the whole of the UK’s weight behind them.

There are regular meetings of agriculture Ministers from across the UK. But despite these contacts and their close relationship, tensions can arise. Last September the National Assembly for Wales wanted to reintroduce a calf-processing aid scheme and the Scottish Parliament demanded that the Executive introduce a cull ewe scheme. These pressures were felt unevenly in different parts of the country, and neither scheme attracted support from all four parts of the UK.

Two issues arose: was it legal to apply the scheme in only part of the UK, and was the cull ewe scheme a state aid? Nick Brown had the responsibility to represent the Scottish and Welsh cases as best he could to the Commission. The Commission, who incidentally soon made clear they were only prepared to negotiate with the UK as Member State, ruled that the cull ewe scheme was inconsistent with state aid rules, and that a Wales-only calf-processing scheme would be discriminatory and therefore illegal.

The price of negotiating within the UK. No sense, however, that the trade-off was anything other than transparent.

The Scottish Parliament has, of course, established its own European Committee. Among its functions is to hold the Scottish Executive to account for their implementation of EU legislation in Scotland, and to exercise pre-legislative scrutiny of EU legislation. This includes reporting on draft Commission proposals as well as on broader EU issues such as enlargement. Like the Westminster Scrutiny Committees, it receives some 1200 documents deposited by Whitehall each year.

Westminster is to some extent the victim of its own success; the growing volume of documents which it scrutinises could easily mask those areas where Scotland, Wales or Northern Ireland have distinctive features which need to be addressed. Certainly Westminster is always racing against the clock. The scrutiny reserve system sets an unforgiving timetable.

I am sure that Hugh Henry, Convenor of the European Committee, would agree with me that the trick will be to identify those issues which are of most interest to Scotland and where the Scottish Parliament’s influence can best be brought to bear, first on the Scottish Executive and second on the Westminster Committees. The UK’s overall response to Commission proposals could also be enhanced in cases where the Scottish Parliament looked at proposals at an early stage. Constructive comments on Commission green and white papers help to shape proposals, avoiding the need to react at the last minute.

Let us not forget the vital role of Scotland’s eight Members of the European Parliament, representing all of Scotland’s main political parties. The European Parliament’s political and legislative powers have greatly increased in recent years. Last year’s resignation of the Santer Commission was testimony to that. MEPs now have the final say over more than half the Community budget, and following the Amsterdam Treaty some 75% of Community legislation is now co-decided between Parliament and Council.

I know that Scotland’s MEPs are already working closely with the Executive and with Scotland House in Brussels to further those interests. Together they can be a formidable team. The common purpose and resolve with which Northern Ireland’s three MEPs – Ian Paisley, John Hume and Jim Nicholson – fierce political rivals at home, went about persuading the European Commission to continue funding the PEACE structural fund programme in Northern Ireland made a real impression in Brussels. I know that Scottish MEPs can and will match this.

EU policy-making, EU negotiation, EU implementation. All are a critical part of the way the UK is governed. Devolution inevitably affects all these processes. The objective must be a process which ensures that all parts of the UK are represented in the development of the UK’s position in Europe.

The MoU and Concordats represent a consensus on some basic principles and some broad operating guidelines for handling EU and other business. They will be subject to regular review to take account of changing circumstances. They are an insurance policy against the devolved administrations being frozen out of the Whitehall decision-making process. They do not and cannot answer all the practical questions which may arise about handling procedures between Whitehall and the devolved administrations. They work with common sense and goodwill on all sides. The key is to ensure that established working relationships and efficient information flow operate as rapidly and as widely as possible. But there can be no substitute for close collaboration at official and Ministerial level. The aim must be to prevent problems rather than have to cure them.

Clearly there are incentives for Ministers and officials in the devolved administrations to be visibly seen to be arguing the best for their people. But the disagreements are transparent, and few trade-offs apparent. The benefits of co-operation, and being part of the UK, are obvious.

These then are the principles, and the practice. We have only just begun. We have much to learn. But I think three clear principles emerge:

• it is in the whole of the UK’s interest that we are one entity in our dealings with the EU.

• Devolution allows a more authentic and more powerful regional voice to be heard in the discussions which go on to determine the UK’s negotiating position.

• Co-operation between Whitehall and the devolved administrations is the key to success in future EU negotiations.

• From time to time there will have to be trade-offs, but the gains from being part of the UK are vastly greater than for the things which can’t be done because of that.

We are moving from a centralised British state, where power flowed top-down, to a devolved and plural state. Devolution has not, and will not, create new identities within Britain. But it is giving expression to existing ones. Devolution frees the nations of the United Kingdom to innovate local solutions for local problems. But also allows the benefits of being part of the UK to be deployed to best advantage.

Our ambition does not stop with the UK’s internal constitutional framework. We also want to see a modernised European Union which is responsive to the people and thoroughly accountable. That means ensuring that in fields of government which been devolved to Scotland, Wales or Northern Ireland, the devolved institutions must have – and be seen to have – a real contribution to make to the way in which the UK conducts itself as a Member State. Through the machinery of government which we have established we are seeking to translate those aspirations into practical reality.

I am confident that the UK as a whole can only gain in stature and effectiveness as a result.

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