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Chamber and committees

Meeting date: Tuesday, April 30, 2019

Economy, Energy and Fair Work Committee 30 April 2019

Agenda: Decision on Taking Business in Private, Subordinate Legislation, Construction and Scotland’s Economy, Common Frameworks and the Committee’s Scrutiny Role after EU Exit, European Union (Withdrawal) Act 2018


Contents


Common Frameworks and the Committee’s Scrutiny Role after EU Exit

The Convener

For agenda item 5, the cabinet secretary has been joined by Lewis Hedge, who is the head of regulation, standards and conformity at the Scottish Government. I welcome him to the meeting. Item 5 relates to common frameworks and the committee’s scrutiny role after the UK leaves the European Union. Unlike for agenda item 4, I invite the cabinet secretary to make a short opening statement.


Derek Mackay

I am grateful for that, convener: it will be a short statement.

The Scottish Government has made it clear that we are not, in essence, opposed to common UK frameworks, but will agree to them only when they are in Scotland’s interests. No firm conclusions have been reached on whether there is a need to establish common frameworks for any areas within my portfolio. In addition to wider internal market considerations, there are six potential frameworks within my portfolio: services, mutual recognition of professional qualifications, public procurement, late payment in commercial transactions, recognition of insolvency proceedings in EU member states, and statistics.

Paul Wheelhouse has indicated that we will be happy to keep the committee informed of progress in ministerial discussions on energy and EU exit as they progress, and Michael Russell, as the Cabinet Secretary for Government Business and Constitutional Relations, is happy to offer further information—or to appear at committee, if you wish—on the wider issue of Scottish and UK Government relations in developing common frameworks.


The Convener

Thank you. Are there any questions from committee members?


Andy Wightman

As the Finance and Constitution Committee has demonstrated in its work, this is a new area for UK Governments and devolved Administrations. I have a general question about process and how it all happens. We have identified common frameworks that require legislation, so there is clearly a role for legislatures, and we have identified frameworks that do not require legislation and which are, essentially, memorandums of understanding or agreements between the Governments across the UK.

It seems to be a rather ad hoc process at the moment, with people trying to identify what will require legislation and what will not. The number of common frameworks has been identified by the UK Government—we have been told that there will be 111. As a senior member of Government, and forgetting for a moment your portfolio responsibilities, do you think that changes are needed to the Scotland Acts to provide a better legislative framework for delivering both types of common framework? Have you discussed that?


Derek Mackay

Since I am being asked for a wider Government opinion, rather than my portfolio opinion, the simple answer to the situation is independence. [Interruption.] I was asked, convener.


The Convener

You were.


Derek Mackay

The complexity of finding a way through that is something that Michael Russell can address, as the appropriate cabinet secretary. I have tried to focus on the areas within my portfolio, but the process is complex and ad hoc. For our part, we are trying to protect the interests of the people of Scotland and we are trying to protect the responsibilities that are already devolved in order to ensure that whatever we do is in those interests. However, the situation is very complex.


Andy Wightman

To follow on from that, I note that protecting the interests of the people of Scotland is, rightly, your Government’s job. That means that you will possibly take approaches in your areas of responsibility that are different from how other ministers approach common frameworks—for example, on the environment or agriculture. When it comes to making sure that the frameworks are operational and deliver what they are meant to deliver, surely there will be weaknesses if there is no agreed approach to how we do them.


Derek Mackay

I understand the point. That is why Michael Russell has overall responsibility for engagement with the UK Government, as I said in my opening statement. When the Scottish Government engages with the UK Government, behaviour varies from one Whitehall department to another. Even in relation to the Brexit negotiations, some departments have been more forthcoming in sharing information than others, so they are better performers, whether they are Treasury, rural or business departments.

Within the Scottish Government, Michael Russell oversees the process. There is an infrastructure of intergovernmental arrangements, which is being reviewed by the UK Government. My engagement with the Treasury is being reviewed in relation to the finance ministers’ quadrilateral meetings, which we do not currently have because there is no functioning Northern Ireland Government. The infrastructure is in place to deal with intergovernmental issues, and Michael Russell leads on the common frameworks. Where those affect a specific cabinet secretary’s responsibility, we engage. We are trying to put some structure in the process, but it is clear that not all the common frameworks will be in place on day 1 of exit from the European Union—if it happens, and if it happens in the fashion that the UK Government currently appears to desire.

We are doing our best to make it all work in the interests of the people, but we will not compromise devolution, although we recognise that in some areas it would be good to have UK-wide co-operation—for example, in mutual recognition of professional qualifications. The committee considered, when it looked at a statutory instrument on that, why a common framework should be developed for that in the event of a no-deal Brexit.

12:15  


Andy Wightman

That is helpful. On the services directive, for example, in your letter of 17 April you say that

“Official-level discussions are continuing on the potential for a common framework in this area.”

Without getting into the substance of what that might look like, you say that “discussions are continuing” and you have said that Mike Russell is co-ordinating the work overall. For clarification, if you complete your work and determine that a common framework would be useful, is it the case that the Government would not seek to implement that until a common approach has been agreed for all common frameworks?


Derek Mackay

We would have to have both: we will have to be assured that the common frameworks are as we want them to be, that they are agreed by the Scottish Government collectively and that we are happy with the process. Of course, we will have to be assured that individual frameworks work for specific policy interests.

I am absolutely speculating, based on the premise of the question: we are not even at the stage of there having been a presentation to ministers on what a common framework would look like. That is because, as a result of where we are on the Brexit negotiations, we have not got into policy detail. All the work is being done on the basis that there will be Brexit. I speculate, however, that we would, of course, want agreement on both those matters.


Angela Constance

Is the lead body that is driving forward the work on the 111 common frameworks that have to be established the joint ministerial committee on European Union negotiations?


Derek Mackay

Yes. That committee is, ultimately, where the political negotiations happen.


Angela Constance

How are the Scottish Government’s interests pursued on that body? Is it just Mr Russell who attends the meetings, or is his presence supplemented by that of other ministers, as appropriate?


Derek Mackay

Other ministers can, as appropriate, join Mr Russell.


Angela Constance

At JMC level, where are we in the process of agreeing a way forward that is mutually respectful to the various Governments? Has there been agreement about the processes by which ministers will communicate and seek to come to agreement, or on what will happen if ministers cannot agree?


Derek Mackay

That is an excellent question, although it is probably more for Michael Russell, because he is at JMC meetings more regularly than I am. However, it will come as no surprise that what he has reported back to the Cabinet is that the process has been pretty unsatisfactory so far: it is well understood that Scotland has been sidelined, and we have not found the political interventions and platforms to be particularly fruitful for Scotland’s interests. However, as I acknowledged in my letter to the committee, some of the work of officials on work streams to prepare for and make progress on common frameworks has been more fruitful.

Nothing is predetermined. I set out in my opening statement the broad position that the Government has taken. However, the existing infrastructure has—to say the least—not worked well in terms of recognising Scotland. I understand that the UK Government will reflect further on the issue this weekend, not just in relation to frameworks, but more widely on Scotland’s position, so let us see what that produces.


Angela Constance

Assuming that the intergovernmental framework and minister-to-minister relationships can be sorted out, do you have a view on how Parliament, the committee—in relation to the common frameworks that fall within your portfolio—and civic Scotland should be informed of and involved in the decision-making processes?


Derek Mackay

There are no firm proposals yet, because they would be premature, but as Mr Russell has said to the Finance and Constitution Committee, if we are to progress with common frameworks, there should, as appropriate, be engagement with civic Scotland, Parliament and policy committees including this one. That engagement should take place so that there is openness and transparency in what we do.


Angela Constance

Are there any missing common frameworks for your portfolio? Do you agree with the UK Government’s framework analysis of the subject areas and the type of common frameworks that are proposed?


Derek Mackay

There is an understanding that a UK-wide framework would be helpful in some areas—mutual recognition of professional qualifications is an example in which it is self-evident that that would be helpful.

There are other areas that are in dispute, because it is the UK Government that has decided what is and what is not in scope. Areas of dispute include the status of state aid and data sharing.

All the other areas will be subject to considerations such as what the common frameworks look like—the details that the UK Government wants us to agree to. When we consider all that, we will ensure that devolved matters are protected and that the common frameworks do not interfere with Scotland’s interests. If we can find justifications for and benefits to Scotland in common frameworks, we will work to find a way through that.

There is not total harmony right now: some areas are in dispute. Even on the areas in which we think common frameworks might have benefit, the devil will be in the detail, when we see it.


Angela Constance

So, are there still more questions than answers?


Derek Mackay

Absolutely.


The Convener

I think that you said that the detail will be worked out by department officials.


Derek Mackay

Absolutely. That will depend on each policy. Some frameworks will be more straightforward than others. For example, mutual recognition of professional qualifications might be an area on which we can make a lot of progress. There might be other areas in which it is more difficult to reach an understanding about what the two Governments are trying to achieve with policy, so we might be in conflict. We will not know until we get into the policy minutiae that will be presented to ministers. We will try to work our way through the issues with arrangements at political level, although they have, thus far, been unsatisfactory. However, there has been intensive work by officials to find a way forward.


The Convener

The next agenda item will require a new set of officials, so we will allow the cabinet secretary to depart in harmony on this occasion. Thank you for coming in, cabinet secretary.