Finance and Constitution Committee

Meeting date: Wednesday, June 14, 2017

Official Report 508KB pdf

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Brexit (Implications for Devolution Settlement of UK Common Frameworks)

The next item on our agenda is to take evidence on Brexit and the implications for the Scottish devolution settlement of any UK common frameworks, as discussed in the UK Government’s white paper. We are joined for that purpose today by Professor Michael Keating from the University of Aberdeen; Professor Charlie Jeffery from the University of Edinburgh; and Professor Aileen McHarg from the University of Strathclyde. I warmly welcome our witnesses to the committee. I am aware that Professor Jeffery has another engagement to attend—he will be here until about 11.45, so we need to bear that in mind. If necessary, he will just have to go at the appropriate time.

We have received written submissions from all our witnesses, so we will go straight to questions. I will open the session with what is probably an impossible question for you to answer, but it is probably the right place to begin. We have seen the outcome of the UK general election. I would like you to give your take, as best you can, on what that might mean in terms of the likely impact on Brexit negotiations, in particular with regard to paragraph 11 of Professor Jeffery’s paper, in which he observes that

“the Great Repeal Bill ... will be irrelevant in the event of”

an

“election outcome”

other than a Conservative majority. Before the meeting started, Professor Jeffery told me that he wrote that six days before the general election.

I ask you all to provide whatever clarity you can in the current context, as that would be incredibly useful. Professor Jeffery, given that I have quoted you, it is probably right that you start.

Thank you, convener—I wrote that the day before the general election.

The day before—sorry.

Clearly, the result of the election was a surprise to pretty much everybody except the clever people at YouGov, who used an elaborate forecasting model that got it just about right.

The point about the great repeal bill is pretty valid, because the Prime Minister is clearly weakened and very much dependent on building a different kind of coalition of support within and beyond her own party. In those circumstances, much of what we have talked about in the Brexit debate hitherto is now subject to question, including the great repeal bill and those provisions that appear to set a direction in relation to devolution.

What I identified as perhaps a rather more muscular approach to cross-UK co-ordination vis-à-vis the various devolved Administrations is one of the things that would need to be reflected on, given the relative political weakness of the Prime Minister now, in comparison with one week ago.

Would Professor Keating or Professor McHarg like to contribute?

Before the election, it appeared that the UK Government was going to pursue a course that it called a UK Brexit, but in which the decisions would be taken by the UK Government in consultation with the devolved Administrations and legislatures, rather than jointly with them. It was also clear that the UK Government was resisting any form of differentiation across the United Kingdom, possibly with the exception of the Irish border. That has now become much more difficult.

The UK Government is going to have to reach out in various directions in order to get the legislation through. It will have to pay more attention to Northern Ireland because of the proposed arrangement with the Democratic Unionist Party, whatever that turns out to be, and it cannot open up to Northern Ireland without also taking into consideration the distinct circumstances and expressions of interest in Scotland and Wales and indeed in London and the regions of England.

I suppose the lesson of the general election is, “Don’t make predictions about anything,” but as you have asked us to do so I will say something. In response to Professor Jeffery’s comment about the great repeal bill being irrelevant, I will make the qualification that I do not think that it will be irrelevant. The things that the great repeal bill purports to do must be done, whatever form Brexit takes. The question is how we do them.

The bill provides for continuity of laws and enables replacements where necessary. The only real question, as the other two panellists have said, is what degree of compromise there is likely to be and whether the UK Government is willing to concede. As they both said, it seems possible that there will be a more conciliatory and consultative approach; on the other hand, perhaps the DUP’s involvement in maintaining the Government, if that is what happens, will reinforce Irish exceptionalism—I do not know.

That sets the scene. Adam Tomkins will go next.

I will ask about common frameworks. The devolution arrangements in all three devolved nations were based on many assumptions, one of which was that the whole of the UK would continue to be a member state of the European Union. That is why it is incompetent for any of the devolved Parliaments or Assemblies or any of the devolved Administrations to act, or to make law, in a manner that is incompatible with EU law. Given that we voted to leave the EU, that clearly needs to be revisited.

As I understand it, what the UK Government is proposing—albeit that what is in the public domain on this is sketchy, at best—is that there will need to be some kind of pan-UK common frameworks that do the job in a post-Brexit UK that the requirement to act compatibly with EU law has been doing in the pre-Brexit UK. Roughly speaking, is that your understanding of the talk about common frameworks?

Yes, although I might query your premise, which was that we voted to leave the EU. The result of the vote was very narrow, and different parts of the UK voted differently. I think that it is legitimate to take into account the need to reconcile both sides of the argument rather than to simply say that the pro-leave side will have its own way. That relates to the convener’s earlier question.

It is widely accepted that there is a need for common frameworks. The Scottish Government has talked about cross-border frameworks. There are externalities and international obligations. The question is how far those frameworks should go, who should set them and what should be in them.

The UK Government has said that it will take over the common frameworks, which will revert to the UK. I think that that is a misleading interpretation—I think that the common frameworks must be built anew, from nothing. The question is how detailed they should be. We can look at the experience in other countries. Spain and Italy have framework laws that have been proved to be a centralising measure and which have generated interminable litigation in the constitutional court. In Germany, on the other hand—which still has framework laws, although they have been reduced—the framework laws are negotiated bilaterally and they pass through the Bundesrat, as the representative of the federal regions.

The question is not about the principle of frameworks; it is about how they are set, what is in them, how detailed they are and who has the last word in setting them. Will we have genuinely joint decision making or will it simply be decision making by the UK Parliament?

I agree very much with Michael Keating. There is a real difference in substance and meaning between a framework that is imposed from the top down and one that is agreed from the bottom up by the contracting parties.

There is another question. The election result has brought into discussion a different conversation about the terms of departure from the EU. Some people are advocating continued membership of the single market and other EU frameworks. If those people win out in that conversation, there might well be rather less of a difference in the internal arrangements that are required to manage the relationship with the single market than there would be if we pursued a different kind of Brexit, which might require a very different approach. The conversation about whether to have a top-down or a bottom-up framework will also depend on the nature of Brexit, and I think that the likely nature of Brexit might have moved since last week.

We should be a bit wary of the argument that EU law provided us with UK common frameworks, so they must be replaced, as there is an element of post hoc rationalisation in that. EU law only partially provides common UK frameworks. There are various ways in which internal differentiation is still permissible, even in the context of EU law.

In some of these areas, to the extent that I understand them—such as agriculture—we did not have much in place prior to joining the EU and EU law provided us with the common framework.

I agree with the previous comments. We need to think about each area on its own merits and not simply assume that, because we have had an element of commonality, it has to be replaced.

10:15  

It seems that we all agree that we will need some sort of series of common frameworks, if I have understood your answers correctly. In which areas will we need them? Agriculture is often mentioned—I know that other members want to talk about that—but it is an umbrella term that covers a lot of different things. It covers landholdings and agricultural subsidies, and also a lot of consumer protection law and product safety law.

There has been some talk about the importance of the UK’s internal market. In addition to agriculture, however you might want to define that, and the UK internal market, however you might want to define that—I would be interested to know how you would define it—where else might we need pan-UK or perhaps pan-GB common frameworks post Brexit?

There is the whole area of environmental policy. Again, it is difficult to draw boundaries and say what lies within that, but there are obvious externalities there, in that pollution does not respect borders between parts of the United Kingdom, and there are also international environmental obligations.

As Aileen McHarg points out in her submission, the UK internal market is a recent idea—nobody ever talked about it before Europe came in. However, it is to do with having a level playing field. It is about fair competition within markets and about controlling externalities, which could arise in relation to all sorts of things. State aid is an obvious example. That is not reserved—it is partially reserved. It is not a huge policy area these days but, as you know from your discussion under the previous agenda item, state aid issues can pop up in all sorts of places where we did not expect them.

UK competition policy will certainly have to be revised. The UK will need to have its own competition policy, because its existing policy complements the EU policy. That might apply within the UK as well—

That is all reserved under the Scotland Act 1998, is it not? There is no devolved competence with regard to competition law.

Yes, but competition issues may arise in relation to actions of Governments on, for example, state aid—that is really about competition—or environmental regulation that might be considered anti-competitive in various ways, or protectionist. We do not have a comprehensive UK competition law. That might need to be thought about now that we will no longer have EU law to rely on, because things come up that are devolved and are not necessarily covered by existing UK competition law.

One thing that was suggested in the Conservative Party manifesto—again, it is now rather conditional, because we do not know the extent to which the manifesto will be a guide for the Government, given that the party has to negotiate policy with other partners following the election—was regional policy for EU structural funding, given the consequences of withdrawal from the EU. The manifesto contained a commitment to establish a shared prosperity fund that would, in so far as it was spelt out, replace EU structural policy in the UK, claiming therewith a UK-wide role for the UK Government and proposing a framework for delivering that policy.

That is probably a bit more contentious given that regional economic development is clearly understood to be a matter of devolved governance. The way in which the proposal was phrased was interesting, as it described the devolved Administrations as consultees in the development of whatever common framework might be introduced under the policy. I suspect that we might have moved away from that, but it shows the potential for thinking about the EU as a way of understanding differently how powers are exercised post Brexit.

To pick up on what Michael Keating said, state aid is devolved. There is no UK state-aid policy and there never has been, so that is an area where I expect that the UK Government will want to create some kind of replacement for EU law, not least because international trade law, once we are subject to it, will have state-aid implications. That is one thing.

More generally, we probably want to distinguish between two kinds of reasons for common frameworks. One is the level playing field argument. If businesses that are based in different parts of the UK are subject to different requirements, their business costs will be different and some will be less able to compete.

The other argument for common frameworks is policy effectiveness. For instance, although emissions policy would in principle be devolved, it probably does not make much sense for the Scottish Government to set up its own emissions trading schemes. Indeed, it does not make much sense for the UK to set up its own emissions trading schemes. That is an example of an area where, for reasons of policy effectiveness, doing things on a larger scale makes more sense. Another one is air quality, which has cross-border effects—you cannot keep air in one part of the country. Another example is animal health policy, for the same sorts of reasons. There is a risk of policies not being effective, quite apart from any single-market effects.

That is very helpful—thank you.

I will go back to the question of state aid as an example. A number of the witnesses have suggested that you think that the UK Government might want to have a single, common, pan-UK state-aid law. Is it your judgement that it is in the national interest that there is only one UK state-aid law, or could we have four—or potentially more, if cities in England are taken seriously—different laws of state aid in the same country without disrupting whatever we mean by the “internal market” within that country?

The experience in other countries where those sorts of things are not controlled is of uncontrolled competition and subsidising industry. It is a terrible problem in the United States, where there is no way of regulating it. It is ineffective because those efforts cancel each other out. They waste a lot of public money because they give subsidies where they are not needed.

Another general comment is that many of the competences that the EU has in the fields of competition and environmental policy were never in the treaties. They were extended by the European Court of Justice on an ad hoc basis and then they became law.

Yes, I know.

The question then is what the UK frameworks would look like. Would they be flexible and open-ended in that way and entrusted to judges, or would we have something much more rigid?

State aid is a good example, because it pops up in all sorts of unexpected places. Environmental policy was never in the treaties until, I think, the Treaty of Amsterdam—it just came along as a result of the spillover effect from one policy area to another.

I have one addendum, on the consequences of internal differences on brokering external trade agreements. State aids are non-tariff-related factors that can impact the terms of trade between different places. To the extent that the UK will need to negotiate international trade deals in the future—and that extent is currently not clear—there may be an external rationale for stronger internal co-ordination.

There is an ideological dimension to all this. Maintaining a single market within the UK and the extent of that single market—what sectors it extends to—are highly politically contentious questions.

Because of the effect of EU membership, we have got used to thinking about frameworks as normal and natural, but if we strip out that element of the UK constitution and go back to our own, very thin constitution, the idea of constitutionalising market principles becomes quite contentious and problematic.

Professor Keating, you mentioned that, where framework laws and provisions exist in other European countries, they are often a major source of contention between the parties. It would be challenging to create and maintain such framework laws and provisions, even somewhere that had a well-developed set of intergovernmental relations that were working well. We probably do not have that here.

You mentioned that there are a couple of other countries in Europe that have models in which IGR is working better. Could you say a little bit about those? Could that work here?

Intergovernmental relations do two things: one is to facilitate common working where there is a common perception of the problem and there is not a big political difference; the other is to deal with conflicts. Our system of intergovernmental committees—joint ministerial committees—does neither. When joint policy making is needed, it is done, but not through the joint ministerial committee mechanism. Where conflicts need to be resolved, they are solved politically, not through that mechanism. The only ministerial committee that meets regularly has been that on Europe, and there have been concerns about that, too.

There is a general question about whether we want to go in the direction of intergovernmental policy making. The tendency in most systems in recent years has been to move away from too much intergovernmentalism, because it is extremely costly, it does not encourage transparency or accountability, it sometimes makes policy making more complicated and it overburdens the system. Attempts to disentangle the layers never really work, but that is the general tendency. We should think very carefully about the implications before moving down that road.

If we are going to go for intergovernmental policy making, we need to address a question that has never been addressed in our system—that of power and where it lies. In Spain, there are sectoral conferences. They are quite active, and they make a lot of joint policy. There is a voting system. The delegates do not vote very often, but the fact that there is a voting system means that the central Government cannot always get its own way.

In other systems, there is a second chamber that represents the territories, as in Germany. Unless you think seriously about that power, the negotiations will never be among equals; they will involve the centre, in consultation with the other levels of government, imposing its own way. That is the experience of Spain and Italy, which do not have effective second chambers.

I will add a bit more on Germany, on which I used to work quite a lot. Germany has moved away from framework laws, because neither side was particularly content with the way in which the system worked. There was a tendency to specify too much at the central level, which annoyed people at the regional level.

Nonetheless, there is a framework for enacting statewide legislation in areas that are, in principle, ones of regional competence. Broadly, that works well, because there is agreement that certain conditions are good conditions to meet statewide. In Germany, that is partly expressed in economic terms—in single market terms, broadly—but it is also expressed in social terms. The phrase that is used in various parts of the constitution is “equality of living conditions” or—depending on the place—“equivalence of living conditions”. It is an equity-based argument as well as a single market argument. Germany is a place that has general agreement on those economic and social dimensions of the purposes of central and regional governments working together. You have to have that to make intergovernmental relations work, and I am not sure that we have that in the UK.

10:30  

Michael Keating is right about power. We have an asymmetrical system not simply in the differing devolution settlements in different parts of the country but in the asymmetry between the UK level and the devolved level. We are talking about potential constraints on devolved Governments, but there are no equivalent constraints on the UK Government. We have to bear in mind the fact that the background to all the talk about common frameworks is that the UK Parliament can impose them if it chooses to do so, subject only to the Sewel convention, which we now know is not legally enforceable. We are in a situation of significant imbalance.

If I understand the witnesses correctly, they are saying that other European countries are moving away from such frameworks. Would that be fair to say? If so, what are they moving towards and how are they arranging matters differently?

Charlie Jeffery knows about Germany, so I will leave that to him. Almost all the autonomous communities in Spain have reformed and updated their statutes. There is a binding of competences—they call it “blindaje competencial”, which means an armouring of competences. That is the principle that the central Government cannot intervene—in the guise of co-ordination or whatever—in certain kinds of competence, so the autonomous communities are being strengthened and reinforced. The Italian system has been trying to do that too, although not quite as successfully. Recent Canadian reforms have also tried to make it clear that certain competences belong to the provinces alone and cannot be interfered with by the central Government in the guise of spending power, transversal legislation or whatever.

In the German case, there was a move away from framework laws on which both levels of Government legislate—the central level legislates to set the framework and the regional level legislates to work within that framework—towards a concurrent power system, in which the central level is empowered to act if certain needs, such as single market needs or equity needs, are met. In effect, that led to a disentanglement of the areas that had been subject to framework laws, with some becoming the responsibility of the central level and others becoming the responsibility of the regional level but, in some cases, with the possibility of central legislation in areas of regional competence if particular needs or conditions were met.

I emphasise that that can work because there is a high degree of consensus across Germany about the purposes of government. I am not sure that we have that kind of consensus here.

The witnesses have just told us that we have a system of intergovernmental relations that is creaky at best—it disnae work. There is an agreement that, if we are not going to remain in the single market, there will have to be some sort of common framework arrangements. We have talked about the areas that they might cover, but there is enormous potential for conflict between the various devolved bodies and the UK Government. The question at the back of my mind at this stage—this refers to some of the stuff on page 4 of Aileen McHarg’s submission—is about how we could get a different type of common framework and what way of coming to that would best suit the devolved nations and the Scottish Parliament.

Aileen, you describe three different ways of doing that—an ad hoc way, permanent re-reservations and a new cross-cutting constraints process. I think that you suggest that the ad hoc way would be the best way forward for the devolved legislature of Scotland. Could you reflect more on that, because we will eventually reach that point in the discussions?

Yes. That would be my preference, partly for reasons of the preservation of devolved autonomy and partly for reasons of flexibility. There is nothing permanent about ad hoc solutions, but they do not achieve everything that the UK Government might want to achieve. If we want to comprehensively protect international trade deals or the UK single market—whatever that is—the most obvious way to do that would be by replacing the cross-cutting constraint of EU law with new cross-cutting constraints in relation to the single market and international trade.

That would be problematic for a number of reasons. First, the centralising impact would potentially be great and hard to predict. Secondly, there are severe questions about the constitutional appropriateness of that approach. The cross-cutting constraints that we have at the moment relate to convention rights and EU law, both of which have a particular constitutional status and apply more or less symmetrically to the devolved Governments and the UK Parliament. Convention rights are slightly different in that they bite more tightly on the devolved Parliaments, but they still bite and constrain the UK Parliament as well.

I would be very concerned about the idea of the UK single market acting as a cross-cutting constraint on the devolved Parliaments when there is no equivalent for the UK Parliament and when the UK Parliament and the UK Government, in their English capacities, could undermine the single market through their actions—I think that Professor Jeffery made that point in his submission.

Anything that leads to asymmetrical constraints should be resisted. I prefer the ad hoc model, but that depends on the ability of the devolved and UK Governments to work together to reach agreements where necessary.

I have a side comment to make. The territorial relationships that exist in the UK are not mediated simply through Governments. In our present situation, which echoes others in the past, a particular territorial interest has a certain amount of leverage over central Government and might well use it to extract territory-specific concessions, to put it in a polite way. In the US, that is called pork-barrel politics, and I suspect that we will be in a bit of a pork-barrel era, to the extent that the proposed alignment, which might be confirmed today, persists for some time.

That may also apply in part to Scotland. The Conservative Party in Scotland has said that it will act in coherence in the UK Parliament, and it has more votes than the DUP; that could be a route for it to extract concessions for Scotland that go beyond intergovernmental relationships, but which could have an impact. For example, the DUP has made it clear that it wishes to have a significant increase in public spending in Northern Ireland, which might well have implications for some of the state aid issues that we have discussed.

We are in an interesting situation in which the territorial politics of the UK will be mediated not only by the UK’s territorial Governments, but by territorial lobbies—for want of a better word—that have considerable bargaining power at the moment.

I agree with Aileen McHarg’s comment about the transversal frameworks. Anyone could potentially fall foul of those, and it would be difficult to define what was within them and what was outside them.

Another question concerns international agreements. Some EU laws will lapse, but they will be replaced by existing international agreements on trade, the environment and all kinds of other things. At present, the devolved Administrations have some input into EU decision making. It might not be adequate, but they are part of the delegation to the Council of Ministers—they get the papers and so on. They do not have an input into international treaties, so there is a question about how the devolved territories could safeguard their interests in those areas once they become subject to international treaties rather than European laws.

That leads neatly on to some of the areas that Patrick Harvie wants to look at.

I am not sure that any of this is neat, convener. Sir Humphrey once said to Jim Hacker, “If you must do this damn silly thing, don’t do it in this damn silly way,” and I am afraid that that thought will stay with me for the foreseeable future. One of the traps that we need to avoid falling into is that of assuming that, if the UK completes the process and withdraws from the European Union, a unitary state that never existed in the first place will emerge.

On the question of the extent to which common frameworks are required, there is a tension between whether those decisions will be made at UK level by the UK Government or in a more collaborative, open and participative way. I want to ask about two aspects of that. One of them relates to the specific example of emissions trading that Professor McHarg raised. The UK has been an advocate of the EU emissions trading scheme, but it has had a lot of problems over the years. As the energy sectors in different parts of the UK continue to diverge, those problems will be experienced in different ways. Different jurisdictions in the UK might have different views about the relationship that we ought to have with the EU ETS in future. The jurisdictions in the UK also have their own legislation and domestic climate change targets that interact differently with the EU ETS.

Therefore, decisions have to be made about whether to continue to co-operate as part of the EU ETS and how to deal with the different problems that emerge in different parts of the UK; whether to have a separate emissions trading scheme in the UK, in which our different tensions and interests would need to be balanced; or whether to have an alternative to emissions trading, which would have to be based on tax, although, at present, the relevant taxes are reserved, not devolved. For that one specific example, of which there will be many others, there is a question of how to balance the different needs and expectations of the different parts of the UK based on their different circumstances.

The second aspect of the tension between the UK Government making the decisions about common frameworks and there being a more open and participative approach relates to the Northern Ireland situation. Is it a reasonable interpretation of the new situation that the question of the UK Government making decisions about the extent of common frameworks is no longer possible, given that there is a difference in the devolved context between a Government having an excessive influence on the UK Government and an Opposition party having such an influence, especially when that party is on one side of the carefully balanced unionist-nationalist dividing line in Northern Ireland? Is it not clear that the idea of the UK Government having the practical ability to make and impose those decisions is dead?

Wow!

Or tell me that I am wrong.

Gaun yersel, Michael.

On Patrick Harvie’s first comment, I agree that we should go into the process realising that the UK is not a unitary state. In many senses, Brexit was predicated—this is how it was promoted by some people—on the notion that the UK is a unitary state and that, when the power comes back, we can decide what to do with it. That is not the default position. The default position is that the devolved competences are devolved until such time as they are reserved; they will not automatically go to Westminster.

On Patrick Harvie’s other point—I might be at risk of being a bit political here—there is a serious problem with the UK and Irish Governments assuming the role of honest brokers. In relation to the Irish question, successive UK Governments have said that they have no interest in either the union or Irish unification, as that is entirely up to the people of Northern Ireland. If the UK Government is in a parliamentary alliance of whatever form with a party on one side of that, that creates problems for its role as an honest broker.

There is also a consequent problem with its ability to make decisions on the issue of common frameworks in a way that treats not only both sides in Northern Ireland, but all the nations of the UK, fairly.

Indeed. We are used to seeing Northern Ireland as completely different and not setting a precedent for anywhere else, but we cannot do that any more. There are precedents that will be set in Northern Ireland that will then have to be applied, particularly if we have the notion of a UK framework, which would make it very difficult to say that we will differentiate for Northern Ireland, but not for anybody else.

Yes.

10:45  

I have a comment on the EU ETS point. The point of the EU ETS is to set a carbon price, but our carbon pricing system is set by multiple instruments—at the moment we have climate change levies, climate change agreements, a carbon price floor, emissions performance standards, renewables targets and so on. The whole area is quite a big mess. One might see Brexit as an opportunity to sort out that mess, but I doubt very much that achieving that is in any way a realistic aim.

Those are the sorts of things that we can start to think about rationally in five years. We have to get through the Brexit process before we can take advantage of the policy opportunities that Brexit gives us to sort out some things that we do not do so well.

I raised that as an example of where tension between UK-wide decisions and a more open and flexible arrangement will be inevitable: we will come up against that. For example, one of the reasons why this week Scotland has been able to say that our emissions have gone up but we still met our target is because the target became easier because of changes in the ETS, not because of what we were doing domestically. In contrast, in other parts of the UK, the situation does not play out in the same way.

Yes—we are part of a complex multilevel governance system, so the removal of one level of governance will have interesting and differing impacts throughout the UK. That is an example of a bigger problem. We need ways to deal with issues that cut across boundaries, and we need to recognise that we are in a multilevel system and that taking out one level does not simply empower either the UK or the devolved Administration, but might affect both in ways that have to be managed.

Mr Harvie and Aileen McHarg raised the point about the challenges of disentangling the policy responsibility for England for emissions trading and pretty much anything else, when thinking about common UK-wide frameworks, and about the role that the UK Government performs as the policy maker for England and as the guardian of the UK-wide framework. As we move towards a post-Brexit system of common frameworks in different areas, there will be a need for the UK Government to reflect carefully on the mix of responsibilities that it has that are UK-wide and those that are England only. Policies that are enacted for England inevitably have spill-over effects on the other parts of the UK, because of its large relative size. Securing a full appreciation of that dual role has barely happened since we entered the devolution era; it could become all the more pressing in the new circumstances.

I will ask a gentle question. You have introduced the implications around the English dimension, but what happens to English votes for English laws—EVEL—in all this? There are potential impacts in Scotland, if that begins to unravel.

If the Tories do a deal withy the DUP, they will not have an EVEL problem because they require a majority in England and a majority across the UK, and they will have both. Therefore, it is not a practical problem. Of course, if it were to be a problem, EVEL would be easily undone, because it is secured only by an amendment to the House of Commons standing orders, which can be quite easily changed, if necessary.

Okay—so my question was tangential, and it did not matter, either.

Are you finished, Mr Harvie?

I am finished for the moment, I guess.

If a free-trade agreement were to be concluded between the UK Government and the EU, what impact would that have on the EU common frameworks? Would some or many of them be ported in such that the Scottish Parliament would continue to be bound?

That would depend on what was in the free-trade agreement. We have been talking about everything from a loose agreement to something like the agreements with Canada or Switzerland. There has been a lot of confusion about the single market. Both major parties in the UK say that we are withdrawing from the single market, but that we want to get back into bits of it. The question is how much they want to get back into. The Government said in its white paper that British firms might be bound by European product standards, which seems to me to be very likely. Most of those provisions are not devolved, although some in relation to food safety are. The closer we get to a deep partnership and something like the single market, the more those issues will come up, and some of the areas will be devolved.

So, it will be entirely a function of the negotiation.

Yes.

If a free-trade agreement is made, what impact would that have on repatriation of powers from the EU? Is the answer to that similar to the answer to the previous question?

That would fall into the category of the relationship of devolved competences to international agreements, because the agreements will cease to be EU ones and will become international. The devolved Administrations are bound by international agreements, whether or not they relate to devolved competences. That raises the question of what the devolved input would be to making those agreements, which gets us back to the question that I asked earlier about whether we need a mechanism to give the devolved Administrations some say in the making of international trade agreements, since those will become more and more important.

The devolved Governments are not bound by international agreements. We have a dualist system, in that we distinguish between things that are binding in international law and things that are binding in domestic law. International agreements are binding domestically only if, and to the extent that, they have been incorporated by statute. That may be acts of the UK Parliament or it might be acts of the devolved Parliament. At the moment, an act of the Scottish Parliament cannot be challenged on the basis that it conflicts with an unincorporated international agreement. There are provisions in the Scotland Act 1998 that enable the UK Government to try to secure compliance with international agreements. The Secretary of State for Scotland can veto a bill being sent for royal assent if it would breach international agreements, and there are powers of direction to require ministers to take action to implement trade agreements, but that is all.

There is no cross-cutting obligation to comply with international agreements in the way that there is a cross-cutting and comprehensive obligation to comply with EU law. That reflects the different constitutional status of EU law, as a sui generis form of supranational, rather than merely intergovernmental, co-operation.

That raises a wider question about the extent to which devolved jurisdictions simply take the results of international negotiations or contribute to them. There are examples from elsewhere of that contributory element working.

Belgium is probably where that is most fully developed. The internal—the domestic—competence is externalised, so the Belgian regions and communities have the power to act in external affairs in the framework of their internal competencies. That does not mean that Belgium has several foreign policies; rather, it means that there is careful co-ordination between the two levels of government.

To return to the example of Germany, the German intergovernmental system has dark recesses, one of which is called the permanent treaty commission, which in effect co-ordinates between regional and central Government in areas where international treaties touch on regional competencies.

There are frameworks that work in other places that could be used at the very least as prompts for thinking about some of the issues that Brexit will raise where trade agreements inevitably touch on devolved competencies.

Maree is interested in this topic, too.

Yes I am—although I am a little confused by all that. I will try to simplify matters. Are you saying that the UK Government cannot negotiate UK-wide international trade deals and that it must negotiate only English trade deals?

No. International relations are reserved, so only the UK Government can negotiate internationally on behalf of the UK. However, because of our legal system, there is a distinction between what is binding on us as a matter of international law and what is binding on us as a matter of domestic law. A good example of that is the European convention on human rights, which we have been a member of since the 1950s. Since 1966, we have been able to take cases to the European Court of Human Rights, but only after domestic incorporation of the convention via the Human Rights Act 1998 and the devolution statutes did it become possible to use or to rely directly on convention rights in the domestic courts. That important distinction underpins our entire legal system.

There is a difference between negotiating who has the competence to get us into international obligations and the enforcement, compliance with and implementation of those international obligations.

Yes—Aileen McHarg is right on the strict legal position. My comments may have been misleading, because I was giving more of a political perspective, so I thank her for clarifying that legal point.

International trade is going to be significantly more important after Brexit. Everyone is raising agriculture as an area of concern. I represent the Highlands and Islands, where agriculture is a significant part of the economy. Agricultural tends to be a thorny issue in international trade agreements because of the level of state subsidy and the ability, for example, to give farm payments and to make it a level playing field in international trade.

The pattern of agriculture in Scotland is very different from the pattern of agriculture in England. It is also a devolved issue. I imagine that in trading terms it is important—or worth more—to strike a UK-wide trade deal. How will we navigate that?

We have the options that were outlined earlier: we can have ad hoc legislation to implement particular trade deals, which could be negotiated or imposed; we could try to have cross-cutting mechanisms to ensure that the UK Government can make the devolved Governments comply with the terms of international trade; or we could forget about devolution of agriculture and re-reserve it to the UK.

I know from speaking to friends who are farmers that they are worried about the implications of future trade deals. A problem with the new era that we are about to enter is the lack of transparency and predictability.

One of the positive things about the EU is that it is an ordered system of governance. It operates on the basis of treaties—those treaties might change from time to time, but we know what the scope of competencies is. We can predict what the likely policy outcomes will be, and there is an open policy-making process that the devolved Governments can influence either through the UK Government or directly, because there are mechanisms at EU level that allow for consultation of regional Governments and so on. The system is a relatively ordered, relatively predictable and relatively transparent way of making decisions at international level.

11:00  

We are about to go into a system of much more ad hoc trade deals with different countries and trading blocs, the terms of which might be different and the negotiation of which will take place between negotiating teams behind closed doors. It is much harder for the devolved Governments either to anticipate what will come out of those discussions or to influence them.

In your paper, you mention that health is a non-marketised sector. That is the case in Scotland, but there is a significantly different picture south of the border. When the transatlantic trade and investment partnership was being negotiated, there was huge concern that the national health service might be vulnerable to international private interests. Is that likely to be a significant concern about Brexit? How can we protect the position of the NHS in Scotland, where the health sector is not marketised to the same extent as it is down south and we do not have anything like the same level of private provision?

I had TTIP in mind when I wrote that part of my paper. There are different views on how real that threat from TTIP was but, in principle, it was a concern.

The issue is not unique to international trade. For many countries—although not so much for the UK—EU law has been a route by which previously non-marketised sectors have become subject to competition. In sectors such as energy, telecommunications and transport, international-level free-market rules have been used to push the boundaries between the state and the market. Whether it is likely or not, the possibility remains that that could happen through international trade deals.

Let us return to the point that Patrick Harvie introduced in relation to Northern Ireland. Professor Keating, in your paper you talk about the Supreme Court ruling in the Miller case and so on. During that case, Scotland’s constitutional argument was pretty much dismissed in a sentence or two, and it was confirmed that the Sewel convention is merely a political agreement. Now that the entire political situation has changed significantly and the UK Government is where the power lies, could the UK Government impose legislation in devolved competences in Northern Ireland, for example, without the devolved Administration’s consent? If that is the case for Northern Ireland, does the same apply to Scotland?

The British constitution works largely on the basis of convention, with some things being written down and some things having the status of ordinary laws—there is no single body of constitutional law. The Supreme Court said that the Sewel convention is not binding in law and, like other conventions, cannot be enforced by the courts. We knew that already. However, in a kind of obiter dictum, it went further and said that the Sewel convention is a merely political convention. To me, that betrayed a misunderstanding of what constitutional conventions do. They are neither laws that are justiciable in the courts nor political agreements; they are something else. I think that the point was missed there.

It also surprised me that the Supreme Court went out of its way to make that point, because it could have dismissed the Scottish Government’s intervention by saying that the issue concerned the matter of foreign affairs and that, in any case, the situation was not a normal one. However, it chose to add that ground as well, at the invitation of the Advocate General of the UK Government. That has left a bit of a hole in our understanding of the constitution that really has to be filled. Hitherto, the UK Government has respected the Sewel convention and the process has worked well. If it is to be set aside this time, that will set a constitutional precedent.

That brings into question the whole basis of our constitution, which restrains the devolved Government but not the UK Government. That is very unusual. It means that we have not caught up with the federalising spirit that the devolution settlement seemed to have been taking on.

Therefore, although it can be said that, in one sense, the Supreme Court judgment was not surprising and told us what we already knew, it raised a lot of questions about our constitution, and Brexit is going to be a big test of those questions.

Does anyone else have a comment to make?

There is a point to be made about the level of exceptionality that would justify the UK Parliament overriding the views of the Scottish Parliament. The Miller ruling has opened up that debate beyond what was the practice hitherto, which, as Michael Keating says, had been working rather well.

There might be a sense in which, in a place like Scotland, the notion of a common framework—a more clearly specified set of understandings about the relationship between central and devolved Governments—might be perceived as a threat to devolved powers. However, there are circumstances in which it could be a protection, given the rather labile interpretation of the Sewel convention that we had from the Supreme Court.

In a sense, the Miller case told us what we already knew: that, notwithstanding the Scotland Act 2016, the Sewel convention was not enforceable. It was not inevitable that the convention was not justiciable; I think that it was open to the Supreme Court to determine, and, in a different, less high-profile context, the court might have been willing to say whether the Sewel convention would be engaged by the withdrawal bill. In fact, the court did say some things about whether it would be engaged but did not reach a conclusion.

The Supreme Court said that the intention of the 2016 act was to entrench the Sewel convention politically as a convention. What does that mean? How do you entrench something politically when there is no external enforcement machinery? It is difficult to understand what that could mean.

Interestingly, it has been suggested—I think by Paul Reed—that we should perhaps think of procedural mechanisms to give the Sewel convention greater bite. For instance, it could be required that, when ministers introduce a bill in the UK Parliament, they make a statement—equivalent to the statement that they have to make under the Human Rights Act 1998—on whether, in their view, the Sewel procedure applies. The bill could then be subject to scrutiny by a committee.

If the Sewel convention is to operate in a purely political realm, we probably need to think about how we can give it more political bite. At the moment, we can have a situation in which the Scottish Government takes one view on whether the Sewel procedure is engaged and the UK takes a different view. That has happened in relation to not just Brexit but certain bills. There is no mechanism whatever for adjudicating on those different interpretations, and the UK Government always wins because the Sewel convention is only a convention and not a legal rule.

This question will boil it down in a simple way. When we leave the European Union, what would happen to the competences of the Scottish Parliament if there were no adjustment to the Scotland acts?

They would increase.

Exactly.

Anything that is currently within devolved competence but is subject to EU law would fall to the competence of the Scottish Parliament.

So, unless the UK Government takes an action, all the powers that currently lie with the EU—which I think are laid out quite neatly in paragraph 4 of Michael Keating’s submission—would automatically become powers that would lie with the Scottish Parliament.

Yes, but they could be overridden by the UK Parliament, either on an ad hoc basis by enacting legislation on that topic or—more permanently—by changing the Scotland Act 1998.

That would take us into the political realm. I leave hanging the question about what the political circumstances would be if the Scotland Act 1998 was changed. If the Scotland Act 1998 were not amended, one would immediately think that the Sewel convention was applicable and that the powers would come back to the Scottish Parliament.

The one exception is that the funding would not revert to the Scottish Parliament. That is critical in agriculture.

Yes, it is probably the main ingredient.

I am sorry, Willie—I interrupted you.

That gets to the heart of the issue that I want to explore. If a disagreement should emerge between the Northern Ireland Administration and the UK Government, it is unthinkable in the current political situation that the UK Government would retain some aspect of a devolved power against the will of the Northern Ireland Assembly. Do you think that we will see that effect in Scotland now, given the changing political circumstances?

There is an interesting complication with the Sewel convention in relation to Northern Ireland. Whereas in Wales and Scotland the Sewel convention has two elements—it applies to legislation that is within devolved competence and to legislation that shifts the boundaries of devolved competence—in Northern Ireland it applies only in the former situation. The practice there has been not to seek consent to changes to the boundaries of the devolution settlement. That reflects the situation as it existed in the earlier devolution settlement in Northern Ireland, which is where the origins of the Sewel convention lie. It was not invented in 1998; it was a prediction based on previous practice. I did not know that until the Miller case. I found it very interesting that what is apparently a foundational convention does not even apply in the same way to all the devolution settlements.

The other complication is that we might not have a devolved Government in Northern Ireland to give or withhold its consent to anything.

Yes, but the UK Government needs those 10 votes.

Convener, you said that you are worried about straying into politics.

I do not need to encourage you that much—please feel free.

I will stray into politics a little.

At the UK level, we have a minority Government that is dependent on the support of a Northern Ireland party. I think that the capacities of that Government in managing the next stages of the Brexit process will be severely strained, and it would be a very unwise Government that, in those circumstances, took actions that would prompt conflict over matters of principle with fully functioning devolved Administrations such as the one here and the one in Wales. Of course, politicians sometimes do things that are not very wise.

That opens up an opportunity for the devolved Administrations to seek a more constructive conversation. I really do not think that the UK Government can afford lots of bust-ups.

After the Scotland Act 2016 came into being, many of us got used to using the term “shared competences” in the context of the new relationship that developed between the UK Government and Scotland, but does the idea of shared competence make any sense in the light of the Brexit vote and everything that has flowed from it, given the UK Government’s approach to sovereignty in the present circumstances?

11:15  

At the moment, we have shared competence in relation to the implementation of EU law. I suppose that you could read across from that to the implementation of international trade deals. That would be a possibility. Again, though, the constitutional status of international trade and EU law is not the same. That is an important point to emphasise.

A common framework could be a way of describing a shared competence. We will see what that means as the conversation evolves—it probably meant something different last week.

I quote from the Conservative manifesto, which might no longer be much of a guide:

“We will protect the interest of Welsh farmers as we design our new UK farming policy”.

It is not entirely clear who the “we” are who are designing the policy, but I certainly read the tenor of the document as being rather top-down in intent and I do not think that the current political situation would easily allow such a top-down approach. That suggests that we need the Welsh Government to help us to think through at the UK level what a UK-wide farming policy would be. Everybody recognises that there needs to be some kind of common framework around agriculture, and a wise Government might well look to establish those collaborative conversations.

I still think that we must be wary of getting too many joint competences—there is a difference between those and overlapping competences—as that might be a problem.

Agriculture, for example, is tied up with environmental policy to the point that the ministerial responsibility in England, Wales and Scotland has been shared. Arrangements around agriculture might therefore spill over into environmental policy. You would have to look at having clusters of policies that would make it more difficult to say that the UK Government could just devolve little bits of agriculture while reserving other bits, because that would have knock-on effects. However we do it, we will need some kind of mechanism to deal with policy fields that spill over into other jurisdictions. We just do not have that at the moment.

The EU has solved a lot of those problems hitherto, but that mechanism will not be there.

We have covered a lot of ground today. The witnesses are indicating that we have covered as much as we can until we are a bit clearer about the circumstances. I thank you for your evidence today. We will wait to see what the final picture looks like, although that might take some time.

11:18 Meeting continued in private until 11:28.